Exhibit 10.112

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”), dated as of December 19, 2008, is
entered into by and between CORTEX PHARMACEUTICALS, INC. (the “Company”), and
MARK VARNEY (the “Executive”).

WITNESSETH

WHEREAS, the Executive has considerable experience in management and
pharmaceutical research and development.

WHEREAS, the Company wishes to employ the Executive as its President and Chief
Executive Officer, and the Executive wishes to be so employed by the Company.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:

1. Engagement. The Company hereby employs the Executive as its President and
Chief Executive Officer, reporting to the Company’s Board of Directors, and the
Executive hereby accepts such employment, on the terms and conditions
hereinafter set forth. Additionally, during the term of this Agreement, the
Company shall nominate the Executive for reelection as a member of the Board of
Directors and use its best efforts to cause Executive to be so elected.

2. Term. The term of this Agreement will begin on August 13, 2008, and shall
continue thereafter for an initial three (3) year period, unless earlier
terminated pursuant to the provisions of this Agreement or otherwise extended by
mutual agreement of the Company’s Board of Directors and the Executive.

3. Duties. During the term of this Agreement, the Executive shall serve as the
Company’s President and Chief Executive Officer, and shall have such duties and
responsibilities as are set forth in the Company’s Bylaws and such other
executive responsibilities as may be assigned to him from time to time by the
Company’s Chairman of the Board and/or the Board of Directors. In particular and
without limitation, the Executive’s duties shall include using diligent efforts
as appropriate to (i) assist in raising additional equity capital and research
and development funds for the Company, (ii) facilitate the internal development
of the Company’s technology assets, (iii) integrate developments licensed from
academic laboratories into the technology base of the Company, and pursue both
the in/out licensing of technologies and/or acquisition of other technologies
complementary to those of the Company, (iv) develop relationships with potential
corporate partners for the development and commercialization of the Company’s
technologies, and (v) pursue the in-licensing of drug candidates from third
parties. The Executive shall use his best efforts and shall act in good faith in
performing all duties reasonably required to be performed by him under this
Agreement.

 

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4. Availability. Except as herein provided, the Executive shall devote
substantially all of his working time, attention and energies to the Company’s
business and, except as provided herein, during the term of this Agreement shall
not be engaged in any other business activity without the prior written approval
of the Board of Directors. The Executive may engage in a reasonable level of
professional activities as are typical for individuals of a comparable
professional stature.

5. Compensation. As compensation for the services to be rendered hereunder, the
Company agrees as follows:

(a) To pay the Executive an annual salary of not less than Three Hundred
Sixty-Two Thousand Dollars ($362,000) per annum, subject to increases based on
an annual review by the Compensation Committee of the Board of Directors.

(b) To provide the Executive with the opportunity to earn an annual bonus based
upon the attainment of individual and corporate performance criteria defined by
the Board of Directors in such amounts as shall be within the discretion of the
Compensation Committee and as the Board of Directors determines is appropriate
based on the overall financial condition of the Company.

(c) To continue the mortgage assistance program adopted at the time of
Executive’s hire. The mortgage assistance program specifies that the Company
will provide an interest subsidy over five (5) years in the form of monthly
payments, whereby the Company will pay 6% of the principal amount of a mortgage
(which mortgage shall not to exceed $1,200,000) on Executive’s primary residence
in Southern California during the first year, 5% during the second year, 4%
during the third year, 3% during the fourth year, and 2% during the fifth year.
Payments under the mortgage assistance program will also be subject to an income
tax gross up factor of 1.6. This mortgage assistance program started in August
2006 and will terminate upon the earlier of (i) Executive’s termination of
employment with the Company or (ii) August 2011.

(d) To reimburse the Executive, promptly upon presentation of itemized vouchers,
for all ordinary and customary business expenses, consistent with the Company’s
reimbursement policy, incurred by the Executive in the performance of his
duties.

(e) To allow the Executive to participate in such employee benefit programs as
are made available to the management of the Company when and as the Executive
becomes eligible therefore under the terms of such programs, including, without
limitation, group health, disability and life insurance benefits and
participation in other employee benefit plans.

 

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(f) To allow the Executive to have four (4) weeks of paid vacation each year
during the term of this Agreement, subject to the maximum accrual permitted by
the Company’s employment policies. The Company and the Executive agree that time
devoted by the Executive toward travel to, and attendance at, scientific
meetings, boards of director meetings, and trips to meet with business leaders
at trade associations shall not constitute vacation periods. The Executive
acknowledges that salary and all other compensation payable under this Agreement
shall be subject to withholding for income and other applicable taxes to the
extent required by law.

6. Ownership of Material Information. All right, title and interest of every
kind and nature whatsoever in and to discoveries, inventions and improvements,
patents (and applications therefore), copyrights, ideas, know how, creations or
other proprietary rights arising from or connected with the Executive’s
employment with the Company shall become and remain the exclusive property of
the Company, and the Executive shall have no interest therein. The Executive
agrees to sign the standard proprietary rights agreement that is required of all
Company employees.

7. Confidential Information. The Executive covenants and agrees with the Company
that he will not, during the term of this Agreement or thereafter, disclose to
anyone (except to the extent reasonably necessary for the Executive to perform
his duties hereunder or as may be required by law) any confidential information
concerning the business or affairs of the Company (or of any affiliate or
subsidiary of the Company), including but not limited to business plans, joint
ventures, financial or cost information, and confidential scientific and
clinical information (whether of the Company or entrusted to the Company by a
third party under a confidentiality agreement or understanding), which the
Executive shall have acquired in the course of or incident to the performance of
his duties pursuant to the terms of this Agreement or his prior employment by
the Company. Nothing herein shall be construed as prohibiting the Executive from
disclosing to anyone any information which is, or which becomes, available to
the public (other than by reason of a violation by the Executive of this
Section 7), which is a matter of general business knowledge or experience or
which the Executive is required to disclose under applicable law.

8. Termination for Cause. The Company may terminate the employment of the
Executive under this Agreement at any time for “Cause” (as hereinafter defined)
upon notice to the Executive. As used herein, the term “Cause” shall mean only:
(a) the Executive’s willful refusal or failure to perform the duties assigned to
him; provided, however, that the employment of the Executive shall not be
terminated under this clause unless the Executive is given notice in writing by
the Chairman of the Board or the Board of Directors that the conduct in question
constitutes grounds for termination under this Section 8 and the Executive is
allowed a period of thirty (30) days to remedy the refusal or failure; (b) the
Executive’s conviction of a crime involving moral turpitude under the laws of
any state, the District of Columbia or of the United States; or (c) the
Executive’s breach of any of the material terms of this Agreement. If the
employment of the Executive under this Agreement is terminated under Section 8,
the Company shall give written notice to the Executive specifying the cause of
such action. Upon the effectiveness of a termination of employment under this
Section 8, (i) the Executive agrees to immediately tender his resignation from
the Company’s Board of Directors and (ii) the Company shall be relieved of all
further obligations under this Agreement, except

 

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as set forth in this Section 8. In the event of a termination of this Agreement
pursuant to this Section 8, the Company’s sole liability to Executive shall be
(i) to pay Executive the installments of his then base salary accrued hereunder
and unpaid for services rendered by Executive up to the date of such
termination, together with any accrued but unused vacation, accrued and unpaid
reimbursements under Section 5(d), and accrued and unpaid amounts under the
mortgage assistance program described in Section 5(c), and (ii) to pay the
unpaid portion, if any, of any bonus that was previously awarded to him but
which is unpaid as of the effective date of such termination of employment,
unless the payment of such bonus is dependent on Executive’s continued
employment with the Company or the satisfaction of any other conditions that
have not been satisfied at the time of the termination of his employment.
Notwithstanding such termination of employment, the Executive shall continue to
be bound by the provisions of Sections 6 and 7.

9. Termination Without Cause or for Good Reason.

(a) The Company may terminate the employment of the Executive under this
Agreement without Cause at any time upon at least sixty (60) days’ prior written
notice to the Executive. In the event of (i) a termination by the Company of the
Executive’s employment for any reason other than Cause, (ii) the Executive’s
termination of his employment for Good Reason, the Company shall pay to the
Executive, in accordance with its normal payroll practices, severance pay equal
to twelve (12) months of the base salary based upon the average monthly base
salary for the twelve (12) months immediately prior to the termination event.

(b) The Executive may terminate his employment under this Agreement at any time
in accordance with this Section 9(b) for “Good Reason,” which shall mean (i) the
Company’s breach of any of the material terms of this Agreement, (ii) a material
reduction or alteration of the duties of the Executive, or (iii) the relocation
absent the Executive’s consent of Executive’s principal office to a location
more than 35 miles from the Company’s current headquarters (other than for
temporary assignments or required travel in connection with the performance by
Executive of his duties for the Company). In order to terminate his employment
under this Agreement for Good Reason, the Executive must provide written notice
to the Company of the existence of the condition giving rise to Good Reason (a
“Good Reason Condition”) within ninety (90) days of the initial existence of
such Good Reason Condition. Upon receipt of such notice of the Good Reason
Condition, the Company will be provided with a period of sixty (60) days during
which it may remedy the Good Reason Condition, or ninety (90) days in the event
of a Change of Control of the Company (as defined in Section 12), and not be
required to provide for the payments and benefits described herein as a result
of such proposed resignation due to the Good Reason Condition specified in the
notice. If the Good Reason Condition is not remedied within the period specified
in the preceding sentence, and provided that the Executive is still employed by
the Company, the Executive may resign for Good Reason based on the Good Reason
Condition specified in the notice, provided that such resignation must occur
within two years after the initial existence of such Good Reason Condition.

 

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(c) In the event of either a termination by the Company of the Executive’s
employment without Cause or the Executive’s termination of his employment for
Good Reason in either case which constitutes a “separation from service” within
the meaning of Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) and the regulations promulgated thereunder, including Treasury
Regulation Section 1.409A-1 (h) (a “Separation from Service”), the twelve
(12) months of severance pay described in section 9(a) shall be paid in
accordance with its normal payroll practices over the twelve months following
the Separation from Service.

(d) Nothing contained in this Agreement shall be construed to abrogate the
obligations of the Company to the Executive, or the Executive’s personal
representative or heirs, as the case may be, to make payment or provide any
other benefit that accrued prior to the termination of the Executive’s
employment. Termination of employment under this Section 9 shall not terminate
the Executive’s obligations under Sections 6 and 7.

10. Death or Disability of the Executive.

(a) This Agreement and Executive’s employment with the Company shall terminate
immediately, without notice, upon the death of Executive. In the event of
Executive’s death, the Company’s sole liability to Executive shall be to pay
Executive’s estate the same compensation that would be due to him under
Section 8 in the event of a termination of Executive’s employment for Cause.

(b) In the event that the Executive during this period while employed under this
Agreement shall at any time become unable, due to illness, accident, injury or
otherwise, to carry out his duties under this Agreement for a period of at least
three (3) consecutive months, or a number of days totaling one hundred twenty
(120) or more in any period of twelve (12) consecutive months, the Company may
terminate the employment of the Executive under this Agreement. In such event,
the Company shall compensate the Executive in an amount equal to the difference
between (i) the amount of severance pay that would have been payable under
section 9(a) had Executive been terminated without Cause and (ii) any disability
insurance proceeds. A termination of employment under this Section 10 will not
terminate the Executive’s obligations under Sections 6 and 7.

11. Voluntary Termination. The Executive may terminate his employment under this
Agreement at any time by giving the Company ninety (90) days written notice. In
the event of Executive’s voluntary termination, the Company’s sole liability to
Executive shall be to pay Executive the same compensation that would be due to
him under Section 8 in the event of a termination of Executive’s employment for
Cause. Termination of employment under this Section 11 shall not terminate the
Executive’s obligations under Sections 6 and 7.

 

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12. Grant of Stock Options. The Company may grant to the Executive annual stock
options to purchase shares of common stock of the Company with an exercise price
equal to the market price of the stock on the date of the grant. The decision
whether to grant options and the quantity to be granted shall be at the sole
discretion of the Company’s Compensation Committee with appropriate consultation
with the Chairman of the Board. The Executive’s stock option position will be
reviewed by the Compensation Committee of the Board of Directors from time to
time, but in no event less than annually, and increases in such stock option
position may be awarded dependent upon the performance of the Executive and
performance factors for the Company. To the maximum extent permissible under the
Code, stock options granted to the Executive shall be “incentive stock options”
as defined in Section 422 of the Code. The general terms and conditions of stock
options granted to the Executive shall be in accordance with the
stockholder-approved plans established for the granting of options, amended from
time to time and the Company’s customary form of stock option agreement;
provided that in the event of the Executive’s termination of employment (i) by
the Company without Cause, or (ii) by the Executive for Good Reason, the
Executive’s outstanding stock options shall be exercisable with respect to that
portion of such stock options which is vested as of the Executive’s termination
for the remainder of their original term. In addition, notwithstanding anything
herein, in any of the Company’s stock option plans or in any stock option
agreement between the Company and the Executive, upon a Change of Control (as
defined in such plans or agreements) all stock options then held by the
Executive shall vest immediately prior to such Change of Control; provided,
however, that such acceleration of vesting shall not occur to the extent that a
termination notice under Sections 8 or 11 hereof has been delivered and such
termination is ultimately consummated in accordance with such notice. In the
event that the Company’s future plans or option agreements do not provide the
definition of a Change of Control, and for purposes of Section 9(b) hereof, the
definition for purposes of such options and Section 9(b) shall be the same as
the definition contained in the Company’s Amended and Restated 1996 Stock
Incentive Plan.

13. Code Section 409A.

(a) Notwithstanding any provision to the contrary in this Agreement, if the
Executive is deemed by the Company at the time of his Separation from Service to
be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code,
to the extent delayed commencement of any portion of the benefits to which
Executive is entitled under this Agreement is required in order to avoid a
prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion
of Executive’s benefits shall not be provided to Executive prior to the earlier
of (a) the expiration of the six-month period measured from the date of the
Executive’s Separation from Service with the Company or (b) the date of
Executive’s death. Upon the first business day following the expiration of the
applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant
to this Section 13(a) shall be paid in a lump sum to Executive, and any
remaining payments due under the Agreement shall be paid as otherwise provided
herein. For purposes of Section 409A of the Code (including, without limitation,
for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Executive’s
right to receive the installment payments payable pursuant to Section 9 or 10
(the “Installment Payments”) shall be treated as a right to receive a series of
separate payments and, accordingly, each Installment Payment shall at all times
be considered a separate and distinct payment.

 

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(b) Any reimbursements payable to the Executive pursuant to this Agreement shall
be paid to the Executive no later than thirty (30) days after submission of the
appropriate expense report and, if requested, appropriate supporting documents.
The amount of expenses reimbursed in one year shall not affect the amount
eligible for reimbursement in any subsequent year, and the Executive’s right to
reimbursement under this Agreement will not be subject to liquidation or
exchange for another benefit.

14. Capacity. The Executive represents and warrants to the Company that he is
not now under any obligation of a contractual nature or otherwise, to any
person, firm, corporation, association, or other entity that is inconsistent or
in conflict with this Agreement or which would prevent, limit or impair in any
way the performance by him of his obligations hereunder.

15. Participation in Competitive Business. While the Executive is employed under
this Agreement, the Executive shall not directly or indirectly either as an
employee, employer, consultant, agent, principal, partner, stockholder,
corporate consultant, officer, director or in any other individual or
representative capacity, engage or participate in any business that is in
competition in any manner whatsoever with the business of the Company without
the prior written approval of the Company; provided, however, that nothing
herein, shall preclude the Executive from owning less than one percent (1%) of
the outstanding capital stock of any company whose shares are traded on the New
York Stock Exchange, the NYSE Alternext US (formerly, the American Stock
Exchange) or NASDAQ.

16. Waiver. No act, delay, omission or course of dealing on the part of any
party hereto in exercising any right, power or remedy hereunder shall operate
as, are be construed as, a waiver thereof or otherwise prejudice such party’s
rights, powers and remedies under this Agreement.

17. Notice. Any and all notices referred to herein shall be sufficient if
furnished in writing and delivered by hand or by registered or certified mail,
return receipt requested, postage fully prepaid, to the respective parties at
the following addresses or such other address as either party may from time to
time designate in writing. Notices shall be effective when delivered.

 

To Executive:    Mark Varney To Company:    Attn: Corporate Secretary    Cortex
Pharmaceuticals, Inc.    15241 Barranca Parkway    Irvine, California 92618

 

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18. Arbitration. All disputes arising under or in connection with this Agreement
shall be submitted to arbitration in Orange County, California, under the rules
of the American Arbitration Association, and the decision of the arbitrator
shall be final and binding. Judgment upon the award rendered may be entered and
enforced in any court having jurisdiction.

19. Assignability. The rights and obligations contained herein shall be binding
on and inure to the benefit of the successors and assigns of the Company. The
Executive may not assign his rights or obligations hereunder without the prior
written consent of the Company.

20. Attorneys’ Fees. If either party hereto brings any action to enforce his or
its rights hereunder, the Company agrees to compensate the Executive for his
reasonable legal fees. Additionally, the Company agrees to pay for any fees
associated with the preparation of this Agreement and, if required by the
Company, any potential changes agreed to by the Executive to the terms and
conditions of this Agreement in the future.

21. Construction. This Agreement shall be governed by and construed in
accordance with the laws of the state of California.

22. Completeness. This Agreement sets forth all, and is intended by each party
to be an integration of all, of the promises, agreements and understandings
between the parties hereto with respect to the subject matter hereof and
supercedes all prior agreements and understandings, whether written or oral,
between the parties with respect to that subject matter, including, without
limitation, that certain offer letter bearing the date December 22, 2005 from
the Company to Executive. Notwithstanding the foregoing, this Agreement shall
not supercede the negative equity agreement dated February 1, 2007 by and
between the Company and Executive, which agreement shall continue in full force
and effect.

23. Counterparts. This Agreement may be executed in multiple counterparts each
of which shall be deemed to be an original, and all of which together shall
constitute one agreement binding on the parties hereto.

24. Severability. Each provision of this Agreement shall be considered severable
and if for any reason any provision that is not essential to the effectuation of
the basic purpose of the Agreement is determined to be invalid or contrary to
any existing or future law, such invalidity shall not impair the operation of or
affect those provisions of this Agreement that are valid.

25. Headings. Headings constrained in the Agreement are inserted for reference
and convenience only and in no way define, limit, extend or describe the scope
of this Agreement or the meaning or construction of any of the provisions
hereof.

 

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26. Survival of Terms. If this Agreement is terminated for any reason, the
provision of Sections 6 and 7 shall survive and the Executive and the Company,
as the case may be, shall continue to be bound by the terms thereof to the
extent provided therein.

27. No Duty to Seek Employment. The Executive and the Company acknowledge and
agree that nothing contained in the Agreement shall be construed as requiring
Executive to seek or accept alternative or replacement employment in the event
of his termination of employment by the Company for any reason, and no payment
or benefit payable hereunder shall be conditioned on Executive’s seeking or
accepting such alternative or replacement employment.

IN WITNESS HEREOF, the parties hereto have executed this Employment Agreement on
the day and year first above written.

 

CORTEX PHARMACEUTICALS, INC. By:   /s/ Roger G. Stoll   Name: Roger G. Stoll  
Its: Exec. Chairman EXECUTIVE /s/ Mark A. Varney MARK VARNEY

 

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