Exhibit 10.1
 
EMPLOYMENT AGREEMENT
 
AGREEMENT (the “Agreement”), dated as of June 25, 2008, by and between ZIOPHARM
Oncology, Inc., a Delaware corporation with principal executive offices at 1180
Avenue of the Americas, New York, NY 10036 (the “Company”), and RICHARD E.
BAGLEY, residing at 197 Eighth Street, #503, Charlestown, MA 02129 (the
“Executive”).
 
W I T N E S S E T H:
 
WHEREAS, the Company desires to continue to employ the Executive as President of
the Company, and the Executive desires to serve the Company in that capacity,
upon the terms and subject to the conditions contained in this Agreement;
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto hereby agree as follows:
 
1. Employment.
 
(a) Services. During the Term (as hereinafter defined), the Executive will be
employed by the Company as its President and Chief Operating Officer. The
Executive will report to the Chief Executive Officer of the Company and shall
perform such duties as are consistent with the position of President and Chief
Operating Officer of the Company (the “Services”). The Executive agrees to
perform such duties faithfully, to use his best efforts to advance the best
interests of the Company, to devote all of his business time, attention and
energies to the business of the Company, and while he remains employed, not to
engage in any other business activity, whether or not such business activity is
pursued for gain, profit or other pecuniary advantage, that will interfere with
the performance by the Executive of his duties hereunder or the Executive’s
availability to perform such duties, or that will adversely affect, or
negatively reflect upon, the Company.
 
(b) Directorship. The Company shall use its best efforts to cause the Executive
to be elected as a member of the Board of Directors of the Company (the “Board”)
throughout the Term (as defined below) and shall include him in the management
slate for election as a director at every stockholders meeting during the Term
at which his term as a director would otherwise expire. The Executive agrees to
accept election, and to serve during the Term, as director of the Company,
without any compensation therefor other than as specified in this Agreement.
 
(c) Acceptance. Executive hereby accepts such employment and agrees to render
the Services.
 
2. Term.
 
The Executive's employment under this Agreement (the "Term") shall commence as
of July 1, 2008 and shall continue for a term of three (3) years, unless sooner
terminated pursuant to Section 8 of this Agreement. Notwithstanding anything to
the contrary contained herein, the provisions of this Agreement governing
protection of Confidential Information shall continue in effect as specified in
Section 5 hereof and survive the expiration or termination hereof. The Term may
be extended for additional one (1) year periods upon mutual written consent of
the Executive and the Board. 
 
3. Place of Performance. 
 
The duties to be performed by the Executive hereunder shall be performed
primarily at the offices of the Company in Navy Yard Plaza, Boston,
Massachusetts, subject to reasonable travel requirements on behalf of the
Company, or such other place as the Board may reasonably designate. The
Executive acknowledges that the Company’s executive offices are located in New
York, New York, that the Company also maintains offices in New Haven,
Connecticut, and that Executive will be required to travel frequently to such
other offices of the Company.
 

 

 
 

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4. Compensation. As full compensation for the performance by the Executive of
his duties under this Agreement, the Company shall pay the Executive as follows:
 
(a) Base Salary. The Company shall pay Executive a salary (the “Base Salary”)
equal to Three Hundred Fifteen Thousand Dollars ($315,000) per year. Payment
shall be made semi-monthly, on the fifteenth and the last day of each calendar
month. The Board shall annually review the Base Salary to determine whether an
increase in the amount thereof is warranted.
 
(b) Performance Bonus. The Executive shall receive a targeted performance bonus
(the “Performance Bonus”), based on his performance as determined by the Board
for each calendar year or partial calendar year during the Term (each a “Bonus
Calculation Year”). The target amount of the Performance Bonus shall be $100,000
per annum ($50,000 for each of the partial calendar years ending December 31,
2008 and June 30, 2011), with the amount of the actual bonus payable each year
determined in accordance with the provisions of Schedule 4(b) attached hereto.
The amount so determined shall be payable within 30 days following December 31
of each calendar year during the Term (and partial calendar years ending
December 31, 2008 and June 30, 2011), provided that the Executive remains
employed by the Company on such date.
 
(c) Discretionary Bonus. At the sole discretion of the Board, the Executive
shall be eligible to receive an additional annual bonus (the “Discretionary
Bonus”) in such amount as may be determined by the Board based upon his
performance on behalf of the Company during each Bonus Calculation Year. The
Discretionary Bonus, if any, shall be payable at such times and in such manner
as the Board may determine in its sole discretion.
 
(d) Stock Options Awards. As additional compensation for the services to be
rendered by the Executive pursuant to this Agreement, the Company shall grant
the Executive an award of 60,000 options to purchase Common Stock of the Company
(“Stock Options”), which grant shall be effective as of the date of this
Agreement. The Stock Options shall be governed by the terms of the Company’s
Stock Option Plan, as the same may be amended from time to time, and shall vest,
if at all, in three equal annual installments on June 25, 2009, June 25, 2010,
and June 25, 2011, subject in each case to the provisions of Section 9 below. In
connection with such grant, the Executive shall enter into a Stock Option
Agreement with the Company, which will incorporate the foregoing vesting
schedule and the Stock Option provisions contained in Section 9 below. 
 
(e) Expenses. The Company shall reimburse the Executive for all reasonable out
of pocket expenses incurred by the Executive in furtherance of the business and
affairs of the Company, including reasonable travel and entertainment, upon
timely receipt by the Company of appropriate vouchers or other proof of the
Executive’s expenditures and otherwise in accordance with any expense
reimbursement policy as may from time to time be adopted by the Company. The
Company’s expense reimbursement policy generally requires that application for
reimbursement be made as soon as practicable after the expense is incurred, but
in no event more than one year after the date of the expense. Reimbursements are
made by the Company no less frequently than monthly.
 
(f) Vacation. The Executive shall, during the Term, be entitled to a vacation of
four (4) weeks per annum, in addition to holidays observed by the Company. The
Executive shall not be entitled to carry any vacation forward to the next year
of employment and shall not receive any compensation for unused vacation days.
 
(g) Other Benefits. The Executive shall be entitled to all rights and benefits
for which he shall be eligible under any benefit or other plans (including,
without limitation, dental, medical, medical reimbursement and hospital plans,
pension plans, employee stock purchase plans, profit sharing plans, bonus plans
and other so-called "fringe" benefits) as the Company shall make available to
its senior executives from time to time. In addition, the Company shall
reimburse the Executive for his reasonable professional dues.
 

 

 
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5. Confidential Information and Inventions.
 
(a) The Executive recognizes and acknowledges that in the course of his duties
he is likely to receive confidential or proprietary information owned by the
Company, its affiliates or third parties with whom the Company or any of such
affiliates has an obligation of confidentiality. Accordingly, during and after
the Term, the Executive agrees to keep confidential and not disclose or make
accessible to any other person or use for any other purpose other than in
connection with the fulfillment of his duties under this Agreement, any
Confidential and Proprietary Information (as defined below) owned by, or
received by or on behalf of, the Company or any of its affiliates.
“Confidential and Proprietary Information” shall include, but shall not be
limited to, confidential or proprietary scientific or technical information,
data, formulas and related concepts, business plans (both current and under
development), client lists, promotion and marketing programs, trade secrets, or
any other confidential or proprietary business information relating to
development programs, costs, revenues, marketing, investments, sales activities,
promotions, credit and financial data, manufacturing processes, financing
methods, plans or the business and affairs of the Company or of any affiliate or
client of the Company. The Executive expressly acknowledges the trade secret
status of the Confidential and Proprietary Information and that the Confidential
and Proprietary Information constitutes a protectable business interest of the
Company. The Executive agrees: (i) not to use any such Confidential and
Proprietary Information for himself or others; and (ii) not to take any Company
material or reproductions (including but not limited to writings,
correspondence, notes, drafts, records, invoices, technical and business
policies, computer programs or disks) thereof from the Company’s offices at any
time during his employment by the Company, except as required in the execution
of the Executive’s duties to the Company. The Executive agrees to return
immediately all Company material and reproductions (including but not limited,
to writings, correspondence, notes, drafts, records, invoices, technical and
business policies, computer programs or disks) thereof in his possession to the
Company upon request and in any event immediately upon termination of
employment.
 
(b) Except in furtherance of the business of the Company, or otherwise with
prior written authorization by the Company, the Executive agrees not to disclose
or publish any of the Confidential and Proprietary Information, or any
confidential, scientific, technical or business information of any other party
to whom the Company or any of its affiliates owes an obligation of confidence,
at any time during or after his employment with the Company. Nothing in the
foregoing shall be construed to prevent the Executive from disclosing or using
any Confidential or Proprietary Information that:
 
(i)  Executive can evidence through written documentation was in the Executive’s
possession or control prior to the date of disclosure;
 
(ii)  Executive can evidence through written documentation was in the public
domain or enters into the public domain through no improper act by Executive
 
(iii)  is approved for public release by written authorization of the Board;
 
(iv)  is required to be disclosed by legal, administrative or judicial process;
or
 
(v) is rightfully granted to Executive by sources independent of the Company,
its officers, employees, agents, affiliates and consultants.
 
(c) The Executive agrees that all inventions, discoveries, improvements and
patentable or copyrightable works (“Inventions”) initiated, conceived or made by
him, either alone or in conjunction with others, during the Term shall be the
sole property of the Company to the maximum extent permitted by applicable law
and, to the extent permitted by law, shall be “works made for hire” as that term
is defined in the United States Copyright Act (17 U.S.C.A., Section 101). The
Company shall be the sole owner of all patents, copyrights, trade secret rights,
and other intellectual property or other rights in connection therewith. The
Executive hereby assigns to the Company all right, title and interest he may
have or acquire in all such Inventions; provided, however, that the Board may in
its sole discretion agree to waive the Company’s rights pursuant to this Section
6(c) with respect to any Invention that is not directly or indirectly related to
the Company’s business. The Executive further agrees to assist the Company in
every proper way (but at the Company’s expense) to obtain and from time to time
enforce patents, copyrights or other rights on such Inventions in any and all
countries, and to that end the Executive will execute all documents necessary:
 

 

 
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(i) to apply for, obtain and vest in the name of the Company alone (unless the
Company otherwise directs) letters patent, copyrights or other analogous
protection in any country throughout the world and when so obtained or vested to
renew and restore the same; and
(ii) to defend any opposition proceedings in respect of such applications and
any opposition proceedings or petitions or applications for revocation of such
letters patent, copyright or other analogous protection.
 
(d) The Executive acknowledges that while performing the services under this
Agreement the Executive may locate, identify and/or evaluate patented or
patentable inventions having commercial potential in the fields of pharmacy,
pharmaceutical, biotechnology, healthcare, technology and other fields which may
be of potential interest to the Company (the “Third Party Inventions”). The
Executive understands, acknowledges and agrees that all rights to, interests in
or opportunities regarding, all Third-Party Inventions identified by the
Company, any of its officers, directors, employees (including the Executive),
agents or consultants during the Term as being of potential interest to the
Company shall be and remain the sole and exclusive property of the Company and
the Executive shall have no rights whatsoever to such Third-Party Inventions and
will not pursue for himself or for others any transaction relating to the
Third-Party Inventions which is not on behalf of the Company.
 
(e) The provisions of this Section 5 shall survive any termination of this
Agreement.
 
6. Non-Competition, Non-Solicitation and Non-Disparagement.
 
(a) The Executive understands and recognizes that his services to the Company
are special and unique and that in the course of performing such services the
Executive will have access to and knowledge of Confidential and Proprietary
Information (as defined in Section 5) and the Executive agrees that, during the
Term and for a period of twelve (12) months thereafter (subject to the
provisions of Section 9(e) hereof), he shall not without the consent of the
Company in any manner, directly or indirectly, on behalf of himself or any
person, firm, partnership, joint venture, corporation or other business entity
(“Person”), enter into or engage in any business which is engaged in any
business directly or indirectly competitive with the Company’s Business (as
defined below), either as an individual for his own account, or as a partner,
joint venturer, owner, executive, employee, independent contractor, principal,
agent, consultant, salesperson, officer, director or shareholder of a Person in
a business competitive with the Company within the geographic area of the
Company’s Business, which is deemed by the parties hereto to be worldwide. The
Executive acknowledges that, due to the nature of the Company’s Business, and
the importance to the Company’s Business of its Confidential and Proprietary
Information, a violation of this Section 6(a) could cause substantial damage to
the Company and its affiliates and, therefore, the Company has a strong
legitimate business interest in protecting the continuity of its business
interests and the restriction herein agreed to by the Executive narrowly and
fairly serves such an important and critical business interest of the Company.
For purposes of this Agreement, the “Company’s Business” shall mean the business
or businesses set forth on the attached Schedule 6(a), which shall be amended
from time to time upon the mutual written agreement of the parties, but which
will automatically include the research, development and commercialization of
any technologies that are licensed or otherwise acquired by the Company.
Notwithstanding the foregoing, nothing contained in this Section 6(a) shall be
deemed to prohibit the Executive from (i) acquiring or holding, solely for
investment, publicly traded securities of any corporation, some or all of the
activities of which are competitive with the business of the Company so long as
such securities do not, in the aggregate, constitute more than three percent
(3%) of any class or series of outstanding securities of such corporation.
 
(b) During the Term and for a period of twelve (12) months thereafter (subject
to the provisions of Section 9(e) hereof), the Executive shall not, directly or
indirectly, without the prior written consent of the Company:
 
(i) solicit or induce any employee of the Company to leave the employ of the
Company; or hire for any purpose any employee of the Company or any employee who
has left the employment of the Company within six months of the termination of
such employee’s employment with the Company or at any time in violation of such
employee’s non-competition agreement with the Company; or
 

 

 
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(ii) solicit or accept employment or be retained by any Person who, at any time
during the term of this Agreement, was an agent, client or customer of the
Company where his position will be related to the Company’s Business; or

(iii) solicit or accept the business of any agent, client or customer of the
Company with respect to products, services or investments similar to those
provided or supplied by the Company.

(c) The Company and the Executive each agree that both during the Term and at
all times thereafter, neither party shall directly or indirectly disparage,
whether or not true, the name or reputation of the other party or any of its
affiliates, including but not limited to, any officer, director, employee or
stockholder owning greater than five percent (5%) of the Company’s outstanding
Common Stock. This Section 6(c) shall not apply to (i) statements made by the
Executive in performing his duties in the ordinary course as President (e.g.,
employee evaluations and remarks made in private meetings of the Board) and (ii)
statements made by the Executive under oath in a legal proceeding, including
without limitation an investigation or administrative proceeding before any
governmental agency or instrumentality with regulatory authority over the
Company or its business.
 
(d) In the event that the Executive breaches any provisions of Section 5 or this
Section 6 or there is a threatened breach, then, in addition to any other rights
which the Company may have, the Company shall (i) be entitled, without the
posting of a bond or other security, to injunctive relief to enforce the
restrictions contained in such Sections and (ii) have the right to require the
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments and other benefits derived or received by the
Executive as a result of any transaction constituting a breach of any of the
provisions of Sections 5 or 6 and the Executive hereby agrees to account for and
pay over such amounts to the Company.
 
(e) Each of the rights and remedies enumerated in Section 6(d) shall be
independent of the others and shall be in addition to and not in lieu of any
other rights and remedies available to the Company at law or in equity. If any
of the covenants contained in this Section 6, or any part of any of them, is
hereafter construed or adjudicated to be invalid or unenforceable, the same
shall not affect the remainder of the covenant or covenants or rights or
remedies which shall be given full effect without regard to the invalid
portions. If any of the covenants contained in this Section 6 is held to be
invalid or unenforceable because of the duration of such provision or the area
covered thereby, the parties agree that the court making such determination
shall have the power to reduce the duration and/or area of such provision and in
its reduced form such provision shall then be enforceable. No such holding of
invalidity or unenforceability in one jurisdiction shall bar or in any way
affect the Company’s right to the relief provided in this Section 6 or otherwise
in the courts of any other state or jurisdiction within the geographical scope
of such covenants as to breaches of such covenants in such other respective
states or jurisdictions, such covenants being, for this purpose, severable into
diverse and independent covenants.
 
(f) In the event that an actual proceeding is brought in equity to enforce the
provisions of Section 5 or this Section 6, the Executive shall not urge as a
defense that there is an adequate remedy at law nor shall the Company be
prevented from seeking any other remedies which may be available.
 
(g) The provisions of this Section 6 shall survive any termination of this
Agreement.
 
7. Representations and Warranties by the Executive.
 
The Executive hereby represents and warrants to the Company that (a) the
Executive has the full right, power and legal capacity to enter and deliver this
Agreement and to perform his duties and other obligations hereunder; (b) this
Agreement constitutes the legal, valid and binding obligation of the Executive
enforceable against him in accordance with its terms; and (c) no approvals or
consents of any persons or entities are required for the Executive to execute
and deliver this Agreement or perform his duties and other obligations
hereunder.
 

 

 
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8. Termination. The Executive’s employment hereunder shall be terminated upon
the Executive’s death and may be terminated as follows:
 
(a) The Executive’s employment hereunder may be terminated by the Board for
Cause. Any of the following actions by the Executive shall constitute “Cause”:
 
(i) The willful misconduct, failure, disregard or refusal by the Executive to
perform any of the material duties of his employment hereunder including,
without limitation, insubordination with respect to written directions received
by the Executive from the Board, provided, however, that the Executive shall
have one (1) opportunity to cure any breach of this Section 8(a)(i) within five
(5) business days (“Cure Period”) of written notice to the Executive;

(ii) Any willful, intentional or grossly negligent act by the Executive having
the effect of injuring, in a material way (whether financial or otherwise and as
determined in good faith by a majority of the Board), the business or reputation
of the Company or any of its affiliates, including but not limited to, any
officer, director, executive of the Company or any stockholder owning greater
than five percent (5%) of the Company’s outstanding Common Stock; provided,
however, that the Executive shall be granted an opportunity to appear personally
before the Board during its deliberations to explain the reasons for such
conduct;
 
(iii) The Executive’s conviction of any felony or a misdemeanor involving moral
turpitude (including entry of a nolo contendere plea);
 
(iv) The determination by the Company, after a reasonable and good-faith
investigation by the Company following a written allegation by another employee
of the Company, that the Executive engaged in some form of harassment prohibited
by law (including, without limitation, harassment that constitutes age, sex or
race discrimination), unless the Executive’s actions were specifically directed
by the Board;
 
(v) Any misappropriation or embezzlement of the property of the Company or its
affiliates;
 
(vi) Breach by the Executive of any of the provisions of Sections 5, 6 or 7 of
this Agreement; and
(vii) Breach by the Executive of any provision of this Agreement other than
those contained in Sections 5, 6 or 7 which is not cured by the Executive within
thirty (30) days after notice thereof is given to the Executive by the Company.

(b) The Executive’s employment hereunder may be terminated by the Board due to
the Executive’s Disability. For purposes of this Agreement, a termination for
“Disability” shall occur upon rendering of a written termination notice by the
Board after the Executive has been unable to substantially perform his duties
hereunder for 90 or more consecutive days, or more than 120 days in any
consecutive 12 month period, by reason of any physical or mental illness or
injury. For purposes of this Section 8(b), the Executive agrees to make himself
available and to cooperate in any reasonable examination by a reputable
independent physician retained by the Company.
 

 

 
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(c) The Executive’s employment hereunder may be terminated by the Board (or its
successor) upon the occurrence of a Change of Control. For purposes of this
Agreement, “Change of Control” means (i) the acquisition, directly or
indirectly, following the date hereof by any person (as such term is defined in
Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended),
in one transaction or a series of related transactions, of securities of the
Company representing in excess of fifty percent (50%) or more of the combined
voting power of the Company’s then outstanding securities if such person (or his
or its affiliate(s)) does not own in excess of 50% of such voting power on the
date of this Agreement, or (ii) the future disposition by the Company (whether
direct or indirect, by sale of assets or stock, merger, consolidation or
otherwise) of all or substantially all of its assets in one transaction or
series of related transactions (other than (i) a merger effected exclusively for
the purpose of changing the domicile of the Company, (ii) financing activities
in the ordinary course in which the Company sells its equity securities, or
(iii) a transfer to a person or entity that, immediately after the transfer, is
or is controlled by a person or entity that controlled the Company before the
transfer, within the meaning of Section 1.409A-3(i)(5)(vii)(B) of the Treasury
Regulations).
 
(d) The Executive’s employment hereunder may be terminated by the Executive for
Good Reason, provided that such termination occurs within two (2) years
following the occurrence of an event of Good Reason (as defined below) and
provided, further, that the Executive has provided the Board with written notice
of an event of Good Reason within ninety (90) days following the date of its
occurrence and the Company shall have failed to cure the event of Good Reason
within thirty (30) days following the Board’s receipt of such notice from the
Executive. For purposes of this Agreement, “Good Reason” shall mean any of the
following: (i) the assignment to the Executive of duties that constitute a
material diminution in the Executive's position, responsibilities, titles or
offices as described herein; (ii) any material reduction by the Company of the
Executive's duties and responsibilities; (iii) any reduction by the Company of
the Executive's compensation or benefits payable hereunder (it being understood
that a reduction of benefits applicable to all employees of the Company,
including the Executive, shall not be deemed a reduction of the Executive's
compensation package for purposes of this definition); (iv) a material breach by
the Company of this Agreement that is not cured within 30 days after receipt by
the Company of written notice of such breach; or (v) upon a Change of Control
(x) that results in the elimination of the Board or (y) in which representatives
of the Board just prior to the event causing the Change of Control do not
represent a majority of the Board immediately subsequent to the event causing
the Change of Control.
 
9. Compensation Following Termination.
 
(a) If the Executive’s employment is terminated as a result of his death or
Disability, the Company shall pay to the Executive or to the Executive’s estate,
as applicable, his Base Salary for a period of one year following the date of
termination and any accrued but unpaid Bonus and expense reimbursement amounts
for expense incurred through the date of his Death or Disability. Any Stock
Options that have vested as of the date of the Executive’s termination shall
remain exercisable for a period of 90 days. All Stock Options that have not
vested as of the date of termination shall be deemed to have expired as of such
date.
 
(b) If the Executive’s employment is terminated by the Board for Cause, then the
Company shall pay to the Executive his Base Salary through the date of his
termination and any expense reimbursement amounts for expense incurred through
the date of termination. The Executive shall have no further entitlement to any
other compensation or benefits from the Company. All Stock Options that have not
vested as of the date of termination shall be deemed to have expired as of such
date. Any Stock Options that have vested as of the date of the Executive’s
termination for Cause shall remain exercisable for a period of 90 days.
 
(c) If the Executive’s employment is terminated by the Company (or its
successor) without Cause and either (i) within eighteen (18) months following
the occurrence of a Change of Control or (ii) prior to and in connection with
the occurrence of a Change in Control, then the Company (or its successor, as
applicable) shall continue to pay to the Executive his Base Salary and employee
benefits for a period of one year following such termination of employment, as
well as any expense reimbursement amounts for expenses incurred through the date
of termination. Any Stock Options that have vested (or been deemed to have
vested pursuant to the provisions of Section 9(f) below) as of the date of the
Executive’s termination shall remain exercisable for a period of 90 days. In the
case of a termination pursuant to this Section 9(c) that occurs prior to the
date of a Change of Control, all Stock Options that have not vested as of the
date of termination shall remain outstanding until the earlier of (x) 90 days
following the date they become vested pursuant to Section 9(f) by reason of the
Change of Control, or (y) the date of exercise of such Stock Options, or (z) the
date on which the original term of any such Stock Options expires (without
regard to the termination of the Executive’s employment). All Stock Options that
have not vested (or been deemed to have vested) as of the date of the
Executive’s termination or as of the date determined pursuant to Section 9(f)
below, as the case may be, shall be deemed to have expired as of such date.
 
(d) If the Executive’s employment is terminated by the Company without Cause
other than as a result of the Executive’s death or Disability and other than for
reasons specified in Section 9(c), or if the Executive’s employment is
terminated by the Executive for Good Reason, then the Company shall continue to
pay to the Executive his Base Salary and employee benefits for a period of one
year following such termination, as well as any expense reimbursement amounts
for expenses incurred through the date of termination. Any Stock Options that
have vested as of the date of the Executive’s termination shall remain
exercisable for a period of 90 days. All Stock Options that have not vested as
of the date of termination shall be deemed to have expired as of such date.
 

 

 
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(e) Following expiration and non-renewal of the Term, should the Company in its
sole discretion require that the Executive continue to comply with the terms of
Section 6(a) or Section 6(b) hereof, or both, the Company shall pay the
Executive his Base Salary for a period of one year following expiration of the
Term.
 
(f) Upon the occurrence of a Change of Control, all Stock Options held by the
Executive that are scheduled to vest by the end of the calendar year in which
such Change of Control occurs shall be accelerated and deemed to have vested as
of the date immediately preceding such Change of Control.
 
(g) This Section 9 sets forth the only obligations of the Company with respect
to the termination of the Executive’s employment with the Company, and the
Executive acknowledges that, upon the termination of his employment, he shall
not be entitled to any payments or benefits which are not explicitly provided in
Section 9.
 
(h) Upon termination of the Executive’s employment hereunder for any reason, the
Executive shall be deemed to have resigned as director of the Company, effective
as of the date of such termination.
 
(i) Amounts payable to the Executive pursuant to Sections 9(a), 9(c) 9(d), or
9(e) hereof shall only be paid following the Executive’s separation from service
with the Company. The time for payment of amounts due following the Executive’s
separation from service pursuant to this Section 9 shall be determined in
accordance with the Company’s regular payroll and bonus payment practices,
subject to the provisions of Section 409A of the Internal Revenue Code of 1986,
as amended, and the Treasury Regulations promulgated thereunder. Payments of
Base Salary following separation from service shall be made semi-monthly at the
same times as, and in accordance with, the Company’s regular payroll payments.
Payments for Performance Bonus, Discretionary Bonus or expense reimbursements
accrued with respect to periods of service completed prior to the Executive’s
separation from service, but unpaid at the time of termination of employment,
shall be due and payable at the same times as they otherwise would be due in
accordance with the Company’s regular bonus payment practices (i.e., Performance
Bonus within 30 days following the end of the Bonus Calculation Year;
Discretionary Bonus within 2 months following the end of a calendar year for
which bonus is granted). Notwithstanding any other provision of this Agreement,
no amount of Base Salary payable to the Executive by reason of the Executive’s
termination of his employment pursuant to Section 8(d) above, other than a
termination by reason of Section 8(d)(vi), and no amount in excess of $315,000
payable following the Executive’s separation from service for any reason shall
be paid earlier than the day following the date that is six (6) months after the
date of the Executive’s separation from service with the Company. For purposes
of this section 9(i), the term “separation from service” shall have the meaning
set forth in Section 1.409A-1(h)(1) of the Treasury Regulations, and the
Executive shall be deemed to be a “key employee” for purposes of such Treasury
Regulations.
 
(j) The provisions of this Section 9 shall survive any termination of this
Agreement.
 
10. Miscellaneous.
 
(a) Withholding. The Company shall withhold from all amounts payable to the
Executive under this Agreement all applicable federal, state and local income
taxes, Social Security contributions and such other payroll taxes and deductions
as may be required by law.
 
(b) This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York, without giving effect to its
principles of conflicts of laws.
 

 

 
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(c) Any dispute arising out of, or relating to, this Agreement or the breach
thereof (other than Sections 5 or 6 hereof), or regarding the interpretation
thereof, shall be finally settled by arbitration conducted in New York City in
accordance with the Employment Dispute Rules of the American Arbitration
Association then in effect before a single arbitrator appointed in accordance
with such rules. Judgment upon any award rendered therein may be entered and
enforcement obtained thereon in any court having jurisdiction. The arbitrator
shall have authority to grant any form of appropriate relief, whether legal or
equitable in nature, including specific performance. For the purpose of any
judicial proceeding to enforce such award or incidental to such arbitration or
to compel arbitration and for purposes of Sections 5 and 6 hereof, the parties
hereby submit to the non-exclusive jurisdiction of the Supreme Court of the
State of New York, New York County, or the United States District Court for the
Southern District of New York, and agree that service of process in such
arbitration or court proceedings shall be satisfactorily made upon it if sent by
registered mail addressed to it at the address referred to in paragraph (g)
below. The costs of such arbitration shall be borne proportionate to the finding
of fault as determined by the arbitrator. Judgment on the arbitration award may
be entered by any court of competent jurisdiction.
 
(d) This Agreement shall be binding upon and inure to the benefit of the parties
hereto, and their respective heirs, legal representatives, successors and
permitted assigns.
 
(e) This Agreement, and the Executive’s rights and obligations hereunder, may
not be assigned by the Executive. The Company may assign its rights, together
with its obligations, hereunder in connection with any sale, transfer or other
disposition of all or substantially all of its business or assets and shall
cause the acquirer to assume all of its obligations under this Agreement.
 
(f) This Agreement cannot be amended orally, or by any course of conduct or
dealing, but only by a written agreement signed by the parties hereto.
 
(g) The failure of either party to insist upon the strict performance of any of
the terms, conditions and provisions of this Agreement shall not be construed as
a waiver or relinquishment of future compliance therewith, and such terms,
conditions and provisions shall remain in full force and effect. No waiver of
any term or condition of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing and signed
by such party.
 
(h) All notices, requests, consents and other communications, required or
permitted to be given hereunder, shall be in writing and shall be delivered
personally or by an overnight courier service or sent by registered or certified
mail, postage prepaid, return receipt requested, to the parties at the addresses
set forth on the first page of this Agreement, and shall be deemed given when so
delivered personally or by overnight courier, or, if mailed, five days after the
date of deposit in the United States mails. Either party may designate another
address, for receipt of notices hereunder by giving notice to the other party in
accordance with this Section 10(h).
 
(i) This Agreement sets forth the entire agreement and understanding of the
parties relating to the subject matter hereof, and supersedes all prior
agreements, arrangements and understandings, written or oral, relating to the
subject matter hereof. No representation, promise or inducement has been made by
either party that is not embodied in this Agreement, and neither party shall be
bound by or liable for any alleged representation, promise or inducement not so
set forth.
 
(j) As used in this Agreement, “affiliate” of a specified Person shall mean and
include any Person controlling, controlled by or under common control with the
specified Person.
 
(k) The section headings contained herein are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Agreement.
 
(l) This Agreement may be executed in any number of counterparts, each of which
shall constitute an original, but all of which together shall constitute one and
the same instrument.
 
 

 

 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
 

        ZIOPHARM Oncology, Inc.  
   
   
    By:   /s/ Jonathan J. Lewis  

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Name: Jonathan J. Lewis, M.D., Ph.D.  
Title: Chief Executive Officer

 

       
EXECUTIVE
 
   
   
    By:   /s/ Richard E. Bagley  

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Name: Richard E. Bagley    

 

 
 

 

 
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 SCHEDULE 4(b)

Calculation of Performance Bonus

Prior to the beginning of each Bonus Calculation Year during the Term, the
Executive and the Compensation Committee of the Board shall agree upon five (5)
performance goals (“Targets”) for the Bonus Calculation Year. The amount of
Performance Bonus payable to the Executive pursuant to Section 4(b) of this
Agreement for any Bonus Calculation Year shall be determined based on the
Executive’s achievement of the Targets as follows:

With respect to each of the Targets, the Executive will receive $20,000 in
Performance Bonus if the Target is met on or before the end of the Bonus
Calculation Year (e.g., Performance Bonus of $100,000 if all Targets are met).
The amount of Performance Bonus pursuant to this paragraph shall be $10,000
(e.g., Performance Bonus of $50,000 if all Targets are met) with respect to the
Bonus Calculation Years ending on December 31, 2008 and June 30, 2011.

The Executive will receive $15,000 in Performance Bonus with respect to any
Target that has not been met on or before the end of the Bonus Calculation Year,
provided that either of the following has occurred: (1) (a) the Executive has
devoted his reasonable best business efforts toward achievement the Target
during the Bonus Calculation Year, and (b) substantial progress toward
accomplishment of the Target has occurred during the Bonus Calculation Year; or
(2) during the Bonus Calculation Year, the Company abandoned the business goal
that the Target was intended to address (e.g., Performance Bonus of $75,000 if
no Target is met, but the Executive has devoted his reasonable best business
efforts to achievement of all of the Targets). The amount of Performance Bonus
pursuant to this paragraph shall be $7,500 (e.g., Performance Bonus of $37,500
for all Targets) with respect to the Bonus Calculation Years ending on December
31, 2008 and June 30, 2011.

The Executive will receive $25,000 in Performance Bonus with respect to any
Target if the Target is exceeded during the Bonus Calculation Year and the Board
determines that the Executive’s performance with respect to the Target exceeded
expectations (e.g., Performance Bonus of $125,000 if the Executive’s performance
with respect to all Targets exceeded expectations). The amount of Performance
Bonus pursuant to this paragraph shall be $12,500 (e.g., Performance Bonus of
$62,500 for all Targets) with respect to the Bonus Calculation Years ending on
December 31, 2008 and June 30, 2011.

 

 

 
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SCHEDULE 6(a)

1. Developing, designing, producing, marketing, selling or rendering oncology
products in the class of arsenicals, products in the phosphoramidic nitrogen
mustard family and “mustard gas family,” and anti-mitotics with the same
mechanism as that in indibulin or products that are in the same chemical family
as those that have been or are being developed, designed, produced, marketed,
sold or rendered by the Corporation during the period of the Executive’s
employment with the Company.

 

 
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