EXHIBIT 10.1

 
EMPLOYMENT AGREEMENT
 
This Employment Agreement (this “Agreement”) is made and entered into as of
May 4, 2009 (the “Effective Date”) by and between CytRx Corporation, a Delaware
corporation (“Employer”), and Jaisim Shah, an individual and resident of the
State of California (“Employee”).
 
WHEREAS, Employer desires to employ Employee, and Employee is willing to be
employed by Employer, on the terms set forth in this Agreement.
 
NOW, THEREFORE, upon the above premises, and in consideration of the mutual
covenants and agreements hereinafter contained, the parties hereto agree as
follows.
 
1.           Employment.  Effective as of the Effective Date, Employer shall
employ Employee, and Employee shall serve, as Employer’s Chief Business Officer
and Senior Vice President-Business Development on the terms set forth herein.
 
2.           Duties; Place of Employment.  Employee shall perform in a
professional and business-like manner, and to the best of his ability, the
duties described on Schedule 1 to this Agreement and such other duties as are
assigned to him from time to time by Employer’s President and Chief Executive
Officer.  Employee understands and agrees that his duties, title and authority
may be changed from time to time in the discretion of Employer’s President and
Chief Executive Officer.  Subject to the next succeeding sentence, Employee’s
services hereunder shall be rendered at Employer’s corporate offices in Los
Angeles, California, except for travel when and as required in the performance
of Employee’s duties hereunder.  Employee generally shall be required to be
physically present, and to perform his services hereunder, at Employee’s
corporate headquarters not less than five consecutive business days per
month.  Employee and Employer shall consult with each other from time to time
regarding the optimal scheduling of Employee’s time at Employer’s corporate
offices.  Except as provided above, Employee may work remotely from his
residence.  When not present at Employer’s corporate offices, Employee shall
make himself readily accessible to Employer by telephone, via the Internet or
other remote access, as Employer deems reasonably necessary for the performance
of Employee’s services hereunder.  Employer shall make available to Employee
remote computer access to Employer’s computerized systems.
 
3.           Time and Efforts.  Employee shall devote all of his business time,
efforts, attention and energies to Employer’s business and to discharge his
duties hereunder, except that he shall be permitted to continue to serve on the
board of directors of up to two (2) other companies for whom he currently serves
as of the date of this Agreement; provided that such position(s) do not pose any
direct conflict of interest and that he does not spend more than 5% of his
business time serving on those boards.
 
4.           Term.  The term (the “Term”) of Employee’s employment hereunder
shall commence on the Effective Date and shall expire on December 31, 2010,
unless sooner
 

 
 

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terminated in accordance with Section 6.  Neither Employer nor Employee shall
have any obligation to extend or renew this Agreement, except that Employer
agrees to provide notice of non-renewal no later than December 1, 2010.  In the
event that Employer does not offer to extend or renew the Agreement, Employer
shall continue to pay Employee his salary as provided for in Section 5.1 during
the period commencing on the final date of the Term and ending on (a) June 30,
2011 or (b) the date of Employee’s re-employment with another employer,
whichever is earlier; provided that, as a condition to Employer’s obligations
under this sentence, Employee shall have executed and delivered to Employer a
Separation Agreement and General Release in the form attached hereto as
Exhibit A.  Employee shall notify Employer immediately in the event Employee
accepts such employment with another employer.
 
5.           Compensation.  As the total consideration for Employee’s services
rendered hereunder, Employer shall pay or provide Employee the following
compensation and benefits:
 
5.1.           Salary.  Employee shall be entitled to receive an annual salary
of Three Hundred Thousand Dollars ($300,000), payable in accordance with
Employer’s normal payroll policies and procedures.
 
5.2.           Performance Bonus.  Employee shall be entitled to a performance
bonus from time to time in an amount equal to one percent (1%) of all up-front
monies received by Employer pursuant to each strategic partnership, sale of
assets and out-license arrangement consummated by Employer during the Term, or
within six months thereafter, in which Employee was significantly involved on
Employer’s behalf.  Such performance bonus shall be payable by Employer within
thirty (30) days following Employer’s receipt of such monies.  For clarity,
Employer’s obligations under this Section 5.2 are conditioned upon its actual
receipt of monies pursuant to such a transaction.  No bonus shall be paid with
respect to any milestone payments, royalty payments, expense sharing or expense
advancements received by Employer.  Notwithstanding anything to the contrary
herein, Employer’s obligations under this Section 5.2 shall not apply to
financing transactions involving the sale of Employer’s securities, or any sale
of all or substantially all of Employer’s assets.  Any bonus payable hereunder
shall be reduced by any amounts paid by Employer for third party investment
banking services for the respective transaction.
 
5.3.           Discretionary Bonus.  Employee also may be eligible for a bonus
from time to time for his services during the Term.  Employee’s eligibility to
receive a bonus, any determination to award Employee such a bonus and, if
awarded, the amount thereof, shall be in Employer’s sole discretion.  For 2009,
any discretionary bonus shall not be prorated, and instead shall be commensurate
to a full year of service.
 
5.4.           Stock Options.  Employer shall grant Employee as of the Effective
Date a nonqualified stock option under Employer’s 2000 Long-Term Incentive Plan
(the “Plan”) to purchase 150,000 shares of Employer’s common stock (the
“Option”).  The Option shall vest and become exercisable in 36 equal monthly
installments beginning on the one-month anniversary of the Effective Date and
continuing on each succeeding
 
monthly anniversary of the Effective Date until the Option shall have become
fully vested, provided, in each case, that Employee remains in the continuous
employ of Employer through such anniversary dates.  The Option shall (a) be
exercisable at an exercise price equal to $0.41 per share, (b) have a term of
ten years, and (c) be on such other terms as shall be determined by Employer’s
Board of Directors (or the Compensation Committee of the Board) and set forth in
a customary form of stock option agreement under the Plan evidencing the
Option.  Notwithstanding anything to the contrary in Section 6.2 or other
provision of this Agreement or of the stock option agreement evidencing the
Option, upon the occurrence of a “Change in Control” (as defined in the Plan),
the Option shall thereupon vest and become exercisable as to all of the shares
covered thereby in accordance with the terms of the Plan.
 
5.5.           Expense Reimbursement.  Employer shall reimburse Employee for
reasonable and necessary business expenses incurred by Employee in connection
with the performance of Employee’s duties in accordance with Employer’s usual
practices and policies in effect from time to time.  When Employee travels to
Employer’s corporate offices, Employer shall pay for reasonable lodging and
transportation (including flights), but shall not pay for food or other
incidentals.
 
5.6.           Vacation.  Employee shall be entitled to twenty business days of
vacation each year during the Term in accordance with Employer’s vacation policy
in effect from time to time.
 
5.7.           Employee Benefits.  Employee shall be eligible to participate in
any medical insurance and other employee benefits made available generally by
Employer to all of its employees under its group plans and employment policies
in effect during the Term.  Schedule 2 hereto sets forth a summary of such plans
and policies as currently in effect.  Employee acknowledges and agrees that, any
such plans or policies now or hereafter in effect may be modified or terminated
by Employer at any time in its discretion.
 
5.8.           Payroll Taxes.  Employer shall have the right to deduct from the
compensation and benefits due to Employee hereunder any and all sums required
for social security and withholding taxes and for any other federal, state, or
local tax or charge which may be in effect or hereafter enacted or required as a
charge on the compensation or benefits of Employee.
 
6.           Termination.  This Agreement may be terminated as set forth in this
Section 6.
 
6.1.           Termination by Employer for Cause.  Employer may terminate
Employee’s employment hereunder for “Cause” upon notice to Employee.  “Cause”
for this purpose shall mean any of the following:
 
(a)           Employee’s breach of any material term of this Agreement; provided
that the first occasion of any particular breach shall not constitute such Cause
 

 
 

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unless Employee shall have previously received written notice from Employer
stating the nature of such breach and affording Employee at least ten days to
correct such breach;
 
(b)           Employee’s conviction of, or plea of guilty or nolo contendere to,
any misdemeanor, felony or other crime of moral turpitude;
 
(c)           Employee’s act of fraud or dishonesty injurious to Employer or its
reputation;
 
(d)           Employee’s continual failure or refusal to perform his material
duties as required under this Agreement after written notice from Employer
stating the nature of such failure or refusal and affording Employee at least
ten days to correct the same;
 
(e)           Employee’s act or omission that, in the reasonable determination
of Employer’s Board of Directors (or a Committee of the Board), indicates
alcohol or drug abuse by Employee; or
 
(f)           Employee’s act or personal conduct that, in the reasonable
judgment of Employer’s Board of Directors (or a Committee of the Board), gives
rise to a material risk of liability of Employee or Employer under federal or
applicable state law for discrimination, or sexual or other forms of harassment,
or other similar liabilities to subordinate employees.
 
Upon termination of Employee’s employment by Employer for Cause, all
compensation and benefits to Employee hereunder shall cease and Employee shall
be entitled only to payment, not later than the date of termination, of any
accrued but unpaid salary and unused vacation as provided in Sections 5.1 and
5.6 as of the date of such termination and any unpaid bonus that may have been
earned or awarded Employee as provided in Section 5.2 and Section 5.3 prior to
such date.  Notwithstanding anything to the contrary herein, any bonus pursuant
to Section 5.2 shall be payable only with respect to transactions completed
prior to Employee’s termination for Cause, and shall be payable at the time set
forth in Section 5.2.
 
6.2.           Termination by Employer without Cause.  Employer may also
terminate Employee’s employment without Cause upon ten days notice to
Employee.  Upon termination of Employee’s employment by Employer without Cause,
all compensation and benefits to Employee hereunder shall cease and Employee
shall be entitled to (a) payment of (1) any accrued but unpaid salary and unused
vacation as of the date of such termination as required by California law, which
shall be due and payable upon the effective date of such termination, and (2) an
amount, which shall be due and payable within ten days following the effective
date of such termination, equal to six months’ salary as provided in
Section 5.1, and (b) continued participation, at Employer’s cost and expense,
for a period of six months following such termination, in any Employer-sponsored
group benefit plans in which Employee was participating as of the date of
termination, provided that, as a condition to Employer’s obligations under
 

 
 

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Section 6.2(a)(2) and 6.2(b), Employee shall have executed and delivered to
Employer a Separation Agreement and General Release in the form attached hereto
as Exhibit A.
 
6.3.           Death or Disability.  Employee’s employment will terminate
automatically in the event of Employee’s death or upon notice from Employer in
event of his permanent disability.  Employee’s “permanent disability” shall have
the meaning ascribed to such term in any policy of disability insurance
maintained by Employer (or by Employee, as the case may be) with respect to
Employee or, if no such policy is then in effect, shall mean Employee’s
inability to fully perform his duties hereunder for any period of at least
75 consecutive days or for a total of 90 days, whether or not consecutive.  Upon
termination of Employee’s employment as aforesaid, all compensation and benefits
to Employee hereunder shall cease and Employer shall pay to the Employee’s heirs
or personal representatives, not later than ten days after the date of
termination, any accrued but unpaid salary and unused vacation as of the date of
such termination as required by California law.
 
7.           Confidentiality.  While this Agreement is in effect and for a
period of five years thereafter, Employee shall hold and keep secret and
confidential all “trade secrets” (within the meaning of applicable law) and
other confidential or proprietary information of Employer and shall use such
information only in the course of performing Employee’s duties hereunder;
provided, however, that with respect to trade secrets, Employee shall hold and
keep secret and confidential such trade secrets for so long as they remain trade
secrets under applicable law.  Employee shall maintain in trust all such trade
secrets or other confidential or proprietary information, as Employer’s
property, including, but not limited to, all documents concerning Employer’s
business, including Employee’s work papers, telephone directories, customer
information and notes, and any and all copies thereof in Employee’s possession
or under Employee’s control.  Upon the expiration or earlier termination of
Employee’s employment with Employer, or upon request by Employer, Employee shall
deliver to Employer all such documents belonging to Employer, including any and
all copies in Employee’s possession or under Employee’s control.
 
8.           Equitable Remedies; Injunctive Relief.  Employee hereby
acknowledges and agrees that monetary damages are inadequate to fully compensate
Employer for the damages that would result from a breach or threatened breach of
Section 7 of this Agreement and, accordingly, that Employer shall be entitled to
equitable remedies, including, without limitation, specific performance,
temporary restraining orders, and preliminary injunctions and permanent
injunctions, to enforce such Section without the necessity of proving actual
damages in connection therewith.  This provision shall not, however, diminish
Employer’s right to claim and recover damages or enforce any other of its legal
or equitable rights or defenses.
 
9.           Indemnification; Insurance.  Employer and Employee acknowledge
that, as the Chief Business Officer and Senior Vice President-Business
Development of the Employer, Employee shall be a corporate officer of Employer
and, as such, Employee shall be entitled to indemnification to the full extent
provided by Employer to its officers,
 

 
 

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directors and agents under the Employer’s Certificate of Incorporation and
Bylaws as in effect as of the date of this Agreement.  Subject to his
insurability thereunder, effective the Effective Date, Employer shall add
Employee as an additional insured under its current policy of directors and
officers liability insurance and shall use commercially reasonable efforts to
continue to insure Employee thereunder, or under any replacement policies in
effect from time to time, during the Term.
 
10.           Severable Provisions.  The provisions of this Agreement are
severable and if any one or more provisions is determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions, and any
partially unenforceable provisions to the extent enforceable, shall nevertheless
be binding and enforceable.
 
11.           Successors and Assigns.  This Agreement shall inure to the benefit
of and shall be binding upon Employer, its successors and assigns and Employee
and his heirs and representatives; provided, however, that neither party may
assign this Agreement without the prior written consent of the other party.
 
12.           Entire Agreement.  This Agreement contains the entire agreement of
the parties relating to the subject matter hereof, and the parties hereto have
made no agreements, representations or warranties relating to the subject matter
of this Agreement that are not set forth otherwise herein.  This Agreement
supersedes any and all prior or contemporaneous agreements, written or oral,
between Employee and Employer relating to the subject matter hereof.  Any such
prior or contemporaneous agreements are hereby terminated and of no further
effect, and Employee, by the execution hereof, agrees that any compensation
provided for under any such agreements is specifically superseded and replaced
by the provisions of this Agreement.
 
13.           Amendment.  No modification of this Agreement shall be valid
unless made in writing and signed by the parties hereto and unless such writing
is made by an executive officer of Employer (other than Employee).  The parties
hereto agree that in no event shall an oral modification of this Agreement be
enforceable or valid.
 
14.           Governing Law.  This Agreement is and shall be governed and
construed in accordance with the laws of the State of California without giving
effect to California’s choice-of-law rules.
 
15.           Notice.  All notices and other communications under this Agreement
shall be in writing and mailed, telecopied (in case of notice to Employer only)
or delivered by hand or by a nationally recognized courier service guaranteeing
overnight delivery to a party at the following address (or to such other address
as such party may have specified by notice given to the other party pursuant to
this provision):
 
        If to Employer:
 
        CytRx Corporation
        11726 San Vicente Boulevard, Suite 650
        Los Angeles, California  90049
        Facsimile:  (310) 826-5529
        Attention: Chief Executive Officer
 
        If to Employee:
 
        Jaisim Shah
        __________________
        __________________
 

16.           Survival.  Sections 7 through 16 and 18 shall survive the
expiration or termination of this Agreement.
 
17.           Counterparts.  This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and all of which together shall
be deemed to be one and the same agreement.  A counterpart executed and
transmitted by facsimile shall have the same force and effect as an originally
executed counterpart.
 
18.           Attorney’s Fees.  In any action or proceeding to construe or
enforce any provision of this Agreement the prevailing party shall be entitled
to recover its or his reasonable attorneys’ fees and other costs of suit (up to
a maximum of $50,000) in addition to any other recoveries.
 
IN WITNESS WHEREOF, this Agreement is executed as of the day and year first
above written.
 

 
“EMPLOYER”
 
CytRx Corporation
 
By: /s/ STEVEN A. KRIEGSMAN
Steven A. Kriegsman
President & Chief Executive Officer
 
 
 
“EMPLOYEE”
 
/s/ JAISIM SHAH
Jaisim Shah

 

 
 

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