EXHIBIT 10.1

EMPLOYMENT AGREEMENT
 
This Employment Agreement (this “Agreement”) is made and entered into as of
October 12, 2009 (the “Effective Date”) by and between CytRx Corporation, a
Delaware corporation (“Employer”), and Daniel Levitt, M.D., Ph.D., 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 Medical Officer
on the terms set forth herein.
 
2.           Duties; Places 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 succeeding sentences, Employee’s
services hereunder shall be rendered at Employer’s San Francisco office and its
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 three consecutive
business days per week for not more than 46 weeks per year, reduced by each week
when traveling for the Employer’s business.  Employee and Employer shall consult
with each other from time to time regarding the optimal scheduling of Employee’s
time at Employer’s San Francisco and corporate offices.  Employee may work
remotely from the San Francisco office and during such time, 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 in Employer’s San Francisco office to Employer’s computerized
systems and shall provide technical and hardware support.
 
3.           Time and Efforts.  Subject to this Section 3, Employee shall devote
all of his business time, efforts, attention and energies to Employer’s business
and to discharge his duties hereunder.  Employer agrees that Employee may
continue to serve as a director on the board of directors of Aquinox Corp. and
as a director and treasurer of the board of the San Francisco SPCA.  In
addition, Employee may serve on the board or advisory committee of one other
company or organization from time to time, provided that such company or
organization is not directly competitive with Employer and provided that
Employer has consented to such role by Employee, which consent shall not be
unreasonably withheld.
 
 

 
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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 terminated in accordance with Section 6.  Neither Employer nor
Employee shall have any obligation to extend or renew this Agreement.  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 Seventy Five Thousand Dollars ($375,000), payable in accordance
with Employer’s normal payroll policies and procedures.
 
5.2.           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; provided
that the bonus payable with respect to calendar year 2010 shall not be less than
25% of Employee’s base salary at the time that bonus is paid.
 
5.3.           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 500,000 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 $1.06
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 entire (100%) Option shall thereupon vest and
become exercisable as to all of the shares covered thereby in accordance with
the terms of the Plan.
 

 
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5.4.           Expense Reimbursement.  (a) 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.  (b) When Employee travels
to Employer’s corporate offices, Employer shall pay for round-trip airfare and
airport parking, but shall not pay for food or other incidentals except as
specifically set forth herein.  During the Term, Employer shall provide Employee
with (i) access to a furnished apartment leased by Employer in reasonable
proximity to Employer’s corporate offices, inclusive of parking, utilities,
cable and Internet access, weekly cleaning and laundry service, (ii)
Employer-paid memberships to (x) a health club reasonably near Employer’s
corporate offices and (y) one airline club, and (iii) the use of a rental car
leased by Employer with Employer-paid insurance for use while in Los Angeles,
California.
 
5.5.           Tax Gross-Ups.
 
(a)           Travel and Housing Payments.  In the event it shall be determined
that any payment by the Employer to or for the benefit of Employee under Section
5.4(b) above (whether paid or payable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 5.5) (a “Travel and Housing Payment”) would be subject to
federal or state income or payroll tax (such income and payroll tax, together
with any such interest and penalties, are hereinafter collectively referred to
as the “Additional Section 5.4(b) Income Tax”), then Employee shall be entitled
to receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by Employee of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) imposed upon
the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal
to the Additional Section 5.4(b) Income Tax imposed upon the Travel and Housing
Payments.
 
(b)           Change in Control Payments.  In the event it shall be determined
that any payment or distribution by the Employer to or for the benefit of
Employee (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement, including Section 5.3 above, or otherwise, but
determined without regard to any additional payments required under this Section
5.5) (a “Change in Control Payment”) would be subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or
any interest or penalties are incurred by Employee with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the “Excise Tax”), then Employee shall
be entitled to receive an additional payment (a “Parachute Gross-Up Payment”) in
an amount such that after payment by Employee of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Parachute Gross-Up Payment,
Employee retains an amount of the Parachute Gross-Up Payment equal to the Excise
Tax imposed upon the Change in Control Payments.
 

 
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(c)           Subject to the provisions of Section 5.5(d) hereof, all
determinations required to be made under this Section 5.5, including whether and
when a Gross-Up Payment or a Parachute Gross-Up Payment is required and the
amount of such Gross-Up Payment or Parachute Gross-Up Payment, whichever shall
apply, and the assumptions to be used in arriving at such determination, shall
be made by the certified public accounting firm designated by the Employer (the
“Accounting Firm”) which shall provide detailed supporting calculations both to
the Employer and Employee within 15 business days of the receipt of notice from
Employee that there has been a Change in Control Payment or the Travel and
Housing Payment is being treated as taxable income to Employee.  All fees and
expenses of the Accounting Firm shall be borne solely by the Employer.  Any
Gross-Up Payment or Parachute Gross-Up Payment, as determined pursuant to this
Section 5.5, shall be paid by the Employer to Employee within five days of the
receipt of the Accounting Firm’s determination.  Any determination by the
Accounting Firm shall be binding upon the Employer and Employee.  As a result of
the uncertainty in the application of Sections 61 or 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments or Parachute Gross-Up Payments which will not
have been made by the Employer should have been made (“Underpayment”),
consistent with the calculations required to be made hereunder.  In the event
that the Employer exhausts its remedies pursuant to Section 5.5(d) and Employee
thereafter is required to make a payment of any Additional Section 5.4(b) Income
Tax or any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Employer to or for the benefit of Employee.
 
(d)           Employee shall notify the Employer in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Employer of the Gross-Up Payment or the Parachute Gross-Up Payment.  Such
notification shall be given as soon as practicable but no later than thirty days
after Employee is informed in writing of such claim and shall apprise the
Employer of the nature of such claim and the date on which such claim is
requested to be paid.  Employee shall not pay such claim prior to the expiration
of the 30-day period following the date on which it gives such notice to the
Employer (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due).  If the Employer notifies Employee in
writing prior to the expiration of such period that it desires to contest such
claim, Employee shall:  give the Employer any information reasonably requested
by the Employer relating to such claim,
 
(i)           take such action in connection with contesting such claim as the
Employer shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Employer,
 
(ii)           cooperate with the Employer in good faith in order effectively to
contest such claim, and
 

 
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(iii)           permit the Employer to participate in any proceedings relating
to such claim;
 
provided, however, that the Employer shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Employee harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses.  Without limitation of the foregoing provisions
to this Section 5.5(d), the Employer shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim.
 
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
unless Employee shall have previously received written notice from Employer
stating the nature of such breach and affording Employee at least ten business
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;
 

 
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(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 business 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 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 three days after the date of
termination, of any accrued but unpaid salary and unused vacation as provided in
Sections 5.1 and 5.5 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 prior
to such date.
 
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, the
minimum bonus described in Section 5.2 applied to the base salary paid through
the date of termination, any Tax Gross-Up or Parachute Tax Gross-Up payment as
described in Section 5.5 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 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, the minimum bonus described in
Section 5.2 applied to the base salary paid through the date of termination, any
Tax Gross-Up or Parachute Tax Gross-Up payment as described in Section 5.5  and
unused vacation as of the date of such termination as required by California
law.
 

 
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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 Medical Officer 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,
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 thereunder1, effective on 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.
 
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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:
 
       Daniel Levitt, M.D., Ph.D.
       __________________
       __________________
 

16.           Survival.  Sections 5.5, 6.2., 6.3, 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 $15,000) 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/ DANIEL LEVITT                                                               
Daniel Levitt, M.D., Ph.D.

 
 
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