Exhibit 10.4
EXECUTION COPY

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), effective as of September 8, 2015
(the “Effective Date”), is between Array BioPharma Inc., a Delaware corporation
(the “Company”), and Mary Patricia Henahan (“Employee”).

In consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:

1.    Employment. The Company hereby employs Employee and Employee hereby agrees
to be employed by the Company for the period and upon the terms and conditions
hereinafter set forth.

2.    Capacity and Duties. Employee shall be employed by the Company as Chief
Financial Officer. During her employment Employee shall perform the duties and
bear the responsibilities commensurate with her position and shall serve the
Company faithfully and to the best of her ability, under the direction of the
Board of Directors and the duly elected officers of the Company. Employee shall
devote her entire working time, attention and energies to the business of the
Company. Her actions shall at all times be such that they do not discredit the
Company or its products and services. Employee shall not engage in any other
business activity or activities that conflict with the proper performance of
Employee’s duties hereunder, including constituting a conflict of interest
between such activity and the Company’s business. Nothing in this paragraph
shall prevent Employee from serving on board of charitable or non-profit
organizations, subject to Company approval, or from engaging in personal
investing activities not involving any competitor of the Company. Exhibit A to
this Agreement contains a list of the other business and professional activities
in which Employee is currently engaged, if any, and have been approved to the
extent set forth in Exhibit A.

3.    Compensation.

(a)    For all services rendered by Employee the Company shall pay Employee
during the term of this Agreement an annual salary as set forth herein, payable
semimonthly in arrears. Employee’s initial annual salary shall be $360,000.
During the term of this Agreement, the amount of Employee’s salary shall be
reviewed at periodic intervals and appropriate upward adjustments in such salary
may be made.

(b)    Employee shall also be eligible for a performance bonus for each fiscal
year, beginning in fiscal year 2016, that Employee is employed by the Company
(the “Performance Bonus”). The Performance Bonus shall be based on Employee’s
base salary and the achievement of performance criteria to be established by the
Board of Directors under a Management Bonus Plan (the “Management Bonus Plan”),
which the Compensation Committee shall develop and recommend to the Board of
Directors of the Company for each fiscal year and which shall apply to Employee
and other members of the Company’s senior management. The performance criteria
under the Management Bonus Plan shall include such items as performance of the
Company compared to its fiscal year plan and budget; new business and customer

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development by the Company; and operational efficiency of the Company. It shall
be a condition to Employee’s receipt of a Performance Bonus in any given year
that Employee achieves certain minimum performance criteria to be established
under the Management Bonus Plan.  It is anticipated that the Performance Bonus
for any particular fiscal year will range between 20% and 60%, with a target of
40%, of Employee’s base salary; provided that the minimum performance criteria
are achieved. The Performance Bonus may be paid in cash or in equity, at the
discretion of the Board of Directors. The Performance Bonus shall be payable to
Employee upon achievement of the minimum performance criteria and not later than
60 days following receipt by the Board of Directors of the Company’s audited
financial statements for that fiscal year.

(c)    Employee shall receive awards of that number of options to purchase
shares of the Company’s common stock that translate to a value of $1,200,000 on
the date of grant (the “Options”). The Options will be incentive stock options
under Section 422 of the Internal Revenue Code (the “Code”) to the extent
permitted under Section 422(d) of the Code. The Options shall be governed by an
option agreement (the “Option Agreement”) and shall be governed by the Company’s
Amended and Restated Stock Option and Incentive Plan (the “Stock Option Plan”).
The Option Agreement shall provide that the Options shall become exercisable
upon vesting, and shall vest in tranches of twenty-five percent (25%) of the
shares each at the completion of each year of the term of this Agreement. The
exercise price of the Options shall be the fair market value of the Company’s
common stock on the date of grant. In the event of termination of employment,
Employee’s exercise of the Options, and any termination of the Options, shall be
governed by the Option Agreement and the Stock Option Plan.

(d)    In addition to salary payments as provided in Section 3(a), the Company
shall provide Employee, during the term of this Agreement, with the benefits of
such insurance plans, hospitalization plans and other employee fringe benefit
plans as shall be generally provided to employees of the Company and for which
Employee may be eligible under the terms and conditions thereof.  Nothing herein
contained shall require the Company to adopt or maintain any such employee
benefit plans.

(e)    During the term of this Agreement, except as otherwise provided in
Section 5(b), Employee shall be entitled to sick leave and annual vacation
consistent with the Company’s customary sick leave and vacation policies.

(f)    During the term of this Agreement the Company shall reimburse Employee
for all reasonable out-of-pocket expenses incurred by Employee in connection
with the business of the Company and in the performance of her duties under this
Agreement, upon presentation to the Company of an itemized accounting of such
expenses with reasonable supporting data.

(g)    The Company shall reimburse Employee’s and her family’s expenses in
moving from Highwood, Illinois to the Boulder, Colorado metropolitan area
(“Boulder”) in accordance with Company’s standard relocation policy in existence
as of the effective date of this Agreement, which expenses shall include (i)
moving costs for Employee’s and Employee’s

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immediate family’s personal property from Employee’s principal residence in
Highwood, Illinois to Employee’s new principal residence in Boulder, and (ii)
closing costs (including, without limitation, realtor fees and commissions,
title fees, one point loan origination fee and other transaction fees and
expenses) associated with the sale of Employee’s current residence in Highwood,
Illinois and the purchase of a principal residence in Boulder. The benefits
pursuant to the Company’s standard relocation policy shall be available to
Employee throughout the term of this Agreement. The Company shall reimburse
Employee’s expenses for coach class travel costs between Boulder and Employee’s
primary residence in Illinois for commuting until Employee relocates to Boulder.
The Company shall arrange at the Company’s expense for up to 60 days of
temporary housing and a vehicle to be available for Employee’s use during time
spent in Boulder on Company business prior to the date Employee relocates to
Boulder.

4.    Term.  Unless sooner terminated in accordance with Section 5, the term of
this Agreement shall be for two years from the Start Date, and thereafter shall
continue for one year terms from year to year unless and until either party
shall give notice to the other at least 60 days prior to the end of the original
or then current renewal term of her or its intention to terminate at the end of
such term.  The provisions of Sections 6, 7, 9 and 11 shall remain in full force
and effect notwithstanding the termination of this Agreement; other sections
intended to survive termination of this Agreement shall survive according to
their terms.

5.    Termination and Severance.

(a)    If Employee dies during the term of this Agreement, (i) the Company shall
pay her estate the compensation that would otherwise be payable to her for the
month in which her death occurs; (ii) this Agreement shall be considered
terminated on the last day of such month; and (iii) the Company shall cause any
issued but unvested equity awards granted to Employee to immediately vest.

(b)    If during the term of this Agreement Employee is prevented from
performing her material duties by reason of illness or incapacity for a
continuous period of 120 days, the Company may terminate this Agreement upon 30
days’ prior notice thereof to Employee or her duly appointed legal
representative. For the purposes of this Section 5(b), a period of illness or
incapacity shall be deemed “continuous” notwithstanding Employee’s performance
of her duties during such period for continuous periods of less than 15 days in
duration.

(c)    The Company may terminate this Agreement For Cause for Employee’s (i)
gross negligence; (ii) material breach of any obligation created by this
Agreement; (iii) a violation of any policy, procedure or guideline of the
Company, of any material injury to the economic or ethical welfare of the
Company caused by Employee’s malfeasance, misfeasance, misconduct or inattention
to Employee’s duties and responsibilities, or any other material failure to
comply with the Company’s reasonable performance expectations, upon notice of
same from Company and failure to cure such violation, injury or failure within
30 days, or (iv), misconduct, including but not limited to, commission of any
felony, or of any misdemeanor involving

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dishonesty or moral turpitude, violation of any state or federal law in the
course of her employment, or theft of the Company’s property or time.

(d)    Either party may terminate this Agreement at any time for any or no
reason upon 30 days’ notice to the other party.

(e)    If Employee’s employment is terminated by the Company prior to the end of
the term pursuant to any provision other than Section 5(a) or 5(c), then,
provided Employee executes the release described in Section 5(g) below and
complies with her obligations under the Confidential Information Agreement and
Noncompete Agreement incorporated by reference in Sections 6 and 7 of this
Agreement: (i) the Company shall pay as severance to Employee one year’s current
base salary, in equal semi-monthly installments in accordance with the Company’s
standard payroll practices, subject to all applicable deductions and
withholdings; and (ii) the Company shall cause any issued but unvested equity
scheduled to vest in the year of termination to immediately vest; provided,
however, that this sentence shall not diminish the vesting contemplated by 5(f)
below in connection with a Change of Control (collectively “Severance
Benefits”). In the event of (x) a requested relocation of Employee’s principal
workplace by more than 50 miles from Boulder following Employee’s relocation to
Boulder; (y) any reduction of Employee’s salary to a rate below Employee’s
initial annual salary; or (z) a material diminishment of Employee’s duties or
position, Employee may elect to resign with Good Reason and shall be entitled to
receive from Company the Severance Benefits listed in this paragraph. A
resignation with Good Reason will not be deemed to have occurred unless Employee
gives the Company written notice of the condition within 30 days after the
condition comes into existence specifying all relevant facts and the Company
fails to remedy the condition within 30 days after receipt of Employee’s written
notice.

(f)    If this Agreement is terminated by Company pursuant to Section 5(d) as a
result of a Change of Control, then all outstanding options granted to Employee
as of such Change of Control shall immediately vest (to the extent they are not
already vested). For purposes of this Agreement, (i) a “Change of Control shall
mean the consolidation or merger involving the Company in which the Company is
not the surviving entity or any transaction in which more than 50% of the
Company’s voting power is transferred or more than 50% of the Company’s assets
are sold; and (ii) a termination shall be deemed to be the “result of” a Change
of Control if, without limiting the generality of such phrase, the Company
terminates or is deemed to have terminated Employee pursuant to Section 5(d) of
this Agreement during the period commencing three months prior to the occurrence
(or expected occurrence) of a Change of Control and ending 12 months after the
occurrence of a Change of Control. The foregoing acceleration provision shall be
supplementary to, and shall not diminish any rights that Employee has under any
other written agreement with the Company, including an option certificate or
agreement.

(g)    As a condition to receiving any severance payments and benefits under
this Agreement, Employee shall execute and return to the Company, on or before
the Release Expiration Date (as defined below), a full and complete release of
all claims against the

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Company, its affiliates, and their respective employees, officers, directors,
owners and members, in a form reasonably acceptable to the Company (the
“Release”). For purposes of this Agreement, the “Release Expiration Date” means
the date that is 28 days following the date that the Company timely delivers the
Release to Employee, or in the event that Employee’s termination of employment
is “in connection with an exit incentive or other employment termination
program” (as such phrase is defined in the Age Discrimination in Employment Act
of 1967), the date that is 52 days following such delivery date. Notwithstanding
any provision to the contrary in this Agreement, (i) the Company will deliver
the Release to Employee within 10 business days following the termination date,
and the Company’s failure to timely deliver a Release will constitute a waiver
of any requirement to execute a Release; (ii) if Employee fails to execute the
Release or the Release fails to become irrevocable on or before the Release
Expiration Date, Employee will not be entitled to any severance payments under
this Agreement; and (iii) payments under this Agreement shall commence on the
first payroll period commencing after the Release becomes irrevocable, provided
however, that if the termination date and the Release Expiration Date fall in
two separate taxable years, any payments that are treated as nonqualified
deferred compensation for purposes of Section 409A will be made in the later
taxable year.

6.    Confidential Information. This Agreement incorporates by reference all the
terms of that certain Confidentiality and Inventions Agreement as of the date
signed between Employee and Company, as if fully set forth herein.

7.    Confidentiality, Noncompete. This Agreement incorporates all the terms of
that certain Noncompete Agreement between Employee and the Company as of the
date signed between Employee and Company, as if fully set forth herein.

8.    Waiver of Breach.  A waiver by the Company of a breach of any provision of
this Agreement by Employee shall not operate or be construed as a waiver of any
subsequent breach by Employee.

9.    Severability. It is the desire and intent of the parties that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision or portion of
this Agreement shall be adjudicated to be invalid or unenforceable, this
Agreement shall be deemed amended to delete therefrom the portion thus
adjudicated to be invalid or unenforceable, such deletion to apply only with
respect to the operation of this Section in the particular jurisdiction in which
such adjudication is made.

10.    Notices. All communications, requests, consents and other notices
provided for in this Agreement shall be in writing and shall be deemed given if
hand delivered, mailed by first class mail, postage prepaid, sent by nationally
recognized overnight courier or by facsimile, addressed as follows:  (i) If to
the Company: to its principal office at 3200 Walnut Street, Boulder, Colorado
80301, facsimile: (303) 386-1290;  (ii) If to Employee: to 705 Lyster Road,
Highwood,

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IL 60040; or such other address as either party may hereafter designate by
notice as herein provided.  Notwithstanding the foregoing provisions of this
Section 10, so long as Employee is employed by the Company any such
communication, request, consent or other notice shall be deemed given if
delivered as follows:  (x) If to the Company, by hand delivery to any executive
officer of the Company other than Employee, and (y) If to Employee, by hand
delivery to her.

11.    Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Colorado without regard to
choice of law provisions thereof, and the parties each agree to exclusive
jurisdiction in the state and federal courts in Colorado.

12.    Assignment. The Company may assign its rights and obligations under this
Agreement to any affiliate of the Company or to any acquirer of substantially
all of the business of the Company, and all covenants and agreements hereunder
shall inure to the benefit of and be enforceable by or against any such
assignee.  Neither this Agreement nor any rights or duties hereunder may be
assigned or delegated by Employee.

13.    Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties and supersedes all prior understandings, agreements
or representations by or between the parties, whether written or oral, which
relate in any way to the subject matter hereof. 

14.    Amendments. No provision of this Agreement shall be altered, amended,
revoked or waived except by an instrument in writing signed by the party sought
to be charged with such amendment, revocation or waiver.

15.    Binding Effect.  Except as otherwise provided herein, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, heirs, successors and assigns.

16.     Section 409A. Payments pursuant to this Agreement are intended to comply
with or be exempt from Section 409A of the Internal Revenue Code and
accompanying regulations and other binding guidance promulgated thereunder
(“Section 409A”), and the provision of this Agreement will be administered,
interpreted and construed accordingly. Any payments under this Agreement that
may be excluded from Section 409A either as separation pay due to an involuntary
separation from service or as a short-term deferral shall be excluded from
Section 409A to the maximum extent possible. For purpose of Section 409A, each
installment payment provided under this Agreement shall be treated as a separate
payment. Any payments to be made under this Agreement upon a termination of
employment shall only be made upon a “separation from service” under Section
409A. To the extent that any reimbursement of expenses or in-kind benefits
constitutes “deferred compensation” under Section 409A, (i) such reimbursement
or benefit will be provided no later than December 31 of the year following the
year in which the expense was incurred; (ii) the amount of expenses reimbursed
in one year will not affect the amount eligible for reimbursement in any
subsequent year and (iii) the right to reimbursement of expenses or in-kind
benefits may not be liquidated or exchanged for any other benefit.

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Notwithstanding the foregoing, the Company makes no representations that the
payments and benefits provided under this Agreement comply with Section 409A and
in no event shall the Company be liable for all or any portion of any taxes,
penalties, interest or other expenses that may be incurred by the Employee on
account of non-compliance with Section 409A.

***Signature Page Follows***

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                IN WITNESS WHEREOF the parties have executed this Agreement this
26th day of August 2015 effective as of the Effective Date hereof.

 
 
COMPANY:
 
 
 
 
ARRAY BIOPHARMA INC.
 
 
 
 
By:
/s/ RON SQUARER
 
Name:
Ron Squarer
 
Title:
Chief Executive Officer
 
 
 
 
EMPLOYEE:
 
 
 
 
/s/ MARY P. HENAHAN
 
Mary Patricia Henahan
 
 
 
 
 

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Exhibit 10.4
EXECUTION COPY

EXHIBIT A

OTHER PROFESSIONAL ACTIVITIES

None.

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