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Exhibit 10.1
 
EMPLOYMENT AGREEMENT
 
This EMPLOYMENT AGREEMENT (this “Agreement”), dated as of February 2, 2015
(“Effective Date”), is made by and between Rexahn Pharmaceuticals, Inc., a
Delaware corporation (the “Company”), and Ely Benaim, M.D. (the “Executive”).
 
RECITALS
 
WHEREAS, the Company desires to employ the Executive pursuant to the terms and
conditions contained in this Agreement; and
 
WHEREAS, the Executive desires to accept such employment pursuant to the terms
and conditions contained in this Agreement.
 
NOW, THEREFORE, in consideration of the premises, and of the mutual covenants
and agreements hereinafter contained, the parties hereto agree as follows:
 
1.                  Term.  The Executive’s employment under this Agreement shall
commence on the Effective Date, and shall continue until terminated pursuant to
Section 7 hereof (the “Term”). During the Term, Executive’s employment is
terminable “at will” (i.e., with or without cause and with or without notice),
in any case, in accordance with the terms of this Agreement.
 
2.                   Title.  The Executive will serve as the Chief Medical
Officer of the Company.
 
3.                  Duties.  The Executive is responsible for duties
commensurate with his position as the Chief Medical Officer of the Company, or
as may be assigned to him from time to time by the Company’s Chief Executive
Officer (the “CEO”) or his designee.  The Executive agrees to devote his full
time, attention, skill and energy to the duties set forth herein and to the
business of the Company, and to use his best efforts to promote the success of
the Company’s business.
 
4.                   Reporting.  The Executive will report directly to the CEO
or to such other executive officer of the Company to which the CEO delegates his
authority for overseeing the responsibilities of the Executive.
 
5.                  Location.  The Executive shall be based in the Company’s
Rockville, Maryland offices.  However, the Executive acknowledges that in order
to effectively perform his duties, he will occasionally be required to travel
for business purposes.
 
6.                   Compensation.
 
(a)                Base Salary.  The Executive will receive an annualized base
salary of Three Hundred and Seventy-Five Thousand dollars ($375,000.00) (the
“Base Salary”), payable in accordance with the Company’s normal payroll
practices as in effect from time to time.  Such Base Salary shall be subject to
periodic review by the Compensation Committee (the “Compensation Committee”) of
the Board of Directors (the “Board”), and may be adjusted in the sole discretion
of the Compensation Committee. In addition, The Executive will receive a signing
bonus of Fifty Thousand dollars ($50,000.00) from the Company, half of which
will be paid within two weeks of the Effective Date and half of which will be at
the end of 2015.
 

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(b)               Discretionary Annual Cash Bonus.  The Executive shall be
eligible to receive a discretionary annual cash bonus for each fiscal year (the
“Bonus”).  Whether to award a Bonus, and the amount of any Bonus, will be
determined by the Compensation Committee in its sole discretion; provided, that
the Bonus shall target Forty percent (40%) of the Base Salary (the “Target
Bonus”).  The Bonus will be based on a program and criteria established by the
Board or the Compensation Committee, and shall be generally consistent among all
of the Company’s similarly situated executives.  The Bonus shall be paid to the
Executive within sixty (60) days after the Compensation Committee determines to
award such bonus but in no event later than March 15 of the year following the
year of performance.
 
(c)                Stock Option Awards.  Upon the commencement of the
Executive’s employment with the Company (the “Commencement Date”), the Executive
shall be granted an option to purchase up to 1,200,000 shares of the Company’s
common stock (the “Stock Option”) which shall vest based on the following
schedule: twenty-five percent (25%) of the shares subject to the Stock Option
shall vest on the first anniversary of the Commencement Date; and thereafter,
one forty-eighth (1/48th) of the shares subject to the Stock Option shall vest
in monthly installments, on the first business day of each month, until the
Stock Option is fully-vested.  The Stock Option shall be subject to such other
terms and conditions as are set forth in the Stock Option Agreement dated the
Commencement Date (the “Stock Option Agreement”) between the Company and the
Executive, and the Company’s Stock Option Plan, as amended from time to time.
 
 (d)              Vacation.  During the Term, the Executive shall be entitled to
vacation benefits in accordance with the Company’s vacation policy for
management and officers.
 
(e)                Benefits.  During the Term, and provided that the Executive
satisfies, and continues to satisfy, any plan eligibility requirements, the
Executive shall be entitled to participate in, and receive benefits under, any
retirement savings plan or welfare benefit plan made available by the Company to
similarly-situated executives, as such plans may be in effect from time to
time.  Such benefits may be changed unilaterally by the Company, without notice
to the Executive.
 
(f)                Reimbursement of Business Expenses.  The Company will
reimburse the Executive for all reasonable and properly-documented
business-related expenses incurred or paid by him in connection with the
performance of his duties hereunder, consistent with Company policy regarding
reimbursement of such expenses.
 
(g)               Term Life Insurance.  The Company shall provide the Executive,
at the Company’s cost, with term life insurance in accordance with the Company’s
insurance policy, for which the Executive may designate the beneficiary.
 
(h)               Withholdings.  All payments made under this Section 6, or
under any other provision of this Agreement, shall be subject to any and all
federal, state and local taxes and other withholdings to the extent required by
applicable law.
 
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7.                   Termination of Employment.
 
(a)                Due to Death.  The Executive’s employment will automatically
terminate immediately upon his death.
 
(b)               Due to Disability.  If the Executive incurs a Disability (as
defined below) during the Term, then the Company, in its sole discretion, shall
be entitled to terminate the Executive’s employment immediately upon written
notice to the Executive of such decision.  For purposes of this Agreement,
“Disability” shall mean a physical or mental impairment that prevents the
Executive from performing the essential duties of his position, with or without
reasonable accommodation, for (i) a period of ninety (90) consecutive calendar
days or (ii) an aggregate of ninety (90) work days in any period of six (6)
months.  The determination of whether the Executive incurred a Disability shall
be made by the Board, in good faith, after consultation with the Executive’s
physician.  The Executive acknowledges that the Company regards him as a “key
employee” under the Family and Medical Leave Act, to the extent that Act is
applicable.
 
(c)                By the Company With Cause.  During the Term, the Company
shall be entitled to terminate the Executive’s employment with Cause (as defined
below) by providing ten (10) days’ prior written notice to the Executive that
Cause exists to terminate his employment and reasonably specifying the Cause;
provided, that the Cause is not cured and continues to exist at the end of such
ten-day (10-day) period.  The Company reserves the right to withdraw any and all
duties from the Executive, and to exclude the Executive from the Company’s
premises, upon delivery of such notice of termination.  For purposes of this
Agreement, “Cause” shall mean any of the following:
 
            (i)                  the commission by the Executive of an act of
malfeasance, dishonesty, fraud or breach of trust against the Company or any of
its Executives, customers or suppliers;
 
(ii)                material breach by the Executive of any of his obligations
under this Agreement, or any other agreement between the Executive and the
Company;
 
(iii)               the Executive’s material failure to comply with the
Company’s written policies;
 
(iv)              the Executive’s material failure, neglect or refusal to
perform his duties under this Agreement, or to follow the lawful written
directions of the Board;
 
(v)                the Executive’s commission of any act that would constitute a
felony or any crime involving moral turpitude;
 
(vi)              any act or omission by the Executive involving dishonesty or
fraud or that is, or is reasonably likely to be, materially injurious to the
financial condition or business reputation of the Company, or that otherwise is
materially injurious to the Company’s Executives, customers or suppliers; or
 
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(vii)             other than with respect to a Disability, the inability of the
Executive to perform the duties of his position.
 
(d)               By the Executive Without Good Reason.  The Executive shall be
entitled to terminate his employment with the Company by providing the Company
with at least thirty (30) days’ advance written notice of such decision.  The
Company reserves the right to withdraw any and all duties from the Executive,
and to exclude the Executive from the Company’s premises, upon delivery of such
notice of termination.
 
(e)                By the Company Without Cause.  The Company shall be entitled
to terminate the Executive’s employment without Cause by providing written
notice to the Executive of such decision.  No advance notice period is required
for a termination by the Company without Cause.  The Company reserves the right
to withdraw any and all duties from the Executive, and to exclude the Executive
from the Company’s premises, upon delivery of such notice of termination.
 
(f)               By the Executive With Good Reason.
 
(i)                 The Executive may voluntarily terminate his employment for
Good Reason (as defined below) by notifying the Company in writing, within
ninety (90) days after the initial existence of one of the events below, that
the Executive intends to terminate his employment for Good Reason, and, if such
Good Reason is not cured in accordance with the cure provision set forth below,
the Executive must actually terminate employment no later than thirty (30) days
following the expiration of the cure period; provided, that the event
constituting Good Reason continues to exist as of such date.  “Good Reason”
means the occurrence of any of the following events:

(A)          A material diminution in the Executive’s duties or authority
inconsistent with the Executive’s position (including status, offices, titles
and reporting requirements), excluding an isolated, insubstantial and
inadvertent action not taken in bad faith that is remedied by the Company after
receipt of notice thereof given by the Executive:

(B)            A material reduction in the Executive’s Base Salary or target
bonus percentage; or

(C)            Any action or inaction by the Company that constitutes a material
breach of the terms and provisions of this Agreement (and its Exhibits).

(ii)                 Anything herein to the contrary notwithstanding, the
Executive’s employment shall not be terminated for Good Reason unless he
provides written notice to the Company stating the basis of such termination and
the Company fail to cure the action or inaction that is the basis for the
termination for Good Reason within thirty (30) days after receipt of such
notice.
 
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8.                  Compensation Upon Termination of Employment.
 
(a)                Termination by Reason of Death, Disability, for Cause or by
the Executive.  Subject to Section 8(c) below, if the Executive’s employment is
terminated pursuant to Section 7(a), 7(b), 7(c) or 7(d) above, then the Company
shall pay to the Executive (or his estate, as appropriate), within 30 days of
his termination date:
 
(i)                   The Base Salary to which he is otherwise entitled for the
period ending on the termination date.
 
(ii)                 The Base Salary to which he is entitled for any accrued but
unused vacation days as of the termination date.
 
 (b)              Other Termination.  If the Executive’s employment is
terminated pursuant to Section 7(e) or 7(f) above, but not under the
circumstances contemplated by Section 8(c) below, then the Company shall pay to
the Executive, within 60 days of his termination date (but in all cases subject
to Section 8(d) below and not before the applicable general release becoming
effective in accordance with its terms), the following amounts and benefits:
 
(i)            A cash lump sum amount equal to his then current annual Base
Salary on the effective date of termination, ignoring any decrease in Base
Salary that forms the basis for Good Reason.
 
(ii)           An amount equal to a pro-rata portion of the bonus to which the
Executive otherwise might have been entitled pursuant to Section 6(b) above,
assuming for such purposes that the Executive would have received a bonus for
that year equal to his Target Bonus if he had stayed employed with the Company
for the entire year.
 
(iii)          If Executive timely elects continued coverage under COBRA for
himself and his covered dependents under the Company’s group health plans
following such termination employment, then the Company will pay the COBRA
premiums necessary to continue the Executive’s health insurance coverage in
effect for himself and his eligible dependents on the termination date, as and
when due to the insurance carrier or COBRA administrator (as applicable),
through the earlier to occur of the expiration of the twelve-month (12-month)
period following his termination date or the expiration of Executive’s
eligibility for the continuation coverage under COBRA.  Notwithstanding the
foregoing, if the Company determines, in its sole discretion, that the payment
of the COBRA premiums would result in a violation of the nondiscrimination rules
of Section 105(h)(2) of the Code or any statute or regulation of similar effect
(including but not limited to the 2010 Patient Protection and Affordable Care
Act, as amended by the 2010 Health Care and Education Reconciliation Act), then
in lieu of providing the COBRA premiums, the Company, in its sole discretion,
may elect instead to pay Executive on the first day of each month of the
twelve-month period, a fully taxable cash payment equal to such portion of the
COBRA premiums for that month, subject to applicable tax withholdings (such
amount, the “Special Severance Payment”).  Executive may, but is not obligated
to, use such Special Severance Payment toward the cost of COBRA premiums.  The
first Special Severance Payment will occur on the date that is thirty days
following the date of Executive’s termination from employment, subject to the
effectiveness of the general release as set forth in Section 8(d), and
subsequent payments will occur on the schedule described above. If the Executive
becomes eligible for coverage under another employer's group health plan or
otherwise cease to be eligible for COBRA during the period provided in this
clause, the Executive must immediately notify the Company of such event, and all
payments and obligations under this clause will cease.
 
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(iv)          All of the Executive’s then-outstanding Stock Options will be
subject to accelerated vesting, and (if applicable) become immediately
exercisable, with respect to the number of shares as to which the Stock Options
that otherwise would have vested in the twelve-month (12-month) period following
the Executive’s termination date.
 
(v)           The Company will extend the post-termination exercise period
applicable to the Executive’s then-outstanding Stock Options until the earliest
to occur of (i) twelve (12) months following his termination date, and (ii) the
original term of the Stock Options.
 
(c)           Change of Control.
 
(i)            If the Executive’s employment is terminated by the Company
without Cause (and not as a result of death or a Disability) or by the Executive
for Good Reason and such termination date falls within the one-year (1-year)
period immediately following a Change of Control (as defined in the Company’s
Stock Option Plan as in effect on the date hereof) (a “Change of Control
Termination”), then the Company shall pay to the Executive, within 60 days of
his termination date (but in all cases subject to Section 8(d) below and not
before the applicable general release becoming effective in accordance with its
terms), the following amounts:
 
(A)      A cash lump sum amount equal to his then current annual Base Salary on
the effective date of termination, ignoring any decrease in Base Salary that
forms the basis for Good Reason; and
 
(B)       An amount equal to the bonus to which the Executive otherwise would
have been entitled pursuant to Section 6(b) above, assuming for such purposes
that the Executive would have received a bonus for that fiscal year equal to the
Target Bonus if he had stayed employed with the Company for the entire year; and
 
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(ii)           Following the Change of Control Termination, if Executive timely
elects continued coverage under COBRA for himself and his covered dependents
under the Company’s group health plans following such termination employment,
then the Company will pay the COBRA premiums necessary to continue the
Executive’s health insurance coverage in effect for himself and his eligible
dependents on the termination date, as and when due to the insurance carrier or
COBRA administrator (as applicable), through the earlier to occur of the
expiration of the eighteen-month period following his termination date or the
expiration of Executive’s eligibility for the continuation coverage under
COBRA.  Notwithstanding the foregoing, if the Company determines, in its sole
discretion, that the payment of the COBRA premiums would result in a violation
of the nondiscrimination rules of Section 105(h)(2) of the Code or any statute
or regulation of similar effect (including but not limited to the 2010 Patient
Protection and Affordable Care Act, as amended by the 2010 Health Care and
Education Reconciliation Act), then in lieu of providing the COBRA premiums, the
Company, in its sole discretion, may elect instead to pay Executive on the first
day of each month of the eighteen-month period, the Special Severance Payment. 
Executive may, but is not obligated to, use such Special Severance Payment
toward the cost of COBRA premiums.  If the Executive becomes eligible for
coverage under another employer's group health plan or otherwise cease to be
eligible for COBRA during the period provided in this clause, the Executive must
immediately notify the Company of such event, and all payments and obligations
under this clause will cease.
 
(iii)          Immediately prior to a Change of Control, all options, restricted
stock and other equity-based awards granted to the Executive by the Company and
held by him immediately prior to such a Change of Control shall become
immediately and fully vested and, in the case of Stock Options, shall remain
exercisable for their respective original terms.
 
(d)           Release Required; Certain Limitations on the Company’s Obligations
Hereunder.  The obligations of the Company to the Executive under this Section 8
shall be subject to the Executive’s execution of a general release in favor of
the Company, in the form of Exhibit A hereto or in such other form reasonably
satisfactory to the Company, within sixty (60) days of Executive’s termination
of employment and all revocation periods applicable to such general release
having expired without the release having been revoked prior to such sixtieth
(60th) day.  Other than as expressly set forth in this Section 8, the Company
shall have no payment or other obligations to the Executive following a
termination of his employment by the Company.
 
9.                   Confidential Information.
 
(a)                Non-Use and Non-Disclosure of Confidential Information.  The
Executive acknowledges that, during the course of his employment with the
Company, he will have access to information about the Company and/or its
subsidiaries and their clients and suppliers, that is confidential and/or
proprietary in nature, and that belongs to the Company and/or its subsidiaries. 
As such, at all times, both during the Term and thereafter, the Executive will
hold in the strictest confidence, and not use or attempt to use except for the
benefit of the Company and/or its subsidiaries, and not disclose to any other
person or entity (without the prior written authorization of the Board) any
Confidential Information (as defined below).  Notwithstanding anything contained
in this Section 9, the Executive will be permitted to disclose any Confidential
Information to the extent required by validly-issued legal process or court
order, provided that the Executive notifies the Company and/or its subsidiaries
immediately of any such legal process or court order in an effort to allow the
Company and/or its subsidiaries to challenge such legal process or court order,
if the Company and/or its subsidiaries so elects, prior to the Executive’s
disclosure of any Confidential Information.
 
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(b)                No Breach.  The Executive represents and warrants that he has
not and will not make unauthorized disclosure to the Company of any confidential
information or trade secrets of any third party or otherwise breach any
obligation of confidentiality to any third party.
 
(c)                Definition of “Confidential Information”.  For purposes of
this Agreement, “Confidential Information” means any confidential or proprietary
information that belongs to the Company and/or its subsidiaries, or any of their
clients or suppliers, including without limitation, technical data, market data,
trade secrets, trademarks, service marks, copyrights, other intellectual
property, know-how, research, business plans, product information, projects,
services, client lists and information, client preferences, client transactions,
supplier lists and information, supplier rates, software, hardware, technology,
inventions, developments, processes, formulas, designs, drawings, marketing
methods and strategies, pricing strategies, sales methods, financial
information, revenue figures, account information, credit information, financing
arrangements and other information disclosed to the Executive by the Company
and/or its subsidiaries in confidence, directly or indirectly, and whether in
writing, orally or by electronic records, drawings, pictures or inspection of
tangible property.  “Confidential Information” does not include any of the
foregoing information that has entered the public domain other than by a breach
of this Agreement.
 
10.               Return of Company Property.  Upon the termination of the
Executive’s employment with the Company (whether upon the expiration of the Term
or thereafter), or at any time during such employment upon request by the Board,
the Executive will promptly deliver to the Board (or its representative) and not
keep in his possession, recreate or deliver to any other person or entity, any
and all property that belongs to the Company and/or its subsidiaries, or that
belongs to any other third party and is in the Executive’s possession as a
result of his employment with the Company, including without limitation,
computer hardware and software, pagers, PDA’s, cell phones, other electronic
equipment, records, data, client lists and information, supplier lists and
information, notes, reports, correspondence, financial information, account
information, product information, files, electronically-stored information and
other documents and information, including any and all copies of the foregoing.
 
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11.               Intellectual Property.
 
(a)                Prior Inventions.  The Executive hereby acknowledges and
agrees that he has made no invention, original work of authorship, development,
improvement, and trade secret prior to the commencement of his employment with
the Company, that belong solely to the Executive or belong to the Executive
jointly with others (subject to the restriction in Section 9(b))(collectively
referred to as “Prior Inventions”)), that relate in any way to any of the
Company’s and/or its subsidiaries’ actual or proposed businesses, products,
services or research and development, and that are not assigned to the Company
and/or its subsidiaries herein).  If in the course of the Executive’s employment
with the Company (whether during the Term or thereafter), he incorporates into
any Company’s or its subsidiaries’ products, processes, services or machines, a
Prior Invention owned by the Executive or in which he has an interest, then the
Company is hereby granted and shall have a non-exclusive, royalty-free,
irrevocable, perpetual, worldwide license (with the right to sublicense) to
make, have made, copy, modify, make derivative works of, use, sell and otherwise
distribute such Prior Invention as part of, or in connection with, such product,
process, service or machine.
 
(b)                Assignment of Inventions.  The Executive will promptly make
full written disclosure to the Board, will hold in trust for the sole right and
benefit of the Company, and hereby assigns to the Company or its designee, all
his right, title and interest throughout the world in and to any and all
inventions, original works of authorship, developments, concepts, know-how,
improvements or trade secrets, whether or not patentable or registrable under
copyright or similar laws, that he may solely or jointly conceive or develop or
reduce to practice, or cause to be developed or reduced to practice, during his
employment with the Company (whether during the Term or thereafter) that (i)
relate at the time of conception, development or reduction to practice to the
actual or demonstrably proposed business or research and development activities
of the Company and/or its subsidiaries, (ii) result from or relate to any work
performed for the Company and/or its subsidiaries, whether or not during normal
business hours or (iii) are developed through the use of Confidential
Information (collectively referred to as “Inventions”).  The Executive further
acknowledges that all Inventions that are made by him (solely or jointly with
others) within the scope of and during the period of his employment with the
Company and/or its subsidiaries (whether during the Term or thereafter) are
“works made for hire” (to the greatest extent permitted by applicable law) and
are compensated by his salary, unless regulated otherwise by law.
 
(c)                 Maintenance of Invention Records.  The Executive will keep
and maintain adequate and current written records of all Inventions made by him
(solely or jointly with others) during his employment with the Company and/or
its subsidiaries (whether during the Term or thereafter).  The records may be in
the form of notes, sketches, drawings, flow charts, electronic data or
recordings, laboratory notebooks or any similar format.  The records will be
available to and remain the sole property of the Company and its subsidiaries at
all times.  The Executive will not remove such records from the Company’s or its
subsidiaries’ business premises except as expressly permitted by Company policy
that may, from time to time, be revised at the sole discretion of the Company.
 
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(d)                Further Assistance.  The Executive will assist the Company or
its designee, at the Company’s expense, in every way to secure the Company’s
rights in any Inventions and any copyrights, patents, trademarks, trade secrets,
moral rights or other intellectual property rights relating thereto in any and
all countries, including without limitation, the disclosure to the Company of
all pertinent information and data with respect thereto, the execution of all
applications, specifications, oaths, assignments, records and all other
instruments that the Company shall deem necessary in order to apply for, obtain,
maintain and transfer such rights and in order to assign and convey to the
Company, its successors, assigns and nominees the sole and exclusive rights,
title and interest in and to such Inventions, and any copyrights, patents,
trademarks, trade secrets, moral rights or other intellectual property rights
relating thereto.  The Executive acknowledges that his obligation to execute, or
cause to be executed, when it is in his power to do so, any such instrument or
papers shall continue after the termination of his employment with the Company
until the expiration of the last such intellectual property right in any
country.  If the Company is unable, after reasonable effort, because of the
Executive’s mental or physical incapacity or unavailability for any other
reason, to secure his signature to apply for or to pursue any application for
any patents or copyright registrations covering Inventions assigned to the
Company above, then the Executive hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as his agent and attorney in
fact, to act for and in his behalf and stead to execute and file any such
applications and to do all other lawfully-permitted acts to further the
application for, prosecution, issuance, maintenance or transfer of letters
patent or copyright registrations thereon with the same legal force and effect
as if originally executed by the Executive.  The Executive hereby waives and
irrevocably quitclaims to the Company and/or its subsidiaries any and all
claims, of any nature whatsoever, that he now or hereafter has for infringement
of any and all Inventions assigned to the Company and/or its subsidiaries.
 
12.               No Prior Restrictions.  The Executive represents and warrants
that his employment with the Company will not violate, or cause him to be in
breach of, any obligation or covenant made to any former employer or other third
party, and that during the course of his employment with the Company (whether
during the Term or thereafter), he will not take any action that would violate
or breach any legal obligation that he may have to any former employer or other
third party.
 
13.               No Interference with Executives and Customers.  The Executive
agrees that, during the Executive’s employment with the Company and for a period
of twelve (12) months immediately thereafter, the Executive will not, directly
or indirectly through another entity, for himself or any other person or entity,
(i) induce or solicit, or attempt to induce or solicit, any executive or
independent contractor of the Company or its subsidiaries (or any individual who
was employed or engaged by the Company or its subsidiaries during the one-year
period immediately before the termination of the Executive’s employment) to
leave the employment of, or to cease his or her contracting relationship with,
the Company or its subsidiaries, (ii) interfere in any way with the employment
relationship between the Company or its subsidiaries or their executives and
independent contractors, (iii) hire or engage any executive or independent
contractor of the Company or its subsidiaries (or any individual who was
employed or engaged by the Company or its subsidiaries during the one-year
period immediately before the termination of the Executive’s employment) or (iv)
induce or attempt to induce any customer, supplier, licensee or other business
relation of the Company or its subsidiaries to cease doing business with the
Company or its subsidiaries, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or its subsidiaries.
 
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14.              Non-Disparagement.  Both during and after the Executive’s
employment with the Company, the Executive agrees not to disparage, portray in a
negative light, or take any action that would be harmful to, or lead to
unfavorable publicity for, the Company or any of its current or former clients,
suppliers, officers, directors, Executives, agents, consultants, contractors,
owners, parents, subsidiaries or divisions, whether in public or private,
including without limitation, in any and all interviews, oral statements,
written materials, electronically-displayed materials and materials or
information displayed on Internet-related sites.
 
15.              Equitable Relief.  The Executive acknowledges that the remedy
at law for his breach of Sections 9, 10, 11, 13 and 14 above will be inadequate,
and that the damages flowing from such breach will not be readily susceptible to
being measured in monetary terms.  Accordingly, upon a violation of any part of
such sections, the Company shall be entitled to immediate injunctive relief (or
other equitable relief) and may obtain a temporary order restraining any further
violation.  No bond or other security shall be required in obtaining such
equitable relief, and the Executive hereby consents to the issuance of such
equitable relief.  Nothing in this Section 15 shall be deemed to limit the
Company’s remedies at law or in equity for any breach by the Executive of any of
the parts of Sections 9, 10, 11, 13 and 14 above which may be pursued or availed
of by the Company.

16.               Judicial Modification.  The Executive acknowledges that it is
the intent of the parties hereto that the restrictions contained or referenced
in Sections 9, 10, 11, 13 and 14 above be enforced to the fullest extent
permissible under the laws of each jurisdiction in which enforcement is sought. 
If any of the restrictions contained or referenced in such Sections is for any
reason held by an arbitrator or court to be excessively broad as to duration,
activity, geographical scope or subject, then such restriction shall be
construed, judicially modified or “blue penciled” in such jurisdiction so as to
thereafter be limited or reduced to the extent required to be enforceable in
such jurisdiction under applicable law.
 
17.               Arbitration.  Other than actions seeking injunctive relief to
enforce the provisions of Sections 9, 10, 11, 13 and 14 above (which actions may
be brought by the Company in a court of appropriate jurisdiction), any dispute
or controversy between the parties hereto, whether during the Term or
thereafter, including without limitation, matters relating to this Agreement,
the Executive’s employment with the Company and the cessation thereof, and all
matters arising under any federal, state or local statute, rule or regulation or
principle of contract law or common law, including but not limited to any and
all medical leave statutes, wage-payment statutes, employment discrimination
statutes and any other equivalent federal, state or local statute, shall be
settled by arbitration administered by JAMS in Washington, D.C. pursuant to its
rules applicable to employment disputes, which arbitration shall be
confidential, final and binding to the fullest extent permitted by law.  Each
party hereto shall be responsible for paying one-half of the cost of the
arbitration (including the cost of the arbitrator), and all of the cost of its
own attorneys’ fees and costs, unless otherwise apportioned by the arbitrator in
accordance with applicable law
 
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18.               Notices.  All notices and other communications provided for in
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered and received by the other party, or when sent by recognized
overnight courier to the following addresses:
If to the Company:

15245 Shady Grove Road
Suite 455
Rockville, Maryland 20850
Attention:  Secretary

If to the Executive:

at the Executive’s home address
as reflected on the Company’s records

or to such other address as either party hereto will have furnished to the other
in writing in accordance with this Section 18, except that such notice of change
of address shall be effective only upon receipt.

19.               Severability.  In the event that any of the provisions of this
Agreement, or the application of any such provisions to the Executive or the
Company with respect to obligations hereunder, is held to be unlawful or
unenforceable by any court or arbitrator, the remaining portions of this
Agreement shall remain in full force and effect and shall not be invalidated or
impaired in any manner.
 
20.               Waiver.  No waiver by any party hereto of the breach of any
term or covenant contained in this Agreement, whether by conduct or otherwise,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such breach, or a waiver of any other term or
covenant contained in this Agreement.
 
21.               Entire Agreement.  This Agreement contains the entire
agreement between the Executive and the Company with respect to the subject
matter of this Agreement, and supersedes any and all prior agreements and
understandings, oral or written, between the Executive and the Company with
respect to the subject matter of this Agreement.
 
22.              Amendments.  This Agreement may be amended only by an agreement
in writing signed by the Executive and an authorized representative of the
Company (other than the Executive).
 
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23.               Section 409A Provisions
 
(a)           Separation from Service. Notwithstanding anything in this
Agreement to the contrary, to the extent that any severance payments or benefits
paid or provided to Executive, if any, under this Agreement are considered
deferred compensation subject to Section 409A of the Code and the final
regulations and any guidance promulgated thereunder (“Section 409A”) (such
payments, the “Deferred Payments”), then (i) to the extent required by Section
409A, no Deferred Payments will be payable unless Executive’s termination of
employment also constitutes a “separation from service,” as defined in Treasury
Regulations Section 1.409A-1(h) (without regard to any alternative definition
thereunder) (a “Separation from Service”). Similarly, no Deferred Payments
payable to Executive, if any, under this Agreement that otherwise would be
exempt from Section 409A pursuant to Treasury Regulations Section 1.409A-1(b)(9)
will be payable until Executive has a Separation from Service. For clarity, if
Executive terminates employment with the Company in a manner entitling Executive
to severance payments and benefits under Section 8, but does not incur a
separation from service within the meaning of Section 409A, then any severance
payments or benefits that are Deferred Payments and that are not immediately
payable under this Section 23(a) will instead be paid to Executive when
Executive incurs a Separation from Service, notwithstanding that Executive may
no longer be employed under this Agreement.  For purposes of Section 409A
(including, without limitation, for purposes of Treasury Regulations Section
1.409A-2(b)(2)(iii)), Executive’s right to receive the payments under this
Agreement, including the severance payments and benefits, will be treated as a
right to receive a series of separate payments and, accordingly, each
installment payment will at all times be considered a separate and distinct
payment.
 
(b)                Six-Month Wait for Key Executives Following Separation from
Service.  To the extent that any amount payable or benefit to be provided under
this Agreement or any other agreement between the parties hereto constitutes an
amount payable or benefit to be provided under a “nonqualified deferred
compensation plan” (as defined in Section 409A) upon a “separation from service”
(as defined in Section 409A), including any amount payable under Section 8
above, and to the extent that the Executive is deemed to be a “specified
employee” (as that term is defined in Section 409A and pursuant to procedures
established by the Company) on the “separation from service” date, then,
notwithstanding any other provision in this Agreement or any other agreement to
the contrary, such payment or benefit provision will not be made to the
Executive during the six-month period immediately following the Executive’s
“separation from service” date.  Instead, on the first day of the seventh month
following such “separation from service" date, all amounts that otherwise would
have been paid or provided to the Executive during that six-month period, but
were not paid or provided because of this Section 23(a), will be paid or
provided to the Executive at such time, with any cash payment to be made in a
single lump sum (without any interest with respect to that six-month period). 
This six-month delay will cease to be applicable if the Executive “separates
from service” due to death or if the Executive dies before the six-month period
has elapsed.
 
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(c)           Section 409A Compliance; Exceptions to Payment Delay. To the
maximum extent permitted by applicable law, amounts payable to Executive under
Section 8 will be made in reliance upon Treasury Regulations Section
1.409A-1(b)(4) (with respect to short-term deferrals) or Treasury Regulations
Section 1.409A-1(b)(9) (with respect to separation pay plans). Accordingly, the
severance payments provided for in Section 8 are not intended to provide for any
deferral of compensation subject to Section 409A of the Code to the extent (i)
the severance payments payable under Section 8, by its terms and determined as
of the date of Executive’s Separation from Service, may not be made later than
the 15th day of the third calendar month following the later of (1) the end of
the Company’s fiscal year in which Executive’s termination of employment occurs
or (2) the end of the calendar year in which Executive’s termination of
employment occurs, or (ii) the severance payments do not exceed an amount equal
to two times the lesser of (1) the amount of Executive’s annualized compensation
based upon Executive’s annual rate of pay for the calendar year immediately
preceding the calendar year in which Executive’s termination of employment
occurs (adjusted for any increase during the calendar year in which such
termination of employment occurs that would be expected to continue indefinitely
had Executive remained employed with the Company) or (2) the maximum amount that
may be taken into account under a qualified plan under Section 401(a)(17) of the
Code for the calendar year in which Executive’s termination of employment
occurs. To the extent the payments and benefits under this Agreement are subject
to Section 409A, this Agreement will be interpreted, construed and administered
in a manner that satisfies the requirements of Sections 409A(a)(2), (3) and (4)
of the Code and the Treasury Regulations and official guidance thereunder. If
said payments and benefits to Executive are not exempt from or in compliance
with Section 409A, the parties will attempt to bring such payments and benefits
into compliance with Section 409A without diminishing the benefits to which
Executive is entitled to the greatest extent possible.
 
(d)           Expense Reimbursement.  If required for compliance with Section
409A of the Code, any business expenses incurred by Executive that are
reimbursed by the Company as a non-taxable reimbursement under this Agreement
will be paid in accordance with Treasury Regulations Section 1.409A-3(i)(1)(iv)
and in accordance with the Company’s standard expense reimbursement policies,
but in any event on or before the last day of Executive’s taxable year following
the taxable year in which Executive incurred the expenses. The amounts
reimbursed during any taxable year of Executive will not affect the amounts
provided in any other taxable year of Executive, and Executive’s right to
reimbursement for these amounts will not be subject to liquidation or exchange
for any other benefit.
 
(e)           Timing of Release.  Notwithstanding anything in this Agreement to
the contrary, if the sixty-day (60-day) consideration period set forth in
Section 8(d) would span two calendar years, any payments specified as commencing
within sixty (60) days of Executive’s termination of employment shall commence
in the next calendar year, with the first payment to include all payments that
would have been made but for the provisions of this Section 23(e).
 
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24.               Successors and Assigns.  Because the Executive’s obligations
under this Agreement are personal in nature, the Executive’s obligations may
only be performed by the Executive and may not be assigned by him.  This
Agreement is also binding upon the Executive’s successors, heirs, executors,
administrators and other legal representatives, and shall inure to the benefit
of the Company and its subsidiaries, successors and assigns.
 
25.               Consultation with Counsel.  The Executive acknowledges that he
has had a full and complete opportunity to consult with counsel of his own
choosing concerning the terms, enforceability and implications of this
Agreement.
 
26.               No Other Representations.  The Executive acknowledges that the
Company has made no representations or warranties to the Executive concerning
the terms, enforceability or implications of this Agreement other than as
reflected in this Agreement.
 
27.              Headings.  The titles and headings of sections and subsections
contained in this Agreement are included solely for convenience of reference and
will not control the meaning or interpretation of any of the provisions of this
Agreement.
 
28.              Counterparts.  This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, and
such counterparts shall together constitute but one agreement.
 
29.              Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Maryland, without giving
effect to its conflict of laws principles.
 
[Signature page follows]
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
 
REXAHN PHARMACEUTICALS, INC.
 
EXECUTIVE
     
By:
/s/ Peter Suzdak   /s/ Ely Benaim
Name: Peter Suzdak, Ph.D.
 
Name: Ely Benaim, M.D.
Title:   Chief Executive Officer
   

 
[Signature page to Employment Agreement]
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EXHIBIT A

Form of Employment Release
(“Employment Release”)

In consideration of the payments and benefits set forth in Section 8 of the
Agreement, I, Ely Benaim, M.D., do hereby release and forever discharge Rexahn
Pharmaceuticals, Inc., together with its direct and indirect subsidiaries), the
“Company”), and all present and former directors, officers, agents,
representatives, employees, successors and assigns of the Company, and its
direct or indirect owners, and its affiliates and all present and former
directors, officers, agents, representatives, employees, successors and assigns
of such affiliates (collectively, the “Released Parties”) to the extent provided
below.
 
1.    Except as provided in paragraph 3 below, I knowingly and voluntarily
release and forever discharge the Company and the other Released Parties from
any and all claims, controversies, actions, causes of action, cross-claims,
counter-claims, demands, debts, compensatory damages, liquidated damages,
punitive or exemplary damages, other damages, claims for costs, expenses and
attorneys’ fees, or liabilities of any nature whatsoever in law and in equity,
both past and present (through the date of this Employment Release) and whether
known or unknown, suspected, or claimed against the Company or any of the
Released Parties which I or any of my heirs, executors, administrators or
assigns, may have, including, but not limited to, any allegation, claim or
violation, arising under:  Title VII of the Civil Rights Act of 1964, as
amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act
of 1967, as amended (including the Older Workers Benefit Protection Act); the
Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990;
the Family and Medical Leave Act of 1993; the Civil Rights Act of 1866, as
amended; the Worker Adjustment Retraining and Notification Act; the Employee
Retirement Income Security Act of 1974; any applicable Executive Order Programs;
the Fair Labor Standards Act; Corporate and Criminal Fraud Accountability Act of
2002, also known as the Sarbanes Oxley Act or their state or local counterparts;
or under any other federal, state or local civil or human rights law, or under
any other local, state, or federal law, regulation or ordinance; or under any
public policy, contract or tort, or under common law; or arising under any
policies, practices or procedures of the Company; or any claim for wrongful
discharge, breach of contract, infliction of emotional distress, defamation; or
any claim for costs, fees, or other expenses, including attorney’ fees, incurred
in these matters).  Nothing herein releases the Company from its post-employment
obligations to me pursuant to the Agreement or from any claims that may not be
released as a matter of law through a private agreement.
 
Anything herein to the contrary notwithstanding, nothing herein shall release
the Company or any other Released Parties from any claims or damages based on:
(i) any right or claim that arises after the Execution Date (as defined below),
(ii) any right, including a right to a payment or benefit, the Executive may
have under this Agreement or for accrued or vested benefits and stock based
awards pursuant to the terms and conditions of the applicable plan document,
(iii) the Executive’s eligibility for indemnification, in accordance with
applicable laws or the certificate of incorporation or by-laws of the Company,
or under any applicable insurance policy, with respect to any liability the
Executive incurs or has incurred as a director, officer or employee of the
Company and its subsidiaries or (iv) any right the Executive may have to obtain
contribution as permitted by law in the event of entry of judgment against him
as a result of any act or failure to act for which he and the Company or any
other Released Parties are jointly liable.
 
Exhibit A - Page 1

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2.    I represent that I have made no assignment or transfer of any right,
claim, demand, cause of action, or other matter covered by paragraph 1 above.
 
3.    I acknowledge and agree that my separation from employment with the
Company in compliance with the terms of the Agreement shall not serve as the
basis for any claim or action, including without limitation any claim under the
Age Discrimination in Employment Act of 1967.
 
4.    In signing this Employment Release, I acknowledge and intend that it shall
be effective as a bar to each and every one of the claims hereinabove mentioned
or implied.  I expressly consent that this Employment Release shall be given
full force and effect according to each and all of its express terms and
provisions, including those relating to unknown and unsuspected claims
(notwithstanding any state statute that expressly limits the effectiveness of a
general release of unknown, unsuspected and unanticipated claims), if any, as
well as those relating to any other claims hereinabove mentioned or implied.  I
acknowledge and agree that this waiver is an essential and material term of this
Employment Release and that without such waiver the Company would not have
agreed to the terms of the Agreement.  I further agree that in the event I
should bring a claim seeking damages against the Company or any Released Party,
or in the event I should seek to recover against the Company or any Released
Party in any claim brought by a governmental agency on my behalf, this release
shall serve as a complete defense to such claims.  I further agree that I am not
aware of any pending claim or complaint of the type described in paragraph 1 as
of the execution of this Employment Release.
 
5.    I agree that neither this Employment Release, nor the furnishing of the
consideration for this Employment Release, shall be deemed or construed at any
time to be an admission by the Company, any Released Party or myself of any
improper or unlawful conduct.
 
6.    I acknowledge and agree that
 
(a)                the consideration provided to me exceeds anything to which I
am otherwise entitled and that I am owed no wages, commissions, bonuses,
finder’s fees, equity or incentive awards, severance pay, vacation pay or any
other compensation or vested benefits or payments or remuneration of any kind or
nature other than as specifically provided for in this Employment Release;
 
Exhibit A - Page 2

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(b)                if I make any claim or demand or commence or threaten to
commence any action, claim or proceeding against the Company or any other
Released Parties with respect to any cause, matter or thing which is the subject
of this Employment Release, the Company may raise this Employment Release as a
complete bar to any such action, claim or proceeding, and the Company or any
other Released Parties, as applicable may recover from me all costs incurred in
connection with such action, claim or proceeding, including attorneys’ fees.
 
7.    I agree that I will forfeit all amounts payable by the Company pursuant to
the Agreement if I challenge the validity of this Employment Release.  I also
agree that if I violate this Employment Release by suing the Company or the
other Released Parties, I will pay all costs and expenses of defending against
the suit incurred by the Released Parties, including reasonable attorneys’ fees,
and return all payments received by me pursuant to the Agreement.
 
8.    Notwithstanding anything in this Employment Release to the contrary, this
Employment Release shall not relinquish, diminish, or in any way affect any
rights or claims arising out of any breach by the Company or by any Released
Party of the Agreement.
 
9.    Whenever possible, each provision of this Employment Release shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Employment Release is held to be invalid, illegal
or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Employment Release shall
be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
 
BY SIGNING THIS EMPLOYMENT RELEASE, I REPRESENT AND AGREE THAT:
 
1.    I HAVE READ IT CAREFULLY;
 
2.    I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT
RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN
EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964,
AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF
1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;
 
3.    I VOLUNTARILY CONSENT TO EVERYTHING IN IT;
 
4.    I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I
HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO
SO OF MY OWN VOLITION;
 
Exhibit A - Page 3

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5.    I HAVE BEEN OFFERED AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS
RELEASE ON [_____________, 20__], TO CONSIDER IT AND THE CHANGES MADE SINCE THE 
[_____________, 20__] VERSION OF THIS RELEASE ARE NOT MATERIAL AND WILL NOT
RESTART THE REQUIRED 21‑DAY PERIOD;
 
6.    THE CHANGES TO THE AGREEMENT SINCE [_____________, 20__] EITHER ARE NOT
MATERIAL OR WERE MADE AT MY REQUEST;
 
7.    I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO
REVOKE THIS RELEASE SOLELY WITH RESPECT TO THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, AS AMENDED, AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR
ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;
 
8.    I HAVE SIGNED THIS EMPLOYMENT RELEASE KNOWINGLY AND VOLUNTARILY AND WITH
THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND
 
9.    I AGREE THAT THE PROVISIONS OF THIS EMPLOYMENT RELEASE MAY NOT BE AMENDED,
WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN
AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.
 
IN WITNESS WHEREOF, the parties hereto have executed this Employment Release as
of this [_____ day of _________ 20__] (the “Execution Date”).
 
REXAHN PHARMACEUTICALS, INC.
 
EXECUTIVE
     
By:
           
Name:
 
Name: Ely Benaim, M.D.
Title:
   

 
 
Exhibit A - Page 4

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