Document:

ex4-8.htm

 

EXHIBIT 4.8

 

RESTRICTED STOCK PURCHASE AGREEMENT

 

This Restricted Stock Purchase Agreement (this “Agreement”) is entered into as of December 31, 2012 by and between CytRx Corporation, a Delaware corporation (the “Company”), and Daniel Levitt, M.D., Ph.D. (“Levitt”), with reference to the following facts:

 

RECITALS

 

A.           The Company proposes to grant to Levitt under the Company’s 2008 Stock Incentive Plan (the “Plan”) 100,000 restricted shares (the “Restricted Shares”) of common stock, par value $0.001 per share, of the Company (“Common Stock”) on the terms and provisions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing, the Company and Levitt hereby agree as follows:

 

1. Grant of Restricted Shares.  Concurrently with the execution and delivery of this Agreement, the Company shall grant and issue to Levitt 100,000 Restricted Shares against Levitt’s payment and delivery to the Company of $100, representing the par value of the Restricted Shares.

 

2. Vesting of the Restricted Shares.

 

(a) Vesting Schedule.  The Restricted Shares that shall have vested in accordance with the terms of this Agreement are referred to as “Vested Shares,” and the Restricted Shares that shall not have vested are referred to as “Unvested Shares.”  All of the Restricted Shares shall be Unvested Shares as of the date of issuance hereunder.  The Unvested Shares shall vest in accordance with the following schedule:

 

(i) 50,000 of the Restricted Shares shall vest on June 30, 2013, but only if Levitt remains in the continuous employ of the Company through that date; and

 

(ii) The remaining 50,000 of the Restricted Shares shall vest in six installments of 8,333 shares each (8,335 shares in the case of the sixth and final installment) on the last day of each month commencing July 2013 and ending December 2013, but only if Levitt remains in the continuous employ of the Company through each such date.

 

(b) Accelerated Vesting Upon a Change in Control.  Notwithstanding paragraph (a) above, in the event of a “Change in Control” all Unvested Shares shall immediately and automatically vest and become Vested Shares on the day that is one day prior to the completion of the Change in Control.  For purposes of this Section 2(b), a “Change in Control” shall have the meaning ascribed to such term in the Company’s 2000 Long-Term Incentive Plan and shall also have the meaning ascribed to the term “Corporate Transaction” in the Company’s 2008 Stock Incentive Plan, as each such Plan may be amended from time to time.

 

(c) Accelerated Vesting upon Death or Termination due to Disability or by the Company without Cause.  Notwithstanding paragraph (a) above, any Unvested Shares shall vest in full as of the date of Levitt’s termination of employment on or after January 1, 2013 due to Levitt’s death or by the Company without Cause or on account of Levitt’s Disability (as such terms are defined in Sections 6.2 and 6.3 of the Employment Agreement effective as of January 1, 2013 by and between the Company and Levitt (the “2013 Employment Agreement”).

 

(d) Forfeiture of Unvested Shares upon Early Termination of Service.  If Levitt ceases to be employed by the Company prior to December 31, 2013 for any reason other than as described in paragraph (c) above, (i) all of the Restricted Shares that are Unvested Shares as of such employment termination date shall immediately and automatically be forfeited and reconveyed to the Company without the necessity for any payment by the Company and shall be cancelled on the Company’s share record books, and (ii) Levitt shall immediately and automatically cease to have any ownership right in any and all such Unvested Shares as of such employment termination date.

 

(e) Stockholder Rights.  From the Grant Date and continuing for so long as the Unvested Shares shall not have been forfeited as provided in paragraph (c), above, Levitt shall have the right to vote the Restricted Shares, including the Unvested Shares, and shall have a right to receive any dividends with respect to the Restricted Shares that the Company may declare regarding the Common Stock, except that any dividend payable with respect to any Unvested Shares in capital stock or other assets other than cash shall be deemed to be Uninvested Shares under this Agreement and shall be retained by the Company and released to Levitt only in conjunction with the release to him of the underlying Vested Shares as provided in Section 4, below.

 

  

  

  

3. No Transfer Permitted of Unvested Shares; Restriction on Transfer of Vested Shares; Taxes.

 

(a) Levitt shall not, and shall not purport to, sell, assign or otherwise transfer any of the Restricted Shares, or any interest therein, that are Unvested Shares.  Levitt is permitted to sell, assign or otherwise transfer the Restricted Shares only if and when they become Vested Shares pursuant to Section 2, above, and only in accordance with Section 3(b), below.

 

(b) Levitt may satisfy any federal, state or local tax withholding obligation relating to the Restricted Shares by any of the following means or by a combination of such means: (i) tendering a cash payment; or (ii) electing to have the Company withhold or otherwise reacquire Vested Shares from Levitt having a fair market value equal to the minimum statutory amount required to be withheld in connection with the vesting of such Shares.  Except as contemplated by Section 3(b)(ii), Levitt shall not, and shall not purport to, sell, assign or otherwise transfer any of the Restricted Shares, or any interest therein, that are Vested Shares unless and until all of the Restricted Shares shall have become Vested Shares or shall have been forfeited pursuant to Section 2(c), above.  Notwithstanding the foregoing, but subject to Section 3(c), below, Levitt shall be entitled, in his discretion, to sell such number of Restricted Shares that shall have become Vested Shares, as or after they shall have become Vested Shares, to the extent necessary to provide funds to Levitt in an amount equal to the federal and state income taxes payable by Levitt as a result of Restricted Shares becoming Vested Shares hereunder, assuming for this purpose that Levitt is subject to federal and state income tax at the highest marginal tax rates under applicable federal and state law.

 

(c) Any and all sales of Vested Shares permitted under Section 3(b), above, shall be made exclusively under a plan established by Levitt and implemented in accordance with Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Levitt agrees to furnish such 10b5-1 plan to the Company in advance of any such permitted sales of Vested Shares and that the Company, in its discretion, may disclose in the Company’s periodic or current reports filed under the Exchange Act Levitt’s establishment of such 10b5-1 plan and the material terms thereof.  Nothing in this Section 3 shall affect Levitt’s responsibilities under any insider trading policy or other applicable policy of the Company in connection with any permitted sale of Vested Shares hereunder.

 

4. Stock Certificates.

 

(a) Concurrently herewith, the Company shall issue in book-entry form in Levitt’s name the Restricted Shares.  The Company shall retain the same, and any stock certificate or certificates or other evidence of the Unvested Shares at any time.  For purposes of facilitating the enforcement of this Agreement, concurrently herewith Levitt shall deliver a Stock Power, in substantially the form that is attached hereto as Exhibit A, executed in blank by Levitt and Levitt’s spouse, with respect to the Restricted Shares, to the Secretary or Assistant Secretary of the Company, to hold in escrow for so long as the Restricted Shares remain Unvested Shares, with the authority to take all such actions and to effectuate all such transfers and releases as may be necessary or appropriate to accomplish the objectives of this Agreement in accordance with the terms hereof.  Levitt hereby acknowledges that the appointment of the Secretary or Assistant Secretary of the Company as the escrow holder hereunder with the authority stated is a material inducement to the Company to grant the Restricted Shares and enter into this Agreement, and that such appointment is coupled with an interest and is accordingly irrevocable.  Levitt agrees that such escrow holder shall not be liable to any party for any actions or omissions unless such escrow holder is guilty of intentional misconduct, bad faith or gross negligence relative thereto.  The escrow holder may rely upon any letter, notice or other document executed by any signature purported to be genuine and may resign at any time.

 

(b) The Company shall release to Levitt in book-entry form in his name the Vested Shares if and when they become Vested Shares hereunder.

 

5. Levitt’s Representations and Warranties.  In connection with the receipt of the Restricted Shares, Levitt hereby represents and warrants as follows:

 

(a) Access to Information.  The Company has furnished Levitt the prospectus relating to the Plan, and Levitt has had access to and a sufficient opportunity to review all annual and periodic reports and proxy and information statements that the Company has filed with the SEC during the twelve months prior to the date hereof.  Neither the Company nor any of its officers, other directors, employees or other agents has made any representation or recommendation to Levitt about the advisability of Levitt’s acceptance or retention of the Restricted or the sale of any Vested Shares.

 

  

  

  

(b) Tax Matters.  The Company previously advised Levitt to consult with his own tax advisor regarding whether an election under Section 83(b) of the Internal Revenue Code of 1986, as amended, should be made by Levitt within thirty days after the date hereof.  Levitt shall be solely responsible for the payment of any and all federal, state and other taxes that may be imposed on Levitt by reason of the grant of the Restricted Shares and any vesting or subsequent sale of the Vested Shares.

 

(c) Levitt acknowledges and agrees that any certificates or other documentation evidencing the Restricted Shares shall bear a legend or notation substantially as follows:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN VESTING AND FORFEITURE PROVISIONS AS SET FORTH IN A RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION.

(d) In addition, the Company shall make a notation regarding the restrictions on transfer of the Restricted Shares in its stock books, and shares of the Restricted Shares shall be transferred on the books of the Company only if transferred or sold in accordance with this Agreement.

 

(e) No Right to Continuing Employment.  Levitt understands that nothing in this Agreement gives him a right to continued employment by the Company.

 

6. Miscellaneous Provisions.

 

(a) Further Instruments.  The Company and Levitt agree to execute such further instruments and to take such further actions as may be reasonably necessary to carry out the intent of this Agreement.

 

(b) Plan Provisions.  The grant of the Restricted Shares and the terms of this Agreement are subject to the terms and provisions of the Plan.  In the event of a conflict between the provisions of this Agreement and of the Plan, the provisions of the Agreement shall govern.

 

(c) Complete Agreement.  This Agreement, the 2013 Employment Agreement and the Plan constitute the complete and exclusive agreement between the Company and Levitt with respect to the subject matter herein and replace and supersede any and all other prior written and oral agreements or statements by the parties relating to such subject matter.

 

(d) Successors and Assigns.  Subject to the provisions of this Agreement relating to the non-transferability of the Unvested Shares, this Agreement shall be binding upon and inure to the benefit of the Company and Levitt and their respective successors and permitted assigns.  Whenever appropriate in this Agreement, references to the Company or Levitt shall be deemed to refer to such person’s legal representative, estate or other transferees, successors or permitted assigns, as applicable.

 

(e) Amendment and Termination.  This Agreement may be amended or terminated only by a writing executed by both the Company and Levitt.

 

(f) Counterparts.  This Agreement may be executed by facsimile and in two counterparts, each of which shall be deemed an original, but both of which shall constitute one and the same instrument.

 

(g) Governing Law.  This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware without giving effect to such state’s conflict-of-law principles.

 

(h) Spousal Consent.  Levitt shall cause his spouse, if any, to execute a Consent of Spouse in substantially the form of that attached hereto as Exhibit B concurrently with the execution of this Agreement or, if Levitt is not now married, at such later time as he may marry.

 

  

  

  

IN WITNESS WHEREOF, the Company and Levitt have executed and delivered this Agreement as of the day and year first written above.

 

	  	
CYTRX CORPORATION

 

 

By:      /s/ STEVEN A. KRIEGSMAN

Name: Steven A. Kriegsman

Title: President and CEO

 

	  	
 

 

/s/ Daniel Levitt, M.D., Ph.D.

Daniel Levitt, M.D., Ph.D.ex10-19.htm

 

EXHIBIT 10.19

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is made and entered into as of January 1, 2013 (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 continue to employ Employee, and Employee shall continue to serve, as Employer’s Chief Medical Officer on the terms set forth herein.  As of the Effective Date, Employer shall also be promoted to the title of Executive Vice President.

 

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 mutually agreed to from time to time by Employee and 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 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 Employee 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 .  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 other companies or organizations or provide consulting services to other companies or organizations, provided in each case 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. Employee shall inform Employer of such services.

 

4. Term.  The term (the “Term”) of Employee’s employment hereunder shall commence on the Effective Date and shall expire on December 31, 2013, 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 June 30, 2014.

 

  

  

  

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 Five Hundred Twenty Five Thousand Dollars ($525,000), payable in accordance with Employer’s normal payroll policies and procedures.

 

5.2. Bonus.  Employee is eligible for a bonus for his services during the Term.  The bonus, payable with respect to calendar year 2013 shall not be less than $150,000. One half of such bonus (i.e. not less than $75,000) shall be paid on or before June 30, 2013, and the other half of such bonus (i.e. not less than $75,000) shall be paid on or before December 31, 2013.

 

5.3. 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 (i) round-trip airfare and airport parking or other ground transportation to and from the airports, or, (ii) if driving, the cost of gas and meals, but shall not pay for any other 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.

 

5.4. 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 5.3(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 5.4) (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 5.3(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 5.3(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 5.4) (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

 

(c) Subject to the provisions of Section 5.4(d) hereof, all determinations required to be made under this Section 5.4, 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 5.4, 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 5.4(d) and Employee thereafter is required to make a payment of any Additional Section 5.3(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

 

(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 5.4(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.

 

5.5. Vacation.  Employee shall continue to accrue vacation days without loss of compensation in accordance with Employer’s usual policies applicable to all employees at a rate of four weeks’ vacation time for each 12-month period during the Term.

 

5.6. Employee Benefits.  Employee shall be eligible to participate in any employee benefits made available generally by Employer to all of its employees under its group plans and employment policies in effect during the Term; provided, however, that Employee waives coverage in Employer’s group medical plan.  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.

 

5.7. 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 30 calendar days to correct such breach;

 

(b) Employee’s conviction of, or plea of guilty or nolo contendere to, any misdemeanor, felony or other crime of moral turpitude;

 

  

  

  

(c) Employee’s conviction of fraud 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 30 calendar 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 written 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 as if paid through the end of the Term, any Tax Gross-Up or Parachute Tax Gross-Up payment as described in Section 5.4 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 death or permanent disability, any accrued but unpaid salary, the minimum bonus described in Section 5.2 applied to the base salary as if paid through the end of the Term, any Tax Gross-Up or Parachute Tax Gross-Up payment as described in Section 5.4 and unused vacation as of the date of such termination as required by California law.

 

7. Confidentiality.  While this Agreement is in effect and for a period of five years thereafter, Employee shall hold and keep secret and confidential all “trade secrets” (within the meaning of applicable law) and other confidential or proprietary information of Employer and shall use such information only in the course of performing Employee’s duties hereunder; provided, however, that with respect to trade secrets, Employee shall hold and keep secret and confidential such trade secrets for so long as they remain trade secrets under applicable law.  Employee shall maintain in trust all such trade secrets or other confidential or proprietary information, as Employer’s property, including, but not limited to, all documents concerning Employer’s business, including Employee’s work papers, telephone directories, customer information and notes, and any and all copies thereof in Employee’s possession or under Employee’s control.  Upon the expiration or earlier termination of Employee’s employment with Employer, or upon request by Employer, Employee shall deliver to Employer all such documents belonging to Employer, including any and all copies in Employee’s possession or under Employee’s control.

 

  

  

  

8. Equitable Remedies; Injunctive Relief.  Employee hereby acknowledges and agrees that monetary damages are inadequate to fully compensate Employer for the damages that would result from a breach or threatened breach of Section 7 of this Agreement and, accordingly, that Employer shall be entitled to equitable remedies, including, without limitation, specific performance, temporary restraining orders, and preliminary injunctions and permanent injunctions, to enforce such Section without the necessity of proving actual damages in connection therewith.  This provision shall not, however, diminish Employer’s right to claim and recover damages or enforce any other of its legal or equitable rights or defenses.

 

9. Indemnification; Insurance.  Employer and Employee acknowledge that, as the Executive Vice President and 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.  Effective on the Effective Date, Employer shall maintain 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, and for a period of five years thereafter or, if longer, the date as of which the statute of limitations on any claim covered by these indemnification rights expires.

 

10. Severable Provisions.  The provisions of this Agreement are severable and if any one or more provisions is determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions, and any partially unenforceable provisions to the extent enforceable, shall nevertheless be binding and enforceable.

 

11. Successors and Assigns.  This Agreement shall inure to the benefit of and shall be binding upon Employer, its successors and assigns and Employee and his heirs and representatives; provided, however, that neither party may assign this Agreement without the prior written consent of the other party.

 

12. Entire Agreement.  This Agreement contains the entire agreement of the parties relating to the subject matter hereof, and the parties hereto have made no agreements, representations or warranties relating to the subject matter of this Agreement that are not set forth otherwise herein.  This Agreement supersedes any and all prior or contemporaneous agreements, written or oral, between Employee and Employer relating to the subject matter hereof.  Any such prior or contemporaneous agreements are hereby terminated and of no further effect, and Employee, by the execution hereof, agrees that any compensation provided for under any such agreements is specifically superseded and replaced by the provisions of this Agreement.

 

13. Amendment.  No modification of this Agreement shall be valid unless made in writing and signed by the parties hereto and unless such writing is made by an executive officer of Employer (other than Employee).  The parties hereto agree that in no event shall an oral modification of this Agreement be enforceable or valid.

 

14. Governing Law.  This Agreement is and shall be governed and construed in accordance with the laws of the State of California without giving effect to California’s choice-of-law rules.

 

  

  

  

15. Notice.  All notices and other communications under this Agreement shall be in writing and mailed, telecopied (in case of notice to Employer only) or delivered by hand or by a nationally recognized courier service guaranteeing overnight delivery to a party at the following address (or to such other address as such party may have specified by notice given to the other party pursuant to this provision):

 

	
If to Employer:

 

CytRx Corporation

11726 San Vicente Boulevard, Suite 650

Los Angeles, California  90049

Facsimile:                  (310) 826-5529

Attention:                  Chief Executive Officer

	
If to Employee:

 

Daniel Levitt, M.D., Ph.D.

__________________

__________________

 

 

16. Survival.  Sections 4, 5.2, 5.3, 5.4, 6.2, 6.3, 7 through 16, 18 and 20 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.

 

19. No Interpretation of Ambiguities Against Drafting Party.  This Agreement has been negotiated at arm's length between persons knowledgeable in the matters dealt with herein.  In addition, each party has been represented by experienced and knowledgeable legal counsel.  Accordingly, the parties agree that any rule of law, including, but not limited to, California Civil Code Section 1654 or any other statutes, legal decisions, or common law principles of similar effect, that would require interpretation of any ambiguities in this Agreement against the party that has drafted it, is of no application and is hereby expressly waived.  The provisions of this Agreement shall be interpreted in a reasonable manner to effect the intentions of the parties hereto.

 

20. Section 409A of the Code.  This Agreement is intended to comply with the applicable requirements of Section 409A of the Code and the regulations promulgated thereunder (“Section 409A”), and shall be administered in accordance with Section 409A to the extent Section 409A of the Code applies to the Agreement. Notwithstanding anything in the Agreement to the contrary, distributions pursuant to the Agreement that are subject to Section 409A may only be made in a manner, and upon an event, permitted by Section 409A.

 

The provisions of this Agreement shall be construed and interpreted to avoid the imposition of any additional tax, penalty or interest under Section 409A while preserving, to the extent possible, the intended benefits hereunder payable to Employee.  Employer and Employee agree that any payment made pursuant to this Agreement due to Employee’s “separation from service” as defined in Section 409A shall be delayed in accordance with Section 409A(a)(2)(B)(i) of the Code (six month delay) if and to the extent required to avoid the imposition of any tax, penalty or interest under Section 409A. Any additional cost to Employee by reason of such postponement period, including, for example, Employee’s payment of the cost of health benefits during the postponement period, shall be reimbursed by the Company to Employee after such period has ended. If Employee dies during the postponement period prior to the payment of benefits, the amounts withheld on account of Section 409A shall be paid to Employee’s beneficiary, or if none, to the personal representative of Employee’s estate within 30 days after the date of Employee’s death.

 

  

  

  

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, M.D., Ph.D.

Daniel Levitt, M.D., Ph.D.

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