Document:

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (“Agreement”) is made effective as of January 10, 2011, by and between ENTREMED, INC., a Delaware corporation having its principal office at 9640 Medical Center Drive, Rockville, MD 20850 (the “Company”) and Sara Capitelli (the “Executive”).

 

FOR AND IN CONSIDERATION of the mutual premises, agreements and covenants contained herein, the parties hereto, intending to be legally bound, do hereby agree as follows:

 

1.           Employment; Position and Duties.

 

Subject to the terms hereof, the Company hereby agrees to employ Executive during the Term (as hereafter defined) to act as, and to exercise all of the powers and functions of, its Vice President, Finance and Principal Accounting Officer, and to perform such acts and duties and to generally furnish such services to the Company and its subsidiaries (if any) as is customary for a senior management person with a similar position in like companies.  Among other things, and subject to change at the discretion of the Executive Committee of the Board of Directors (the “Board”), the Executive shall be responsible for providing direction to and management of the Company’s finance, accounting, treasury, Securities and Exchange Commission reporting and other administration activities.  Executive shall report directly to the Executive Committee of the Board or such other senior officers of the Company as designated by the Executive Committee, and have such other powers, duties and responsibilities as the Executive Committee shall from time to time reasonably prescribe.  Executive will be a member of the Company’s Senior Management Team.  Executive hereby agrees to accept such employment and shall perform and discharge faithfully, diligently, and to the best of her abilities such duties and responsibilities and shall devote sufficient working time and efforts to the business and affairs of the Company and its subsidiaries.

 

2.           Place of Employment.

 

While Executive is employed by the Company during the Term, Executive shall conduct her duties and responsibilities hereunder from the executive offices located in Rockville, Maryland (except for routine and customary business travel), or from such other location as approved by the Executive Committee.

 

3.           Compensation

 

a.           Base Salary.  While the Company employs the Executive during the Term, the Company shall pay to Executive an annual base salary (“Base Salary”) of no less than $170,000, payable in accordance with the Company’s customary payroll policy for its executives.

 

b.           Base Salary Adjustments.  Executive’s Base Salary shall be reviewed at least annually in accordance with the Company’s customary practices for its executives.  The Board or a committee thereof may make such adjustments, as it deems appropriate in its sole discretion; provided, however, in no event shall the Company pay Executive a Base Salary of less than $170,000, unless the change to Executive’s Base Salary was applicable to the annual base salary of all senior executives of the Company in substantially the same manner.

 

c.           Incentive Compensation. While the Company employs Executive during the Term, Executive’s annual incentive compensation (“Incentive Compensation”) shall be targeted at 25% of base compensation, the exact amount of which shall be determined by the Board or a committee thereof in its sole discretion. Executive shall be eligible for Incentive Compensation commencing at the start of the Initial Term. Such bonus, if any, shall be paid within ninety (90) days following the last day of each fiscal year of the Company.

 

  

  

 

 

d.           Certain Other Benefits.  Throughout the Term, Executive shall be entitled to participate in any and all employee benefit plans and arrangements which are available to senior executive officers of the Company, including without limitation, group medical, disability and life insurance plans, and the Company’s Directors and Officers (D&O) insurance policy.  Executive shall also be afforded no fewer than twenty-three (23) days paid time off (PTO) pursuant to policies fixed by the Company.

 

e.           Expenses.  The Company shall pay or reimburse Executive for all reasonable business expenses actually paid or incurred by Executive while Executive is employed by the Company during the Term, including annual certified public accountant dues or other professional dues incurred in connection with her duties as set forth in Section 1 of this Agreement, subject to reasonable documentation and in accordance with the Company’s business expense reimbursement policy.

 

f.           Signing Bonus.   The Company shall pay Executive a one-time signing bonus of $5,000, which payment shall be made following commencement of Executive’s employment with the Company, in accordance with the Company’s customary payroll procedures and subject to any required deductions or withholdings.

 

4.           Term.

 

The term of this Agreement shall be the period commencing on January 10, 2011 and continuing for one year (the “Initial Term”); provided, however, that the Term of this Agreement shall be extended automatically for successive one year periods (each one-year extension a “Successor Term” and together with the Initial Term referred to herein as the “Term”) unless written notice of nonextension is provided by either party to the other party at least sixty (60) days prior to the end of the Initial Term or any Successor Term.  In the event that this Agreement is not extended at the end of the Initial Term or any Successor Term and thereby terminates, only paragraphs 6, 7, 8(d), 8(g), 8(h), 8(i) and 11 shall survive such termination, except that Executive shall be entitled to receive compensation and benefits to the extent expressly provided herein or by the terms of any of the Company’s compensation and benefit plans, programs or policies or as required by applicable law.

 

5.           Stock Options.

 

In connection with Executive’s acceptance of employment, the Company shall grant stock options to Executive covering 10,000 shares of the Company’s common stock with a per share exercise price equal to the closing price of the Company’s stock on the date of grant.  Such options will vest as to 25% of the covered shares on the date of grant, and shall vest as to the remaining covered shares in cumulative 25% share increments on each of the first, second, and third anniversary of the date of grant, if Executive is then employed by the Company, and such award shall be subject to the terms and conditions of the Company’s form of non-qualified stock option award agreement.  Other periodic stock and non-qualified stock option grants to Executive, if any, while the Company employs Executive during the Term shall be determined by the Board or a committee thereof in its discretion. In the event of a termination pursuant to paragraph 8(d) hereof or a resignation pursuant to paragraph 9 hereof, for which purposes sections 10(a) and 10(c) of this Agreement shall control, all vested options held by Executive on the effective date of such termination or resignation shall be exercisable in accordance with the terms of such grants until the later of the date set forth in such grant or twelve (12) months following Executive’s date of termination, but in no event beyond the expiration date of the relevant option. Upon a change in control, as defined in the option agreement, all unvested options shall vest and become exercisable immediately in accordance with the terms of the option agreement. All other unvested options shall expire in accordance with the terms of such grants. Except as set forth herein, the terms of the stock option grants under this paragraph 5 shall be otherwise in accordance with and subject to the terms of the Company’s 2001 Long Term Incentive Plan or successor plan and such terms and conditions as the Board or a committee thereof may specify.

 

  

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6.           Unauthorized Disclosure.

 

During the Term and at all times thereafter, Executive shall not, without the written consent of the Company, or except as required by applicable law, disclose to any person, other than a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by Executive of her duties as an executive officer of the Company, any material confidential information obtained by Executive while in the employ of the Company with respect to the businesses of the Company or any of its subsidiaries, including but not limited to, operations, pricing, contractual or personnel data, products, discoveries, improvements, trade secrets, license agreements, marketing information, suppliers, dealers, principles, customers, or methods of distribution, or any other confidential information the disclosure of which Executive  knows, or in the exercise of reasonable care should know, will be damaging to the Company; provided, however, that confidential information shall not include any information known generally to the public or to persons in the industry of which the Company’s business is a part (in each case, other than as a result of unauthorized disclosure by Executive) or any information otherwise considered by the Company not to be confidential.

 

7.           Indemnification.

 

a.           The Company shall defend, indemnify and hold harmless Executive if she is made a party, or threatened to be made a party, to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (a “Proceeding”), because she is or was an officer or director of the Company or any of its subsidiaries, affiliates, or successors, or because she is or was serving in a fiduciary capacity with respect to employee benefit plans of the Company, whether or not the basis of such Proceeding is alleged action in an official capacity or otherwise, against all Expenses incurred or suffered by her in connection with such Proceeding to the fullest extent authorized by the General Corporation Law of the State of Delaware and any other applicable law in effect from time to time, and such indemnification shall continue as to Executive even if she ceases to be an officer or director or is no longer employed by the Company, and shall inure to the benefit of Executive’s heirs, executors and administrators.

 

b.           As used in this Agreement, the term “Expenses” shall include, without limitation, damages, losses, judgments, liabilities, fines, penalties, excise taxes, settlements and reasonable costs, reasonable attorneys’ fees, reasonable accountants’ fees, and reasonable disbursements and costs of attachment or similar bonds, investigations, and any reasonable expenses of establishing a right to indemnification under this Agreement.

 

c.           Expenses incurred by Executive in connection with any Proceeding shall be paid by the Company upon presentation of appropriate documentation and a giving by Executive of any undertakings required by applicable law.

 

  

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8.           Termination.

 

a.           Upon Death.  If Executive dies while employed by the Company during the Term, her estate shall be entitled to receive payment of Base Salary through the last day of the six (6) months following the month in which her death occurred, payable over six (6)  months at the Company’s normal pay periods; provided, however, that is Executive’s death occurs during the first three months of her employment, her estate shall be entitled to receive payment of Base Salary through the last day of the three (3) months following the month in which her death occurred, payable over three (3)  months at the Company’s normal pay periods. If, in respect of the fiscal year in which Executive dies the Board or a committee thereof determines in its discretion that she would otherwise have been entitled to receive Incentive Compensation under subparagraph 3(c) by reason of the operations of the Company during such fiscal year, Executive’s estate shall be entitled to receive a pro rata portion of her Incentive Compensation for such fiscal year. Such pro rata portion shall equal the product of (x) the full amount of such Incentive Compensation, and (y) a fraction, the numerator of which is the number of days in the fiscal year of Executive’s death prior to the date of death, and the denominator of which is the total number of days in such fiscal year.

 

b.           Termination Upon Disability.  The Company may terminate Executive’s employment hereunder during the Term at the end of any calendar month in the event of her Disability by giving to Executive written notice of termination. In the event of any such termination pursuant to this subparagraph 8(b), Executive shall be entitled to receive her Base Salary, payable in accordance with the Company’s customary payroll policy for it executives, through the last day of the six (6)  months following the month in which the date of termination occurred, provided, however, that if such termination occurred during the first three (3) months of Executive’s employment with the Company, Executive shall be entitled to receive her Base Salary, payable in accordance with the Company’s customary payroll policy for it executives, through the last day of the three (3) months following the month in which the date of termination occurred.  If in respect of the fiscal year in which Executive’s employment terminates pursuant to this subparagraph 8(b) the Board or a committee thereof determines in its discretion that she would otherwise have been entitled to receive Incentive Compensation under subparagraph 3(c) by reason of the operations of the Company during such fiscal year, Executive shall be entitled to receive a pro rata portion of her Incentive Compensation for such year.  Such pro rata portion shall equal the product of (x) the full amount of such Incentive Compensation, and (y) a fraction, the numerator of which is the number of days in the fiscal year of Executive’s termination on account of Disability prior to the date of termination, and the denominator of which is the total number of days in such fiscal year.

 

c.           Termination for Cause.  The Company may terminate Executive’s employment hereunder at any time during the Term for Cause by giving to Executive written notice of termination that specifies the reasons for and date of termination, subject to the terms of sub-paragraph 10(a) hereunder.  Upon any such termination for Cause under this subparagraph 8(c), the Company shall pay to Executive Base Salary through the date of termination, including the benefits provided at paragraph 3(d), and the Company shall have no further obligations under this Agreement.

 

  

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d.           Termination Without Cause.  The Company may terminate Executive’s employment with the Company at any time during the Term, for any reason and without Cause, by giving her written notice thirty (30) days prior to the date of termination.  Until the effective date of any such termination, the Company shall continue to pay to Executive the full compensation specified in this Agreement, including the benefits provided at paragraph 3(d).  Following the date of termination, Executive shall make herself reasonably available to members of the Board and other senior managers and officers of the Company to assist in the transition of responsibilities and information to others and to facilitate the orderly conduct of business operations. Upon termination, the Company shall have no other financial obligations to Executive under any compensation or benefit plan, program or policy and Executive’s participation in the Company’s compensation and benefit plans, programs and policies shall cease as of the date of Executive’s termination except as set forth herein or as expressly provided under the terms of any such plans, programs or policies, or as required by applicable law.  However, in addition to the above, if Executive is terminated (i) pursuant to this subparagraph 8(d) or (ii) the Term is not extended in accordance with Section 4 and for any reason other than Cause, the Company shall (A) pay Executive a severance amount equal to six (6) months Base Salary over the following six (6) months at the Company’s normal pay periods; provided, however, that if such termination occurs within the first three months of Executive’s employment, the Company shall pay Executive a severance amount equal to three (3) months Base Salary over the following three (3) months at the Company’s normal pay periods, and (B) provide Executive coverage under the Company’s health insurance program, under the same terms as are available to other senior executive officers of the Company, for a period of six (6) months (or, if applicable, three (3) months in the event of a termination within the first three months of Executive’s employment), after which Executive would be eligible for COBRA continuation coverage, or until she has obtained substantially equivalent new coverage, as determined by the Board or a committee thereof in its discretion, through successor employment, whichever occurs sooner.  If, in respect of the fiscal year in which Executive’s employment terminates pursuant to this subparagraph 8(d), the Board or a committee thereof determines in its discretion that she would otherwise have been entitled to receive Incentive Compensation under subparagraph 3(c) by reason of the operations of the Company during such fiscal year, Executive shall be entitled to receive a pro rata portion of her Incentive Compensation for such year. Such pro rata portion shall equal the product of (x) the full amount of such Incentive Compensation, and (y) a fraction, the numerator of which is the number of days in the fiscal year of Executive’s termination without Cause prior to the date of termination, and the denominator of which is the total number of days in such fiscal year.

 

e.           Resignation for Other than Good Reason.  Executive may voluntarily terminate her employment with the Company during the Term for any reason upon at least thirty (30) days prior written notice, which specifies the effective date of termination.  Until the effective date of such termination, the Company shall continue to pay her the full compensation specified in this Agreement, including the benefits provided at paragraph 3(d), provided she continues to perform her duties during this period. Thereafter, the Company shall have no further obligations to her under this Agreement. This subparagraph 8(e) shall not apply to Executive’s resignation for Good Reason pursuant to paragraph 9 hereof.

 

f.           No Mitigation.  The parties hereto acknowledge and agree that, in the event Executive’s employment with the Company is terminated pursuant to this paragraph 8, she shall not be required to mitigate her damages by affirmatively seeking other employment.  Further, except as provided in subparagraph 8(d)(ii) above, the amount of any payment or benefit provided for in this Agreement shall not be reduced by any compensation earned by her or benefit provided to her as the result of employment by another employer or otherwise.

 

g.           Non-Competition.  For the period of (i) twelve (12) months after resignation for other than for Good Reason, or (ii) six (6) months after termination of employment with the Company for any other reason, Executive shall not, as an individual, principal, agent, employee, consultant or otherwise, directly or indirectly, or with respect to any company or entity with which the Company has concluded partnership, licensing, joint research and development or other similar business agreements during her employment with the Company, render any services to any firm or company or any division or subsidiary of any firm or company, engaged in the development or commercialization of compounds, analogs or derivatives of those compounds that (a) are of a similar type, that is, small molecules, (for example, but not limited to, small peptidomimetic molecules), (b) have more than one mechanism of action and cellular pathway in common with; and (c) are within the same field (i.e. oncology or inflammation) as, those being developed and or commercialized by the Company during the Term (“Competing Company”).  In addition, for an additional period of six (6) months after the six-month period set forth above and subject to Section 6 hereof, Executive only may provide services to such a Competing Company if Executive does not work on, or furnish confidential information regarding, any matter related to such compounds defined above.  Moreover, for a period of twelve (12) months after the termination of Executive’s employment with the Company, Executive shall not take any action, without the prior written consent of the Company, to assist Executive’s successor employer or any other entity in recruiting or hiring any other employee who was an employee of the Company during Executive’s employment.  This prohibition includes (i) identifying to such successor employer or its agents or such other entity, the person or persons who have special knowledge concerning the Company or its inventions, processes, methods or confidential affairs, and (ii) commenting to Executive’s successor employer or its agents or such other entity about the quantity or work, quality of work, special knowledge or personal characteristics of any person who is still employed by the Company. Executive also agrees that he will not provide such information to a prospective employer or to an executive search firm during interviews preceding possible employment.

 

  

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h.           Non-Disparagement.  During the Term and thereafter, Executive shall not communicate negatively about or otherwise disparage the Company or its products or each and any of the released parties described in subparagraph 8(i) in any way whatsoever except as may be required for truthful sworn testimony or in connection with a legal or administrative proceeding, report, claim or dispute. The Company, acting in its official capacity, shall not make any public false, disparaging or derogatory statements in connection with or concerning Executive’s service to the Company except as may be required for truthful sworn testimony or in connection with a legal or administrative proceeding, report, claim or dispute. After termination, in the event Executive materially breaches any of the conditions set forth herein or in any other paragraph of this Agreement, the Company may discontinue the provision of any payment or benefits to her under this Agreement, and in such event she shall forfeit her entitlement to any further termination payments or benefits under this Agreement. After termination, in the event the Company materially breaches any of the conditions set forth herein or in any other paragraph of this Agreement, the Executive may pursue any remedies available to her at law.

 

i.           Release.  In consideration of Executive’s receipt of severance benefits subject to and in accordance with subparagraphs 8(b) and (d) and paragraph 9 of this Agreement, Executive agrees that, upon her first receipt and acceptance of any such benefits, she shall have released and forever discharged the Company, its subsidiaries and affiliates, successors and assigns, predecessors and all of their respective officers, directors, employees and agents and employee benefits plans from all claims, demands, liabilities and causes of action arising out of facts or occurrences arising or occurring at any time up to and including the time of Executive’s termination or resignation, whether known or unknown, and the parties hereto contemplate that this release shall be broadly construed.

 

9.           Resignation for Good Reason.

 

If Executive has Good Reason during the Term, Executive may resign at any time during the Term by providing at least thirty (30) days prior written notice to the Company that specifies the reason for, and the effective date of, her resignation.  If Executive resigns during the Term for Good Reason, such resignation shall be deemed a Termination without Cause under subparagraph 8(d) hereof and Executive shall receive the compensation and benefits provided under subparagraph 8(d) hereof as if she had been terminated without Cause.

 

10.         Definitions.

 

a.           “Cause” shall mean Executive’s (i) habitual drunkenness or drug addiction, (ii) material failure to perform and discharge her duties and responsibilities hereunder, (iii) misconduct that is materially and significantly injurious to the Company, (iv) conviction of a felony involving the personal dishonesty of Executive or moral turpitude, (v) conviction of any crime or offense involving the property of the Company or (vi) material breach of Executive’s obligations under this Agreement, provided, however, with regard to Section 10(a)(ii) and 10(a)(vi) above, the parties exclude for this purpose an action not taken in bad faith that is remedied by Executive promptly upon receipt of written notice thereof given to the Company.

 

  

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b.           “Disability” shall mean the Executive’s incapacity due to physical or mental illness which prevents the proper performance of Executive’s duties as set forth herein or established pursuant hereto for ninety (90) days in any twelve (12) month period of the Term.  A qualified independent physician mutually selected by the Company and the Executive shall determine any questions as to the existence or extent of illness or incapacity of Executive, upon which the Company and Executive cannot agree.  The determination of such physician certified in writing to the Company and to the Executive shall be final and conclusive for all purposes of this Agreement.  For purposes of the disability provisions of this Agreement, if the Executive is unable to act on her own behalf due to incapacity, any person legally authorized to do so may act on the Executive’s behalf.

 

c.           “Good Reason” shall mean the occurrence of any of the following events during the Term:  (A) the assignment to Executive of any duties inconsistent in any material respect with Executive’s position, authority, duties or responsibilities as of the commencement of the Term or any other action by the Company which results in a diminution in any material respect in such position, duties or responsibilities, excluding for this purpose an isolated and inadvertent action not taken in bad faith that is remedied by the Company promptly after receipt of written notice thereof given by Executive; (B) a reduction by the Company in Executive’s annual Base Salary as in effect on the date hereof or subsequently in effect hereunder, except as agreed to by Executive, unless such change was applicable to all senior executives of the Company; (C) the failure by the Company to continue to provide Executive with benefits substantially similar to those enjoyed by her under any of the Company’s pension, life insurance, medical, health and accident, disability or other welfare plans in which she was participating as of the commencement of the Term or subsequently in effect hereunder, unless such change was applicable to all senior executives of the Company; (D) the failure by the Company to pay to Executive any deferred compensation when due under any deferred compensation plan or agreement applicable to her; (E) the failure by the Company to honor in any material respect the terms and provisions of this Agreement; or (F) a requirement by the Company that Executive conduct her duties and responsibilities from a permanent location more than fifty (50) miles from the place of employment, as defined in paragraph 2 herein.

 

11.         Miscellaneous.

 

a.           Assignments and Binding Effect.  The respective rights and obligations of the parties under this Agreement shall be binding upon the parties hereto and their heirs, executors, administrators, successors, and assigns, including, in the case of the Company, any other corporation or entity with which the Company may be merged or otherwise combined and, in the case of Executive, her estate or other legal representatives.

 

b.           No Assignment of Benefits.  Except as otherwise provided herein or by applicable law, no right or interest of the Executive under this Agreement shall be assignable or transferable, in whole or in part, either directly or by the operation of law or otherwise, including without limitation execution, levy, garnishment, attachment, pledge or in any manner; no attempted transfer thereof shall be effective.

 

c.           Governing Law.  This Agreement shall be governed as to its validity, interpretation and effect by the laws of the State of Maryland, without reference to its conflict of laws provisions.

 

d.           Severability.  In the event that any provision or portion of this Agreement shall be determined to be invalid, illegal, or unenforceable for any reason, the remaining provisions and portions of this Agreement shall remain in full force and effect to the fullest extent permitted by law.  Such invalid, illegal or unenforceable provision(s) shall be deemed modified to the extent necessary to make it (them) valid, legal, and enforceable.

 

  

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e.           Withholding.  All amounts payable hereunder shall be paid net of any applicable withholding required under federal, state or local laws and any additional withholding to which Executive has agreed.

 

f.           Entire Agreement; Amendments.  This Agreement constitutes the entire Agreement and understanding of the Company and Executive with respect to the terms of Executive’s employment with the Company and supersedes all prior discussions, understandings and agreements with respect thereto.

 

g.           Captions.  All captions and headings used herein are for convenient reference only and do not form part of this Agreement.

 

h.           Waiver.  No provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in writing and signed by the Executive and the Board or its delegate. The failure of the Company or the Executive to insist upon strict compliance with the terms of this Agreement or the failure of the Company or the Executive to assert any right the Company or the Executive may have hereunder shall not be deemed a waiver of such provision or right or any other provision of this Agreement.

 

i.            Notice.  Any notice or communication required or permitted under this Agreement shall be made in writing and shall be delivered by hand, or mailed by registered or certified mail, return receipt requested, first call postage prepaid, addressed as follows:

 

If to Executive:

Sara Capitelli

c/o EntreMed, Inc.

9640 Medical Center Drive

Rockville, Maryland 20850

If to the Company:

EntreMed, Inc.

9640 Medical Center Dive

Rockville, Maryland 20850

Attn.:  Chief Operating Officer

j.            Counterparts.  This Agreement may be executed in counterparts, each of which shall constitute one and the same agreement.

 

[Remainder of Page Intentionally Left Blank]

 

  

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of January 10, 2011.

 

	  	
EXECUTIVE

	  	  
	 	   
	  	
Sara Capitelli

	  	  	  
	  	
ENTREMED, INC.

	  	  	  
	  	
By:

	    
	  	  	
Name:  Cynthia W. Hu

	  	  	
Title:    Chief Operating Officer,

	  	  	
             General Counsel & Secretary

 

  

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SEPARATION AGREEMENT AND GENERAL RELEASE

THIS AGREEMENT AND GENERAL RELEASE (hereinafter this Agreement”) is made and entered into by and between Kathy Wehmeir-Davis, (hereinafter “Employee”) and EntreMed, Inc., a Delaware corporation (hereinafter “Employer”).  Employer and Employee are sometimes referred to collectively herein as “the Parties” and individually herein as “Party.”

 

WHEREAS, Employee and Employer entered into that certain Employment Agreement, effective as of January 1, 2009 (the “Employment Agreement”), pursuant to which Employee serves as Employer’s Principal Accounting Officer;

 

WHEREAS, Employee’s employment shall terminate effective January 15, 2011 (hereinafter “Employment Termination Date”); and

 

WHEREAS, Employee and Employer desire to resolve and settle any matters between them, including, without limitation, matters that might arise out of Employee's employment by Employer and the termination thereof.

 

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises herein contained, of other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged by the Parties, it is agreed as follows:

 

1.           In accordance with Section 8(d) of the Employment Agreement, in connection with Employee’s termination without “Cause” (as such term is defined in the Employment Agreement), Employee will be eligible to receive severance benefits representing 6 months (“severance period”) of base salary (i.e., $100,000) (less any applicable taxes) to follow the Employer’s pay cycle, beginning with the first pay period following the Effective Date of this Agreement.  Employer will provide coverage under the Employer’s health insurance plan at the Employer’s expense for the earlier of: (i) nine (9) months following the Effective Date, after which Employee shall be entitled to continue group health insurance at her own expense pursuant to the federal law commonly known as COBRA, or (ii) until Employee has obtained substantially equivalent health insurance, as determined by the Board of Directors of Employer or a committee thereof in its discretion, through successor employment.  Employee agrees to immediately notify Employer, in writing, at such time that Employee has obtained substantially equivalent health insurance through successor employment, if such employment is obtained within nine months of the Effective Date.  Additionally, Employer shall (i) reimburse Employee’s housing costs for Employee’s apartment at Oakwood in Rockville, Maryland (the “Oakwood Apartment”) through February 28, 2011 or until an earlier date (but no earlier than the Effective Date) if such landlord at the Oakwood Apartment agrees to modify the lease to reduce the notice period for terminating the apartment lease, and (ii) take all necessary actions, with respect solely to the stock option award granted to Employee on January 27, 2009, to accelerate the vesting of the shares subject to such award that remain unvested as of the Effective Date.

2.           In exchange for the payments and other considerations provided for in this Agreement, Employee hereby completely, irrevocably and unconditionally releases and forever discharges Employer, and any of its affiliated companies, and each and all of their officers, agents, directors, supervisors, employees, representatives, and their successors and assigns, and all persons acting by, through, under, for, or in concert with them, or any of them, in any and all of their capacities (hereinafter individually or collectively, the “Released Parties”), from any and all charges, complaints, claims, and liabilities of any kind or nature whatsoever, known or unknown, suspected or unsuspected (hereinafter referred to as “claim” or “claims”) which Employee at any time heretofore had or claimed to have or which Employee may have or claim to have regarding events that have occurred as of the Effective Date of this Agreement, including, without limitation, those based on: any employee welfare benefit or pension plan governed by the Employee Retirement Income Security Act as amended (“ERISA”) (provided that this release does not extend to any vested retirement benefits of Employee under Employer’s 401(k) Safe Harbor Plan); the Civil Rights Act of 1964, as amended (race, color, religion, sex and national origin discrimination and harassment); the Civil Rights Act of 1866 (42 U.S.C. § 1981) (discrimination); the Age Discrimination in Employment Act of 1967 (“ADEA”), as amended; the Older Workers Benefit Protection Act, as amended; the Americans With Disabilities Act (“ADA”), as amended; § 503 of the Rehabilitation Act of 1973; the Fair Labor Standards Act, as amended (wage and hour matters); the Family and Medical Leave Act, as amended, (family leave matters), any other federal, state, or local laws or regulations regarding employment discrimination or harassment, wages, insurance, leave, privacy or any other matter; any negligent or intentional tort; any contract, policy or practice (implied, oral, or written); or any other theory of recovery under federal, state, or local law, and whether for compensatory or punitive damages, or other equitable relief, including, but not limited to, any and all claims which Employee may now have or may have had, arising from or in any way whatsoever connected with Employee’s employment, termination of employment, or contacts, with Employer or any other of the Released Parties whatsoever.  Employee represents that she has been provided with all leave to which he may have been entitled under the Family and Medical Leave Act, and he has been paid all wages (including overtime, if applicable) to which she is entitled under the Fair Labor Standards Act (or any similar state or local laws).  Employee further represents that as of the Separation Date, he or she is not suffering from a work-related injury and that he or she has not failed to report a work-related injury to Employee.  Notwithstanding the foregoing, Employee is not releasing:  (1) any rights under this Agreement; (2) any rights to indemnification or liability insurance coverage; (3) any vested rights; (4) any rights that may not be released as a matter of law; or (5) any rights that arise after the Effective Date.

  

  

 

Execution Copy

3.           To the extent permitted by law, Employee agrees that she will not cause or encourage any future legal proceedings to be maintained or instituted against any of the Released Parties, and will not participate in any manner in any legal proceedings against any of the Released Parties, with respect to any claims released under Section 2, above.  To the extent permitted by law, Employee agrees that she will not accept any remedy or recovery arising from any charge filed or proceedings or investigation conducted by the EEOC or by any state or local human rights or employment rights enforcement agency relating to any of the matters released in this Agreement.

4.           Older Workers Benefit Protection Act /ADEA Waiver

a.         Employee acknowledges that Employer has advised her in writing to consult with an attorney of her choice before signing this Agreement, and Employee has been given the opportunity to consult with an attorney of her choice before signing this Agreement.

b.         Employee acknowledges that she has been given the opportunity to review and consider this Agreement for a full twenty-one days before signing it, and that, if he or she has signed this Agreement in less than that time, he or she has done so voluntarily in order to obtain sooner the benefits of this Agreement.

c.         Employee further acknowledges that he or she may revoke this Agreement within seven (7) days after signing it, provided that this Agreement will not become effective until such seven (7) day period has expired.  To be effective, any such revocation must be in writing and delivered to Employer’s principal place of business by the close of business on the seventh (7th) day after signing the Agreement and must expressly state Employee’s intention to revoke this Agreement.  Provided that Employee does not timely revoke this Agreement, the eighth (8th) day following the execution of this Agreement shall be deemed the “Effective Date” of this Agreement.

d.         The Parties also agree that the release provided by Employee in this Agreement does not include a release for claims under the ADEA arising after the date Employee signs this Agreement.

e.         Employee further acknowledges and agrees that the amounts he or she is to receive under this Agreement exceed the amounts to which he or she would otherwise be entitled upon his/her termination from employment with Employer.

5.           To the extent Employee has not already done so and except as provided otherwise in this Agreement, following the Employment Termination Date, Employee shall promptly turn over to Employer any and all documents, files, computer records, or other materials belonging to, or containing confidential or proprietary information obtained from Employer that are in Employee's possession, custody, or control, including any such materials that may be at Employee's home.

6.           Employee acknowledges that, during the course of Employee's employment with Employer, Employee has acquired or been exposed to Employer’s confidential information and trade secrets, including, but not limited to, business plans, research and development plans, financial data, proprietary technology, scientific research, and customer lists (“Confidential Information”).  Employee agrees hereafter to maintain the confidentiality of the Confidential Information to refrain from disclosing any Confidential Information to anyone, to refrain from using the Confidential Information on his/her own behalf or on behalf of anyone other than Employer, and to comply with any “Employee Confidentiality Agreement” Employee has executed.

  

  

 

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7.           The Parties agree that they will keep absolutely confidential, and not make any future disclosures to anyone other than to their attorneys and accountants about anything regarding the terms and conditions of this Agreement, except to the extent that disclosure may be necessary:

a.           to enforce this Agreement; and/or

b.           to obtain unemployment compensation; and/or

c.           to a tax advisor or attorney in connection with a tax matter; and/or

d.           to the United States Internal Revenue Service, or state or local tax authority upon its request for tax purposes; and/or

e.           to their immediate families; and/or

f.           as required by court order or otherwise required by law or in response to valid legal process; provided that the Parties may make disclosure to attorneys, accountants, tax advisors, and family members (as permitted under the limited circumstances stated above) only if such persons agree to keep the information confidential; and provided further that before providing information pursuant to a court order or other legal requirement, the Party providing such information shall promptly notify the other Party, and to the extent possible will comply with the court order or other legal requirement in ways that preserve confidentiality.

8.           Employee agrees that she will not make or publish any untrue or misleading statement or comment about Employer or any of its officers, directors, employees, or agents.  Employer agrees that  neither it nor any person or entity its control will make or publish any adverse, disparaging, untrue, or misleading statement or comment about Employee. 

9.           This Agreement shall not in any way be construed as an admission by Employer of any acts of unlawful conduct, wrongdoing or discrimination against Employee, and Employer specifically disclaims any liability to Employee on the part of itself, its employees, or its agents.  This Agreement shall not in any way be construed as an admission by Employee of any acts of unlawful conduct, wrongdoing or discrimination against Employer, and Employee specifically disclaims any liability to Employer on the part of himself/herself or his/her agents.

10.         This Agreement shall be binding upon Employee and upon Employee's heirs, administrators, representatives, executors, successors, and assigns, and shall inure to the benefit of the Released Parties and each of them, and to their heirs, administrators, representatives, executors, successors, and assigns.  This Agreement shall be binding upon Employer and upon Employer’s assigns and shall inure to the benefit of Employee and his/her heirs, administrators, representatives, executors, successors, and assigns.

11.         This Agreement sets forth the entire agreement between Employer and Employee and, except as expressly provided for in this Agreement, fully supersedes any and all prior agreements or understandings between Employer and Employee pertaining to the subject matter hereof, except that the Employee Confidentiality Agreement shall remain in full force and effect.  In reaching this Agreement, neither Employer nor Employee has relied upon any representation or promise except those set forth herein.  If any provision, or portion of a provision, of this Agreement is held to be invalid, void or unenforceable for any reason, the remainder of the Agreement shall remain in full force and effect, as if such provision, or portion of such provision, had never been contained herein.  The unenforceability or invalidity of a provision of the Agreement in one jurisdiction shall not invalidate or render that provision unenforceable in any other jurisdiction.

12.         This Agreement cannot be amended, modified, or supplemented in any respect except by written agreement entered into and signed by the Parties.

13.         This Agreement shall be governed by the laws of the State of Maryland without giving effect to conflict of laws principles, and Employee consents to exclusive personal jurisdiction in the state and federal courts of the State of Maryland for any proceeding arising out of or relating to this Agreement.  The language of all parts of the Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the Parties.

  

  

 

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14.         Employee acknowledges that he or she has read each and every section of this Agreement and that he or she understands his/her rights and obligations under this Agreement.

15.         This Agreement may be signed in counterparts, each of which shall be considered an original for all purposes, and all of which taken together shall constitute one and the same written agreement.

PLEASE READ THIS AGREEMENT CAREFULLY; IT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

 

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IN WITNESS WHEREOF, Employer has caused this Agreement to be executed by its duly authorized officer, and Employee has executed this Agreement, on the date(s) set forth below.

 

	
EMPLOYEE:

	  
	  	  
	
  

	
Date     1/27/11

	
Kathy Wehmeir-Davis

	  

 

	
ENTREMED, INC. (“EMPLOYER”)

	  
	 	 
	
By:

	    	
Date     1/27/11

	
Name:

	  	  
	
Title:

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