Document:

Exhibit 10.2

                               DIGIRAD CORPORATION
                      2005 INDUCEMENT STOCK INCENTIVE PLAN

                          NOTICE OF STOCK OPTION AWARD
                          ----------------------------

     Grantee's Name and Address:
                                           ---------------------

                                           ---------------------

                                           ---------------------

     You (the "Grantee") have been granted, as an inducement material to your
decision to accept employment with Digirad Corporation (the "Company"), an
option to purchase shares of Common Stock, subject to the terms and conditions
of this Notice of Stock Option Award (the "Notice"), the Digirad Corporation
2005 Inducement Stock Incentive Plan, as amended from time to time (the "Plan")
and the Stock Option Award Agreement (the "Option Agreement") attached hereto,
as follows. Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Notice.

     Date of Award
                                           ----------
     Vesting Commencement Date
                                           ----------
     Exercise Price per Share
                                           ----------
     Total Number of Shares Subject
     to the Option (the "Shares")
                                           ----------
     Expiration Date:
                                           ----------

     Post-Termination Exercise Period:     Three (3) Months

Vesting Schedule:
-----------------

     Subject to the Grantee's Continuous Service and other limitations set forth
in this Notice, the Plan and the Option Agreement, the Option may be exercised,
in whole or in part, in accordance with the following schedule:

     25% of the Shares subject to the Option shall vest twelve months after the
Vesting Commencement Date, and 1/36 of the remaining Shares subject to the
Option shall vest on each monthly anniversary of the Vesting Commencement Date
thereafter.

     During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall be suspended after the leave of absence exceeds
a period of ninety (90) days. Vesting of the Option shall resume upon the
Grantee's termination of the leave of absence and return to service to the
Company or a Related Entity. The Vesting Schedule of the Option shall be
extended by the length of the suspension.

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<PAGE>

     In the event of the Grantee's change in status from Employee to Consultant
or from an Employee whose customary employment is 20 hours or more per week to
an Employee whose customary employment is fewer than 20 hours per week, vesting
of the Option shall continue only to the extent determined by the Administrator
as of such change in status.

     In the event of termination of the Grantee's Continuous Service for Cause,
the Grantee's right to exercise the Option shall terminate concurrently with the
termination of the Grantee's Continuous Service, except as otherwise determined
by the Administrator.

     IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice
and agree that the Option is to be governed by the terms and conditions of this
Notice, the Plan, and the Option Agreement.

                                               Digirad Corporation,
                                               a Delaware corporation

                                               By:
                                                   -----------------------------

                                               Title: President and CEO

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS SERVICE (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES
HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY
RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEE'S CONTINUOUS
SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT
OF THE COMPANY OR RELATED ENTITY TO WHICH THE GRANTEE PROVIDES SERVICES TO
TERMINATE THE GRANTEE'S CONTINUOUS SERVICE, WITH OR WITHOUT CAUSE, AND WITH OR
WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN
EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE SHALL BE
CONSIDERED AN AT-WILL EMPLOYEE.
     The Grantee acknowledges receipt of a copy of the Plan and the Option
Agreement, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts the Option subject to all of the terms
and provisions hereof and thereof. The Grantee has reviewed this Notice, the
Plan, and the Option Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Notice, and fully
understands all provisions of this Notice, the Plan and the Option Agreement.
The Grantee hereby agrees that all questions of interpretation and
administration relating to this Notice, the Plan and the Option Agreement shall
be resolved by the Administrator in accordance with Section 13 of the Option
Agreement. The Grantee further agrees to the venue selection and waiver of a
jury trial in accordance with Section 14 of the Option Agreement. The Grantee
further agrees to notify the Company upon any change in the residence address
indicated in this Notice.

Dated:                                   Signed:
       ----------------------                    -------------------------------
                                                             Grantee

                                       2
<PAGE>

                                                       Award Number: ___________

                               DIGIRAD CORPORATION
                      2005 INDUCEMENT STOCK INCENTIVE PLAN

                          STOCK OPTION AWARD AGREEMENT
                          ----------------------------

     1.   Grant of Option. Digirad Corporation, a Delaware corporation (the
"Company"), hereby grants to the Grantee (the "Grantee") named in the Notice of
Stock Option Award (the "Notice"), an option (the "Option") to purchase the
Total Number of Shares of Common Stock subject to the Option (the "Shares") set
forth in the Notice, at the Exercise Price per Share set forth in the Notice
(the "Exercise Price") subject to the terms and provisions of the Notice, this
Stock Option Award Agreement (the "Option Agreement") and the Company's 2005
Inducement Stock Incentive Plan, as amended from time to time (the "Plan"),
which are incorporated herein by reference. Unless otherwise defined herein, the
terms defined in the Plan shall have the same defined meanings in this Option
Agreement.

          The Option is a non-qualified stock option and is not intended to
qualify as an incentive stock option as defined in Section 422 of the Code.

     2.   Exercise of Option.
          ------------------

          a)   Right to Exercise. The Option shall be exercisable during its
     term in accordance with the Vesting Schedule set out in the Notice and with
     the applicable provisions of the Plan and this Option Agreement. The Option
     shall be subject to the provisions of Section 0 of the Plan relating to the
     exercisability or termination of the Option in the event of a Corporate
     Transaction or Change in Control. The Grantee shall be subject to
     reasonable limitations on the number of requested exercises during any
     monthly or weekly period as determined by the Administrator. In no event
     shall the Company issue fractional Shares.

          b)   Method of Exercise. The Option shall be exercisable by delivery
     of an exercise notice (a form of which is attached as Exhibit A) or by such
     other procedure as specified from time to time by the Administrator which
     shall state the election to exercise the Option, the whole number of Shares
     in respect of which the Option is being exercised, and such other
     provisions as may be required by the Administrator. The exercise notice
     shall be delivered in person, by certified mail, or by such other method
     (including electronic transmission) as determined from time to time by the
     Administrator to the Company accompanied by payment of the Exercise Price.
     The Option shall be deemed to be exercised upon receipt by the Company of
     such notice accompanied by the Exercise Price, which, to the extent
     selected, shall be deemed to be satisfied by use of the broker-dealer sale
     and remittance procedure to pay the Exercise Price provided in Section 0,
     below.

                                       1
<PAGE>

          c)   Taxes. No Shares will be delivered to the Grantee or other person
     pursuant to the exercise of the Option until the Grantee or other person
     has made arrangements acceptable to the Administrator for the satisfaction
     of applicable income tax and employment tax withholding obligations,
     including,without limitation, such other tax obligations of the Grantee
     incident to the receipt of Shares. Upon exercise of the Option, the Company
     or the Grantee's employer may offset or withhold (from any amount owed by
     the Company or the Grantee's employer to the Grantee) or collect from the
     Grantee or other person an amount sufficient to satisfy such tax
     withholding obligations.

     3.   Method of Payment. Payment of the Exercise Price shall be made by any
of the following, or a combination thereof, at the election of the Grantee;
provided, however, that such exercise method does not then violate any
Applicable Law and, provided further, that the portion of the Exercise Price
equal to the par value of the Shares must be paid in cash or other legal
consideration permitted by the Delaware General Corporation Law:

          a)   cash;

          b)   check;

          c)   surrender of Shares or delivery of a properly executed form of
     attestation of ownership of Shares as the Administrator may require which
     have a Fair Market Value on the date of surrender or attestation equal to
     the aggregate Exercise Price of the Shares as to which the Option is being
     exercised, provided, however, that Shares acquired under the Plan or any
     other equity compensation plan or agreement of the Company must have been
     held by the Grantee for a period of more than six (6) months (and not used
     for another Award exercise by attestation during such period); or

          d)   payment through a broker-dealer sale and remittance procedure
     pursuant to which the Grantee (i) shall provide written instructions to a
     Company-designated brokerage firm to effect the immediate sale of some or
     all of the purchased Shares and remit to the Company sufficient funds to
     cover the aggregate exercise price payable for the purchased Shares and
     (ii) shall provide written directives to the Company to deliver the
     certificates for the purchased Shares directly to such brokerage firm in
     order to complete the sale transaction.

     4.   Restrictions on Exercise. The Option may not be exercised if the
issuance of the Shares subject to the Option upon such exercise would constitute
a violation of any Applicable Laws. If the exercise of the Option within the
applicable time periods set forth in Section 6, 7 and 8 of this Option Agreement
is prevented by the provisions of this Section 5, the Option shall remain
exercisable until one (1) month after the date the Grantee is notified by the
Company that the Option is exercisable, but in any event no later than the
Expiration Date set forth in the Notice.

     5.   Termination or Change of Continuous Service. In the event the
Grantee's Continuous Service terminates, other than for Cause, the Grantee may,
but only during the Post-Termination Exercise Period, exercise the portion of
the Option that was vested at the date of such termination (the "Termination
Date"). The Post-Termination Exercise Period shall commence on the Termination
Date. In the event of termination of the Grantee's Continuous Service for Cause,
the Grantee's right to exercise the Option shall, except as otherwise determined
by the Administrator, terminate concurrently with the termination of the

                                        2
<PAGE>

Grantee's Continuous Service (also the "Termination Date"). In no event,
however, shall the Option be exercised later than the Expiration Date set forth
in the Notice. In the event of the Grantee's change in status from Employee,
Director or Consultant to any other status of Employee, Director or Consultant,
the Option shall remain in effect. In the event of the Grantee's change in
status from Employee to Director or Consultant, vesting of the Option shall
continue only to the extent determined by the Administrator as of such change in
status. Except as provided in Sections 0 and 0 below, to the extent that the
Option was unvested on the Termination Date, or if the Grantee does not exercise
the vested portion of the Option within the Post-Termination Exercise Period,
the Option shall terminate.

     6.   Disability of Grantee. In the event the Grantee's Continuous Service
terminates as a result of his or her Disability, the Grantee may, but only
within twelve (12) months commencing on the Termination Date (but in no event
later than the Expiration Date), exercise the portion of the Option that was
vested on the Termination Date. To the extent that the Option was unvested on
the Termination Date, or if the Grantee does not exercise the vested portion of
the Option within the time specified herein, the Option shall terminate.

     7.   Death of Grantee. In the event of the termination of the Grantee's
Continuous Service as a result of his or her death, or in the event of the
Grantee's death during the Post-Termination Exercise Period or during the twelve
(12) month period following the Grantee's termination of Continuous Service as a
result of his or her Disability, the person who acquired the right to exercise
the Option pursuant to Section 8 may exercise the portion of the Option that was
vested at the date of termination within twelve (12) months commencing on the
date of death (but in no event later than the Expiration Date). To the extent
that the Option was unvested on the date of death, or if the vested portion of
the Option is not exercised within the time specified herein, the Option shall
terminate.

     8.   Transferability of Option. The Option may not be transferred in any
manner other than by will or by the laws of descent and distribution, provided,
however, that the Option may be transferred during the lifetime of the Grantee
to the extent and in the manner authorized by the Administrator. Notwithstanding
the foregoing, the Grantee may designate one or more beneficiaries of the
Grantee's Option in the event of the Grantee's death on a beneficiary
designation form provided by the Administrator. Following the death of the
Grantee, the Option, to the extent provided in Section 7, may be exercised (a)
by the person or persons designated under the deceased Grantee's beneficiary
designation or (b) in the absence of an effectively designated beneficiary, by
the Grantee's legal representative or by any person empowered to do so under the
deceased Grantee's will or under the then applicable laws of descent and
distribution. The terms of the Option shall be binding upon the executors,
administrators, heirs, successors and transferees of the Grantee.

     9.   Term of Option. The Option must be exercised no later than the
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein. After the Expiration Date or such earlier date, the Option
shall be of no further force or effect and may not be exercised.

                                       3
<PAGE>

     10.  Tax Consequences. Set forth below is a brief summary as of the date of
this Option Agreement of some of the federal tax consequences of exercise of the
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

          a)   Exercise of Option. On exercise of the Option, the Grantee will
     be treated as having received compensation income (taxable at ordinary
     income tax rates) equal to the excess, if any, of the Fair Market Value of
     the Shares on the date of exercise over the Exercise Price. If the Grantee
     is an Employee or a former Employee, the Company will be required to
     withhold from the Grantee's compensation or collect from the Grantee and
     pay to the applicable taxing authorities an amount in cash equal to a
     percentage of this compensation income at the time of exercise, and may
     refuse to honor the exercise and refuse to deliver Shares if such
     withholding amounts are not delivered at the time of exercise.

          b)   Disposition of Shares. If the Shares received upon exercise of
     the Option are held for more than one year, any gain realized on
     disposition of the Shares will be treated as long-term capital gain for
     federal income tax purposes.

     11.  Entire Agreement: Governing Law. The Notice, the Plan and this Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee. Nothing in the Notice,
the Plan and this Option Agreement (except as expressly provided therein) is
intended to confer any rights or remedies on any persons other than the parties.
The Notice, the Plan and this Option Agreement are to be construed in accordance
with and governed by the internal laws of the State of California without giving
effect to any choice of law rule that would cause the application of the laws of
any jurisdiction other than the internal laws of the State of California to the
rights and duties of the parties. Should any provision of the Notice, the Plan
or this Option Agreement be determined to be illegal or unenforceable, such
provision shall be enforced to the fullest extent allowed by law and the other
provisions shall nevertheless remain effective and shall remain enforceable.

     12.  Construction. The captions used in the Notice and this Option
Agreement are inserted for convenience and shall not be deemed a part of the
Option for construction or interpretation. Except when otherwise indicated by
the context, the singular shall include the plural and the plural shall include
the singular. Use of the term "or" is not intended to be exclusive, unless the
context clearly requires otherwise.

     13.  Administration and Interpretation. Any question or dispute regarding
the administration or interpretation of the Notice, the Plan or this Option
Agreement shall be submitted by the Grantee or by the Company to the
Administrator. The resolution of such question or dispute by the Administrator
shall be final and binding on all persons.

     14.  Venue and Waiver of Jury Trial. The Company, the Grantee, and the
Grantee's assignees pursuant to Section 8 (the "parties") agree that any suit,
action, or proceeding arising out of or relating to the Notice, the Plan or this
Option Agreement shall be brought in the United States District Court for the

                                        4
<PAGE>

Southern District of California (or should such court lack jurisdiction to hear
such action, suit or proceeding, in a California state court in the County of
San Diego) and that the parties shall submit to the jurisdiction of such court.
The parties irrevocably waive, to the fullest extent permitted by law, any
objection the party may have to the laying of venue for any such suit, action or
proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT
THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If
any one or more provisions of this Section 14 shall for any reason be held
invalid or unenforceable, it is the specific intent of the parties that such
provisions shall be modified to the minimum extent necessary to make it or its
application valid and enforceable.

     15.  Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery, upon
deposit for delivery by an internationally recognized express mail courier
service or upon deposit in the United States mail by certified mail (if the
parties are within the United States), with postage and fees prepaid, addressed
to the other party at its address as shown in these instruments, or to such
other address as such party may designate in writing from time to time to the
other party.

                                END OF AGREEMENT

                                       5
<PAGE>

                                    EXHIBIT A
                                    ---------

                               DIGIRAD CORPORATION
                      2005 INDUCEMENT STOCK INCENTIVE PLAN

                                 EXERCISE NOTICE
                                 ---------------

Digirad Corporation
13950 Stowe Drive
Poway, California 92064-8803
Attention: Secretary

     1. Exercise of Option. Effective as of today, ______________, ___ the
undersigned (the "Grantee") hereby elects to exercise the Grantee's option to
purchase ___________ shares of the Common Stock (the "Shares") of Digirad
Corporation (the "Company") under and pursuant to the Company's 2005 Inducement
Stock Incentive Plan, as amended from time to time (the "Plan") and the
Non-Qualified Stock Option Award Agreement (the "Option Agreement") and Notice
of Stock Option Award (the "Notice") dated ______________, ________. Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Exercise Notice.

     2. Representations of the Grantee. The Grantee acknowledges that the
Grantee has received, read and understood the Notice, the Plan and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.

     3. Rights as Stockholder. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 0 of the Plan.

     4. Delivery of Payment. The Grantee herewith delivers to the Company the
full Exercise Price for the Shares, which, to the extent selected, shall be
deemed to be satisfied by use of the broker-dealer sale and remittance procedure
to pay the Exercise Price provided in Section 0 of the Option Agreement.

     5. Tax Consultation. The Grantee understands that the Grantee may suffer
adverse tax consequences as a result of the Grantee's purchase or disposition of
the Shares. The Grantee represents that the Grantee has consulted with any tax
consultants the Grantee deems advisable in connection with the purchase or
disposition of the Shares and that the Grantee is not relying on the Company for
any tax advice.

     6. Taxes. The Grantee agrees to satisfy all applicable foreign, federal,
state and local income and employment tax withholding obligations and herewith
delivers to the Company the full amount of such obligations or has made
arrangements acceptable to the Company to satisfy such obligations.

                                        1
<PAGE>

     7. Successors and Assigns. The Company may assign any of its rights under
this Exercise Notice to single or multiple assignees, and this agreement shall
inure to the benefit of the successors and assigns of the Company. This Exercise
Notice shall be binding upon the Grantee and his or her heirs, executors,
administrators, successors and assigns.

     8. Construction. The captions used in this Exercise Notice are inserted for
convenience and shall not be deemed a part of this agreement for construction or
interpretation. Except when otherwise indicated by the context, the singular
shall include the plural and the plural shall include the singular. Use of the
term "or" is not intended to be exclusive, unless the context clearly requires
otherwise.

     9. Administration and Interpretation. The Grantee hereby agrees that any
question or dispute regarding the administration or interpretation of this
Exercise Notice shall be submitted by the Grantee or by the Company to the
Administrator. The resolution of such question or dispute by the Administrator
shall be final and binding on all persons.

     10. Governing Law; Severability. This Exercise Notice is to be construed in
accordance with and governed by the internal laws of the State of California
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties. Should any provision of this
Exercise Notice be determined by a court of law to be illegal or unenforceable,
such provision shall be enforced to the fullest extent allowed by law and the
other provisions shall nevertheless remain effective and shall remain
enforceable.

     11. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery, upon
deposit for delivery by an internationally recognized express mail courier
service or upon deposit in the United States mail by certified mail (if the
parties are within the United States), with postage and fees prepaid, addressed
to the other party at its address as shown below beneath its signature, or to
such other address as such party may designate in writing from time to time to
the other party.

     12. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this agreement.

     13. Entire Agreement. The Notice, the Plan and the Option Agreement are
incorporated herein by reference and together with this Exercise Notice
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee. Nothing in the Notice,
the Plan, the Option Agreement and this Exercise Notice (except as expressly
provided therein) is intended to confer any rights or remedies on any persons
other than the parties.

                                        2
<PAGE>

Submitted by:                              Accepted by:

GRANTEE:                                   DIGIRAD CORPORATION

                                           By:
                                               ---------------------------------

                                           Title:
-----------------------------------
           (Signature)

Address:                                   Address:
-------                                    -------

-----------------------------------        13950 Stowe Drive

-----------------------------------        Poway, California 92064-8803

SSN:
     ------------------------------

                                       3EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement"), dated as of September 12, 2005, is made by and between Rexahn Pharmaceuticals, Inc. (the "Company") and Dr. Chang H. Ahn (the "Employee").

W I T N E S S E T H :

WHEREAS, the Company desires to employ the Employee pursuant to the terms and conditions contained in this Agreement; and 

WHEREAS, the Employee 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 Employee's employment under this Agreement shall commence on the date first written above, and unless sooner terminated pursuant to Section 7 below, shall continue through the fifth anniversary of such date (hereinafter, such period of employment is referred to as the "Term").  Should the Employee's employment continue beyond the Term, such employment shall become "at-will," unless the Company's Board of Directors (the "Board") and the Employee agree to an extension of the Term in a writing expressly referencing this Agreement.

2.            Title.  During the Term, the Employee will serve as the Chief Executive Officer of the Company.

3.            Duties.  During the Term, the Employee will be responsible for such duties and responsibilities as are consistent with his position or past practices of the Company, or as may be assigned to him from time to time by the Board.  The Employee 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.

5.            Location.  During the Term, the Employee shall be based in the Company's Rockville, Maryland offices.  However, the Employee acknowledges that in order to effectively perform his duties, he will occasionally be required to travel for business purposes.

	
             
 	
            6.
 	
            Compensation.
 

 

 

 

 

(a)          Base Salary.  During the Term, the Employee will receive an annual base salary of $350,000 (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, and may be increased at the Board's sole discretion.  

(b)          Bonus and Stock Options.  During the Term, the Employee shall be eligible to receive an annual cash bonus for each fiscal year, as determined by the Board in its sole discretion.  Such annual bonus, as determined by the Board in its sole discretion, will not exceed 75% of the Base Salary.  

Any such bonus must be paid to the Employee within sixty (60) days after the date the Board determines to award such bonus.  In order to receive any cash bonus payable pursuant to this Section 6(b), the Employee must be actively employed by the Company on the date on which such bonus is scheduled to be paid to the Employee.  

During the Term, the Employee shall be eligible for awards of options to purchase shares of the Company's stock (the "Stock Options"), such Stock Options to be awarded in the sole discretion of the Board and in accordance with the terms of the Company's Stock Option Plan (the "Plan"), as the Plan may be amended, suspended, or terminated from time to time.

In addition to the annual cash bonus and stock option awards set forth above, additional bonus in the form of cash and/or stock in the Board's sole discretion may be paid to the Employee.

 (c)         Vacation.  During the Term, the Employee shall be entitled to vacation benefits in accordance with the Company's vacation policy for management and officers.  

(d)          Benefits.  During the Term, and provided that the Employee satisfies, and continues to satisfy, any plan eligibility requirements, the Employee 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 employees, as such plans may be in effect from time to time.

(e)          Reimbursement of Business Expenses.  The Company will reimburse the Employee for all reasonable and properly-documented business-related expenses incurred or paid by him in connection with the performance of his duties hereunder.

 

2

 

 

 

(f)           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.

	
             
 	
            7.
 	
            Termination of Employment.
 

(a)          Due to Death.  The Employee's employment with the Company will automatically terminate immediately upon his death.

(b)          Due to Disability.  If the Employee incurs a "Disability" (as defined below) during the Term, then the Board, in its sole discretion, shall be entitled to terminate the Employee's employment immediately upon written notice to the Employee of such decision.  For purposes of this Agreement, "Disability" shall mean a physical or mental impairment that prevents the Employee 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 six (6) month period.  The determination of whether the Employee incurred a Disability shall be made by the Board, in its sole discretion, after consultation with the Employee's physician.

(c)          By the Board.  During the Term, the Board shall be entitled to terminate the Employee's employment with or without "Cause" (as defined below) by providing written notice to the Employee of such decision, provided that if the Board terminates the Employee's employment without Cause (and not as a result of a Disability), then the Board must provide at least thirty (30) days' advance written notice of such decision to the Employee.  No advance notice period is required for a termination by the Board with Cause.  The Board reserves the right to withdraw any and all duties and responsibilities from the Employee, and to exclude the Employee from the Company's premises, during such 30-day notice period.  For purposes of this Agreement, "Cause" shall mean (i) the
commission by the Employee of an act of malfeasance, dishonesty, fraud, or breach of trust against the Company or any of its employees, clients, or suppliers, (ii) the breach by the Employee of any of his obligations under this Agreement, or any other agreement between the Employee and the Company, (iii) the Employee's failure to comply with the Company's written policies; (iv) the Employee's failure, neglect, or refusal to perform his duties under this Agreement, or to follow the lawful written directions of the Board, (v) the Employee's indictment, conviction of, or plea of guilty or no contest to, any felony or any crime involving moral turpitude, (vi) any act or omission by the Employee involving dishonesty or fraud or that is, or is reasonably likely to be, injurious to the financial condition or business reputation of the Company, or that otherwise is injurious to the Company's employees, clients, or suppliers, or (vii) the inability of the Employee, as a result of repeated
alcohol or drug use, to perform the duties and/or responsibilities of his position.  

 

3

 

 

 

(d)          By the Employee.  During the Term, the Employee shall be entitled to terminate his employment with the Company by providing the Board with at least thirty (30) days' advance written notice of such decision 

	
             
 	
            8.
 	
            Compensation Upon Termination of Employment.
 

(a)          Termination By Reason of Death or Disability.  If the Employee's employment is terminated by reason of his death or Disability under Section 7(a) or 7(b) above, then the Company shall pay to the Employee (or his estate, as appropriate), within thirty (30) days of his termination date, (i) his then current Base Salary through the termination date, and (ii) any accrued but unused vacation days as of the termination date.  Thereafter, the Company shall have no further obligations to the Employee.

(b)          Termination by the Board with Cause.  If the Employee's employment is terminated by the Board with Cause under Section 7(c) above, then the Company shall pay to the Employee, within thirty (30) days of his termination date, (i) his then current Base Salary through the termination date, and (ii) any accrued but unused vacation days as of the termination date.  Thereafter, the Company shall have no further obligations to the Employee.

(c)          Termination by the Board without Cause.  Subject to Section 8(d) below, if the Employee's employment is terminated by the Board without Cause (and not as a result of a Disability) under Section 7(c) above, then the Company shall provide the Employee with (i) a payment of his then current Base Salary through the termination date within thirty (30) days of such termination date, (ii) a payment for any accrued but unused vacation days as of the termination date, within thirty (30) days of such termination date, (iii) a payment of a pro-rata portion of the Employee's bonus for the fiscal year in which the termination occurs, within thirty (30) days of such termination date, using the assumption that the Employee would have received a bonus for that
fiscal year equal to 75% of his then current Base Salary (e.g., if one-third of the fiscal year elapsed prior to the termination date, then the Employee would receive one-third of his bonus, if any), (iv) a payment equal to his then current Base Salary for a period of six months, payable within sixty (60) days of such termination date, and (v) continued coverage under the Company's health insurance plan for a period of eighteen months, provided that the Employee makes a timely election to continue such coverage under the federal law known as "COBRA" (such continued coverage to run concurrently with the Company's obligations under COBRA and any other similar state law).  The Company's obligations under clauses (iv) and (v) of this subsection shall be subject to reimbursement by the Employee and be reduced by any compensation or benefits actually earned or received by the Employee as an employee of or consultant to any other
entity during the six-month period following the date of termination, as applicable, and the Employee shall be required, in good faith, to seek other employment in a comparable position and to 

 

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otherwise mitigate the payments and benefits set forth under such clauses.  The payments and benefits set forth under clauses (iii), (iv), and (v) of this subsection are conditioned upon the Employee's execution of a customary general release, in a form satisfactory to the Company.  Other than as set forth in this subsection, the Company shall have no further obligations to the Employee.

(d)          Termination by the Board Following a Change of Control.  If the Employee's employment is terminated by the Board without Cause (and not as a result of death or a Disability) under Section 7(c) above, and such termination date falls within the one-year period immediately following a "Change of Control" (as defined in the Company's Plan as in effect on the date hereof), then the Company shall provide the Employee with (i) a payment of his then current Base Salary through the termination date within thirty (30) days of such termination date, (ii) a payment for any accrued but unused vacation days as of the termination date, within thirty (30) days of such termination date, (iii) a payment of a pro-rata portion of the Employee's bonus for the fiscal year
in which the termination occurs, within thirty (30) days of such termination date, using the assumption that the Employee would have received a bonus for that fiscal year equal to 75% of his then current Base Salary (e.g., if one-third of the fiscal year elapsed prior to the termination date, then the Employee would receive one-third of his bonus, if any), (iv) a payment of his then current Base Salary for the greater of (i) the the remainder of the Term , or (ii) a period of one year, payable within sixty (60) days of such termination date, and (v) continued coverage under the Company's health insurance plan for a period of eighteen months, provided that the Employee makes a timely election to continue such coverage under the federal law known as "COBRA" (such continued coverage to run concurrently with the Company's obligations under COBRA and any other similar state law).  The Company's obligations under clauses (iv) and (v)
of this subsection shall be subject to reimbursement by the Employee and be reduced by any compensation or benefits actually earned or received by the Employee as an employee of or consultant to any other entity during the remainder of the Term or the one-year period following the date of termination, whichever is applicable, and the Employee shall be required, in good faith, to seek other employment in a comparable position and to otherwise mitigate the payments set forth under such clauses.  The payments set forth under clauses (iii), (iv) and (v) of this subsection are conditioned upon the Employee's execution of a customary general release, in a form satisfactory to the Company.  The payments and benefits set forth in this Section 8(d) are mutually exclusive of the payments and benefits set forth in Section 8(c) above.  Other than as set forth in this subsection, the Company shall have no further obligations to the Employee.  

(e)          Termination by the Employee.  If the Employee terminates his employment under Section 7(d) above, then the Company shall pay to the Employee, within thirty (30) days of his termination date, (i) his then current Base Salary through the 

 

5

 

 

termination date, and (ii) any accrued but unused vacation days as of the termination date.  Thereafter, the Company shall have no further obligations to the Employee.

	
             
 	
            9.
 	
            Confidential Information.
 

(a)          Non-Use and Non-Disclosure of Confidential Information.  The Employee 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 Employee 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 Employee will be permitted to disclose any Confidential Information to the extent required by validly-issued legal process or court order, provided that the Employee 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 Employee's disclosure of any Confidential Information.

(b)          No Breach.  The Employee 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 Employee 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.

 

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10.          Return of Company Property.  Upon the termination of the Employee'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 Employee 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 Employee's possession as a result of his employment with the Company, including without limitation, computer hardware and software, pagers, PDA's, Blackberries, 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.

	
             
 	
            11.
 	
            Intellectual Property.  
 

(a)          Prior Inventions.  Except as disclosed to the Board in writing, contemporaneous with the Employee's execution of this Agreement (which writing describes with particularity all inventions, original works of authorship, developments, improvements, and trade secrets that were made by the Employee prior to the commencement of his employment with the Company, that belong solely to the Employee or belong to the Employee 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), the
Employee represents that there are no Prior Inventions.  If in the course of the Employee's employment with the Company (whether during the Term or thereafter), he incorporates into any Company's or its subsidiaries' product, process, service, or machine, a Prior Invention owned by the Employee 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 Employee 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 registerable 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 

 

7

 

 

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 Employee 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 Employee 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 Employee 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.

(d)          Further Assistance.  The Employee 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 Employee 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, because of the Employee'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 Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as his 

 

8

 

 

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 Employee.  The Employee 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 Employee 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.

14.          Non-Disparagement.  Both during and after the Employee's employment with the Company, the Employee will not 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, employees, 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 Employee 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 Employee 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 Employee of
any of the parts of Sections 9, 10, 11, 13, and 14 which may be pursued or availed of by the Company.

16.          Judicial Modification.  The Employee 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 

 

9

 

 

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 Employee'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 the American Arbitration Association ("AAA") in Washington, D.C. pursuant to the AAA's National Rules for the Resolution of Employment Disputes (or their equivalent), 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, incurred under this Section 18, unless otherwise apportioned by the arbitrator in accordance with applicable law.

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:

9620 Medical Center Drive

Rockville, Maryland 20850

Attention:  Secretary

If to the Employee:

 

13014 Boswell Court

Potomac, MD 20854;

 

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.

 

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19.          Severability.  In the event that any of the provisions of this Agreement, or the application of any such provisions to the Employee 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 Employee 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 Employee 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 Employee and an authorized representative of the Company (other than the Employee).

	
             
 	
            23.
 	
            Section 409A Provisions
 

(a)          Six-Month Wait for Key Employees Following Separation from Service.  To the extent that any amount payable under this Agreement constitutes an amount payable under a "nonqualified deferred compensation plan," as defined in Internal Revenue Code Section 409A ("Section 409A"), following a "separation from service," as defined in Section 409A, then, notwithstanding any other provision in this Agreement to the contrary, such payment will not be made until the date that is six months following the Employee's "separation from service," but only if the Employee is then deemed to be a "specified employee" under Section 409A.

(b)          Necessary Amendments Due to Section 409A.  The parties hereto acknowledge that the requirements of Section 409A are still being developed and interpreted by government agencies, that certain issues under Section 409A remain unclear at this time, and that the parties hereto have made a good faith effort to comply with current guidance under Section 409A.  Notwithstanding anything in this Agreement to the contrary, in the event that amendments to this Agreement are necessary in order to comply with future guidance or interpretations under Section 409A, including amendments necessary to ensure that compensation will not be subject to Section 409A, the Employee agrees that the Company shall be permitted to make such amendments, on a prospective and/or retroactive
basis, in its sole discretion.

 

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24.          Successors and Assigns.  Because the Employee's obligations under this Agreement are personal in nature, the Employee's obligations may only be performed by the Employee and may not be assigned by him.  This Agreement is also binding upon the Employee'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 Employee 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 Employee acknowledges that the Company has made no representations or warranties to the Employee 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 Delaware, without giving effect to its conflict of laws principles. 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

	
            REXAHN PHARMACEUTICALS, INC.
 	
            DR. CHANG H. AHN
 

 

 

  	 By:
          /s/ Tae Heum
          Jeong                      
	 /s/
          Chang H. Ahn                      

	 	Name: Tae Heum Jeong	Signature	 
	  
	 Title:
          Secretary
	  
	  

					

   

 

 

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