Document:

exv10w8

Exhibit 10.8

Execution Version

EMPLOYMENT AGREEMENT

     The
Employment Agreement (the “Agreement”) is made and
entered into as of April 13,
2011 (the “Effective Date”) by and between RXi Pharmaceuticals Corporation, a Delaware
corporation (the “Company”, or “Employer”), and Mark W. Schwartz, Ph.D., an
individual and resident of the State of California (“Employee”).

     WHEREAS, Employer and Employee desire to enter into an employment agreement under which
Employee shall serve on a full-time basis as the Company’s Executive Vice President and Chief
Operating Officer on the terms set forth in the Agreement, with the term of the Agreement to
commence on the Effective Date.

     NOW, THEREFORE, upon the above premises, and in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows.

     1. Engagement. Effective as of the Effective Date, Employer shall employ Employee, and
Employee shall serve, as the Company’s Executive Vice President and Chief Operating Officer.
Employee understands that his duties as Executive Vice President and Chief Operating Officer may
change from time to time during the Term (as herewith defined) in the discretion of Employer’s
Board of Directors (hereinafter the “Board”), but such duties shall in all events be at
least consistent with the duties customarily assigned to the Executive Vice President and Chief
Operating Officer of a company substantially comparable as of the Effective Date to Employer. As a
condition to the Employee’s employment by the Employer, Employee and Employer shall execute the
Employee Confidentiality, Non-Competition, and Proprietary Information Agreement, attached hereto
as Exhibit 1 (the “Confidentiality Agreement”).

     2. Duties. Employee shall perform all duties assigned to him in accordance with the
terms of this Agreement by the Board faithfully, diligently and to the best of his ability. Such
duties include, without limitation, the overseeing and implementation of the business plan adopted
by the Board (as may be revised from time to time by the Board). Employee shall perform the
services contemplated under this Agreement in accordance with the policies established by and under
the direction of the Board. Employee shall have such corporate power and authority as shall
reasonably be required to enable him to discharge his duties under this Agreement. Employee’s
services hereunder shall be rendered at Employee’s home office in Danville, CA (or such other
location consistent with Employee’s residence), except for travel when and as required in the
performance of Employee’s duties hereunder.

     3. Time and Efforts. Employee shall devote all of his business time, efforts,
attention and energies to Employer’s business and the discharge of his duties hereunder.
Notwithstanding the foregoing, except as otherwise agreed to in writing, Employee shall have the
right to perform such incidental services as are necessary in connection with (a) his private
passive investments, (b) his charitable or community activities, (c) his participation in trade or
professional organizations and (d) his service on the board of directors (or comparable body) of
one third-party corporate entity that does not compete with the Company Business (as defined in the
Confidentiality Agreement), and teaching responsibilities of one class per semester at San Jose
State University, consistent with past responsibilities at the University.

					
	 	 	 	 	 
	Employment Agreement	 	 	 	 
	Mark W. Schwartz, Ph.D.
	 	Page 1 of 7
	 	 

 

 

     4. Term. Employee’s employment shall commence on the Effective Date and shall
terminate on April 13, 2012 (the “Term”), unless sooner terminated in accordance with
Section 6. Neither Employer nor Employee shall have any obligation to extend or renew this
Agreement or Employee’s employment. Unless the parties otherwise agree in writing, Employee’s
employment by Employer shall terminate upon any termination or expiration of this Agreement.

     5. Compensation. As the total consideration for Employee’s services rendered under the
Agreement, Employer shall pay or provide Employee the following compensation and benefits:

          5.1. Salary. Employee shall initially be entitled to receive an annual base salary
during the Term of Two Hundred Twenty Five Thousand Dollars ($225,000) (hereinafter the “Base
Salary”) payable in accordance with the usual payroll period of Employer, as established from
time to time. If and when during the Term the Company completes one or more financing transactions
(including the transaction currently being undertaken in conjunction with Roth) in which it sells
shares of its capital stock (or securities convertible into or exercisable or exchangeable for its
capital stock) (each, a “Financing,” and collectively, the “Financings”) resulting
in aggregate gross cash proceeds of at least $5.0 million, then the Base Salary shall be increased
to Two Hundred Seventy Five Thousand Dollars ($275,000) per annum. Further, if and when during the
Term the Company completes one or more Financings resulting in aggregate gross cash proceeds of at
least $10.0 million, then the Base Salary shall be increased to Three Hundred Thousand Dollars
($300,000) per annum. For purposes of this Agreement, a Financing shall not include any proceeds
to the Company resulting from the sale of Company capital stock pursuant to the exercise of stock
options or other issuances made primarily for compensatory purposes, or pursuant to the exercise of
warrants or other rights to purchase capital stock of the Company outstanding as of the Effective
Date.

          5.2 Stock Option. On the Effective Date, the Company shall grant Employee a stock
option (“Option”) under the Company’s Amended and Restated 2007 Incentive Plan (the
“Plan”) to purchase Forty Thousand (40,000) shares of the Company’s common stock. Except as
provided in Section 6.2 of this Agreement, the Option shall vest in equal quarterly installments
over 3 years beginning on the first quarterly anniversary of the Effective Date, provided, in each
case, that Employee remains in the continuous employ of Employer through such quarterly anniversary
date. The Option shall (a) be exercisable at an exercise price per share equal to the closing
market price of the Company’s common stock on the date of the grant, (b) have a term of ten years,
and (c) be on such other terms as shall be determined by the Board (or the Compensation Committee
of the Board) and set forth in a customary form of stock option agreement under the Plan evidencing
the Option.

          5.3. Expense Reimbursement. Employer shall reimburse Employee for reasonable business
expenses incurred by Employee in connection with the performance of Employee’s duties in accordance
with Employer’s usual practices and policies in effect from time to time. Employer will reimburse
reasonable and customary expenses for the Employee to maintain his home office. Any reimbursements
hereunder shall be paid to Employee promptly in a lump sum in accordance with such expense
reimbursement policies and procedures then in effect.

					
	 	 	 	 	 
	Employment Agreement	 	 	 	 
	Mark W. Schwartz, Ph.D.
	 	Page 2 of 7
	 	 

 

 

          5.4. Vacation. Employee will be entitled to four weeks of paid “time off” (vacation
days plus sick time/personal time) for each full calendar year in accordance with the Company’s
policies from time to time in effect, in addition to holidays observed by the Company (for partial
calendar years, the Employee’s paid “time off” will be pro-rated). Paid time off may be taken at
such times and intervals as the Employee shall determine, subject to the business needs of the
Company, and otherwise shall be subject to the policies of the Company, as in effect from time to
time. The number of paid “time off” days will accrue per pay period and will stop accruing once 20
days have been reached.

          5.5. Employee Benefits. The Company shall provide Employee and his dependents with
coverage under all medical, dental and/or vision plans and other benefit programs available to the
Company’s executives and their dependents, to the extent Employee and his dependents satisfy the
applicable eligibility requirements, and the Company shall pay, directly or indirectly, the monthly
and annual premiums associated with any such medical plans to the same extent the Company pays such
premiums for other executives of the Company. Employee shall be eligible to participate in any
medical insurance and other employee benefits made available by Employer to all senior executives
and/or all of employees of Employer under Employer’s plans and employment policies in effect during
the Term. Employee acknowledges and agrees that, any such plans or policies now or hereafter in
effect may be modified or terminated by Employer at any time in its discretion.

          5.6. Payroll Taxes. Employer shall have the right to deduct from the compensation and
benefits due to Employee hereunder any and all sums required for social security and withholding
taxes and for any other federal, state, or local tax or charge which may be in effect or hereafter
enacted or required as a charge on the compensation or benefits of Employee.

     6. Termination. The Agreement and Employee’s employment may be terminated as set
forth in this Section 6.

          6.1. Termination by Employer for Cause; Termination by Employee. Employer may
terminate Employee’s employment hereunder for Cause upon notice to Employee, and Employee may
terminate his employment hereunder, for any reason or no reason, upon notice to Employer.
Cause for the purpose of this Agreement shall mean any of the following:

          (a) Employee’s breach of any material term of this Agreement including its Exhibits;
provided that the first occasion of any particular breach shall not constitute Cause unless
Employee shall have previously received written notice from Employer stating the nature of
such breach and affording Employee at least ten (10) days to correct such breach;

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

          (c) Employee’s act of fraud or dishonesty injurious to Employer or its reputation;

					
	 	 	 	 	 
	Employment Agreement	 	 	 	 
	Mark W. Schwartz, Ph.D.
	 	Page 3 of 7
	 	 

 

 

          (d) Employee’s continual failure or refusal to perform his material duties as required
under the Agreement after written notice from Employer stating the nature of such failure or
refusal and affording Employee at least ten days to correct the same;

          (e) Employee’s act or omission that, in the reasonable determination of Employer’s
Board (or a Committee of the Board), indicates alcohol or drug abuse by Employee; or

          (f) Employee’s act or personal conduct that, in the judgment of the Board (or a
Committee of the Board), gives rise to a material risk of liability of Employee or Employer
under federal or applicable state law for discrimination, or sexual or other forms of
harassment, or other similar liabilities to subordinate employees.

          Upon termination of Employee’s employment by Employer for Cause or by Employee for any reason,
all compensation and benefits to Employee hereunder shall cease except that Employee shall be
entitled to payment, not later than three days after the date of termination, of (i) any accrued
but unpaid salary and unused vacation time (only as accrued during the then-current year of
employment), and (ii) reimbursement of business expenses accrued but unpaid as of the date of
termination. In addition, Employer’s indemnification obligations shall remain in effect in
accordance with the terms thereof.

          6.2. Termination by Employer without Cause. Employer may also terminate Employee’s
employment without Cause during the Term; provided, however, that (i) Employer shall remain
obligated to continue paying Employee’s Base Salary at the time of termination for the remainder of
the Term, and (ii) Employee’s Option shall continue to vest for the remainder of the Term. Upon
any termination pursuant to this paragraph, Employee shall, not later than three days after the
date of termination, be entitled to payment of any unused vacation time (only as accrued as of the
date of such termination and in accordance with applicable law) and reimbursement of business
expenses accrued but unpaid as of the date of termination.

          Change of Control — If in the change of control of the company, the compensation, benefits,
title, or duties of the Employee under this agreement are reduced, or the Employee must relocate
more then 50 miles from his current residence, the Employee is considered Terminated without Cause,
with all of the benefits and payments due Employee as detailed in Section 6.2 of this Employment
Agreement.

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

					
	 	 	 	 	 
	Employment Agreement	 	 	 	 
	Mark W. Schwartz, Ph.D.
	 	Page 4 of 7
	 	 

 

 

     8. Indemnification. Employer and Employee acknowledge that, as the Executive Vice
President and Chief Operating Officer of Employer, Employee shall be a corporate officer of
Employer and, as such, Employee shall be entitled to indemnification to the full extent mandated by
Employer to its officers, directors and agents under the Employer’s Certificate of Incorporation
and Bylaws as in effect as of the date of this Agreement.

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

     10. Successors and Assigns. This Agreement shall inure to the benefit of and shall be
binding upon and enforceable by Employer, its successors and assigns and Employee and his heirs and
representatives; provided, however, that neither party may assign the Agreement without the prior
written consent of the other party. Employer will cause any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of Employer to assume expressly and agree to perform this Agreement in the same manner and
to the same extent that Employer would have been required to perform it.

     11. Entire Agreement. This Agreement, including the Confidentiality Agreement,
contains the entire agreement of the parties relating to the subject matter hereof, and the parties
hereto have made no agreements, representations or warranties relating to the subject matter of the
Agreement that are not set forth otherwise therein or herein. Except as expressly provided herein,
this Agreement (including the Confidentiality Agreement) supersedes any and all prior or
contemporaneous agreements, written or oral, between Employee and Employer relating to the subject
matter hereof. Any such prior or contemporaneous agreements, as well as that certain Employment
Agreement between Employee and Apthera, Inc. (“Apthera”) dated April 1, 2010, as amended on
July 1, 2010 (the “Prior Agreement”), are hereby terminated and of no further effect, and
Employee, by the execution hereof, agrees that any compensation provided for under any such
agreements is specifically superseded and replaced by the provisions of this Agreement (including
the Confidentiality Agreement). Employee acknowledges that all compensation and other obligations
owed to Employee by Apthera pursuant to the Prior Agreement have been fully and finally paid and
satisfied as of the Effective Date.

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

     13. Governing Law; Arbitration. This Agreement is and shall be governed and construed
in accordance with the laws of the State of Delaware without giving effect to the choice-of-law
rules of Delaware. Except to the extent a remedy is sought as described in Section 7, above, any
dispute arising out of, or relating to, this Agreement or the breach thereof, or regarding the
interpretation thereof, shall be exclusively decided by binding arbitration

					
	 	 	 	 	 
	Employment Agreement	 	 	 	 
	Mark W. Schwartz, Ph.D.
	 	Page 5 of 7
	 	 

 

 

conducted in Los Angeles, California in accordance with the rules of the American Arbitration
Association (the “AAA”) then in effect before a single arbitrator appointed in accordance with such
rules. Judgment upon any award rendered therein may be entered and enforcement obtained thereon in
any court having jurisdiction. Each of the parties agrees that service of process in such
arbitration proceedings shall be satisfactorily made upon it if sent by registered mail addressed
to it at the address referred to in Section 14 below. The costs of such arbitration shall be borne
proportionate to the finding of fault as determined by the arbitrator. Judgment on the arbitration
award may be entered by any court of competent jurisdiction.

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

If to Employer:

RXi Pharmaceuticals Corporation

60 Prescott St.

Worcester, MA 01605

Attention: Chief Executive Officer

Fax: (508) 767-3862

Email: mahn@rxipharma.com

If to Employee:

Through company e-mail or company regular mail box if employed by Company or if not employed:

Mark W. Schwartz, Ph.D.

305 Love Lane

Danville, CA 94526

Email: mwschwartz@yahoo.com

     15. Survival. Sections 7 through 16 shall survive the expiration or termination of
the Agreement.

     16. Counterparts. The Agreement may be executed in counterparts, each of which shall
be deemed to be an original and all of which together shall be deemed to be one and the same
agreement.

     18. Attorney’s Fees. In any action or proceeding to construe or enforce any provision
of the Agreement the prevailing party shall be entitled to recover its or his reasonable attorneys’
fees and other costs of suit in addition to any other recoveries.

					
	 	 	 	 	 
	Employment Agreement	 	 	 	 
	Mark W. Schwartz, Ph.D.
	 	Page 6 of 7
	 	 

 

 

IN WITNESS WHEREOF, the Agreement is executed as of the day and year first above written.

	 	 	 	 	 
	 	EMPLOYER

RXi Pharmaceuticals Corporation

 	 
	 	By:  	/s/ Mark J. Ahn
 	 
	 	 	Name:  	Mark J. Ahn, Ph.D. 	 
	 	 	Its: 	President & Chief Executive Officer  	 
	 
	 	EMPLOYEE

 	 
	 	/s/ Mark W. Schwartz
 	 
	 	Mark W. Schwartz, Ph.D. 	 
	 	 	 
	 

					
	 	 	 	 	 
	Employment Agreement	 	 	 	 
	Mark W. Schwartz, Ph.D.
	 	Page 7 of 7
	 	 

 

 

Exhibit 1

RXi Pharmaceuticals Corporation

EMPLOYEE CONFIDENTIALITY, NON-COMPETITION, AND

PROPRIETARY INFORMATION AGREEMENT

     AGREEMENT,
effective as of April 13, 2011, between RXi Pharmaceuticals Corporation, a
Delaware corporation (the “Company”), and Mark W. Schwartz, Ph.D. (the “Employee”).

     1. Employee will make full and prompt disclosure to the Company of all inventions,
improvements, modifications, discoveries, methods, technologies, biological materials, and
developments, and all other materials, items, techniques, and ideas related directly or indirectly
to the business of the Company, whether patentable or not, made or conceived by Employee or under
Employee’s direction during Employee’s employment with the Company, whether or not made or
conceived during normal working hours, or on the premises of the Company (all of which are
collectively termed “Intellectual Property” hereinafter).

     2. Employee agrees that all Intellectual Property, as defined above, shall be the sole
property of the Company and its assigns, and the Company and its assigns shall be the sole owner of
all patents and other rights in connection therewith. Employee hereby assigns to the Company any
rights Employee may have or acquire in all Intellectual Property and all related patents,
copyrights, trademarks, trade names, and other industrial and intellectual property rights and
applications therefore, in the United States and elsewhere. Employee further agrees that with
regard to all future developments of Intellectual Property, Employee will assist the Company in
every way that may be reasonably required by the Company (and at the Company’s expense) to obtain
and, from time to time, enforce patents on Intellectual Property in any and all countries that the
Company may require, and to that end, Employee will execute all documents reasonably necessary for
use in applying for and obtaining such patents thereon and enforcing the same, as the Company may
desire, together with any assignment thereof to the Company or persons designated by the Company,
and Employee hereby appoints the Company as Employee’s attorney to execute and deliver any such
documents or assignments requested by the Company (but only for the purpose of executing and filing
any such document). Employee’s obligation to assist the Company in obtaining and enforcing patents
for Intellectual Property in any and all countries shall continue beyond the termination of
Employee’s employment with the Company, but the Company shall compensate Employee at a reasonable,
standard hourly rate following such termination for time directly spent by Employee at the
Company’s request for such assistance.

     3. Employee hereby represents that Employee has no continuing obligation to assign to any
former employer or any other person, corporation, institution, or firm any Intellectual Property as
described above. Employee represents that Employee’s performance of all the terms of this
Agreement and as an employee of the Company does not and will not breach any agreement to keep in
confidence proprietary information acquired by Employee, in confidence or in trust, prior to
Employee’s employment by the Company. Employee has not entered into, and Employee agrees not to
enter into, any agreement (either written or oral), which would put Employee in conflict with this
Agreement.

					
	 	 	 	 	 
	Exhibit 1	 	 	 	 
	Mark W. Schwartz, Ph.D.
	 	Page 1 of 6
	 	 

 

 

     4. Employee agrees to assign to the Company any and all copyrights and reproduction rights to
any material prepared by Employee in connection with this Agreement and/or developed by Employee
during Employee’s employment with the Company that are related directly or indirectly to the
business of the Company.

     5. Employee understands and agrees that a condition of Employee’s employment and continued
employment with the Company is that Employee has not brought and will not bring to the Company or
use in the performance of Employee’s duties at the Company any materials or documents rightfully
belonging to a former employer which are not generally available to the public.

     6. Employee recognizes that the services to be performed by Employee hereunder are special,
unique, and extraordinary and that, by reason of Employee’s employment with the Company, Employee
may acquire Confidential Information (as hereinafter defined) concerning the operation of the
Company, the use or disclosure of which would cause the Company substantial loss and damage which
could not be readily calculated and for which no remedy at law would be adequate. Accordingly,
Employee agrees that Employee will not (directly or indirectly) at any time, whether during or for
a period of seven (7) years after Employee’s employment with the Company:

(i) knowingly use for personal benefit or for any other reason not authorized by the Company any
Confidential Information that Employee may acquire or has acquired by reason of Employee’s
employment with the Company, or;

(ii) disclose any such Confidential Information to any person or entity except (A) in the
performance of Employee obligations to the Company hereunder, (B) as required by a court of
competent jurisdiction, (C) in connection with the enforcement of Employee rights under this
Agreement, or (D) with the prior consent of the Board of Directors of the Company.

     As used herein, “Confidential Information” includes proprietary and confidential information
with respect to the facilities and methods of the Company, reagents, chemical compounds, cell lines
or subcellular constituents, organisms, or other biological materials, trade secrets, and other
Intellectual Property, systems, patent applications, procedures, manuals, confidential reports,
financial information, business plans, prospects, or opportunities, personnel information, or lists
of customers and suppliers which are generally known only to the Company provided, however, that
Confidential Information shall not include any information that is known or becomes generally known
or available publicly other than as a result of disclosure by Employee which is not permitted as
described in clause (ii) above, or the Company discloses same to others without obtaining an
agreement of confidentiality.

     Employee confirms that all Confidential Information is the exclusive property of the Company.
All business records, papers, documents and electronic materials kept or made by Employee relating
to the business of the Company which comprise Confidential Information shall be and remain the
property of the Company during the Employee’s employment and at all times thereafter. Upon the
termination, for any reason, of Employee’s employment with the Company, or upon the request of the
Company at any time, Employee shall deliver to the

					
	 	 	 	 	 
	Exhibit 1	 	 	 	 
	Mark W. Schwartz, Ph.D.
	 	Page 2 of 6
	 	 

 

 

Company, and shall retain no copies of any written or electronic materials, records and documents
made by Employee or coming into Employee’s possession concerning the business or affairs of the
Company and which comprise Confidential Information.

     7. During the term of Employee’s employment with the Company and for one (1) year thereafter
(the “Restricted Period”), the Employee shall not directly or indirectly, for Employee’s own
account or for the account of others, as an officer, director, stockholder (other than as the
holder of less than 1% of the outstanding stock of any publicly traded company), owner, partner,
employee, promoter, consultant, manager or otherwise participate in the promotion, financing,
ownership, operation, or management of, or assist in or carry on through proprietorship, a
corporation, partnership, or other form of business entity which is in competition with the Company
in the field of the development of pharmaceutical vaccine products or vaccine product candidates
for the treatment of HER2-positive breast cancer (the “Company Business”) within the United States
or any other country in which the Company is conducting or is actively seeking or planning to
conduct the Company Business as of the date of such termination. Notwithstanding the foregoing,
except as otherwise agreed to in writing, Employee shall have the right to perform such incidental
services as are necessary in connection with (a) his private passive investments, (b) his
charitable or community activities,(c) his participation in trade or professional organizations,
and (d) his service on the board of directors (or comparable body) of one third-party corporate
entity that does not compete with the Company Business.

     During the Restricted Period, the Employee shall not, whether for Employee’s own account or
for the account of any other person (excluding the Company):

	 	(i)	 	solicit or contact in an effort to do business with any person who was or is a
customer of the Company during the Restricted Period, or any affiliate of any such
person, if such solicitation or contact is for the purpose of competition in the field
of cancer vaccines for HER2 positive breast cancer with the Company; or
	 
	 	(ii)	 	solicit or induce any of the Company’s employees to leave their employment with
the Company or accept employment with anyone else, or hire any such employees or
persons who were employed by the Company during the Restricted Period.

     Nothing herein shall prohibit or preclude the Employee from performing any other types of
services that are not precluded by this Section 7 for any other person.

     The Employee shall give prompt notice to the Company of the Employee’s acceptance of
employment or other fees for services relationship in the field of cancer vaccines for HER2
positive breast cancer during the Restricted Period, which notice shall include the name of, the
business of, and the position that Employee shall hold with such other entity.

     8. In the event that Employee’s employment is transferred by the Company to a subsidiary,
affiliated company, or acquiring company (as the case may be), Employee’s employment by such
company will, for the purpose of this Confidentiality, Non-Competition, and Proprietary Information
Agreement, be considered as continued employment with the Company, unless Employee executes an
agreement, substantially similar in substance to this

					
	 	 	 	 	 
	Exhibit 1	 	 	 	 
	Mark W. Schwartz, Ph.D.
	 	Page 3 of 6
	 	 

 

 

Agreement, and until the effective date of said agreement in any such company for which
Employee becomes employed. It is further agreed that changes in Employee’s position or title or
location unless expressly agreed to in writing will operate to terminate this Confidentiality,
Non-Competition, and Proprietary Information Agreement without Cause.

     9. Upon termination of Employee’s employment for any reason, unless such employment is
transferred to a subsidiary, affiliated or acquiring company of the Company, Employee agrees to
leave with, or return to, the Company all records, drawings, notebooks, and other documents
pertaining to the Company’s Confidential Information, whether prepared by Employee or others, as
well as any equipment, tools or other devices owned by the Company, that are then in Employee’s
possession, however such items were obtained, and Employee agrees not to reproduce or otherwise
retain any document or data relating thereto.

     10. Employee obligations under this Agreement shall survive the termination of Employee’s
employment with the Company for the respective periods specifically set forth herein regardless of
the manner of, and reason for, such termination, and shall be binding upon Employee’s heirs,
executors, and administrators.

     11. Employee understands and agrees that no license to any of the Company’s trademarks,
patents, copyrights or other proprietary rights is either granted or implied by Employee’s access
to and utilization of the Confidential Information or Intellectual Property.

     12. No delay or omission by the Company in exercising any right under this Agreement will
operate as a waiver of that or any other right. A waiver or consent given by the Company on any
one occasion is effective only in that instance and will not be construed as a bar to or waiver of
any right on any other occasion.

     13. Employee agrees that in addition to any other rights and remedies available to the Company
for any breach or threatened breach by Employee of Employee’s obligations hereunder, the Company
shall be entitled to enforcement of Employee’s obligations hereunder by whatever means are at the
Company’s disposal, including court injunction.

     14. The Company may assign this Agreement to any other corporation or entity which acquires
(whether by purchase, merger, consolidation or otherwise) all or substantially all of the business
and/or assets of the Company. In the case of a change of control of the Company in which the
compensation, title, duties are reduced, or requires the Employee to relocate more than 50 miles
from his then current residence, the Employee is considered Terminated without Cause, with all of
the benefits and payments due Employee under Section 6.2 of the Employee Agreement. Employee shall
have no rights of assignment.

     15. If any provision of this Agreement shall be declared invalid, illegal, or unenforceable,
then such provision shall be enforceable to the extent that a court deems it reasonable to enforce
such provision. If such provision shall be unreasonable to enforce to any extent, such provision
shall be severed and all remaining provisions shall continue in full force and effect.

     16. This Agreement shall be effective as of the date first written above.

					
	 	 	 	 	 
	Exhibit 1	 	 	 	 
	Mark W. Schwartz, Ph.D.
	 	Page 4 of 6
	 	 

 

 

     17. This Agreement shall be governed in all respects by the laws of the State of Delaware,
without regard to principles of conflicts of law.

[Signature Page Follows]

					
	 	 	 	 	 
	Exhibit 1	 	 	 	 
	Mark W. Schwartz, Ph.D.
	 	Page 5 of 6
	 	 

 

 

IN WITNESS WHEREOF, Employee has executed this Agreement as of the date set forth above:

	 	 	 	 	 
	 	 	 
	BY:	/s/ Mark W. Schwartz
 	 
	Name of Employee:  Mark W. Schwartz, Ph.D. 	 
	 	 	 
	 
	 	ACCEPTED AND AGREED TO:

RXi Pharmaceuticals Corporation

 	 
	BY:	/s/ Mark J. Ahn
 	 
	Name:  	Mark J. Ahn, Ph.D. 	 
	Title:  	President & Chief Executive Officer 	 
	 

					
	 	 	 	 	 
	Exhibit 1	 	 	 	 
	Mark W. Schwartz, Ph.D.
	 	Page 6 of 6exv10w9

Exhibit 10.9

Execution Version

EMPLOYMENT AGREEMENT

     The Employment Agreement (the “Agreement”) is made and entered into as of April 13,
2011 (the “Effective Date”) by and between RXi Pharmaceuticals Corporation, a Delaware
corporation (the “Company”, or “Employer”), and Robert E. Kennedy, an individual
and resident of the State of Arizona (“Employee”).

     WHEREAS, Employer and Employee desire to enter into an employment agreement under which
Employee shall serve on a full-time basis as the Company’s Vice President and Chief Financial
Officer on the terms set forth in the Agreement, with the term of the Agreement to commence on the
Effective Date.

     NOW, THEREFORE, upon the above premises, and in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows.

     1. Engagement. Effective as of the Effective Date, Employer shall employ Employee, and
Employee shall serve, as the Company’s Vice President and Chief Financial Officer. Employee
understands that his duties as Vice President and Chief Financial Officer may change from time to
time during the Term (as herewith defined) in the discretion of Employer’s Board of Directors
(hereinafter the “Board”), but such duties shall in all events be at least consistent with
the duties customarily assigned to the Vice President and Chief Financial Officer of a company
substantially comparable as of the Effective Date to Employer. As a condition to the Employee’s
employment by the Employer, Employee and Employer shall execute the Employee Confidentiality,
Non-Competition, and Proprietary Information Agreement, attached hereto as Exhibit 1 (the
“Confidentiality Agreement”).

     2. Duties. Employee shall perform all duties assigned to him in accordance with the
terms of this Agreement by the Board faithfully, diligently and to the best of his ability. Such
duties include, without limitation, the overseeing and implementation of the business plan adopted
by the Board (as may be revised from time to time by the Board). Employee shall perform the
services contemplated under this Agreement in accordance with the policies established by and under
the direction of the Board. Employee shall have such corporate power and authority as shall
reasonably be required to enable him to discharge his duties under this Agreement. Employee’s
services hereunder shall be rendered in or around the vicinity of the Employee’s residence, at
Employer’s offices in Worcester, MA, or such other location as the parties may agree, except for
travel when and as required in the performance of Employee’s duties hereunder.

     3. Time and Efforts. Employee shall devote all of his business time, efforts,
attention and energies to Employer’s business and the discharge of his duties hereunder.
Notwithstanding the foregoing, except as otherwise agreed to in writing, Employee shall have the
right to perform such incidental services as are necessary in connection with (a) his private
passive investments, (b) his charitable or community activities, (c) his participation in trade or
professional organizations and (d) his service on the board of directors (or comparable body) of
one third-party corporate entity that does not compete with the Company Business (as defined in the
Confidentiality Agreement).

					
	 	 	 	 	 
	Employment Agreement	 	 	 	 
	Robert E. Kennedy
	 	Page 1 of 7
	 	 

 

 

     4. Term. Employee’s employment shall commence on the Effective Date and shall
terminate on April 13, 2012 (the “Term”), unless sooner terminated in accordance with
Section 6. Neither Employer nor Employee shall have any obligation to extend or renew this
Agreement or Employee’s employment. Unless the parties otherwise agree in writing, Employee’s
employment by Employer shall terminate upon any termination or expiration of this Agreement.
Employer agrees to apply its best efforts to negotiate in good faith a replacement employment
agreement with the Executive on or before September 30, 2011. In the event the parties have not
entered into a new employment agreement by October 1, 2011 then, immediately upon the Employee’s
written request, Employer shall terminate Employee without cause and all of the provisions of
Section 6.2 shall apply.

     5. Compensation. As the total consideration for Employee’s services rendered under the
Agreement, Employer shall pay or provide Employee the following compensation and benefits:

          5.1. Salary. Employee shall initially be entitled to receive an annual base salary
during the Term of One Hundred Seventy Five Thousand Dollars ($175,000) (hereinafter the “Base
Salary”) payable in accordance with the usual payroll period of Employer, as established from
time to time. If and when during the Term the Company completes one or more financing transactions
in which it sells shares of its capital stock (or securities convertible into or exercisable or
exchangeable for its capital stock) (each, a “Financing,” and collectively, the
“Financings”) resulting in aggregate gross cash proceeds of at least $5.0 million, then the
Base Salary shall be increased to Two Hundred Thousand Dollars ($200,000) per annum. Further, if
and when during the Term the Company completes one or more Financings resulting in aggregate gross
cash proceeds of at least $7.5 million, then the Base Salary shall be increased to Two Hundred
Twenty Five Thousand Dollars ($225,000) per annum. For purposes of this Agreement, a Financing
shall not include any proceeds to the Company resulting from the sale of Company capital stock
pursuant to the exercise of stock options or other issuances made primarily for compensatory
purposes, or pursuant to the exercise of warrants or other rights to purchase capital stock of the
Company outstanding as of the Effective Date.

          5.2 Stock Option. On the Effective Date, the Company shall grant Employee a stock
option (“Option”) under the Company’s Amended and Restated 2007 Incentive Plan (the
“Plan”) to purchase Thirty Thousand (30,000) shares of the Company’s common stock. Except
as provided in Section 6.2 of this Agreement, the Option shall vest in equal quarterly installments
over 3 years beginning on the first quarterly anniversary of the Effective Date, provided, in each
case, that Employee remains in the continuous employ of Employer through such quarterly anniversary
date. The Option shall (a) be exercisable at an exercise price per share equal to the closing
market price of the Company’s common stock on the date of the grant, (b) have a term of ten years,
and (c) be on such other terms as shall be determined by the Board (or the Compensation Committee
of the Board) and set forth in a customary form of stock option agreement under the Plan evidencing
the Option.

          5.3. Expense Reimbursement. Employer shall reimburse Employee for reasonable business
expenses incurred by Employee in connection with the performance of Employee’s duties in accordance
with Employer’s usual practices and policies in effect from

					
	 	 	 	 	 
	Employment Agreement	 	 	 	 
	Robert E. Kennedy
	 	Page 2 of 7
	 	 

 

 

time to time. Any reimbursements hereunder shall be paid to Employee promptly in a lump sum in
accordance with such expense reimbursement policies and procedures then in effect.

          5.4. Vacation. Employee will be entitled to four weeks of paid “time off” (vacation
days plus sick time/personal time) for each full calendar year in accordance with the Company’s
policies from time to time in effect, in addition to holidays observed by the Company (for partial
calendar years, the Employee’s paid “time off” will be pro-rated). Paid time off may be taken at
such times and intervals as the Employee shall determine, subject to the business needs of the
Company, and otherwise shall be subject to the policies of the Company, as in effect from time to
time. The number of paid “time off” days will accrue per pay period and will stop accruing once 20
days have been reached.

          5.5. Employee Benefits. The Company shall provide Employee and his dependents with
coverage under all medical, dental and/or vision plans and other benefit programs available to the
Company’s executives and their dependents, to the extent Employee and his dependents satisfy the
applicable eligibility requirements, and the Company shall pay, directly or indirectly, the monthly
and annual premiums associated with any such medical plans to the same extent the Company pays such
premiums for other executives of the Company. Employee shall be eligible to participate in any
medical insurance and other employee benefits made available by Employer to all senior executives
and/or all of employees of Employer under Employer’s plans and employment policies in effect during
the Term. Employee acknowledges and agrees that, any such plans or policies now or hereafter in
effect may be modified or terminated by Employer at any time in its discretion.

          5.6. Payroll Taxes. Employer shall have the right to deduct from the compensation and
benefits due to Employee hereunder any and all sums required for social security and withholding
taxes and for any other federal, state, or local tax or charge which may be in effect or hereafter
enacted or required as a charge on the compensation or benefits of Employee.

     6. Termination. The Agreement and Employee’s employment may be terminated as set
forth in this Section 6.

          6.1. Termination by Employer for Cause; Termination by Employee. Employer may
terminate Employee’s employment hereunder for Cause upon notice to Employee, and Employee may
terminate his employment hereunder, for any reason or no reason, upon notice to Employer.
Cause for the purpose of this Agreement shall mean any of the following:

          (a) Employee’s breach of any material term of this Agreement including its Exhibits;
provided that the first occasion of any particular breach shall not constitute Cause unless
Employee shall have previously received written notice from Employer stating the nature of
such breach and affording Employee at least ten (10) days to correct such breach;

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

					
	 	 	 	 	 
	Employment Agreement	 	 	 	 
	Robert E. Kennedy
	 	Page 3 of 7
	 	 

 

 

          (c) Employee’s act of fraud or dishonesty injurious to Employer or its reputation;

          (d) Employee’s continual failure or refusal to perform his material duties as required
under the Agreement after written notice from Employer stating the nature of such failure or
refusal and affording Employee at least ten days to correct the same;

          (e) Employee’s act or omission that, in the reasonable determination of Employer’s
Board (or a Committee of the Board), indicates alcohol or drug abuse by Employee; or

          (f) Employee’s act or personal conduct that, in the judgment of the Board (or a
Committee of the Board), gives rise to a material risk of liability of Employee or Employer
under federal or applicable state law for discrimination, or sexual or other forms of
harassment, or other similar liabilities to subordinate employees.

          Upon termination of Employee’s employment by Employer for Cause or by Employee for any reason,
all compensation and benefits to Employee hereunder shall cease except that Employee shall be
entitled to payment, not later than three days after the date of termination, of (i) any accrued
but unpaid salary and unused vacation time (only as accrued during the then-current year of
employment), and (ii) reimbursement of business expenses accrued but unpaid as of the date of
termination. In addition, Employer’s indemnification obligations shall remain in effect in
accordance with the terms thereof.

          6.2. Termination by Employer without Cause. Employer may also terminate Employee’s
employment without Cause during the Term; provided, however, that (i) Employer shall remain
obligated to continue paying Employee’s Base Salary at the time of termination for the remainder of
the Term, and (ii) Employee’s Option shall continue to vest for the remainder of the Term. Upon
any termination pursuant to this paragraph, Employee shall, not later than three days after the
date of termination, be entitled to payment of any unused vacation time (only as accrued as of the
date of such termination and in accordance with applicable law) and reimbursement of business
expenses accrued but unpaid as of the date of termination.

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

     8. Indemnification. Employer and Employee acknowledge that, as the Vice President and
Chief Financial Officer of Employer, Employee shall be a corporate officer of Employer and, as
such, Employee shall be entitled to indemnification to the full extent mandated

					
	 	 	 	 	 
	Employment Agreement	 	 	 	 
	Robert E. Kennedy
	 	Page 4 of 7
	 	 

 

 

by Employer to its officers, directors and agents under the Employer’s Certificate of Incorporation
and Bylaws as in effect as of the date of this Agreement.

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

     10. Successors and Assigns. This Agreement shall inure to the benefit of and shall be
binding upon and enforceable by Employer, its successors and assigns and Employee and his heirs and
representatives; provided, however, that neither party may assign the Agreement without the prior
written consent of the other party. Employer will cause any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of Employer to assume expressly and agree to perform this Agreement in the same manner and
to the same extent that Employer would have been required to perform it.

     11. Entire Agreement. This Agreement, including the Confidentiality Agreement,
contains the entire agreement of the parties relating to the subject matter hereof, and the parties
hereto have made no agreements, representations or warranties relating to the subject matter of the
Agreement that are not set forth otherwise therein or herein. Except as expressly provided herein,
this Agreement (including the Confidentiality Agreement) supersedes any and all prior or
contemporaneous agreements, written or oral, between Employee and Employer relating to the subject
matter hereof. Any such prior or contemporaneous agreements, as well as that certain Employment
Agreement between Employee and Apthera, Inc. (“Apthera”) dated April 1, 2010, as amended on
July 1, 2010 (the “Prior Agreement”), are hereby terminated and of no further effect, and
Employee, by the execution hereof, agrees that any compensation provided for under any such
agreements is specifically superseded and replaced by the provisions of this Agreement (including
the Confidentiality Agreement). Employee acknowledges that all compensation and other obligations
owed to Employee by Apthera pursuant to the Prior Agreement have been fully and finally paid and
satisfied as of the Effective Date.

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

     13. Governing Law; Arbitration. This Agreement is and shall be governed and construed
in accordance with the laws of the State of Delaware without giving effect to the choice-of-law
rules of Delaware. Except to the extent a remedy is sought as described in Section 7, above, any
dispute arising out of, or relating to, this Agreement or the breach thereof, or regarding the
interpretation thereof, shall be exclusively decided by binding arbitration conducted in Los
Angeles, California in accordance with the rules of the American Arbitration Association (the
“AAA”) then in effect before a single arbitrator appointed in accordance with such rules. Judgment
upon any award rendered therein may be entered and enforcement

					
	 	 	 	 	 
	Employment Agreement	 	 	 	 
	Robert E. Kennedy
	 	Page 5 of 7
	 	 

 

 

obtained thereon in any court having jurisdiction. Each of the parties agrees that service of
process in such arbitration proceedings shall be satisfactorily made upon it if sent by registered
mail addressed to it at the address referred to in Section 14 below. The costs of such arbitration
shall be borne proportionate to the finding of fault as determined by the arbitrator. Judgment on
the arbitration award may be entered by any court of competent jurisdiction.

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

If to Employer:

RXi Pharmaceuticals Corporation

60 Prescott St.

Worcester, MA 01605

Attention: Chief Executive Officer

Fax: (508) 767-3862

Email: mahn@rxipharma.com

If to Employee:

Through company e-mail or company regular mail box if employed by Company or if not employed:

Robert E. Kennedy

9450 E. Larkspur Drive

Scottsdale, AZ 85260

Email: rob@rekconsultingllc.com

     15. Survival. Sections 7 through 16 shall survive the expiration or termination of
the Agreement.

     16. Counterparts. The Agreement may be executed in counterparts, each of which shall
be deemed to be an original and all of which together shall be deemed to be one and the same
agreement.

     17. Joint Participation. Employer and Employee agree and acknowledge that they have
jointly participated in the negotiation and drafting of this Agreement and that this Agreement has
been fully reviewed and negotiated by both Employer and Employee and their respective Counsel. In
the event of an ambiguity or question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by both Employer and Employee and no presumptions or burdens of
proof shall arise favoring either Employer or Employee by virtue of the authorship of any of the
provisions of this Agreement.

					
	 	 	 	 	 
	Employment Agreement	 	 	 	 
	Robert E. Kennedy
	 	Page 6 of 7
	 	 

 

 

     18. Attorney’s Fees. In any action or proceeding to construe or enforce any provision
of the Agreement the prevailing party shall be entitled to recover its or his reasonable attorneys’
fees and other costs of suit in addition to any other recoveries.

IN WITNESS WHEREOF, the Agreement is executed as of the day and year first above written.

	 	 	 	 	 
	 	EMPLOYER

RXi Pharmaceuticals Corporation

 	 
	 	By:  	/s/
Mark J. Ahn 	 
	 	 	Name:  	Mark J. Ahn, Ph.D. 	 
	 	 	Its:  	President & Chief Executive Officer
	 
	 	EMPLOYEE

 	 
	 	
 /s/ Robert E. Kennedy	 
	 	Robert E. Kennedy 	 
	 	 	 
	 

					
	 	 	 	 	 
	Employment Agreement	 	 	 	 
	Robert E. Kennedy
	 	Page 7 of 7
	 	 

 

 

Exhibit 1

RXi Pharmaceuticals Corporation

EMPLOYEE CONFIDENTIALITY, NON-COMPETITION, AND

PROPRIETARY INFORMATION AGREEMENT

     AGREEMENT, effective as of April 13, 2011, between RXi Pharmaceuticals Corporation, a Delaware
corporation (the “Company”), and Robert E. Kennedy (the “Employee”).

     1. Employee will make full and prompt disclosure to the Company of all inventions,
improvements, modifications, discoveries, methods, technologies, biological materials, and
developments, and all other materials, items, techniques, and ideas related directly or indirectly
to the business of the Company, whether patentable or not, made or conceived by Employee or under
Employee’s direction during Employee’s employment with the Company, whether or not made or
conceived during normal working hours, or on the premises of the Company (all of which are
collectively termed “Intellectual Property” hereinafter).

     2. Employee agrees that all Intellectual Property, as defined above, shall be the sole
property of the Company and its assigns, and the Company and its assigns shall be the sole owner of
all patents and other rights in connection therewith. Employee hereby assigns to the Company any
rights Employee may have or acquire in all Intellectual Property and all related patents,
copyrights, trademarks, trade names, and other industrial and intellectual property rights and
applications therefore, in the United States and elsewhere. Employee further agrees that with
regard to all future developments of Intellectual Property, Employee will assist the Company in
every way that may be reasonably required by the Company (and at the Company’s expense) to obtain
and, from time to time, enforce patents on Intellectual Property in any and all countries that the
Company may require, and to that end, Employee will execute all documents reasonably necessary for
use in applying for and obtaining such patents thereon and enforcing the same, as the Company may
desire, together with any assignment thereof to the Company or persons designated by the Company,
and Employee hereby appoints the Company as Employee’s attorney to execute and deliver any such
documents or assignments requested by the Company (but only for the purpose of executing and filing
any such document). Employee’s obligation to assist the Company in obtaining and enforcing patents
for Intellectual Property in any and all countries shall continue beyond the termination of
Employee’s employment with the Company, but the Company shall compensate Employee at a reasonable,
standard hourly rate following such termination for time directly spent by Employee at the
Company’s request for such assistance.

     3. Employee hereby represents that Employee has no continuing obligation to assign to any
former employer or any other person, corporation, institution, or firm any Intellectual Property as
described above. Employee represents that Employee’s performance of all the terms of this
Agreement and as an employee of the Company does not and will not breach any agreement to keep in
confidence proprietary information acquired by Employee, in confidence or in trust, prior to
Employee’s employment by the Company. Employee has not entered into, and Employee agrees not to
enter into, any agreement (either written or oral), which would put Employee in conflict with this
Agreement.

					
	 	 	 	 	 
	Exhibit 1	 	 	 	 
	Robert E. Kennedy
	 	Page 1 of 6
	 	 

 

 

     4. Employee agrees to assign to the Company any and all copyrights and reproduction rights to
any material prepared by Employee in connection with this Agreement and/or developed by Employee
during Employee’s employment with the Company that are related directly or indirectly to the
business of the Company.

     5. Employee understands and agrees that a condition of Employee’s employment and continued
employment with the Company is that Employee has not brought and will not bring to the Company or
use in the performance of Employee’s duties at the Company any materials or documents rightfully
belonging to a former employer which are not generally available to the public.

     6. Employee recognizes that the services to be performed by Employee hereunder are special,
unique, and extraordinary and that, by reason of Employee’s employment with the Company, Employee
may acquire Confidential Information (as hereinafter defined) concerning the operation of the
Company, the use or disclosure of which would cause the Company substantial loss and damage which
could not be readily calculated and for which no remedy at law would be adequate. Accordingly,
Employee agrees that Employee will not (directly or indirectly) at any time, whether during or for
a period of seven (7) years after Employee’s employment with the Company:

(i) knowingly use for personal benefit or for any other reason not authorized by the Company any
Confidential Information that Employee may acquire or has acquired by reason of Employee’s
employment with the Company, or;

(ii) disclose any such Confidential Information to any person or entity except (A) in the
performance of Employee obligations to the Company hereunder, (B) as required by a court of
competent jurisdiction, (C) in connection with the enforcement of Employee rights under this
Agreement, or (D) with the prior consent of the Board of Directors of the Company.

     As used herein, “Confidential Information” includes proprietary and confidential information
with respect to the facilities and methods of the Company, reagents, chemical compounds, cell lines
or subcellular constituents, organisms, or other biological materials, trade secrets, and other
Intellectual Property, systems, patent applications, procedures, manuals, confidential reports,
financial information, business plans, prospects, or opportunities, personnel information, or lists
of customers and suppliers which are generally known only to the Company provided, however, that
Confidential Information shall not include any information that is known or becomes generally known
or available publicly other than as a result of disclosure by Employee which is not permitted as
described in clause (ii) above, or the Company discloses same to others without obtaining an
agreement of confidentiality.

     Employee confirms that all Confidential Information is the exclusive property of the Company.
All business records, papers, documents and electronic materials kept or made by Employee relating
to the business of the Company which comprise Confidential Information shall be and remain the
property of the Company during the Employee’s employment and at all times thereafter. Upon the
termination, for any reason, of Employee’s employment with the Company, or upon the request of the
Company at any time, Employee shall deliver to the

					
	 	 	 	 	 
	Exhibit 1	 	 	 	 
	Robert E. Kennedy
	 	Page 2 of 6
	 	 

 

 

Company, and shall retain no copies of any written or electronic materials, records and documents
made by Employee or coming into Employee’s possession concerning the business or affairs of the
Company and which comprise Confidential Information.

     7. During the term of Employee’s employment with the Company and for one (1) year thereafter
(the “Restricted Period”), the Employee shall not directly or indirectly, for Employee’s own
account or for the account of others, as an officer, director, stockholder (other than as the
holder of less than 1% of the outstanding stock of any publicly traded company), owner, partner,
employee, promoter, consultant, manager or otherwise participate in the promotion, financing,
ownership, operation, or management of, or assist in or carry on through proprietorship, a
corporation, partnership, or other form of business entity which is in competition with the Company
in the field of the development of pharmaceutical products or product candidates for the treatment
of HER2-positive cancer (the “Company Business”) within the United States or any other country in
which the Company is conducting or is actively seeking or planning to conduct the Company Business
as of the date of such termination. Notwithstanding the foregoing, except as otherwise agreed to in
writing, Employee shall have the right to perform such incidental services as are necessary in
connection with (a) his private passive investments, (b) his charitable or community activities,(c)
his participation in trade or professional organizations, and (d) his service on the board of
directors (or comparable body) of one third-party corporate entity that does not compete with the
Company Business.

     During the Restricted Period, the Employee shall not, whether for Employee’s own account or
for the account of any other person (excluding the Company):

	 	(i)	 	solicit or contact in an effort to do business with any person who was or is a
customer of the Company during the Restricted Period, or any affiliate of any such
person, if such solicitation or contact is for the purpose of competition with the
Company; or
	 
	 	(ii)	 	solicit or induce any of the Company’s employees to leave their employment with
the Company or accept employment with anyone else, or hire any such employees or
persons who were employed by the Company during the Restricted Period.

     Nothing herein shall prohibit or preclude the Employee from performing any other types of
services that are not precluded by this Section 7 for any other person.

     Employee has carefully read and considered the provisions of this Section 7 (including the
Restricted Period, scope of activity to be restrained, and the restriction’s geographical scope)
and concluded them to be fair, appropriate and reasonably required for the protection of the
legitimate business interests of the Company, its officers, directors, employees, creditors, and
shareholders. Employee understands that the restrictions contained in this Section may limit
Employee’s ability to engage in a business competitive to the Company’s business, but acknowledges
that Employee will receive adequate remuneration and other benefits from the Company hereunder to
justify such restrictions.

     The Employee shall give prompt notice to the Company of the Employee’s acceptance of
employment or other fees for services relationship during the Restricted Period, which notice

					
	 	 	 	 	 
	Exhibit 1	 	 	 	 
	Robert E. Kennedy
	 	Page 3 of 6
	 	 

 

 

shall include the name of, the business of, and the position that Employee shall hold with
such other entity.

     8. In the event that Employee’s employment is transferred by the Company to a subsidiary,
affiliated company, or acquiring company (as the case may be), Employee’s employment by such
company will, for the purpose of this Confidentiality, Non-Competition, and Proprietary Information
Agreement, be considered as continued employment with the Company, unless Employee executes an
agreement, substantially similar in substance to this Agreement, and until the effective date of
said agreement in any such company for which Employee becomes employed. It is further agreed that
changes in Employee’s position or title unless expressly agreed to in writing will operate to
terminate this Confidentiality, Non-Competition, and Proprietary Information Agreement without
Cause.

     9. Upon termination of Employee’s employment for any reason, unless such employment is
transferred to a subsidiary, affiliated or acquiring company of the Company, Employee agrees to
leave with, or return to, the Company all records, drawings, notebooks, and other documents
pertaining to the Company’s Confidential Information, whether prepared by Employee or others, as
well as any equipment, tools or other devices owned by the Company, that are then in Employee’s
possession, however such items were obtained, and Employee agrees not to reproduce or otherwise
retain any document or data relating thereto.

     10. Employee obligations under this Agreement shall survive the termination of Employee’s
employment with the Company for the respective periods specifically set forth herein regardless of
the manner of, and reason for, such termination, and shall be binding upon Employee’s heirs,
executors, and administrators.

     11. Employee understands and agrees that no license to any of the Company’s trademarks,
patents, copyrights or other proprietary rights is either granted or implied by Employee’s access
to and utilization of the Confidential Information or Intellectual Property.

     12. No delay or omission by the Company in exercising any right under this Agreement will
operate as a waiver of that or any other right. A waiver or consent given by the Company on any
one occasion is effective only in that instance and will not be construed as a bar to or waiver of
any right on any other occasion.

     13. Employee agrees that in addition to any other rights and remedies available to the Company
for any breach or threatened breach by Employee of Employee’s obligations hereunder, the Company
shall be entitled to enforcement of Employee’s obligations hereunder by whatever means are at the
Company’s disposal, including court injunction.

     14. The Company may assign this Agreement to any other corporation or entity which acquires
(whether by purchase, merger, consolidation or otherwise) all or substantially all of the business
and/or assets of the Company. Employee shall have no rights of assignment.

     15. If any provision of this Agreement shall be declared invalid, illegal, or unenforceable,
then such provision shall be enforceable to the extent that a court deems it reasonable to enforce
such provision. If such provision shall be unreasonable to enforce to any

					
	 	 	 	 	 
	Exhibit 1	 	 	 	 
	Robert E. Kennedy
	 	Page 4 of 6
	 	 

 

 

extent, such provision shall be severed and all remaining provisions shall continue in full
force and effect.

     16. This Agreement shall be effective as of the date first written above.

     17. This Agreement shall be governed in all respects by the laws of the State of Delaware,
without regard to principles of conflicts of law.

[Signature Page Follows]

					
	 	 	 	 	 
	Exhibit 1	 	 	 	 
	Robert E. Kennedy
	 	Page 5 of 6
	 	 

 

 

IN WITNESS WHEREOF, Employee has executed this Agreement as of the date set forth above:

	 	 	 	 	 
	 	 	 
	BY:  	 /S/
Robert E. Kennedy	 	 
	 	Name of Employee:  Robert E. Kennedy 	 	 
	 	 	 	 
	 
	ACCEPTED AND AGREED TO:

RXi Pharmaceuticals Corporation

 	 	 
	BY:  	/s/
Mark J. Ahn, Ph.D. 	 	 
	 	Name:  	Mark J. Ahn, Ph.D. 	 	 
	 	Title:  	President & Chief Executive Officer 	 	 
	 

					
	 	 	 	 	 
	Exhibit 1	 	 	 	 
	Robert E. Kennedy
	 	Page 6 of 6

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