Document:

Exhibit 10.29

    
      

    
                                                                        Exhibit
    10.29
    STRATUS
      PROPERTIES INC.

    

    RESTRICTED
      STOCK UNIT AGREEMENT

    UNDER
      THE 2002 STOCK INCENTIVE PLAN

    

    AGREEMENT
      dated as of ______________, 20__ (the “Grant Date”), between Stratus Properties
      Inc., a Delaware corporation (the “Company”), and ______________ (the
“Participant”).

     

    1.    
      (a)     
      Pursuant
      to the Stratus Properties Inc. 2002 Stock Incentive Plan (the “Plan”), the
      Participant is hereby granted effective the Grant Date ___________ restricted
      stock units (“Restricted Stock Units” or “RSUs”) on the terms and conditions set
      forth in this Agreement and in the Plan.

     

    (b)  Defined
      terms not otherwise defined herein shall have the meanings set forth in Section
      2 of the Plan.

     

    (c)  Subject
      to the terms, conditions, and restrictions set forth in the Plan and herein,
      each RSU granted hereunder represents the right to receive from the Company,
      on
      the respective scheduled vesting date for such RSU set forth in Section 2(a)
      of
      this Agreement or on such earlier date as provided in Section 2(b) of this
      Agreement or Section 5(b) of this Agreement (the “Vesting Date”), one share (a
“Share”) of Common Stock of the Company (“Common Stock”), free of any
      restrictions, all amounts notionally credited to the Participant’s Dividend
      Equivalent Account (as defined in Section 4 of this Agreement) with respect
      to
      such RSU, and all securities and property comprising all Property Distributions
      (as defined in Section 4 of this Agreement) deposited in such Dividend
      Equivalent Account with respect to such RSU.

     

    (d)  As
      soon
      as practicable after the Vesting Date (but no later than 2 1⁄2 months from such
      date) for any RSUs granted hereunder, the Participant shall receive from the
      Company the number of Shares to which the vested RSUs relate, free of any
      restrictions, a cash payment for all amounts notionally credited to the
      Participant’s Dividend Equivalent Account with respect to such vested RSUs, and
      all securities and property comprising all Property Distributions deposited
      in
      such Dividend Equivalent Account with respect to such vested RSUs.

     

    2.   
       (a)    
      The
      RSUs
      granted hereunder are in consideration of the services to be performed by the
      Participant during the service periods indicated below and shall vest in
      installments as follows:

     

    Scheduled
      Vesting Date Service
      Period  Number
      of RSUs

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)  Notwithstanding
      Section 2(a) of this Agreement, at such time as there shall be a Change in
      Control of the Company, all unvested RSUs shall be accelerated and shall
      immediately vest.

     

    (c)  Until
      the
      respective Vesting Date for an RSU granted hereunder, such RSU, all amounts
      notionally credited in any Dividend Equivalent Account related to such RSU,
      and
      all securities or property comprising all Property Distributions deposited
      in
      such Dividend Equivalent Account related to such RSU shall be subject to
      forfeiture as provided in Section 6 of this Agreement.

     

    3.  Except
      as
      provided in Section 4 of this Agreement, an RSU shall not entitle the
      Participant to any incidents of ownership (including, without limitation,
      dividend and voting rights) in any Share until the RSU shall vest and the
      Participant shall be issued the Share to which such RSU relates nor in any
      securities or property comprising any Property Distribution deposited in a
      Dividend Equivalent Account related to such RSU until such RSU
      vests.

     

    4.  From
      and
      after the Grant Date of an RSU until the issuance of the Share payable in
      respect of such RSU, the Participant shall be credited, as of the payment date
      therefor, with (i) the amount of any cash dividends and (ii) the amount equal
      to
      the Fair Market Value of any Shares, Subsidiary securities, other securities,
      or
      other property distributed or distributable in respect of one share of Common
      Stock to which the Participant would have been entitled had the Participant
      been
      a record holder of one share of Common Stock at all times from the Grant Date
      to
      such issuance date (a “Property Distribution”). All such credits shall be made
      notionally to a dividend equivalent account (a “Dividend Equivalent Account”)
      established for the Participant with respect to all RSUs granted hereunder
      with
      the same Vesting Date. All credits to a Dividend Equivalent Account for the
      Participant shall be notionally increased by the Account Rate (as hereinafter
      defined), compounded quarterly, from and after the applicable date of credit
      until paid in accordance with the provisions of this Agreement. The “Account
      Rate” shall be the prime commercial lending rate announced from time to time by
      JPMorgan Chase Bank, N.A. or by another major national bank headquartered in
      New
      York, New York designated by the Committee. The Committee may, in its
      discretion, deposit in the Participant’s Dividend Equivalent Account the
      securities or property comprising any Property Distribution in lieu of crediting
      such Dividend Equivalent Account with the Fair Market Value
      thereof.

     

    5.    
      (a)     
      Except
      as
      set forth in Section 5(b) of this Agreement, all unvested RSUs provided for
      in
      this Agreement, all amounts credited to the Participant’s Dividend Equivalent
      Accounts with respect to such RSUs, and all securities and property comprising
      Property Distributions deposited in such Dividend Equivalent Accounts with
      respect to such RSUs shall immediately be forfeited on the Participant’s
      Termination Date. In the event of a sale by the Company of its equity interest
      in a Subsidiary following which such entity is no longer a Subsidiary of the
      Company, persons who continue to be employed by such entity following such
      sale
      shall cease to be Eligible Individuals for purposes of the Plan and this
      Agreement.

     

    (b)  Notwithstanding
      the foregoing, if the Participant ceases to be an Eligible Individual by reason
      of the Participant’s death, Disability, or Retirement, all the unvested RSUs
      granted hereunder, all amounts credited to the Participant’s Dividend Equivalent
      Accounts with respect to such RSUs, and all securities and property comprising
      Property Distributions 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    deposited
      in such Dividend Equivalent Accounts with respect to such RSUs shall vest as
      of
      the Participant’s Termination Date. In the event that the Participant ceases to
      be an Eligible Individual by reason of the Participant’s Termination by his
      employer or principal without Cause, the Committee or any person to whom the
      Committee has delegated authority may, in its or his sole discretion, determine
      that all or any portion of the unvested RSUs granted hereunder, all amounts
      credited to the Participant’s Dividend Equivalent Accounts with respect to such
      RSUs, and all securities and property comprising Property Distributions
      deposited in such Dividend Equivalent Accounts with respect to such RSUs shall
      vest as of the Participant’s Termination Date. In the event vesting is
      accelerated pursuant to this Section 5(b) and the Participant is a Key Employee,
      a distribution of Shares issuable to the Participant, all amounts notionally
      credited to the Participant’s Dividend Equivalent Account, and all securities
      and property comprising all Property Distributions deposited in such Dividend
      Equivalent Account due the Participant upon the vesting of the RSUs shall not
      occur until six months after the Termination Date, unless the Participant’s
      Termination is due to death or Disability.

     

    6.  The
      RSUs
      granted hereunder, any amounts notionally credited in the Participant’s Dividend
      Equivalent Accounts, and any securities and property comprising Property
      Distributions deposited in such Dividend Equivalent Accounts are not
      transferable by the Participant otherwise than by will or by the laws of descent
      and distribution or pursuant to a domestic relations order, as defined in the
      Code.

     

    7.  All
      notices hereunder shall be in writing and, if to the Company, shall be delivered
      personally to the Secretary of the Company or mailed to its principal office,
      1615 Poydras Street, New Orleans, Louisiana 70112, addressed to the attention
      of
      the Secretary; and, if to the Participant, shall be delivered personally or
      mailed to the Participant at the address on file with the Company. Such
      addresses may be changed at any time by notice from one party to the
      other.

     

    8.  This
      Agreement is subject to the provisions of the Plan. The Plan may at any time
      be
      amended by the Board, except that any such amendment of the Plan that would
      materially impair the rights of the Participant hereunder may not be made
      without the Participant’s consent. The Committee may amend this Agreement at any
      time in any manner that is not inconsistent with the terms of the Plan and
      that
      will not result in the application of Section 409A(a)(1) of the Code.
      Notwithstanding the foregoing, no such amendment may materially impair the
      rights of the Participant hereunder without the Participant’s consent. Except as
      set forth above, any applicable determinations, orders, resolutions or other
      actions of the Committee shall be final, conclusive and binding on the Company
      and the Participant.

     

    9.  The
      Participant is required to satisfy any obligation in respect of withholding
      or
      other payroll taxes resulting from the vesting of any RSU granted hereunder
      or
      the payment of any securities, cash, or property hereunder, in accordance with
      procedures established by the Committee, as a condition to receiving any
      securities, cash payments, or property resulting from the vesting of any RSU
      or
      otherwise.

     

    10.  Nothing
      in this Agreement shall confer upon the Participant any right to continue in
      the
      employ of the Company or any of its Subsidiaries, or to interfere in any way
      with the right 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    of
      the
      Company or any of its Subsidiaries to terminate the Participant’s employment
      relationship with the Company or any of its Subsidiaries at any
      time.

     

    11.  As
      used
      in this Agreement, the following terms shall have the meanings set forth
      below.

     

    (a)  “Cause”
      shall mean any of the following: (i) the commission by the Participant of an
      illegal act (other than traffic violations or misdemeanors punishable solely
      by
      the payment of a fine), (ii) the engagement of the Participant in dishonest
      or
      unethical conduct, as determined by the Committee or its designee, (iii) the
      commission by the Participant of any fraud, theft, embezzlement, or
      misappropriation of funds, (iv) the failure of the Participant to carry out
      a
      directive of his superior, employer or principal, or (v) the breach of the
      Participant of the terms of his engagement.

     

    (b)  “Change
      in Control” shall mean a change in the ownership of the Company, a change in the
      effective control of the Company or a change in the ownership of a substantial
      portion of the assets of the Company as provided under Section 409A of the
      Code,
      as amended from time to time, and any related implementing regulations or
      guidance.

     

    (c)  “Disability”
      shall have occurred if the Participant is (i) unable to engage in any
      substantial gainful activity by reason of any medically determinable physical
      or
      mental impairment which can be expected to result in death or can be expected
      to
      last for a continuous period of not less than 12 months, or (ii) by reason
      of
      any medically determinable physical or mental impairment which can be expected
      to result in death or can be expected to last for a continuous period of not
      less than 12 months, receiving income replacement benefits for a period of
      not
      less than 3 months under an accident and health plan covering employees of
      the
      Participant’s employer.

     

    (d)  “Fair
      Market Value” shall, with respect to a share of Common Stock, a Subsidiary
      security, or any other security, have the meaning set forth in the Stratus
      Properties Inc. 2002 Stock Incentive Plan Policies of the Committee, and, with
      respect to any other property, mean the value thereof determined by the board
      of
      directors of the Company in connection with declaring the dividend or
      distribution thereof.

     

    (e)  “Key
      Employee” shall mean any employee who meets the definition of “key employee” as
      defined in Section 416(i) of the Code.

     

    (f)  “Retirement”
      shall mean early, normal or deferred retirement of the Participant under a
      tax
      qualified retirement plan of the Company or any other cessation of the provision
      of services to the Company or a Subsidiary by the Participant that is deemed
      by
      the Committee or its designee to constitute a retirement. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      day,
      month, and year first above written.

    

    STRATUS
      PROPERTIES INC.

    

    

           
      By:  ____________________________________

    

    

    ____________________________________

    (Participant)

    

    ____________________________________

    (Street
      Address)

    

    ____________________________________

    (City)
      (State) (Zip Code)

     

    
      
        
        

      

      
        5Exhibit 10.1

    Exhibit
      10.1

     

    AMENDED
      AND RESTATED EMPLOYMENT AGREEMENT

     

    This
      AMENDED AND RESTATED EMPLOYMENT AGREEMENT, originally effective as of December
      1, 1997 (the “Commencement Date”) and amended and restated as of May 8, 2007, is
      made by and between Neurogen Corporation, a Delaware corporation (the “Company”)
      with offices at 35 Northeast Industrial Road, Branford, Connecticut 06405,
      and
      Stephen R. Davis, who currently resides at 51 Dairy Hill Road, Madison, CT
      06443
      (the “Employee”).

     

    WHEREAS,
      the Company and the Employee desire to maintain an employment relationship;
      and

     

    WHEREAS,
      the Company and the Employee desire to enter into this Agreement to address,
      on
      the terms and conditions hereinafter set forth, certain matters relating to
      such
      employment.

     

    NOW,
      THEREFORE, the Company and the Employee agree as follows:

    
       

       1.   DEFINITIONS

       

          (a) 
        Cause

       

          For
        purposes of this Agreement "cause" means:

       

              (i) 
        the
        Employee is convicted of a felony or entry of a plea of nolo contendere (or
        similar plea) in a criminal proceeding for commission of a felony or serious
        misdemeanor;

       

              (ii) 
        any willful
        act or omission by the Employee which constitutes gross misconduct or gross
        negligence and which results in demonstrable material harm to the
        Company;

       

              (iii) 
        the
        Employee’s habitual drug or alcohol abuse;

       

              (iv) 
        the
        Employee’s willful and continuous failure to perform his duties with the Company
        after reasonable notice of such failure;

       

              (v) 
        the
        Employee’s participation in any act of dishonesty intended to result in his
        material personal enrichment at the expense of the Company; or

       

              (vi) 
        the
        Employee’s failure to substantially comply with the terms set forth in the
        Proprietary Information and Inventions Agreement between the Employee and
        the
        Company.

       

    

              No
      act, or failure to
      act, by the Employee shall be considered “willful” unless committed in bad faith
      and without a reasonable belief that the act or omission was in the Company’s
      best interest.

     

    
      	(b)  	
              Good
                Reason

            

    

     

    
          For
        purposes
        of this Agreement “good reason” means and shall be deemed to exist if, without
        the prior written consent of the Employee, 
         

                (i) 
          the
          Company relocates the primary place of performance of the duties specified
          in
          Section 3 of this Agreement to a location more than fifty (50) miles from
          its
          current offices located in Branford, Connecticut;

      

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

            (ii) as
      a
      result of any action or inaction on the part of the Company the Employee suffers
      a material reduction in Employee’s duties, responsibilities or effective
      authority typically associated with his title and position as set forth and
      described in Section 3 of this Agreement;

     

            (iii) the
      Employee’s rate of Base Salary (as hereinafter defined) is decreased by the
      Company (other than in connection with an across the board salary reduction
      agreed to by the Employee);

     

            (iv) the
      Company fails to obtain the full assumption of this Agreement by a successor
      entity in accordance with Section 12(b) of this Agreement; or

     

            (v) the
      Board
      of Directors of the Company (the “Board”) or the Company’s stockholders, either
      or both, as may be required to authorize the same, shall approve any liquidation
      or dissolution of the Company, or the sale of all or substantially all of the
      assets of the Company. 
      
         

         2.   TERM

         

      

    

        The
      term of
      Employee’s employment under this Agreement shall, unless earlier terminated
      under Section 7 herein or extended as hereinafter provided, be for a period
      commencing as of (the “Commencement Date”) and terminating on November 30, 1999,
      subject to the terms and conditions contained in this Agreement (the “Employment
      Period”). The Employment Period shall automatically be extended commencing on
      December 1, 1999 and thereafter on the relevant alternate anniversary of the
      Commencement Date, for successive two (2) year periods unless, not later than
      three (3) months prior to December 1, 1999 or any such anniversary, either
      party
      to this Agreement shall give written notice to the other that such party does
      not wish to extend or further extend the Employment Period beyond its then
      already automatically extended term, if any. 
       

      3.   DUTIES
        AND SERVICES 

    

     

        During
      the
      Employment Period, the Employee shall be employed as Executive Vice President,
      Chief Operating Officer of the Company and shall serve on the Company’s Board of
      Directors. In such position, the Employee shall have the duties,
      responsibilities and authority normally associated with, or otherwise
      appropriate to, the offices and positions of an Executive Vice President, Chief
      Operating Officer of a corporation. In the performance of his duties and
      responsibilities as Executive Vice President, Chief Operating Officer, the
      Employee shall report only to the President and Chief Executive Officer of
      the
      Company. During the Employment Period, the Employee shall devote substantially
      all of his business time, during normal business hours, to the business and
      affairs of the Company and the Employee shall use his best efforts to perform
      faithfully and efficiently the duties and responsibilities contemplated by
      this
      Agreement; provided, however, the Employee may manage his personal, financial
      and legal affairs and engage in any activities of a volunteer, civic or business
      nature, as long as such activities do not materially
      interfere with Employee’s responsibilities as Executive Vice President, Chief
      Operating Officer. 
       

      4.   COMPENSATION
        AND OTHER BENEFITS

    

     

    
      	(a)  	
              Salary

            

    

     

        As
      compensation for the Employee’s services under this Agreement, beginning on the
      Commencement Date and until the termination of the Employment Period, the
      Employee shall be paid by the Company a base salary of $180,000 per annum,
      payable in equal semi-monthly installments in accordance with the Company’s
      normal payroll practices, which base salary may be increased but not decreased
      (other than in connection with an across the board salary reduction agreed
      to by
      the Employee) during the Employment Period at the sole discretion of the Board
      or the Board’s designee (the “Base Salary”). Such increased (or decreased) Base
      Salary shall then constitute the “Base Salary’ for purposes of this Agreement.

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    
      	(b)  	
              Annual
                Bonus

            

    

     

        In
      addition
      to the Base Salary, at the sole discretion of the Board of Directors or its
      designee, the Employee is eligible to receive such annual bonuses during the
      Employment Period as the Board or its designee, in its sole discretion, may
      approve. It is anticipated that annual bonus awards, if any, will be calculated
      on the basis of both Company and individual performance and that Employee’s
      annual target bonus for complete achievement of all Company and individual
      objectives will be targeted at a level equal to thirty-five percent (35%) of
      Base Salary. Notwithstanding anything in this agreement to the contrary, the
      Company reserves the right at the sole discretion of the Board or its designee
      at any time and without notice to change or abandon altogether any or all of
      it’s incentive compensation policies and practices, including the award of any
      annual bonuses or the determination not to make any such awards in any
      year.

     

    
      	(c)  	
              Benefits

            

    

     

        During
      the
      Employment Period, the Employee shall be eligible to participate in all employee
      and incentive benefit plans and programs maintained from time to time by the
      Company for the benefit of senior executives. During the Employment Period,
      the
      Employee, Employee’s spouse, if any, and their eligible dependents, if any,
      shall be eligible to participate in and be covered under all the employee and
      dependent health and welfare benefit plans or programs maintained from time
      to
      time by the Company. However, the Company shall have no obligations under this
      Section 4(c) unless and until the Employee has met any generally applicable
      eligibility requirements for participation in such plans and
      programs.

     

    
      	(d)  	
              Equity

            

    

     

        At
      the sole
      discretion of the Board of Directors or its designee, the Employee is eligible
      to receive such stock option grants during the Employment Period as the Board
      or
      its designee, in its sole discretion, may approve. It is anticipated that stock
      option awards, if any, will be calculated on the basis of both Company and
      individual performance. Notwithstanding anything in this agreement to the
      contrary, the Company reserves the right at the sole discretion of the Board
      or
      its designee at any time and without notice to change or abandon altogether
      any
      or all of
      it’s
      incentive compensation policies and practices, including the award of any stock
      options or the determination not to make any such awards in any year.
      Notwithstanding any other provision of this Agreement, in the event of a Change
      in Control of the Company (as defined below), on the first annual anniversary
      of
      the effective date of such Change in Control, all stock options granted to
      the
      Employee prior to the effective date of the Change in Control that have not
      otherwise vested or expired shall automatically vest and be exercisable by
      the
      Employee. For purposes of this Agreement, the term “Change in Control” shall
      have the same meaning given to that term in Section 2.4 of the Amended and
      Restated Neurogen Corporation 2001 Stock Option Plan. 
       

      5.   NON-COMPETITION

       

          (a)  During
        the Employment Period and for one year after the date of any such termination
        of
        employment, the Employee agrees that, without the prior express written consent
        of the Company, he shall not, directly or indirectly, for his own benefit
        or as
        an employee, owner, shareholder, partner, consultant, (or in any other
        representative capacity) for any other person, firm, partnership, corporation
        or
        other entity (other than the Company), (i) engage in the discovery, research
        and/or development of therapeutic, diagnostic or prophylactic products which
        work through the same biological mechanisms as products which at the time
        of
        such termination are under active clinical or pre-clinical development or
        have
        been pre-clinically or clinically developed by the Company and which the
        Company
        has not abandoned (“Related Programs”) or (ii) solicit or hire (or direct
        another to solicit or hire) the services of any employee of the Company or
        attempt to induce any such employee or any consultant to the Company to leave
        the employ of the Company (except when such acts are performed in good faith
        by
        the Employee on behalf of the Company). Notwithstanding the above, this
        provision shall not be deemed to prevent or prohibit Employee from being
        employed during such one year period by another entity in a managerial role
        where Employee has overall responsibility for managing (or assisting in the
        management of) a research and development portfolio which includes one or
        more
        Related Programs, provided that Employee does not violate the terms of Section
        6
        hereof and does not during such one year term actively advise or direct the
        discovery, research or development efforts of such other entity in the Related
        Program(s). During the Employment Period, the Employee shall not own more
        than
        2% of the outstanding common stock of any corporation. The provisions of
        this
        Section 5 shall not be deemed to reduce in any way any other fiduciary,
        contractual or other legal obligation the Employee may have to the Company,
        including without limitation any obligation which may arise by virtue of
        any
        corporation law, securities law, patent or intellectual property law or right,
        the common law, other agreements with the Company or
        otherwise.

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    For
      purposes of Section 5 of this Agreement, the term “solicit” shall mean any
      communication of any kind whatsoever, regardless of by whom initiated, inviting,
      encouraging, or requesting any person or entity to take or refrain from taking
      any action.

     

        (b)  The
      Employee agrees to comply with the terms set forth in the Proprietary
      Information and Inventions Agreement previously entered into by the Company
      and
      Employee.

     

        (c)  If
      at any
      time within twelve (12) months after the date on which the Employee exercises
      a
      Company stock option or stock appreciation right, or on which Company
      restricted stock
      vests, or on which income is realized by the Employee in connection with any
      other Company equity-based award (each of which events is a “Realization
      Event”), the Employee breaches any provision of Section 5(a) or 5(b) of the
      Agreement in more than a minor, deminimus or trivial manner that causes or
      is
      likely it cause, more than deminimus financial or reputational harm to the
      Company (and, if such breach is susceptible to cure, the Employee does not
      cure
      such breach and harm within ten (10) days after the Employee’s receipt of
      written notice of such breach of the Company which specifies in reasonable
      detail the facts and circumstances claimed to be the basis for such breach),
      then (i) the Employee shall forfeit all of Employee’s unexercised (including
      unvested) Neurogen Corporation stock options and restricted stock and (ii)
      any
      gain realized within the twelve (12) months prior to such breach from the
      exercise of any Company stock options or the vesting of any Company restricted
      stock or other equity-based awards by the Employee from the Realization Event
      shall be paid by the Employee to the Company upon written notice from the
      Company within ninety (90) days of such notice (such payments may be made in
      increments over such period). Such gain shall be determined after reduction
      for
      any taxes paid (or, if such gain is determined before such taxes are paid,
      owing, provided that such taxes are actually paid in a timely manner) by the
      Employee which are attributable to such gain as of the date of the Realization
      Event, and without regard to any subsequent change in the Fair Market Value
      (as
      defined below) of a share of Company common stock; provided that any federal
      or
      state income tax benefit actually realized by the Employee as a result of making
      payments to the Company under this Section 5(c) (relating to any of the next
      ten
      (10) tax year periods) shall also be paid to the Company within fifteen (15)
      days of such realization. Such gain shall be paid by the Employee delivering
      to
      the Company shares of Company Common Stock with a Fair Market Value on the
      date
      of delivery equal to the amount of such gain. To the extent permitted by
      applicable law, the Company shall have the right to offset such gain against
      any
      amounts otherwise owed to the Employee by the Company (whether as wages,
      vacation pay, or pursuant to any benefit plan or other compensatory
      arrangement). For purposes of this Section 5(c), the “Fair Market Value” of a
      share of Company Common Stock on any date shall be (i) the closing sale price
      per share of Company Common Stock during normal trading hours on the national
      securities exchange on which the Company Common Stock is principally traded
      for
      such date or the last preceding date on which there was a sale of such Company
      Common Stock on such exchange or (ii) if the shares of Company Common Stock
      are
      then traded on the NASDAQ Stock Market or any other over-the-counter market,
      the
      average of the closing bid and asked prices for the shares of Company Common
      Stock during normal trading hours in such over-the-counter market for such
      date
      or the last preceding date on which there was a sale of such Company Common
      Stock in such market, or (iii) if the shares of Company Common Stock are not
      then listed on a national securities exchange or traded in an over-the-counter
      market, such value as the Compensation Committee, in its sole discretion, shall
      reasonably determine. In the event that the Company seeks to enforce the
      provisions of this Section 5(c), and such enforcement is contested by the
      Employee, and it is finally determined that the Employee is not subject to
      the
      provisions of this Section 5(c), then the Company shall (i) reimburse the
      Employee for reasonable attorneys’ fees incurred by the Employee in connection
      with such contest; and (ii) pay to the Employee an additional amount equal
      to
      one (1) times the amount in clause (i); provided
      that
      such payment under this clause (ii) shall not exceed $250,000.

     

        (d)  Any
      termination of the Employee’s employment or of this Agreement shall have no
      effect on the continuing operation of this Section 5.

     

        (e)  The
      Employee acknowledges and agrees that the Company will have no adequate remedy
      at law, and could be irreparably harmed, if the Employee breaches or threatens
      to breach any of the provisions of this Section 5. The Employee agrees that
      the
      Company shall be entitled to equitable and/or injunctive relief to prevent
      any
      breach or threatened breach of this Section 5, and to specific performance
      of
      each of the terms hereof in addition to any other legal or equitable remedies
      that the Company may have. The Employee further agrees that Employee shall
      not,
      in any equity proceeding relating to the enforcement of the terms of this
      Section 5, raise the defense that the Company has an adequate remedy at
      law.

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

        (f)  The
      terms
      and provisions of this Section 5 are intended to be separate and divisible
      provisions and if, for any reason, any one or more of them is held to be invalid
      or unenforceable, neither the validity nor the enforceability of any other
      provision of this Agreement shall thereby be affected. The parties hereto
      acknowledge that the potential restrictions on the Employee’s future employment
      imposed by this Section 5 are reasonable in both duration and geographic scope
      and in all other respects. If for any reason any court of competent jurisdiction
      shall find any provisions of this Section 5 unreasonable in duration or
      geographic scope or otherwise, the Employee and the Company agree that the
      restrictions and prohibitions contained herein shall be effective to the fullest
      extent allowed under applicable law in such jurisdiction.

     

        (g)  The
      parties acknowledge that this Agreement would not have been entered into and
      the
      benefits described in Section 4 of this Agreement would not have been promised
      in the absence of the Employee’s promises under this Section 5. 
       

      6.   CONFIDENTIAL
        INFORMATION

    

     

       The
      Employee agrees to
      substantially comply with the terms set forth in the Proprietary Information
      and
      Inventions Agreement between the Employee and the Company, a copy of which
      is
      attached hereto as Exhibit A and incorporated by reference herein. 
       

      7.   TERMINATION

       

          (a)    Termination
        by the Company for Cause

       

          The
        Company
        may terminate the Employee’s employment hereunder for cause. If the Company
        terminates the Employee’s employment hereunder for cause, the Employment Period
        shall end and the Employee shall only be entitled to any Base Salary accrued
        or
        annual bonus awarded and earned but not yet paid as of the date of termination
        of the Employee’s employment with the Company.

    

     

        If
      the
      Employee’s employment is to be terminated for cause, the Company shall give
      written notice of such termination to the Employee. Such notice shall specify
      the particular act or acts, or failure to act, which is or are the basis for
      the
      decision to so terminate the Employee’s employment for cause.

        (b)    Termination
      Without Cause or Termination For Good Reason

     

        The
      Company
      may terminate the Employee’s employment hereunder without cause and the Employee
      may terminate Employee’s employment hereunder for good reason. If the Company
      terminates the Employee’s employment hereunder without cause, or if the Employee
      terminates Employee’s employment hereunder for good reason, the Employment
      Period shall end and the Employee shall only be entitled to (i) any Base Salary
      accrued or annual bonus awarded and earned but not yet paid as of the actual
      date of termination of the Employee’s employment with the Company; (ii) a lump
      sum payment in an amount equal to the Employee’s annual Base Salary as provided
      in Section 4 (a) above; (iii) continuation of the health and welfare benefits
      of
      the Employee, Employee’s spouse and their eligible dependents, if any, as set
      forth in Section 4(c) above (except for Disability Insurance), or the economic
      equivalent thereof, at the same cost and level in effect on the date of
      termination of the Employee’s employment with the Company for one (1) year after
      such date of termination; and (iv) the right to exercise immediately any stock
      options and to freely trade any restricted stock granted to the Employee which,
      but for such termination, would have become exercisable or tradable, as the
      case
      may be, within one year of the date of such termination without cause or for
      good reason. Notwithstanding any other provision of this Agreement, in addition
      to the benefits described above, if Employee is terminated without cause or
      terminates his employment for good reason as a result of a Change in Control
      of
      the Company (including without limitation any termination within two (2) years
      of a Change in Control which shall be deemed to be as a result of a Change
      in
      Control) then Employee shall also be entitled to a lump sum payment in an amount
      equal to the greater of (i) the Employee’s then targeted annual bonus or (ii)
      the Employee’s targeted annual bonus immediately prior to the Change in
      Control.

     

        If
      the
      Employee’s employment is to be terminated without cause, the Company shall give
      the Employee thirty (30) days prior written notice of its intent to so terminate
      the Employee’s employment. If the Employee intends to terminate Employee’s
      employment for good reason, the Employee agrees to give the Company at least
      thirty (30) days prior written notice.

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

                  
(c)    Termination
      Due to Death or Disability

     

        The
      Company
      may terminate the Employee’s employment hereunder due to the Employee’s
      inability to render, for a period of three consecutive months or an aggregate
      of
      any on hundred twenty (120) days within any six (6) month period, services
      hereunder by reason of permanent disability, as determined by the written
      medical opinion of an independent medical physician selected in good faith
      by
      the Company (“Disability”). In the event of the Employee’s death or a
      termination of the Employee’s employment by the Company due to Disability, the
      Employment Period shall end and the Employee, Employee’s estate or Employee’s
      legal representative, as the case may be, shall only be entitled to (i) (a)
      any
      Base Salary accrued or annual bonus awarded and earned but not yet paid as
      of
      the actual date of termination of the Employee’s employment with the Company,
      and (b) any other compensation and benefits as may be provided in accordance
      with the terms and provisions of any applicable plans and programs of the
      Company; and (ii) in the case of Disability, (a) continuation of payment of
      the
      Employee’s Base Salary, as set forth in Section 4(a) above, until the Employee
      commences to receive payments under the Company’s long-term disability plan, (b)
      continuation of the health and welfare benefits of the Employee, Employee’s
      spouse and their eligible dependents, if any, as set forth
      in
      Section 4(c) above (except for Disability Insurance), or the economic equivalent
      thereof, at the same cost and level in effect on the date of termination for
      one
      (1) year after the date of termination and (c) the right to exercise immediately
      that proportion of the stock options (rounded up to the nearest whole number
      of
      shares) granted to the Employee which would become exercisable on or before
      the
      December 1 immediately following the date of termination of the Employee’s
      employment with the Company due to Disability which is equal to the number
      of
      days worked by the Employee from, but excluding, the December 1 immediately
      preceding such termination date to, and including, such termination date divided
      by 365 days.

     

        (d)    Voluntary
      Termination

     

        The
      Employee
      may affect a Voluntary Termination of Employee’s employment with the Company
      hereunder. A “Voluntary Termination” shall mean a termination of employment by
      the Employee on Employee’s own initiative other than a termination due to death
      or Disability or a termination for good reason. A Voluntary Termination shall
      not be, and shall not be deemed to be, a breach of this Agreement and shall
      result in the end of the Employment Period and only entitle the Employee to
      all
      of the rights and benefits which the Employee would be entitled in the event
      of
      a termination of the Employee’s employment by the Company for cause. 
       

          (e)    Termination
        by the Company at End of Employment Period

    

     

        Notwithstanding
      any
      provision of this Agreement to the contrary, if (a) the Employment Period is
      not
      terminated early under Sections 7(a), 7(b), 7(c) or 7(d) above and (b) the
      Company provides written notice to the Employee, pursuant to Section 2 above,
      that it does not wish to extend or further extend the Employment Period, then
      the Employee’s employment with the Company shall end on the last day of the
      Employment Period and the Employee shall be entitled to (x) continuation of
      payment of the Employee’s Base Salary, as provided in Section 4(a) above, as of
      the date of termination of the Employee’s employment with the Company for a
      period equal to (1) one year less the number of days notice given by the Company
      to the Employee that it does not wish to extend or further extend the Employment
      Period (such notice period shall be deemed to commence as of the date of such
      written notice by the Company); (y) continuation of the health and welfare
      benefits of the Employee, Employee’s spouse and their eligible dependents, if
      any, as set forth in 4(c) above (except for Disability Insurance), or the
      economic equivalent thereof, at the same cost and level in effect on the date
      of
      termination of the Employee’s employment with the Company for one (1) year after
      such termination; and (z) the right to exercise immediately any stock options
      and to trade freely any restricted stock granted to the Employee which, but
      for
      such termination, would have become exercisable or freely tradable, as the
      case
      may be, on or before the December 1 immediately following the date on which
      the
      one (1) year period referred to the preceding subclause (x) ends; provided,
      however, that the severance payment by the Company to the Employee under
      subclause (x) of this Section 7(e) shall be offset on a dollar for dollar basis
      by any cash, or the fair market value of any non-cash, remuneration, benefit
      or
      other entitlement earned, received or receivable by the Employee in connection
      with the employment of such Employee in any capacity, other than dividends,
      interest income or other passive investment income earned as a result of an
      interest in a business or entity of which the Employee owns less than 2% of
      the
      beneficial ownership. If the Employee shall be entitled to any such severance
      payment from the Company after the termination of the Employment Period, the
      Employee shall have the obligation to notify the Company of any employment,
      consultation or other activity which may involve any remuneration, benefits
      or
      other entitlements as described above, and as to which the Company may be
      entitled to an offset.

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

             8.      SURVIVAL
      

     

    The
      rights and obligations of the parties hereunder shall survive the termination
      of
      the Employee’s employment hereunder and the termination of this Agreement to the
      extent necessary to the intended preservation of such rights and
      obligations.

            

    9       WHOLE
      AGREEMENT AND
      MODIFICATION

     

    This
      Agreement, including the “Proprietary
      Information and Inventions Agreement”,
      sets
      forth the entire agreement and understanding of the parties with respect to
      the
      subject matter contained herein, and supersedes all prior and existing
      agreements except as set forth above, whether written or oral, between them
      concerning the subject matter contained herein. This Agreement may be modified
      only by a written agreement executed by each party to this
      Agreement.

     

    10.    NOTICES

     

    Any
      notice or other communication required or permitted to be given under this
      Agreement shall be in writing and shall be mailed by certified mail, return
      receipt requested, or delivered against receipt to the party to whom it is
      to be
      given at the address of such party set forth above or to such other address
      as
      the party shall have furnished in writing in accordance with this provision.
      Notice to the estate of the Employee shall be sufficient if addressed to the
      Employee in accordance with this provision. Any notice or other communication
      given by certified mail shall be deemed given three (3) days after posting.
      However, a notice changing a party’s address shall be deemed given at the time
      of the receipt of the notice.

     

    11.    WAIVER

     

    Any
      waiver by either party of a breach of any provision of this Agreement shall
      not
      operate as or be construed to be a waiver of any other breach of such provision
      or of any breach of any other provision of this Agreement. The failure of a
      party to insist upon strict adherence to any term of this Agreement on one
      or
      more occasions shall not be considered a waiver or deprive that party of the
      right thereafter to insist upon strict adherence to that term or any other
      term
      of this Agreement. Any waiver must be in writing, signed by the party giving
      such waiver.

     

    12.    SUCCESSORS

     

        (a)    Effect
      on
      Employee

     

        This
      Agreement is personal to the Employee and, without the prior express written
      consent of the Company, shall not be assignable by the Employee, except that
      the
      Employee’s rights to receive any compensation or benefits under this Agreement
      may be transferred or disposed of pursuant to testamentary disposition,
      intestate succession or pursuant to a domestic relations
      order of a court of competent jurisdiction. This Agreement shall inure to the
      benefit of and be enforceable by the Employee’s heirs, beneficiaries and/or
      legal representatives.

     

        (b)    Effect
      on
      Company

     

        This
      Agreement shall inure to the benefit of and be binding on the Company and its
      successors and assigns. The Company shall reasonably require any successor
      to
      all or substantially all of the business and/or assets of the Company, whether
      direct or indirect, by purchase, merger, consolidation, acquisition of stock,
      or
      otherwise, by an agreement in form and substance reasonably satisfactory to
      the
      Employee, expressly to assume and agree to perform this Agreement in the same
      manner and to the same extent as the Company would be required to perform if
      no
      such succession had taken place.

     

    13.    NO
      THIRD PARTY
      BENEFICIARIES

     

    This
      Agreement does not create, and shall not be construed as creating, any rights
      enforceable by any person not a party to this Agreement except as provided
      in
      Section 12 of this Agreement.

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

         14.    COUNTERPARTS

     

    This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      instrument.

     

         
15.  
GOVERNING
      LAW

     

        This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Connecticut, without giving effect to the principles of conflict of
      laws thereof.

     

       
16.    SEVERABILITY

     

    The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity or enforceability of any other provision of this
      Agreement.

      
     17.    NO
      VIOLATION OF OUTSTANDING AGREEMENT(S)

     

    
      Employee
        hereby warrants that the execution of this Agreement and the performance
        of his
        duties hereunder do not and will not violate any agreement with any other
        person
        or entity.

       

      IN
        WITNESS WHEREOF, the parties have duly executed this Agreement which shall
        be
        effective as of the effective date noted above.

       

      
        	
              	
                NEUROGEN
                  CORPORATION

              
	 	 
	
                By:

              	
                /s/
                  William H. Koster

              
	 	
                William
                  H. Koster

              
	 	
                President
                  and Chief Executive Officer

              
	 	 
	 	 
	 	
                /s/
                  Stephen R. Davis

              
	 	
                Stephen
                  R. Davis

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