Document:

Exhibit 10.5

Exhibit 10.5

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Second Amended and Restated Employment Agreement (the “Agreement”) is entered
into as of March 12, 2009 (the “Effective Date”) between RegeneRx Biopharmaceuticals,
Inc., a Delaware corporation (the “Company”), and J.J. Finkelstein (the “Executive”).

Recitals

Whereas, the parties previously entered into an Employment Agreement, dated as of
January 1, 2002 (“Original Effective Date”), subsequently amended the original Employment Agreement
effective as of December 31, 2008 based upon Section 409A of the Internal Revenue Code of 1986, as
amended (“Code”), and now desire to amend and restate the Employment Agreement again in order to
reflect certain revisions to the terms and conditions of employment;

Whereas, Executive possesses substantial knowledge and experience with respect to the
Company’s business; and

Whereas, the Company desires to continue to employ Executive to have the benefits of
his expertise and knowledge and Executive, in turn, desires to remain in employment with the
Company;

Now, Therefore, in consideration of the mutual covenants and representations
contained in this Agreement, the Company and Executive agree as follows:

Agreement

1. Employment Of Executive; Position. The Company agrees to employ Executive and
Executive agrees to be employed by the Company as the President and Chief Executive Officer subject
to the terms and conditions of this Agreement. In connection therewith, Executive shall devote his
best efforts, experience and judgment and all of his business time and attention (except for
vacation periods as set forth herein and reasonable periods of illness or other incapacities
permitted by the Company’s general employment policies) to the business of the Company.

2. Term Of Employment And Renewal. The term of Executive’s employment under this
Agreement commenced on the Original Effective Date. The term of Executive’s employment hereunder
was for an initial term of three (3) years from the Original Effective Date (the “Initial Term”).
Subject to the provisions of Section 13 of this Agreement, the Initial Term of this Agreement has
been and shall be automatically extended for successive one (1) year periods (each a “Renewal
Period”) unless the Company or Executive gives written notice to the other at least thirty (30)
days prior to the expiration of a Renewal Period, of such party’s election not to extend this
Agreement. References herein to the “Term” shall mean the Initial Term as it
may be so extended by one or more Renewal Periods. The last day of the Term is the “Expiration
Date.”

 

 

 

3. Duties. During the Term, Executive shall serve in an executive capacity and shall
perform such duties and responsibilities as are customarily associated with his position and such
other duties not inconsistent with his title and position and as may be assigned to him by the
Company. Executive shall act in conformity with the written and oral policies of the Company and
within the limits, budgets, business plans and instructions as set by its Board of Directors (the
“Board”). Executive shall be subject to the authority of the Board and the Company’s duly
appointed officers.

4. Place Of Employment. Executive acknowledges that the Company’s offices and
headquarters are currently located in the County of Montgomery, State of Maryland and that shall be
the initial site of Executive’s employment.

5. Other Employment Policies. The employment relationship between the parties shall also
be governed by the general employment policies and practices of the Company, including those
relating to protection of confidential information and assignment of inventions, except that when
the terms of this Agreement differ from or are in conflict with the Company’s general employment
policies or practices, this Agreement shall control.

6. Compensation.

6.1 Base Salary. Executive shall receive an annual base salary of Two Hundred Ninety Nine
Thousand Five Hundred and Twenty U.S. Dollars (US$ 299,520) (the “Base Salary”), subject to
standard federal and state payroll withholding requirements. The Base Salary shall be payable in
equal periodic installments which are not less than on a monthly basis. The Base Salary shall not
be adjusted downward without the written consent of Executive, except in a circumstance which is
part of a general reduction or other concessionary arrangement affecting all employees or affecting
senior executive officers.

6.2 Bonus. Executive shall be eligible to receive an annual bonus in such amount as shall be
determined in the sole discretion of the Board.

7. Stock.

7.1 Stock Options. To date, Executive has been granted options (the “Options”) to purchase
850,000 shares of the Company’s common stock pursuant to the Company’s Amended and Restated 2000
Stock Option and Incentive Plan (“Plan”). Additionally, and from time to time at the sole
discretion of the Company’s Board, the Company may make additional stock option awards to Executive
(the “Additional Options”). Subject to the provisions below regarding accelerated vesting of
option grants, the specific terms and conditions of the Option and any Additional Options will be
as set forth in the Plan, and any stock option agreement between Executive and the Company.

7.2 Acceleration Clause For Stock Vesting. In the event of (a) Executive’s termination from
employment without Cause as that term is defined in Section 13.2 of this Agreement; or (b) a Change
of Control event as is set forth under Section 12.1 of this
Agreement, Executive’s Options and any Additional Options shall be immediately vested and
become exercisable in full. Additionally, and without in any way limiting the foregoing,
Executive’s Options and any Additional Options will also become immediately vested and become
exercisable in full in the event of a “Change of Control” (or any similar term provided for in the
Applicable Plan) as defined under the terms of the equity plan (the “Applicable Plan”) pursuant to
which such option was granted.

 

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8. Benefits. Executive shall be entitled to (i) participate in and receive all standard
employee benefits under applicable Company welfare benefits plans and programs (if and when such
benefits are established by the Company) to the same extent as other senior executives of the
Company; (ii) participate in all applicable incentive plans, including stock option, stock, bonus,
savings and retirement plans provided by the Company (if and when such plans are established by the
Company), which are offered to senior executive officers in the Company (provided,
however, that the Company is not obligated to award any particular type or amount of equity
to Executive); (iii) receive such perquisites as the Company may establish from time to time which
are commiserate with Executive’s position and comparable to those received by other senior
executives of the Company; (iv) paid vacation of at least four (4) weeks per annum; and
(v) holidays, leaves of absence and leaves for illness and temporary disability in accordance with
the policies of the Company and federal, state and local law. The Company shall procure and
maintain in effect during the Term (a) life insurance policy covering the life of Executive with
coverage in the amount of not less than $1,000,000 and (ii) disability insurance policy with
coverage in the maximum amount allowable or appropriate as determined by Executive’s Base Salary,
provided, however, that the Company shall not be obligated to pay more than $600 per month (as may
be adjusted by mutual agreement of Executive and the Company), in the aggregate, for life and
disability coverage. Any premium payments or other payments in excess of such amount shall be paid
by Executive.

9. Outside Activities.

9.1 Other Employment/Enterprise. Except with the prior written consent of the Company’s
Board, Executive will not while employed by the Company undertake or engage in any other
employment, occupation or business enterprise, other than ones in which Executive is a passive
investor. Executive may engage in civic and not-for-profit activities or serve as a member of a
not-for-profit or for-profit board of directors so long as such activities do not materially
interfere or conflict with the performance of his duties hereunder.

9.2 Conflicting Interests. Except as permitted by Section 9.3, while employed by the Company,
Executive agrees not to acquire, assume or participate in, directly or indirectly, any position,
investment or interest known by him to be adverse or antagonistic to the Company, its business or
prospects, financial or otherwise.

9.3 Competing Enterprises. While employed by the Company, except on behalf of the Company,
Executive will not directly or indirectly, whether as an officer, director, stockholder, partner,
proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become
financially interested in, be employed by or have any business connection with any other person,
corporation, firm, partnership or other entity whatsoever which are known by him to compete
directly with the Company, throughout the world, in any
line of business engaged in (or planned to be engaged in) by the Company; provided, however,
that anything above to the contrary notwithstanding, he may own, as a passive investor, securities
of any public competitor corporation, so long as his direct holdings in any one such corporation
shall not in the aggregate constitute more than 1% of the voting stock of such corporation.

 

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10. Proprietary Information, Nonsolicitation, Noncompetition And Inventions Assignment
Obligations. As a condition of employment, Executive agrees to execute and abide by the
Proprietary Information, Nonsolicitation, Noncompetition and Inventions Assignment Agreement
attached as Exhibit A to this Agreement.

11. Former Employment.

11.1 No Conflict With Existing Obligations. Executive represents that his performance of all
the terms of this Agreement and as an employee of the Company does not and will not breach any
agreement or obligation of any kind made prior to his employment by the Company, including
agreements or obligations he may have with prior employers or entities for which he has provided
services. Executive has not entered into, and agrees he will not enter into, any agreement or
obligation either written or oral in conflict herewith.

11.2 No Disclosure Of Confidential Information. If, in spite of the second sentence of
Section 11.1, Executive should find that confidential information belonging to any former employer
might be usable in connection with the Company’s business, Executive will not intentionally
disclose to the Company or use on behalf of the Company any confidential information belonging to
any of Executive’s former employers (except in accordance with agreements between the Company and
any such former employer); but during Executive’s employment by the Company he will use in the
performance of his duties all information which is generally known and used by persons with
training and experience comparable to his own and all information which is common knowledge in the
industry or otherwise legally in the public domain.

12. Change Of Control. 

12.1 Definition. “Change of Control” shall be deemed to occur upon any of the following
events:

(a) the dissolution or liquidation of the Company;

(b) the sale of all or substantially all of the assets of the Company to an unrelated person
or entity;

(c) a merger, reorganization or consolidation in which the holders of the Company’s
outstanding voting power immediately prior to such transaction do not own a majority of the
outstanding voting power of the surviving or resulting entity, or its parent corporation,
immediately upon completion of such transaction;

(d) the sale of all of the capital stock of the Company to an unrelated person or entity;

 

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(e) if any individual, firm, corporation, or other entity, or any group (as defined in Section
13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”, other than (1) a
trustee or other fiduciary holding securities of the Company under an employee benefit plan of the
Company or (2) Executive, becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of (A)
the outstanding shares of common stock of the Company, or (B) the combined voting power of the
Company’s then-outstanding securities entitled to vote generally in the election of directors, or

(f) any other transaction in which the owners of the Company’s outstanding voting power prior
to such transaction do not own at least a majority of the outstanding voting power of the relevant
entity after the transaction, in each case, regardless of the form thereof.

12.2 Severance.

(a) In the event that Executive voluntarily terminates his employment with the Company for
any reason within 12 months after a Change of Control event, as defined in Section 12.1, then the
Company shall (i) pay to Executive on the Release Effective Date (as defined below), in a lump sum
cash payment, an amount equal to his annual Base Salary in effect on the date of his termination
from employment, less any applicable federal and state taxes and withholdings, and (ii) to the
extent that Executive is eligible for and timely elects continuation of health benefits for
himself and/or his eligible dependents under the Company’s group health plans pursuant to COBRA or
any analogous state or local law, pay or reimburse Executive for the amount of any insurance
premiums for such continuation coverage for a twelve-month period after the Release Effective
Date, but these payments shall be limited to the amount of the premiums being paid by the Company
for Executive’s coverage immediately prior to the date of his termination from employment. To
receive any severance pay and benefits hereunder (other than Accrued Compensation, as defined
below), Executive shall first be required to execute and deliver to the Company a valid and fully
effective general waiver and release of any claims against the Company, its affiliates, officers,
directors, agents and employees in a form satisfactory to the Company, within the consideration
period set forth in the waiver and release, which period shall not exceed forty-five (45) days
after the effective date of his termination from employment (the “General Release”). The date
upon which the General Release is executed and delivered to the Company, and can no longer be
revoked, is referred to as a the “Release Effective Date.”

(b) By no later than two weeks after the date of Executive’s termination from employment under
this Section (or earlier if required by applicable law or the Company’s policies), the Company
shall pay to Executive any Accrued Compensation. “Accrued Compensation” shall mean any Base Salary
owed to Executive for services performed before the date of his termination from employment, any
bonuses earned, if any, for bonus periods that have concluded prior to the date of his termination
(and not including bonuses for the period in which Executive’s termination occurs, unless otherwise
provided by the Company in its discretion), or any unused vacation or personal time in accordance
with the applicable policies of the Company.

13. Termination. The parties acknowledge that Executive’s employment with the Company is
at-will. The provisions of Sections 13.1 through 13.5 govern the amount of
compensation, if any, to be provided to Executive upon termination of employment in circumstances
other than those governed by Section 12 above and do not alter this at-will status.

 

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13.1 Termination By The Company Without Cause.

(a) The Company shall have the right to terminate Executive’s employment with the Company at
any time without Cause (as that term is defined in Section 13.2) by giving notice as described in
Section 13.7 of this Agreement. Termination of employment on account of Executive’s death or
inability to perform his duties shall be governed by Section 13.4 below.

(b) In the event Executive’s employment is terminated without Cause, he shall receive any
Accrued Compensation, and shall be entitled to receive severance pay and benefits under the terms
of Section 12.2 above.

13.2 Termination by Company for Cause.

(a) The Company, by action of its Board, may terminate Executive’s employment under this
Agreement for Cause at any time by giving notice as described in Section 13.7 of this Agreement.

(b) “Cause” for termination means: (i) refusal, failure or neglect to perform the material
duties of his employment under this Agreement (other than by reason of Executive’s physical or
mental illness or impairment); (ii) willful dishonesty, fraud, embezzlement or misconduct with
respect to the business or affairs of the Company; (iii) indictment or conviction of a felony or
of any crime involving dishonesty or moral turpitude; or (iv) Executive’s refusal to abide by or
comply with the directives of the Board so long as those directives are lawful and ethical.

(c) In the event Executive’s employment is terminated at any time with Cause, he will not
receive any severance pay or benefits under Section 12.2 or otherwise, or any additional
compensation other than his Accrued Compensation, if any.

13.3 Voluntary Termination By Executive.

(a) Executive may voluntarily terminate his employment with the Company at any time by giving
notice as described in Section 13.7.

(b) In the event Executive voluntarily terminates his employment (other than after a Change of
Control event or for Good Reason as that term is defined in Section 13.5 below), he will not
receive any severance pay or benefits under Section 12.2 or otherwise, or any additional
compensation other than his Accrued Compensation, if any.

13.4 Termination for Inability to Regularly Perform Duties.

(a) This Agreement shall terminate automatically in the event of Executive’s death. The
Company may terminate Executive’s employment in the event of his illness, disability or other
incapacity in such a manner that Executive is rendered unable regularly to perform his duties
hereunder for more than either One hundred twenty (120) consecutive days
or more than a total of one hundred eighty (180) days in any consecutive twelve (12) month
period, unless otherwise prohibited by any applicable federal, state, or local law or ordinance.

 

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(b) The determination regarding whether Executive is unable regularly to perform his duties
under (a) above shall be made by a doctor mutually acceptable to Executive and the Company.
Executive’s inability to be physically present on the Company’s premises shall not constitute a
presumption that Executive is unable to perform such duties.

(c) In the event Executive’s employment is terminated because of his death or inability to
regularly perform his duties as described in Section 13.4(a), he shall receive any Accrued
Compensation, and shall be entitled to receive severance pay under the terms of Section 12.2
above.

13.5 Resignation By Executive For Good Reason. Executive may resign his employment for “Good
Reason” by giving notice as described in Section 13.7 of this Agreement.

(a) “Good Reason” is defined as (i) a material change in Executive’s function, duties, or
responsibilities with the Company, which change would cause Executive’s position to become one of
lesser responsibility, importance, or scope from the position and attributes thereof, unless
consented to by Executive, (ii) a relocation of Executive’s principal place of employment by more
than 60 miles from its location at the effective date of this Agreement, unless consented to by
Executive, (iii) a material reduction in the benefits and perquisites to Executive from those being
provided as of the effective date of this Agreement, unless consented to by Executive, or (iv) any
material failure by the Company to pay or provide the compensation and benefits under this
Agreement except any such circumstance which is part of a general reduction or other concessionary
arrangement affecting all employees or affecting senior executive officers. In each such event
listed in (i) through (iv) above, Executive shall give the Company notice thereof by no later than
ninety (90) days after the initial occurrence of the event or condition allegedly constituting Good
Reason which shall specify in reasonable detail the circumstances constituting Good Reason. There
shall be no Good Reason with respect to any such event or condition cured by the Company within
thirty (30) days after such notice. If the Company fails to cure such event or condition within
this thirty- (30-) day period, Executive must terminate employment under this provision within
ninety (90) days after the cure period has expired (and thereafter Executive may no longer
terminate his employment for a Good Reason based upon the event or condition that was not cured).

(b) In the event of Executive’s resignation for a Good Reason, he shall receive any Accrued
Compensation, and shall be entitled to receive severance pay and benefits under the terms of
Section 12.2 above.

13.6 Non-renewal of the Agreement. Non-renewal of this Agreement initiated by the Company in
accordance with Section 2 above resulting in the termination of Executive’s employment by the
Company, or resulting in Executive’s demotion, shall be deemed a termination of Executive’s
employment without Cause and Executive shall be entitled to receive severance pay and benefits
under the terms of Section 12.2. If Executive initiates a non-renewal of this Agreement in
accordance with Section 2 above, he shall not be entitled to any severance pay or benefits from the
Company.

 

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13.7 Notice; Effective Date of Termination. Termination of Executive’s employment pursuant to
this Agreement shall be effective on the earliest of:

(a) thirty (30) days after Executive, for any reason, gives written notice to the Company of
his termination;

(b) thirty (30) days after the Company, without Cause, gives written notice to Executive of
his termination, including for his inability to perform services for a reason other than death;
Executive will receive compensation through the 30-day notice period. However, the Company
reserves the right to require that Executive not perform any services or report to work during the
30-day notice period.

(c) immediately upon the Company giving written notice to Executive of his termination for
Cause.

(d) immediately upon Executive giving written notice to the Company of his termination for a
Good Reason (and after the cure period has expired).

Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of
personal delivery (including personal delivery by hand, telecopier, or telex) or the third day
after mailing by first class mail, to the Company at its primary office location and to Executive
at his address as listed on the Company payroll.

14. Application of Section 409A. Notwithstanding anything to the contrary set forth
herein, any payments and benefits provided under this Agreement that constitute “deferred
compensation” within the meaning of Section 409A of the Code and the regulations and other guidance
thereunder and any state law of similar effect (collectively “Section 409A”) shall not commence in
connection with Executive’s termination of employment unless and until Executive has also incurred
a “separation from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h)
(“Separation From Service”), unless the Company reasonably determines that such amounts may be
provided to Executive without causing him to incur the additional 20% tax under Section 409A.

If the Company (or, if applicable, the successor entity thereto) determines that any severance
payments constitute “deferred compensation” under Section 409A and Executive is, on the termination
of service, a “specified employee” of the Company or any successor entity thereto, as such term is
defined in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the
incurrence of the adverse personal tax consequences under Section 409A, the timing of the severance
payments shall be delayed until the earlier to occur of: (i) the date that is six months and one
day after Executive’s Separation From Service, or (ii) the date of Executive’s death (such
applicable date, the “Specified Employee Initial Payment Date”). On the Specified Employee Initial
Payment Date, the Company (or the successor entity thereto, as applicable) shall (A) pay to
Executive a lump sum amount equal to the sum of the severance payments that Executive would
otherwise have received through the Specified Employee Initial Payment Date if the commencement of
the severance payments had not been so delayed pursuant to this Section and (B) commence paying the
balance of the severance pay in accordance with the applicable payment schedules set forth in this
Agreement.

 

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The Company’s obligations to make any reimbursements or provide in-kind benefits to Executive
shall be subject to the following restrictions: (a) Executive must provide documentation of any
reimbursable expenses in accordance with the Company’s then existing policies and procedures, (b)
the expenses paid or reimbursed by the Company in one calendar year shall not affect the expenses
paid or reimbursed in another calendar year, and (c) the reimbursement for any expenses shall be
made within a reasonable period of time following the date on which the Company receives written
documentation of the expense, provided that all expenses will be reimbursed on or before the last
day of the calendar year following the calendar year in which the expense was incurred.

15. Validity; Complete Agreement. This Agreement and its Exhibit constitute the entire
agreement between Executive and the Company. This Agreement is the complete, final, and exclusive
embodiment of their agreement with regard to this subject matter and supercedes any prior oral
discussions or written communications and agreements. This Agreement is entered into without
reliance on any promise or representation other than those expressly contained herein, and it
cannot be modified or amended except in writing signed by an authorized officer of the Company.

16. Waiver. If either party should waive any breach of any provisions of this Agreement,
he or it shall not thereby be deemed to have waived any preceding or succeeding breach of the same
or any other provision of this Agreement.

17. Severability. Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any
other provision or any other jurisdiction, but this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never
been contained herein.

18. Amendment. This Agreement shall not be modified or amended except by written
agreement of the parties hereto.

19. Choice Of Law; Jurisdiction. This Agreement shall be governed by and construed in
accordance with the law of the State of Maryland regardless of the choice of law provisions of the
State of Maryland or any other jurisdiction. The Parties consent to the exclusive jurisdiction of
the federal and state courts in Maryland.

20. Arbitration Of Disputes. Any controversy or claim arising out of this Agreement or
any aspect of Executive’s relationship with the Company including the cessation thereof shall be
resolved by arbitration in accordance with the then existing Employment Dispute Resolution Rules of
the American Arbitration Association, in Montgomery County, Maryland, and judgment upon the award
rendered may be entered in any court having jurisdiction thereof. The parties shall split equally
the costs of arbitration, except that each party shall pay its own attorneys’ fees. The parties
agree that the award of the arbitrator shall be final and binding.

21. Indemnification. During the term of this Agreement, Executive shall be entitled to
coverage under any liability insurance procured by Company to the same extent as other senior
executives at the Company.

 

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22. Counterpart. This Agreement may be executed in any number of counterparts, all of
which shall be considered one and the same agreement.

23. Delay; Partial Exercise. No failure or delay by any party in exercising any right,
power or privilege under this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.

24. Successors And Assigns.  This Agreement is intended to bind and inure to the benefit
of and be enforceable by Executive and the Company, and their respective successors, assigns,
heirs, executors and administrators, except that Executive may not assign any of his duties
hereunder and he may not assign any of his rights hereunder without the written consent of the
Company, which shall not be withheld unreasonably.

25. Advice Of Counsel. Executive and the Company hereby acknowledge that each party has
had adequate opportunity to review this Agreement, to obtain the advice of counsel with respect to
this Agreement, and to reflect upon and consider the terms and conditions of this Agreement. The
parties further acknowledge that each party fully understands the terms of this Agreement and has
voluntarily executed this Agreement. The Company shall pay the legal fees and costs incurred by
Executive in connection with the negotiation and preparation of this Agreement, upon the
presentation of invoices in appropriate form.

26. Headings. The headings of the sections hereof are inserted for convenience only and
shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

27. Survival. Provisions of this Agreement which must survive the termination of this Agreement in
order to effectuate the intent of the parties, including, but not limited to, Sections 10, 12.2 and
13, shall continue in effect after the termination of the Agreement for a sufficient period of time
under the circumstances to effectuate the parties’ intent.

 

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In Witness Whereof, the parties hereto have caused this Agreement to be executed as
of the day and year first written above.

	 	 	 	 	 
	 

	 	“Executive”	 	 
	 
	 	 	 	 
	 

	 	J.J. Finkelstein	 	 
	 
	 	 	 	 
	 

	 	/s/ J.J. Finkelstein
 

By: J.J. Finkelstein
	 	 
	 
	 	 	 	 
	 

	 	“The Company”	 	 
	 
	 	 	 	 
	 

	 	RegeneRx Biopharmaceuticals, Inc.	 	 

	 	 	 	 	 	 	 
	 	 	/s/ Richard Hindin	 	 
	 	 	 	 	 
	 

	 	By:
	 	Richard Hindin	 	 
	 

	 	Title:
	 	Chairman Compensation Committee	 	 

 

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AMENDMENTS TO THE SECOND AMENDED AND RESTATED EMPLOYMENT

AGREEMENT

Pursuant to Section 18 of the Second Amended and Restated Employment Agreement between RegeneRx
Biopharmaceuticals, Inc. (“Company”) and J.J. Finkelstein (“Executive”), dated as of March 12, 2009
(“Agreement”), the following amendments (“Amendments”) to the Agreement are hereby adopted as of
the dates set forth below:

1. Section 6.1 of the Agreement is amended, effective as of April 1, 2009 (contingent upon the
award of a stock option to the Executive as provided in Paragraph 2 below), to provide that the
Executive’s annual Base Salary shall be $194,350, and to add the following sentence to the end of
Section 6.1: “Notwithstanding the reduction of Base Salary effective as of April 1, 2009, any
severance pay under the terms of the Agreement shall be calculated based upon Executive’s Base
Salary in effect as of March 31, 2009, or, if higher, Executive’s Base Salary in effect at the time
of his termination from employment.” All other provisions of Section 6.1 shall be unchanged.

2. Section 7.1 of the Agreement shall be revised to add the provisions set forth below to the
end of the Section:

“Subject to approval by the Board, the Company agrees to award to the Executive an option to
purchase 172,122 shares of the Company’s Common Stock, pursuant to the terms of the Company’s Plan,
at an exercise price that is equal to the fair market value of such Common Stock on the date of
grant of the option as determined in accordance with the Plan (“New Option”). The New Option,
which shall be an incentive stock option for purposes of section 422 of the Code to the maximum
extent permitted, and otherwise shall be treated as a non-qualified stock option, shall vest in
three equal vesting installments, occurring on June 30, 2009, September 30, 2009 and December 31,
2009, provided that the Executive has not incurred a Termination of Service (as defined in the
Plan) before any applicable vesting date. Notwithstanding Section 7.2 below or any provision of
the Plan, if the Executive is terminated from employment with the Company without Cause or if there
is a Change in Control (either as defined herein or in the Plan), the New Option shall not be
subject to any accelerated vesting, except as provided below. The New Option shall be forfeited in
its entirety (whether vested or unvested) if the Executive’s employment with the Company is
terminated for Cause at any time as set forth in Section 13.2. If the Executive voluntarily
terminates his employment with the Company (or if the Executive’s employment terminates because of
his death or disability), the New Option shall be considered to be vested and exercisable only
through the most recently completed vesting installment. If the Executive’s employment is
terminated without Cause, then the New Option shall be considered to be vested and exercisable
through the most recently completed vesting installment, and shall be credited with an additional
amount of daily pro-rata vesting for the period since the last installment date. If the
Executive’s Base Salary is increased to at least the amount in effect immediately prior to the
reduction on April 1, 2009, then no additional vesting shall occur with respect to the New Option
thereafter, provided that daily pro-rata vesting shall be credited for the period since the date of
the last vesting installment (and any unvested portion of the New Option shall terminate at that
time). The specific terms and
conditions of the New Option shall be as set forth in the Plan and the standard form of stock
option agreement, which the Executive hereby agrees to execute.”

 

 

 

The Executive acknowledges that these Amendments constitute his agreement and consent to the
reduction of his Base Salary, and further agrees that these Amendments and the reduction of his
Base Salary hereunder shall not constitute Good Reason to terminate his employment within the
meaning of the Agreement.

	 	 	 	 	 
	 

	 	EXECUTIVE:	 	 
	 
	 	 	 	 
	 

	 	/s/ J.J. Finkelstein
 

By: J.J. Finkelstein
	 	 
	 
	 	 	 	 
	 

	 	COMPANY:	 	 
	 
	 	 	 	 
	 

	 	RegeneRx Biopharmaceuticals, Inc.	 	 

	 	 	 	 	 	 	 
	 	 	/s/ Richard Hindin	 	 
	 	 	 	 	 
	 

	 	By:
	 	Richard Hindin	 	 
	 

	 	Title:
	 	Chairman Compensation CommitteeExhibit 10.6

Exhibit 10.6

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of March
31, 2009 (the “Effective Date”) between REGENERX BIOPHARMACEUTICALS, INC., a Delaware corporation
(the “Company”), and C. NEIL LYONS (the “Executive”).

Recitals

Whereas, the parties previously entered into an Employment Agreement, dated as of April
12, 2007 (“Original Effective Date”), and subsequently amended the original Employment Agreement
effective as of December 31, 2008 based upon Section 409A of the Internal Revenue Code of 1986, as
amended (“Code”), and now desire to amend and restate the Employment Agreement again in order to
reflect certain revisions to the terms and conditions of employment;

Whereas, Executive possesses substantial knowledge and experience with respect to the
Company’s business, in particular finance, accounting and administration; and

Whereas, the Company desires to continue to employ Executive to have the benefits of his
expertise and knowledge and Executive, in turn, desires to remain in employment with the Company;

NOW, THEREFORE, in consideration of the mutual covenants and representations contained in this
Agreement, the Company and Executive agree as follows:

Agreement

1. Employment of Executive: Position. The Company agrees to employ Executive and Executive agrees
to be employed by the Company as the Chief Financial Officer subject to the terms and conditions of
this Agreement. In connection therewith, Executive shall devote his best efforts, experience and
judgment and all of his business time and attention (except for vacation periods as set forth
herein and reasonable periods of illness or other incapacities permitted by the Company’s general
employment policies) to the business of the Company.

2. Term of Employment and Renewal. The term of Executive’s employment under this Agreement
commenced on the Original Effective Date. Unless terminated earlier subject to the provisions of
Section 13 of this Agreement, the term of Executive’s employment hereunder shall be for one (1)
year from the Original Effective Date and shall renew for a one-year period each year on the
anniversary of the Original Effective Date, unless either party provides written notice at least
thirty days before the anniversary of the Original Effective Date (the “Term”) that it does not
desire to renew. The last day of the Term is the “Expiration Date.”

3. Duties. During the Term, Executive shall serve in an executive capacity and shall perform such
duties and responsibilities as are customarily associated with his position and such other duties
not inconsistent with his title and position and as may be assigned to him by the Company.
Executive shall act in conformity with the written and oral policies of the Company and within the
limits, budgets, business plans and instructions as set by its Board of Directors
(the “Board”). Executive shall be subject to the authority of the Board and the Company’s duly
appointed officers, including the President and Chief Executive Officer (“CEO”).

 

 

 

4. Place of Employment. Executive acknowledges that the Company’s offices and headquarters are
currently located in the County of Montgomery, State of Maryland and that shall be the initial site
of Executive’s employment.

5. Other Employment Policies. The employment relationship between the parties shall also be
governed by the general employment policies and practices of the Company, including those relating
to protection of confidential information and assignment of inventions, except that when the terms
of this Agreement differ from or are in conflict with the Company’s general employment policies or
practices, this Agreement shall control.

6. Compensation.

6.1 Base Salary. Executive shall receive an annual base salary of Two Hundred and Two
Thousand, Five Hundred and Thirty Seven U.S. Dollars (US $202,537) (the “Base Salary”), subject to
standard federal and state payroll withholding requirements. The Base Salary shall be payable in
equal periodic installments which are not less than on a monthly basis. The Company will review and
may adjust the Base Salary from time to time, usually annually.

6.2 Bonus. Executive shall be eligible to receive an annual bonus in such amount as shall be
determined in the sole discretion of the Company’s Board and CEO.

6.3 Life Insurance. The Company will reimburse Executive for 2/3rds of his annual term life
insurance premium, which premium shall be: (i) for term life insurance coverage not to exceed two
times his annual Base Salary, and (ii) reasonable and mutually agreeable.

7. Stock.

7.1 Stock Options. To date, Executive has been granted options (the “Options”) to purchase
350,000 shares of the Company’s common stock pursuant to the Company’s Amended and Restated 2000
Stock Option and Incentive Plan (“Plan”). Additionally, and from time to time at the sole
discretion of the Company’s Board, the Company may make additional stock option awards to Executive
(the “Additional Options”). Subject to the provisions below regarding accelerated vesting of
option grants, the specific terms and conditions of the Option and any Additional Options will be
as set forth in the Plan, and any stock option agreement between Executive and the Company.

7.2 Acceleration Clause for Stock Option Vesting.

(a) In the event of a Change of Control event as is set forth under Section 12.1 of this
Agreement, Executive’s Options and any Additional Options shall be immediately vested and become
exercisable in full. Additionally, and without in any way limiting the foregoing, Executive’s
Options and any Additional Options will also become immediately vested and become exercisable in
full in the event of a “Change of Control” (or any similar term provided for in the Applicable
Plan) as defined under the terms of the equity plan (the “Applicable Plan”) pursuant to which such
option was granted.

 

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(b) In the event Executive is terminated from employment with the Company without Cause by
the existing CEO, the Options and any Additional Options shall vest only with respect to the
portion of the Options and any Additional Options that otherwise would have vested during the
calendar year in which Executive’s termination from employment occurs had Executive not been
terminated.

(c) In the event that Executive is terminated without Cause from employment with the Company
by a new CEO, the Options and any Additional Options shall immediately vest and become exercisable
in full.

8. Benefits. Executive shall be entitled to (i) participate in and receive all standard employee
benefits under applicable Company welfare benefits plans and programs (if and when such benefits
are established by the Company) to the same extent as other senior executives of the Company; (ii)
participate in all applicable incentive plans, including stock option, stock, bonus, savings and
retirement plans provided by the Company (if and when such plans are established by the Company),
which are offered to senior executive officers in the Company (provided, however,
that the Company is not obligated to award any particular type or amount of equity to Executive);
(iii) receive such perquisites as the Company may establish from time to time which are commiserate
with Executive’s position and comparable to those received by other senior executives of the
Company; (iv) paid vacation of at least three (3) weeks per annum; and (v) holidays, leaves of
absence and leaves for illness and temporary disability in accordance with the policies of the
Company and federal, state and local law.

9. Outside Activities.

9.1 Other Employment/Enterprise. Except with the prior written consent of the Company’s
Board, Executive will not, while employed by the Company undertake or engage in any other
employment, occupation or business enterprise, other than ones in which Executive is a passive
investor. Executive may engage in civic and not-for-profit activities or serve as a member of a
not-for-profit or for-profit board of directors so long as such activities do not materially
interfere or conflict with the performance of his duties hereunder.

9.2 Conflicting Interests. Except as permitted by Section 9.3, while employed by the Company,
Executive agrees not to acquire, assume or participate in, directly or indirectly, any position,
investment or interest known by him to be adverse or antagonistic to the Company, its business or
prospects, financial or otherwise.

9.3 Competing Enterprises. While employed by the Company, except on behalf of the Company,
Executive will not directly or indirectly, whether as an officer, director, stockholder, partner,
proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become
financially interested in, be employed by or have any business connection with any other person,
corporation, firm, partnership or other entity whatsoever which were known by him to compete
directly with the Company, throughout the world, in any line of business engaged in (or planned to
be engaged in) by the Company; provided, however, that anything above to the contrary
notwithstanding, he may own, as a passive investor, securities of any public competitor
corporation, so long as his direct holdings in any one such
corporation shall not in the aggregate constitute more than 1% of the voting stock of such
corporation.

 

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10. Proprietary Information, Nonsolicitation, Noncompetition and Inventions Assignment obligations.
As a condition of employment, Executive agrees to abide by the Proprietary Information,
Nonsolicitation, Noncompetition and Inventions Assignment Agreement previously entered into on
April 18, 2005.

11. Former Employment.

11.1 No Conflict With Existing Obligations. Executive represents that his performance of all
the terms of this Agreement and as an employee of the Company does not and will not breach any
agreement or obligation of any kind made prior to his employment by the Company, including
agreements or obligations he may have with prior employers or entities for which he has provided
services. Executive has not entered into, and agrees he will not enter into, any agreement or
obligation either written or oral in conflict herewith.

11.2 No Disclosure of Confidential Information. If, in spite of the second sentence of
Section 11.1, Executive should find that confidential information belonging to any former employer
might be usable in connection with the Company’s business, Executive will not intentionally
disclose to the Company or use on behalf of the Company any confidential information belonging to
any of Executive’s former employers (except in accordance with agreements between the Company and
any such former employer); but during Executive’s employment by the Company he will use in the
performance of his duties all information which is generally known and used by persons with
training and experience comparable to his own and all information which is common knowledge in the
industry or otherwise legally in the public domain.

12. Change of Control.

12.1 Definition. “Change of Control” shall be deemed to occur upon any of the following
events:

(a) the dissolution or liquidation of the Company;

(b) the sale of all or substantially all of the assets of the Company to an unrelated person
or entity;

(c) a merger, reorganization or consolidation in which the holders of the Company’s
outstanding voting power immediately prior to such transaction do not own a majority of the
outstanding voting power of the surviving or resulting entity, or its parent corporation,
immediately upon completion of such transaction;

(d) the sale of all of the capital stock of the Company to an unrelated person or entity;

 

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(e) if any individual, firm, corporation, or other entity, or any group (as defined in §
13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)),
other than (1) a trustee or other fiduciary holding securities of the Company under an
employee benefit plan of the Company or (2) Executive, becomes the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of (A) the outstanding shares of common stock of the Company, or (B) the
combined voting power of the Company’s then-outstanding securities entitled to vote generally in
the election of directors; or

(f) any other transaction in which the owners of the Company’s outstanding voting power prior
to such transaction do not own at least a majority of the outstanding voting power of the relevant
entity after the transaction, in each case, regardless of the form thereof.

12.2 Severance.

(a) In the event Executive voluntarily terminates his employment for any reason within 12
months after a Change of Control event, as defined in Section 12.1, then the Company shall provide
Executive with the severance payments and benefits described in Section 12.2(b) below, less any
applicable federal and state taxes and withholdings. To receive any severance pay and benefits
hereunder (other than Accrued Compensation, as defined below), Executive shall first be required
to execute and deliver to the Company a valid and fully effective general waiver and release of
any claims against the Company, its affiliates, officers, directors, agents and employees in a
form satisfactory to the Company within the consideration period set forth in the waiver and
release, which period shall not exceed forty-five (45) days after the effective date of his
termination from employment (the “General Release”). The date upon which the General Release is
executed and delivered to the Company, and can no longer be revoked, is referred to as a the
“Release Effective Date.”

(b) Severance pay and benefits pursuant to 12.2(a) shall include and be calculated as
follows:

(i) The Company shall continue to pay Executive’s Base Salary in effect on the date of his
termination from employment for a period of twelve (12) calendar months (“Severance Period”).
These payments shall occur on the first day of each calendar month, beginning with the first
calendar month after the Release Effective Date.

(ii) To the extent that Executive is eligible for and timely elects continuation of health
benefits for himself and/or his eligible dependents under the Company’s group health plans pursuant
to COBRA or any analogous state or local law, the Company shall pay or reimburse Executive for the
amount of any insurance premiums for such continuation coverage during the Severance Period, but
these payments shall be limited to the amount of the premiums being paid by the Company for
Executive’s coverage immediately prior to the date of his termination from employment.

(c) By no later than two weeks after the date of Executive’s termination from employment
under this Section (or earlier if required by applicable law or the Company’s policies), the
Company shall pay to Executive any Accrued Compensation. “Accrued Compensation” shall mean any
Base Salary owed to Executive for services performed before the date of his termination from
employment, any bonuses earned, if any, for bonus periods that
have concluded prior to the date of his termination (and not including bonuses for the period
in which Executive’s termination occurs, unless otherwise provided by the Company in its
discretion), or any unused vacation or personal time in accordance with the applicable policies of
the Company.

 

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13. Termination. The parties acknowledge that Executive’s employment with the Company is at-will.
The provisions of Sections 13.1 through 13.6 govern the amount of compensation, if any, and notice
to be provided to Executive upon termination of employment in circumstances other than those
governed by Section 12 above and do not alter this at-will status.

13.1 Termination by the Company Without Cause.

(a) The Company shall have the right to terminate Executive’s employment with the Company at
any time without Cause (as that term is defined in Section 13.2) by giving notice as described in
Section 13.6 of this Agreement. Termination on account of Executive’s death or inability to
perform his duties shall be governed by Section 13.4 below.

(b) In the event Executive’s employment is terminated without Cause, he shall receive any
Accrued Compensation, and shall be entitled to receive severance pay and benefits under the terms
of Section 12.2 above, provided, however, that any installments of severance pay
that remain to be paid to Executive by March 15 of the calendar year following the year in which
Executive terminates employment shall be accelerated and paid in full on such date.

13.2 Termination by Company for Cause.

(a) The Company, by action of its Board, may terminate Executive’s employment under this
Agreement for Cause at any time by giving notice as described in Section 13.6 of this Agreement.

(b) “Cause” for termination means: (i) refusal, failure or neglect to perform the material
duties of his employment under this Agreement (other than by reason of Executive’s physical or
mental illness or impairment); (ii) willful dishonesty, fraud, embezzlement or misconduct with
respect to the business or affairs of the Company; (iii) indictment or conviction of a felony or
of any crime involving dishonesty or moral turpitude; or (iv) Executive’s refusal to abide by or
comply with the directives of the Board or Chief Executive Officer, so long as those directives
are lawful and ethical.

(c) In the event Executive’s employment is terminated at any time with Cause, he will not
receive any severance pay or benefits under Section 12.2 or otherwise, or any additional
compensation other than his Accrued Compensation, if any.

13.3 Voluntary Termination By Executive.

(a) Executive may voluntarily terminate his employment with the Company at any time by giving
notice as described in Section 13.6.

(b) In the event Executive voluntarily terminates his employment (other than after a Change
of Control event), he will not receive any severance pay or benefits under Section 12.2 or
otherwise, or any additional compensation other than his Accrued Compensation, if any.

 

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13.4 Termination for Inability to Regularly Perform Duties.

(a) This Agreement shall terminate automatically in the event of Executive’s death. The
Company may terminate Executive’s employment in the event of the his illness, disability or other
incapacity in such a manner that Executive is rendered unable regularly to perform his duties
hereunder for more than either ninety (90) consecutive days or more than a total of one hundred
twenty (120) days in any consecutive twelve (12) month period, unless otherwise prohibited by any
applicable federal, state, or local law or ordinance.

(b) The determination regarding whether Executive is unable regularly to perform his duties
under (a) above shall be made by a doctor mutually acceptable to Executive and the Company.
Executive’s inability to be physically present on the Company’s premises shall not constitute a
presumption that Executive is unable to perform such duties.

13.5 Non-renewal of the Agreement. Non-renewal of this Agreement initiated by the Company in
accordance with Section 2 above resulting in the termination of Executive’s employment by the
Company, or resulting in Executive’s demotion, shall be deemed a termination of Executive’s
employment without Cause and Executive shall be entitled to receive severance pay and benefits
under the terms of Section 12.2, provided, however, that any installments of
severance pay that remain to be paid to Executive by March 15 of the calendar year following the
year in which Executive terminates employment shall be accelerated and paid in full on such date.
If Executive initiates a non-renewal of this Agreement in accordance with Section 2 above, he shall
not be entitled to any severance pay or benefits from the Company.

13.6 Notice; Effective Date of Termination. Termination of Executive’s employment pursuant to
this Agreement shall be effective on the earliest of:

(a) thirty (30) days after Executive, for any reason, gives written notice to the Company of
his termination;

(b) thirty (30) days after the Company, without Cause, gives written notice to Executive of
his termination, including for his inability to perform services; Executive will receive
compensation through the 30-day notice period. However, the Company reserves the right to require
that Executive not perform any services or report to work during the 30-day notice period;

(c) immediately upon the Company giving written notice to Executive of his termination for
Cause.

Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of
personal delivery (including personal delivery by hand, telecopier, or telex) or the third day
after mailing by first class mail, to the Company at its primary office location and to Executive
at his address as listed on the Company payroll.

 

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14. Application of Section 409A. Notwithstanding anything to the contrary set forth herein, any
payments and benefits provided under this Agreement that constitute “deferred compensation” within
the meaning of Section 409A of the Code, and the regulations and other guidance thereunder and any
state law of similar effect (collectively “Section 409A”) shall not commence in connection with
Executive’s termination of employment unless and until Executive has also incurred a “separation
from service” (as such term is defined in Treasury Regulation Section 1.409A-1(h) (“Separation From
Service”), unless the Company reasonably determines that such amounts may be provided to Executive
without causing him to incur the additional 20% tax under Section 409A.

It is intended that each installment of severance pay provided for in this Agreement is a separate
“payment” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). For the avoidance of
doubt, it is intended that payments of severance set forth in this Agreement satisfy, to the
greatest extent possible, the exemptions from the application of Section 409A provided under
Treasury Regulation Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9). However, if the
Company (or, if applicable, the successor entity thereto) determines that any payments constitute
“deferred compensation” under Section 409A and Executive is, on the termination of service, a
“specified employee” of the Company or any successor entity thereto, as such term is defined in
Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence
of the adverse personal tax consequences under Section 409A, the timing of the severance payments
shall be delayed until the earlier to occur of: (i) the date that is six months and one day after
Executive’s Separation From Service, or (ii) the date of Executive’s death (such applicable date,
the “Specified Employee Initial Payment Date”). On the Specified Employee Initial Payment Date,
the Company (or the successor entity thereto, as applicable) shall (A) pay to Executive a lump sum
amount equal to the sum of the severance payments that Executive would otherwise have received
through the Specified Employee Initial Payment Date if the commencement of the severance payments
had not been so delayed pursuant to this Section and (B) commence paying the balance of the
severance pay in accordance with the applicable payment schedules set forth in this Agreement.

The Company’s obligations to make any reimbursements or provide in-kind benefits to Executive
shall be subject to the following restrictions: (a) Executive must provide documentation of any
reimbursable expenses in accordance with the Company’s then existing policies and procedures, (b)
the expenses paid or reimbursed by the Company in one calendar year shall not affect the expenses
paid or reimbursed in another calendar year, and (c) the reimbursement for any expenses shall be
made within a reasonable period of time following the date on which the Company receives written
documentation of the expense, provided that all expenses will be reimbursed on or before the last
day of the calendar year following the calendar year in which the expense was incurred.

15. Validity: Complete Agreement. This Agreement and its Exhibit constitute the entire agreement
between Executive and the Company. This Agreement is the complete, final, and exclusive embodiment
of their agreement with regard to this subject matter and supercedes any prior oral discussions or
written communications and agreements. This Agreement is entered into without reliance on any
promise or representation other than those expressly contained herein, and it cannot be modified or
amended except in writing signed by the CEO.

 

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16. Waiver. Any waiver of any breach of this Agreement must be in writing. If either party should
waive any breach of any provisions of this Agreement, he or it shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of this Agreement.

17. Severability. Whenever possible, each provision of this Agreement will be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of this Agreement is
held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision
or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained
herein.

18. Amendment. This Agreement shall not be modified or amended except by written agreement of the
parties hereto. To the extent that any amendment itself would result in the imposition of any
taxes under Section 409A, such amendment shall not be given effect.

19. Choice of Law; Jurisdiction. This Agreement shall be governed by and construed in accordance
with the law of the State of Maryland regardless of the choice of law provisions of the State of
Maryland or any other jurisdiction. The parties consent to the exclusive jurisdiction of the
federal and state courts in Maryland.

20. Arbitration of Disputes. Any controversy or claim arising out of this Agreement or any aspect
of Executive’s relationship with the Company including the cessation thereof shall be resolved by
arbitration in accordance with the Company’s Dispute Resolution Policy, which is Attachment A to
this Agreement and incorporated herein by reference. This policy provides that any dispute between
Executive and the Company that is covered by the Dispute Resolution Policy and cannot be resolved
on a more informal basis shall be resolved exclusively through final and binding arbitration,
instead of litigation. The parties agree that the award of the arbitrator shall be final and
binding.

21. Indemnification. During the Term of this Agreement, Executive shall be entitled to coverage
under any liability insurance procured by Company to the same extent as other senior executives at
the Company.

22. Counterpart. This Agreement may be executed in any number of counterparts, all of which shall
be considered one and the same agreement.

23. Delay; Partial Exercise. No failure or delay by any party in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.

24. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be
enforceable by Executive and the Company, and their respective successors, assigns, heirs,
executors and administrators, except that Executive may not assign any of his duties hereunder and
he may not assign any of his rights hereunder without the written consent of the Company, which
shall not be withheld unreasonably.

 

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25. Mutual Acknowledgement. Executive and the Company hereby acknowledge that both parties have
read and fully understand the terms of the Agreement and are entering into the Agreement knowingly
and voluntarily.

26. Headings. The headings of the sections hereof are inserted for convenience only and shall not
be deemed to constitute a part hereof nor to affect the meaning thereof.

27. Survival. Provisions of this Agreement which must survive the termination of this Agreement in
order to effectuate the intent of the parties, including, but not limited to, Sections 10, 12.2 and
13, shall continue in effect after the termination of the Agreement for a sufficient period of time
under the circumstances to effectuate the parties’ intent.

In Witness Whereof, the parties hereto have caused this Agreement to be executed as of the
day and year first written above.

	 	 	 
	“EXECUTIVE”

	 	 
	C. Neil Lyons
	 	 
	 
	 	 
	/s/ C. Neil Lyons
	 	 
	 

By: C. Neil Lyons

	 	 
	 
	 	 
	“THE COMPANY”

	 	 
	RegeneRx Biopharmaceuticals, Inc.
	 	 

	 	 	 	 	 
	/s/ J.J. Finkelstein	 	 
	 	 	 
	By:

	 	J.J. Finkelstein	 	 
	Title:

	 	President & CEO	 	 

 

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Attachment A

DISPUTE RESOLUTION POLICY

Scope of Policy.

This Policy applies to any controversy, claim or dispute that could be brought before a court or
agency, whether based on contract or tort or any state, federal or local law (collectively, a
“Claim”), relating to or arising out of your employment with or separation from RegeneRx
Biopharmaceuticals, Inc. (“RegeneRx”), or the termination thereof This Policy does not apply to
claims for unemployment or workers’ compensation, temporary injunctive relief necessary to prevent
irreparable harm or to enforce an arbitration decision issued in accordance with this Policy.

Informal Resolution and Mediation.

You shall provide RegeneRx’s Principal with a written statement of the claim (“Statement of
Claim”). Similarly, if RegeneRx has a Claim against you, it shall provide you with a Statement of
Claim. The Statement of Claim will describe the Claim to be resolved, identify any documents and
witnesses (or other people who have information) relating to the Claim, and request the relief
sought. The responding party shall have 15 working days in which to offer the relief requested or
proposed, or otherwise satisfy the demand of the aggrieved party. If the Claim has not been
resolved and the aggrieved party wants to pursue the matter, then the aggrieved party shall request
within 10 working days that the Claim be submitted to non-binding mediation in Montgomery County,
Maryland, before a mediator to be jointly selected by the parties. RegeneRx will pay the
mediator’s fee. Such mediation must be held within 90 days of the request for mediation.

Arbitration.

If mediation does not resolve the Claim and the aggrieved party wants to pursue the matter, the
Claim will be resolved by binding arbitration in Montgomery County, Maryland, in accordance with
applicable JAMS Employment Arbitration Rules and Procedures (“Rules”) (for full text of the Rules,
please see www.jamsadr/arbitration_guide.asp). Except as otherwise specifically provided herein,
hearings under this Policy will be conducted in accordance with the Rules. If there is a conflict
between this Policy and the Rules, this Policy will govern.

Time Limits.

The aggrieved party must request arbitration in accordance with the Rules within the limitations
period that would apply if the Claim had been filed in court or with an administrative agency under
statute or common law.

Failure to demand arbitration within this time period shall constitute a waiver of all rights to
bring such a Claim. Arbitration cannot be requested until the party has submitted a Statement of
Claim and exhausted the informal resolution and mediation procedure described in this Policy.

 

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Terms of Arbitration.

Arbitrations under this Policy will be governed by the Federal Arbitration Act, 9 U.S.C. § 1, et
seq. The parties shall attempt to agree upon an arbitrator who shall hear and decide the dispute.
If the parties are unable to agree upon a mutually acceptable arbitrator, they shall select an
arbitrator through the procedures established by the Rules. Both parties will be entitled to
discovery and to be represented by counsel if they choose.

RegeneRx will pay the arbitrator’s costs and fees. RegeneRx and the employee or former employee
each is solely responsible for its own attorneys’ fees and costs incurred (such as for production
of documents, witness fees, transcripts, depositions, etc.), unless the arbitrator shall order the
award of attorney’s fees and costs in accordance with the applicable law.

Arbitrator’s Authority.

The arbitrator shall have the authority to rule only on an issue that has been submitted in a
Statement of Claim in accordance with these procedures. Failure to submit a Statement of Claim in
accordance with these procedures will constitute a waiver of the right to pursue any Claim under
this Policy or in any court or other forum. The arbitrator shall base the decision and award, if
any, on the facts presented in briefs and at the hearing in accordance with governing prevailing
law, including statutory and judicial authority. The arbitrator must follow RegeneRx’s personnel
policies as set forth in the Policy Manual in effect at the time of the event resulting in the
complaint. The arbitrator may not ignore, modify or revoke any lawful provision of this Policy or
any other RegeneRx policy. The arbitrator’s authority shall be consistent with the Rules.

The Arbitrator’s Decision/Award.

The arbitrator’s decision will be final and binding on RegeneRx and the employee/former employee
and may be recorded as a judgment in a court of competent jurisdiction.

Arbitration As Exclusive Means For Resolution.

In exchange for the parties’ mutual agreement to submit claims to the arbitration process, and to
preserve the expeditious and inexpensive nature of arbitration, which is of value to the parties,
the parties agree that arbitration shall be the sole and exclusive means of resolution of all
Claims. Further, the parties expressly waive their right, if any, to have controversies between
them decided by a court or jury.

Nothing in the Policy shall limit the right of the parties to obtain from a court of competent
jurisdiction either (1) injunctive relief where necessary to prevent irreparable harm or violation
of any trade secret and confidentiality agreement then in force, or (2) enforcement of an
arbitration decision issued in accordance with this Policy.

Miscellaneous.

RegeneRx may modify the Dispute Resolution Policy in writing, by providing employees with 30 days
notice of the modification. No other form of modification shall be valid. Any Claim
arising prior to the effective date of the modification would be handled pursuant to the procedures
in existence prior to the change, except by mutual agreement. If any of the provisions of this
Policy are determined to be invalid by a court or governing agency of competent jurisdiction, it is
agreed that such determination shall not affect the enforceability of the other provisions of this
Policy.

 

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AMENDMENTS TO SECOND AMENDED AND RESTATED EMPLOYMENT

AGREEMENT 

Pursuant to Section 18 of the Second Amended and Restated Employment Agreement between
RegeneRx Biopharmaceuticals, Inc. (“Company”) and C. Neil Lyons (“Executive”), dated as of March
31, 2009 (“Agreement”), the following amendments (“Amendments”) to the Agreement are hereby adopted
as of the dates set forth below:

1. Section 6.1 of the Agreement is amended, effective as of April 1, 2009 (contingent upon the
award of a stock option to the Executive as provided in Paragraph 2 below), to provide that the
Executive’s annual Base Salary shall be $131,649, and to delete the last sentence of Section 6.1
and replace it with the following provisions: “The Base Salary shall not be adjusted downward
without the written consent of Executive, except in a circumstance which is part of a general
reduction or other concessionary arrangement affecting all employees or affecting senior executive
officers. Notwithstanding the reduction of Base Salary effective as of April 1, 2009, any
severance pay under the terms of the Agreement shall be calculated based upon Executive’s Base
Salary in effect as of March 31, 2009, or, if higher, Executive’s Base Salary in effect at the time
of his termination from employment.” All other provisions of Section 6.1 shall be unchanged.

2. Section 7.1 of the Agreement shall be revised to add the provisions set forth below to the
end of the Section:

“Subject to approval by the Board, the Company agrees to award to the Executive an option to
purchase 116,592 shares of the Company’s Common Stock, pursuant to the terms of the Company’s Plan,
at an exercise price that is equal to the fair market value of such Common Stock on the date of
grant of the option as determined in accordance with the Plan (“New Option”). The New Option,
which shall be an incentive stock option for purposes of section 422 of the Code to the maximum
extent permitted, and otherwise shall be treated as a non-qualified stock option, shall vest in
three equal vesting installments, occurring on June 30, 2009, September 30, 2009 and December 31,
2009, provided that the Executive has not incurred a Termination of Service (as defined in the
Plan) before any applicable vesting date. Notwithstanding Section 7.2 below or any provision of
the Plan, if the Executive is terminated from employment with the Company without Cause or if there
is a Change in Control (either as defined herein or in the Plan), the New Option shall not be
subject to any accelerated vesting, except as provided below. The New Option shall be forfeited in
its entirety (whether vested or unvested) if the Executive’s employment with the Company is
terminated for Cause at any time as set forth in Section 13.2. If the Executive voluntarily
terminates his employment with the Company (or if the Executive’s employment terminates because of
his death or disability), the New Option shall be considered to be vested and exercisable only
through the most recently completed vesting installment. If the Executive’s employment is
terminated without Cause, then the New Option shall be considered to be vested and exercisable
through the most recently completed vesting installment, and shall be credited with an additional
amount of daily pro-rata
vesting for the period since the last installment date. If the Executive’s Base Salary is
increased to at least the amount in effect immediately prior to the reduction on April 1, 2009,
then no additional vesting shall occur with respect to the New Option thereafter, provided that
daily pro-rata vesting shall be credited for the period since the date of the last vesting
installment (and any unvested portion of the New Option shall terminate at that time). The
specific terms and conditions of the New Option shall be as set forth in the Plan and the standard
form of stock option agreement, which the Executive hereby agrees to execute.”

 

 

 

The Executive herby voluntarily consents and agrees to the foregoing Amendments and acknowledges
that such Amendments are hereby authorized.

	 	 	 	 	 
	 

	 	EXECUTIVE:	 	 
	 
	 	 	 	 
	 

	 	/s/ C. Neil Lyons
 

By: C. Neil Lyons
	 	 
	 
	 	 	 	 
	 

	 	COMPANY:	 	 
	 
	 	 	 	 
	 

	 	RegeneRx Biopharmaceuticals, Inc.	 	 

	 	 	 	 	 	 	 
	 	 	/s/ J.J. Finkelstein	 	 
	 	 	 	 	 
	 

	 	By:
	 	J.J. Finkelstein	 	 
	 

	 	Title:
	 	President & CEO

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