Transition Agreement - EntreMed Inc. and John W. Holaday
TRANSITION AGREEMENT
This Transition Agreement ("Agreement") is entered into between EntreMed, Inc.,
a Delaware corporation, (the "Company") and Dr. John W. Holaday ("Dr. Holaday").
The purposes of this Agreement are to set out the terms and conditions
surrounding Dr. Holaday's orderly and amicable transition from the Company as an
employee, officer, Director and as the Chairman of the Board of Directors of the
Company (the "Board") and as the Company's representative on the Board of
Directors of MaxCyte, Inc., and to confirm that Dr. Holaday hereby submits or
has previously submitted his resignation from all such positions effective as
indicated below.
BACKGROUND
A. The parties recognize the leadership role of Dr. Holaday as one of the
founders and largest shareholders of the Company, having served as its
Chief Executive Officer since its inception until October 31, 2002, and
having served as its Chairman of the Board (the "Chairman") from 1995 until
January 31, 2003 consistent with Dr. Holaday's tender of his resignation
from such position as Chairman and as a Director and member of the Board to
be effective January 31, 2003.
B. The leadership role of Dr. Holaday in connection with a critically
important transaction between the Company and Celgene in 2002 is recognized
and appreciated.
C. Effective as of November 5, 2002, Dr. Holaday stepped down as Chief
Executive Officer of the Company.
D. Dr. Holaday agreed to assist the Company as it repositions itself in the
marketplace by serving as Chief Scientific Officer of the Company and in
this capacity to assist in the refocus of its Scientific programs, to work
to maintain morale, and to retain key employees from November 5, 2002,
until January 31, 2003.
E. Dr. Holaday and the Company are parties to an Employment Agreement entered
into on or about January 1, 1999, (the "Employment Agreement"), pursuant to
which, among other things, the Company was obligated, under certain
circumstances, to pay to him the full amount of his Base Salary, as defined
in such Employment Agreement, through December 31, 2003.
F. For personal reasons, Dr. Holaday has decided to resign as Chief Scientific
Officer of the Company and to resign his position as a Director and member
of the Board, including his position as Chairman of the Board, and his
position as the Company's representative on the Board of Directors of
MaxCyte, Inc.
G. The Company recognizes contributions made by Dr. Holaday over years of
service and desires to be able to call upon him for consultation, advice
and assistance (without additional compensation), through the Board,
including particularly any future Chairman, senior Company executives and
the Company's counsel, from time to time, particularly during calendar year
2003 but possibly thereafter, and the parties to this Agreement further
agree as follows:
EntreMed, Inc. [Signature] JWH [Signature]
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AGREEMENT
1. Effective as of November 5, 2002, Dr. Holaday stepped down as Chief
Executive Officer of the Company.
2. Effective as of November 5, 2002, Dr. Holaday began service as Chief
Scientific Officer of the Company at the salary of Three Hundred
Thirty-Three Thousand Nine Hundred and No/100 Dollars ($333,900.00) if it
were paid over an annual period, with such duties in connection therewith
as have been or shall reasonably be assigned to Dr. Holaday by the Board or
its designee from November 5, 2002, until January 31, 2003, the latter date
being the "Termination Date" of Dr. Holaday's employment by the Company.
The term of Dr. Holaday's employment as the Company's Chief Scientific
Officer and in any employment capacity whatsoever shall end on January 31,
2003. The decision of Dr. Holaday to terminate any employment by the
Company as of and no later than January 31, 2003, is irrevocable, and the
Company has relied on this decision of Dr. Holaday to terminate such
employment. Dr. Holaday agrees that he shall not represent himself as an
employee or officer of the Company at any time after January 31, 2003. Dr.
Holaday expressly promises that he has not undertaken or made any
financial, legal or other obligation on behalf of the Company that has not
been fully disclosed to and approved by the Board except for small
reasonable, ordinary and necessary business expenses incurred on behalf of
the Company, and the Company relies upon this promise. Dr. Holaday
expressly promises that since January 16, 2003, and continuing to and
through January 31, 2003, he has not undertaken or made and shall not
undertake or make any financial, legal or other obligations on behalf of
the Company that in the aggregate exceed Five Hundred Dollars ($500.00) in
costs or effect upon the Company. Consistently with the foregoing, the
Company agrees to reimburse Dr. Holaday for reasonable, ordinary and
necessary business expenses, properly supported by appropriate records and
in accordance with Company policies, incurred by Dr. Holaday on behalf of
the Company through January 16, 2003, and for such reasonable, ordinary and
necessary business expenses, properly supported by appropriate records and
in accordance with Company policies, incurred by Dr. Holaday between
January 17, 2003, and January 31, 2003, so long as all such expenses
exceeding Five Hundred Dollars ($500.00) in the aggregate have been or were
approved in advance of incurring them by a duly authorized representative
of the Board other than Dr. Holaday. Further, Dr. Holaday also hereby
resigns as a Director and member of the Board and as its Chairman and as
the representative of the Company on the Board of Directors of MaxCyte,
Inc., effective as of the close of business on January 31, 2003. Dr.
Holaday agreed that he shall not represent himself as a Director and member
of the Board or as its Chairman or as the Company's representative on the
Board of Directors of MaxCyte, Inc., at any time after January 31, 2003.
During Dr. Holaday's term of employment as Chief Scientific Officer of the
Company, he has been and will be entitled to participate in group medical
and life insurance plans sponsored by the Company. In addition, The
Hartford Life Insurance Company life insurance policy on the lives of Dr.
Holaday and Dorinda A. Holaday (Policy date: 02/26/96, number:
LL6025052-13) ("the Policy") currently in place as of January 1, 2003, will
be maintained through and until the Termination Date of Dr. Holaday's
employment, and the premium for the Policy for the annual period beginning
EntreMed, Inc. [Signature] -2- JWH [Signature]
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February 26, 2003. will be paid by the Company upon timely presentation of
the annual Policy premium notice. Any and all rights to the repayment of
premiums ("Premium Repayment") paid by the Company for the Policy out of
death benefits under the Policy or otherwise shall be relinquished and
waived by the Company at the time the payments by the Company to Dr.
Holaday that will be made pursuant to Paragraph 3 below are made. To the
extent any obligation from the Company toward Dr. Holaday personally may
have been created by either an agreement entitled "Split Dollar Insurance
Agreement" entered into effective the 27th day of March, 1996, by and
between EntreMed, Inc. (therein called "Employer"), and the Holaday Family
Trust No. 2 U/A DTD 11/15/95, James D. Johnson, Trustee (therein called
"Split Dollar Insurance Agreement") or by an assignment contract related
thereto that is entitled "Collateral Assignment" made and entered into
effective the 27th day of March, 1996, by EntreMed, Inc., (therein called
the "Assignee") and James D. Johnson, Trustee, Holaday Family Trust No. 2
U/A DTD 11/15/95, Owner, with respect to the Policy, and any supplementary
contracts issued in connection therewith (said policy and contracts being
therein called the "Policy"), upon the life of John W. Holaday (referenced
therein as "Holaday") and Dorinda B. Holaday, to EntreMed, Inc., a Delaware
corporation, all such rights are extinguished, canceled and terminated as
of the date this Agreement becomes effective and enforceable pursuant to
Paragraph 34(b) below, and it is agreed that the Company shall have no
additional obligation with respect thereto except as expressly specified in
this Agreement.
3. On or before the later of (a) Dr. Holaday's Termination Date or (b) ten
(10) business days after this Agreement becomes effective and enforceable
in accordance with Paragraph 34(b) below, the Company agrees to pay
Dr. Holaday, by check, as severance, the sum of Fifty-Five Thousand Six
Hundred Fifty and No/100 Dollars ($55,650.00) ("Severance"), and a lump sum
in the amount of Fifty Thousand Five Hundred Thirteen and 44/100 Dollars
($50,513.44) representing payment in lieu of paid time off for twenty-nine
and one-half (29.5) accrued but unused Paid Time Off ("PTO") days, both
amounts less applicable withholdings for taxes, FICA and Medicare payments
for the Severance, the PTO, the waiver by the Company of the Policy Premium
Repayment obligation, any other services or benefits provided to
Dr. Holaday that are subject to such a withholding obligation, and the
value of the laptop computer that Dr. Holaday has used during employment
with the Company until January 31, 2003, that will be provided to Dr.
Holaday pursuant to this Agreement if it becomes effective and enforceable
pursuant to Paragraph 34(b) below. Dr. Holaday will be entitled to receive
the Severance payment, less applicable withholdings, provided for in this
Paragraph whether or not Dr. Holaday has other employment after his
Termination Date.
4. Paid time off ("PTO") accrual will cease on the Termination Date. Except as
expressly provided for in this Agreement, Dr. Holaday shall not accrue any
compensation, benefits from or sponsored by the Company or any other
emoluments associated with employment after the Termination Date.
Dr. Holaday shall not accrue any compensation, benefits from or sponsored
by the Company or any other emoluments associated with service to the
Company as Chairman or such service as a Director and member of the Board
or its representative on the Board of MaxCyte, Inc., after January 31,
2003.
EntreMed, Inc. [Signature] -3- JWH [Signature]
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Without limitation, effective by the close of business January 31, 2003,
Dr. Holaday must have canceled all cellular telephone services, electronic
messaging services, and all other such contracts for services currently
paid for by the Company and entered into new contracts for which he
personally is financially responsible if he wishes such services. Dr.
Holaday may access his Company telephone until February 28, 2003. He agrees
that he will forward any telephone message that pertains to the Company's
business or potential business or that is of potential interest to the
Company to Margot Mongold at her Company telephone number as specified in
Paragraph 23 below. Without limiting the provisions of Paragraph 22 below,
Dr. Holaday may access and send e-mail from his EntreMed, Inc., e-mail
address until February 28, 2003. Dr. Holaday agrees that as an additional
safeguard to the Company with respect to its business, potential business
and matters of interest to it, he will forward all such incoming and
outgoing e-mails to Ms. Mongold if she has not been a recipient of such
original incoming or outgoing e-mail message. While the Company shall not
pay for Dr. Holaday's consultation with media consultants or consulting
groups, Dr. Holaday may use any such person or group as his personal
consultants and personally pay for such services.
5. All stock options granted to Dr. Holaday on or before January 1, 2003, that
are unvested as of the Termination Date will be vested in Dr. Holaday on
the date this Agreement becomes effective and enforceable pursuant to
Paragraph 34(b) below of this Agreement. Dr. Holaday will be able to
exercise any such vested option held by Dr. Holaday through the original
expiration date of the option (generally, ten (10) years from the original
grant date). Dr. Holaday's options, which total 1,436,669, are listed on
the attached Schedule A. The Company shall promptly issue to Dr. Holaday a
warrant to purchase up to One Hundred Thousand (100,000) shares of common
stock if this Agreement becomes effective and enforceable in accordance
with Paragraph 34(b) below. The warrant will be exercisable in
non-cumulative monthly installments for Ten Thousand (10,000) shares of
common stock ("Monthly Allotment"), beginning on the date that this
Agreement becomes effective and enforceable in accordance with Paragraph
34(b) below and, thereafter, on the first day of the next nine (9) months
for a total of ten (10) months. To the extent that the Monthly Allotment is
not exercised on or before the close of business on the last business day
in any given month, the warrant shall expire with respect to such Monthly
Allotment. The warrant will be exercisable, in cash, at a price per share
equal to the closing price per share on January 29, 2003. Dr. Holaday
understands and acknowledges that the warrant and the Monthly allotment, if
any, will be issued in reliance on exemptions from registration under the
Securities Act of 1933, as amended, and state securities laws. Dr. Holaday
further understands that neither the warrant nor the Monthly Allotment may
be sold or transferred other than in reliance on an exemption from
registration or qualification under federal and state securities laws.
Details concerning the terms of the warrant shall be governed by the
warrant which shall contain such details consistent with this description
and applicable laws and regulations as have been customary in the Company's
other similar warrants. In addition to all other options available under
Paragraph 24 below, if the grant of this warrant or the exercise of any
Monthly Allotment creates a withholding obligation with respect to taxes,
FICA and Medicare payments, Dr. Holaday shall tender a check to the Company
for all such taxes,
EntreMed, Inc. [Signature] JWH [Signature]
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FICA and Medicare payments by the fifth (5th) day or next business day
thereafter after such obligation to make such payments to the government
has been created.
6. Beginning on the later of (a) February 15, 2003, or (b) ten (10) business
days after this Agreement becomes effective and enforceable pursuant to
Paragraph 34(b) below, on the fifteenth (15th) day and on the last day of
each month beginning in February, 2003, and ending on January 31, 2004,
the Company will pay Dr. Holaday, by check or by direct deposit if that is
administratively reasonable under procedures with ADP and preferred by Dr.
Holaday, the sum of Twenty Thousand Four Hundred Five and No/100 Dollars
($20,405.00), less applicable withholdings for taxes, FICA and Medicare
payments for such payments and for any other benefit provided to
Dr. Holaday that is subject to such withholdings if this Agreement becomes
effective and enforceable pursuant to Paragraph 34(b) below, whether or
not Dr. Holaday has other employment after his Termination Date.
7. Provided that (a) Dr. Holaday properly completes necessary coverage
continuation documents and elects continued coverage under the Consolidated
Omnibus Budget Reconciliation Act ("COBRA") for health care insurance under
a Unicare/NCPPO policy (medical and dental) after his Termination Date for
himself and his dependents covered by such insurance as of January 31,
2003, (b) Dr. Holaday remains eligible for such coverage, and (c) this
Agreement becomes effective and enforceable in accordance with Paragraph
34(b) below, the Company will pay the COBRA premium for such health care
insurance coverage (or for such other health care insurance, if any, as
may then be made available to senior executives of the Company) through
and including January 31, 2004, after which time Dr. Holaday may make
timely premium payments in accordance with the provisions of COBRA and
applicable Company procedures if Dr. Holaday and his covered dependents
remain otherwise eligible for such coverage.
8. The Company agrees to reimburse Dr. Holaday for his reasonable fees and
related expenses for executive outplacement services, including for travel
to confer with such consultants and the like, that are incurred on or
before January 31, 2004, in an amount up to Ten Thousand and No/100
Dollars ($10,000.00), less withholdings for taxes, FICA and Medicare
payments. Dr. Holaday may not elect to receive cash in lieu of
reimbursement for such incurred outplacement services and related expenses.
9. In exchange for the consideration described in this Agreement, Dr. Holaday
hereby voluntarily and irrevocably releases and forever discharges the
Company, its subsidiaries and affiliates (including without limitation
Cytimmune, Inc., MaxCyte, Inc., and Celgene Corp.) and all of their
respective parent companies and organizations, predecessors and successors
and all of their respective officers, directors, employees, agents,
attorneys, associates and employee benefit plans from all claims and
obligations arising out of facts injuries, incidents, circumstances and
occurrences, whether known or unknown to him, occurring from the beginning
of time until the date and time Dr. Holaday executes this Agreement,
including, without limitation, any and all claims and obligations arising
out of Dr. Holaday's employment with the Company, including terms and
conditions of such employment, and the termination of such employment as
of January 31, 2003,
EntreMed, Inc. [SIGNATURE] - 5 - JWH [SIGNATURE]
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(specifically including, but not limited to, any and all claims under the
Civil Rights Acts of 1866, 1871, 1964 (including Title VII of such Act) and
1991, the Rehabilitation Act of 1973, the Age Discrimination in Employment
Act of 1967 ("ADEA"), the Older Workers Benefit Protection Act of 1990
("OWBPA"), the Americans with Disabilities Act of 1990, the Employee
Retirement Income Security Act of 1974 (except as to any benefits that are
vested as of the Termination Date), the Family and Medical Leave Act of
1993, the Immigration Reform and Control Act of 1986, the Worker Adjustment
and Retraining Notification Act of 1988, the Maryland Fair Employment
Practices Act, and under all regulations issued under all of these statutes
and all amendments to all of them whether expressly referenced or not, and,
including, without limitation, any and all claims for severance pay, based
on alleged express or implied contract except for claims for breach of this
Agreement, claims for wrongful discharge and for intentional or negligent
infliction of emotional distress), any action arising in tort, including,
but not limited to, libel, slander, defamation and negligence, any claim
for costs or attorneys' fees incurred by Dr. Holaday in connection with the
drafting and negotiation of this Agreement and any claim or obligation
under any law, constitution or regulation, ordinance or order or under any
common law or equitable theory of recovery or relief. The word "claim(s)"
in this Paragraph refers to and includes all claims, demands, disputes,
rights, suits, charges, complaints, causes, proceedings, actions, rights of
action, causes of action, rights of subrogation, rights of indemnity,
rights to reimbursement, rights to payment, liens and remedies of every
kind or nature whatsoever, whether the same are or any of the same is at
law, in equity or otherwise, and whether the same are or any of the same is
known or unknown, foreseen or unforeseen, suspected or unsuspected, and
whether or not concealed or hidden. The word "obligation(s)" in this
Paragraph refers to and includes all obligations, duties, liabilities,
agreements, promises, illnesses, injuries, damages, costs, fees (including,
without limitation, attorneys' fees), losses, expenses and debts of every
kind or nature whatsoever, whether the same are or any of the same is at
law, in equity or otherwise, and whether the same are or any of the same is
known or unknown, foreseen or unforeseen, suspected or unsuspected, and
whether or not concealed or hidden. The phrase "arising out of" in this
Paragraph and in Paragraph 10 means directly or indirectly resulting from,
connected with or in any matter related to, in the past, present or future,
the subject to which the phrase refers. NOTWITHSTANDING any other provision
of this Agreement, Dr. Holaday does retain the rights to file a charge of
discrimination under the ADEA, to contest the validity of this Agreement
under the provisions of the OWBPA and to take other permissible action
should it be held invalid, and to participate in an investigation or
proceeding under the ADEA or the OWBPA conducted by the EEOC, but Dr.
Holaday does waive any right to seek, recover or accept any monetary
damages, back pay or any other remedy from the Company or from any other
party released by the provisions of this Paragraph resulting from any
investigation or legal action by the EEOC or by any other person or entity
with respect to any claim or charge of age discrimination under the ADEA
unless this Agreement is held invalid under the ADEA and the OWBPA.
10. The Company releases and discharges Dr. Holaday and his heirs, successors
and assigns from all claims, demands or causes of action arising out of
facts or occurrences prior to the Termination Date, whether known or
unknown except to the extent that any such
EntreMed, Inc. [Signature] JWH [Signature]
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claim, demand or cause of action is based on Dr. Holaday's actions or
inactions (a) that do not meet the required standard for indemnification
set forth in the Delaware Corporation Law or applicable By-Laws of the
Company, (b) except to the extent that any such claim, demand or cause of
action is based on Dr. Holaday's actions or inactions that were not
disclosed to the Board of Directors of the Company (whether such actions or
inactions were taken in Dr. Holaday's capacity as an officer, director, or
employee), and (c) except to the extent that is would not be permissible
under applicable standards for the Company to release claims and
obligations arising out of any such acts and omissions. The Company shall
use commercially reasonable efforts to maintain for a period of not fewer
than three (3) years after the date this Agreement becomes effective and
enforceable pursuant to Paragraph 34(b) below, directors and officers
liability insurance covering Dr. Holaday's actions and inactions as a
former officer, Director and member of the Board and former Chairman of the
Board and former representative of the Company on the Board of MaxCyte,
Inc., to the same extent afforded the Company's then current and other
former officers. The Company will indemnify Dr. Holaday for all such
actions and inactions to the extent provided for any other similarly
situated current or former officer of the Company and consistently with the
Company's current By-Laws and applicable provisions of Delaware Law.
11. Notwithstanding anything suggesting to the contrary in Paragraphs 9 or 10
above, nothing in this Agreement shall release or be construed to as
releasing any claim, demand or cause of action for breach of this
Agreement.
12. In connection with business operations of the Company and actual or
potential litigation, the Company desires that the Board, individual Board
members, including a future Chairman, senior executives of the Company, and
the Company's counsel ("Authorized Company Representatives") have
opportunities to avail themselves of the consultations, assistance and
advice that Dr. Holaday may be able to provide them and in connection with
litigation or proceedings or anticipated proceedings before a court,
arbitrator, administrative agency or other tribunal. Should Dr. Holaday be
asked by Authorized Company Representatives to provide consultations,
advice and assistance to the Company through them or to testify as a
witness or to provide information to the Company's counsel concerning
matters in which Dr. Holaday was involved during the course of his
employment with the Company as an employee or officer or during his tenure
as Chairman and as a Director and member of the Board or during his tenure
as the Company's representative on the Board of Directors of MaxCyte, Inc.,
Dr. Holaday agrees to cooperate fully with such Authorized Company
Representatives, including the Company's Chairman and the Company's
counsel. Dr. Holaday agrees to make himself reasonably available to such
Authorized Company Representatives, including the Company's counsel for
consultations, advice, assistance and discussions. Dr. Holaday agrees to
make himself available to the Company's counsel to discuss information and
to review his testimony reasonably in advance of such litigation or
proceedings and to make himself available to testify at depositions or
trial as required or requested by the Company. Dr. Holaday will be
reimbursed for travel expenses and statutorily mandated witness fees;
however, Dr. Holaday agrees that he will not be paid in connection with his
consultations, advice, assistance, testimony, appearances or his
participations pursuant to
EntreMed, Inc. [Signature] JWH [Signature]
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this Paragraph in such litigation or proceedings. Notwithstanding the
foregoing sentence, in the event Dr. Holaday's consultations, advice,
assistance, appearances or testimony at the specific request of the Company
cause him, after January 31, 2004, to spend more than 100 hours in the
aggregate (a) preparing for and providing such consultations, advice,
assistance and discussions and (b) making any such appearances or giving
any such testimony and the Company's Chairman or the Company's counsel has
authorized and requested that Dr. Holaday spend additional time in
preparing for and providing such consultations, advice, assistance,
discussions, appearances, in making such appearances or in giving
testimony, the Company will reimburse Dr. Holaday at the rate of $100 per
hour for all time in addition to such 100 hours spent by Dr. Holaday in
connection with such requests by the Company's Chairman or the Company's
counsel. In the event that Dr. Holaday receives a subpoena or other legal
process seeking his appearance, testimony, documents or other information
related to the Company or to any third person released in Paragraph 9
above, Dr. Holaday shall immediately, and in no event later than
forty-eight (48) hours after the receipt, give written notice to the
Company through the person specified in Paragraph 23 below, of his receipt
of such subpoena or other legal process by facsimile and by overnight,
next-day courier delivery, the cost of which will be paid by the Company.
Dr. Holaday agrees that he shall not appear or release any such information
in response to a subpoena or other legal process without first allowing the
Company a reasonable opportunity to challenge and seek to quash such
subpoena or legal process through court proceedings if it elects to do so.
13. This Agreement is specifically conditioned on Dr. Holaday having abided by
and continuing to abide by all the terms and conditions of this Agreement
and the terms and conditions set forth in the Company's Combined
Non-disclosure and Patent Employee Agreement that he previously executed,
including, but not limited to, Dr. Holaday's agreement not to disclose any
information to any third party relating to the Company's research,
finances, product developments, manufacturing, business/commercial
development, sales and marketing strategies and activities. The Company
agrees that no officer or director of the Company, acting on behalf of the
Company, shall make any public false, disparaging or derogatory statements
in connection with or concerning Dr. Holaday's service to the Company
except as may be required for truthful, sworn testimony or in connection
with a legal or administrative case, proceeding, report, claim or dispute.
Dr. Holaday agrees that he shall not make any public false, disparaging or
derogatory statements in connection with or concerning the Company or any
officer or director of the Company except as may be required for truthful,
sworn testimony or in connection with a legal or administrative case,
proceeding, report, claim or dispute. The parties agree and understand that
comments to the effect that "the Company is changing directions, is
pursuing new avenues, the Company has different senior officers and
directors, that the Company has made some mistakes in the past" and the
like are not false, disparaging or derogatory remarks. In addition, Dr.
Holaday shall direct all inquiries by third parties with respect to Dr.
Holaday's employment at the Company to Margot Mongold, the Company's Senior
Director of Human Resources, or her successor, and she or her successor
will confirm only Dr. Holaday's dates of employment, job titles and last
salary.
EntreMed, Inc. [Signature] JWH [Signature]
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14. For a period of nine (9) months after his Termination Date, Dr. Holaday
agrees not to take any action, without the prior written consent of the
Company, to assist any successor employer of Dr. Holaday or any other
entity in recruiting or hiring any other person who was an employee of the
Company or who performed work for the Company as an independent contractor
or in any other capacity during any time when Dr. Holaday was an employee
of the Company. Examples of the types of actions Dr. Holaday agrees he
shall not take include (a) identifying to any successor employer or its
agents or any other entity the person or persons who have special knowledge
concerning the Company's inventions, processes, methods or confidential
affairs and (b) commenting to Dr. Holaday's successor employer or its
agents or other entity about the quantity of work, quality of work, special
knowledge or personal characteristics of any person who is still employed
by the Company. Dr. Holaday also agrees that he shall not provide such
information to a prospective employer during interviews preceding possible
employment.
15. If Dr. Holaday challenges the enforceability of this Agreement in a court
of law or before an administrative agency, except as permitted under the
ADEA and OWBPA as provided for in the last sentence of Paragraph 9 above,
Dr. Holaday acknowledges that he shall reimburse the Company for all
monetary consideration previously received by him under Paragraphs 3 and 6
above. If the Company breaches this Agreement, the Company acknowledges
that it may be liable for monetary damages Dr. Holaday incurs as a result
and that he may be entitled to equitable relief. Dr. Holaday and the
Company agree that the prevailing party in any proceeding (judicial or
administrative) to enforce this Agreement shall be entitled to an award of
reasonable attorneys' fees and costs actually incurred.
16. Dr. Holaday expressly agrees that he shall not apply for and shall not be
considered for reinstatement or reemployment as an employee of the Company,
although this specific obligation shall not be applicable to any entity
that may acquire all or part of the assets of the Company or be the
surviving entity following a merger with the Company.
17. On or before January 31, 2003, Dr. Holaday shall return to the Company
through Margot Mongold, Senior Director Human Resources, or another
designee of the Board all Company invention, research, business,
production, and employee-related paper and electronic notes, files,
reports, manuals, records and plans, computer software, credit cards, keys,
building entry cards, security cards and Company identification cards,
customer lists, product information and other documents and property that
were created, developed, generated or received by Dr. Holaday during his
employment with the Company or that are the property of the Company,
whether or not such items are confidential to the Company and whether or
not they were received from the Company or from an actual or potential
business partner or investor of the Company, from a customer or vendor of
the Company, or from any other source so long as they pertain to the
Company ("Company Materials"). It is understood that this obligation does
not apply to items that were and are clearly intended to be retained by Dr.
Holaday after his separation from the Company, i.e., pay stubs. It is also
understood that this obligation does not apply to Dr. Holaday's personal
calendar and to his laptop computer, both of which, after removal of all
Company Materials from them by Ms. Mongold or by a person designated
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by her, in accordance with regular Company policies and procedures, shall
become Dr. Holaday's personal property after this Agreement becomes
effective and enforceable pursuant to Paragraph 34(b) below. In addition,
Dr. Holaday shall have the right to copy and retain a copy of specific
Company Materials, the selection and retention of which by Dr. Holaday must
be approved by a duly appointed representative of the Board other than Dr.
Holaday before they are removed from the premises of the Company, and to
the possession of items of artwork and other items that were purchased by
Dr. Holaday and are his personal property as set forth in Schedule B
attached hereto and made part of this Agreement. Dr. Holaday may make
arrangements with Ms. Mongold for a mutually convenient date and time for
the removal of Dr. Holaday's personal property from the Company's
facilities. The Company shall pay for the removal and delivery of furniture
owned by Dr. Holaday to his home at the address contained in Paragraph 22
below; withholdings for taxes, FICA and Medicare applicable to such service
will be withheld from any other funds otherwise due to Dr. Holaday, or at
the Company's request, he shall promptly deliver a check to the Company to
cover all such withholdings. The Company will make arrangements for the
removal and delivery to the address in Paragraph 22 of Dr. Holaday's
personal artworks (paintings, sculptures, etc.), but he shall be
responsible for all costs, fees and expenses associated therewith,
including any breakage and all risk of loss or damage to such items.
Nothing in this Paragraph reduces or otherwise effects the obligations
toward the Company that Dr. Holaday has undertaken in the Combined
Non-disclosure and Patent Employee Agreement that he entered into in favor
or the Company or the requirements of Paragraph 13 above. Further, Dr.
Holaday acknowledges that trade secrets of the Company are worthy of
protection and are the sole property of the Company and of the other
entities from which and about which he has received such information. Dr.
Holaday agrees that he will not personally or on behalf of any other person
or entity divulge or make use of any trade secrets of the Company.
18. In the event of Dr. Holaday's death at any time after his execution of
this Agreement, his employment with the Company shall be deemed to have
terminated as of the earlier of such date or January 31, 2003, and all
payments and benefits described in this Agreement shall be paid or
provided to Dr. Holaday's estate so long as this Agreement becomes
effective and enforceable pursuant to Paragraph 34(b) below.
19. This Agreement contains the entire agreement between Dr. Holaday and the
Company concerning Dr. Holaday's separation from the employment of the
Company and concerning the discontinuation of Dr. Holaday's service to the
Company as Chairman of the Board and as a Director and member of the Board
and as the Company's representative on the Board of Directors of MaxCyte,
Inc. This Agreement shall not be modified except in writing, and all prior
agreements except for the Combined Non-disclosure and Patent Employee
Agreement entered into by and between Dr. Holaday and the Company, whether
written or oral, including the Employment Agreement, relating to his
employment by the Company shall be void and of no further force or effect
beginning on the date this Agreement becomes effective and enforceable
pursuant to Paragraph 34(b) below.
EntreMed, Inc. (signature) -10- JWH (signature)
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<PAGE>
20. This Agreement shall not be construed as an admission by Dr. Holaday or by
the Company of any wrongdoing by Dr. Holaday or by the Company or by any
person or entity released by the provisions of Paragraphs 9 and 10 above or
of any violation of federal, state or local law at any time and for any
purpose, and the Company and Dr. Holaday specifically disclaim any
wrongdoing against or liability to the other.
21. Two exact originals of this Agreement will be executed by Dr. Holaday and
by the Company, and one original will be provided to the two respective
parties upon full execution of both originals.
22. Electronic and paper documents that are addressed or delivered to Dr.
Holaday and that are received by the Company or at its business offices
shall be opened to determine if they pertain to the Company's business or
to Dr. Holaday personally; those that pertain to Dr. Holaday personally
will be forwarded to him at 6502 Hillmead Road, Bethesda, Maryland 20877,
Telephone: (301) 365-2803, and Telefax: (301) 365-8054, and all written
notices to be provided to Dr. Holaday under this Agreement will be
delivered to that address unless and until Dr. Holaday provides notice of a
different address to the Company.
23. Any notice or communication to the Company from Dr. Holaday that is
required or permitted under this Agreement for which no specific recipient
of the notice or communication procedure is provided in the Agreement shall
be provided in writing and shall be delivered (a) personally, (b) by
certified or registered U.S. mail postage prepaid and return receipt
requested or (c) by overnight private courier or U.S. mail requiring
written notice and confirmation of receipt, all addressed as follows:
Attn: Ms. Margot Mongold
Senior Director, Human Resources
EntreMed, Inc.
9640 Medical Center Drive
Rockville, Maryland 20850
Telephone: (240) 864-2630
Telefax: (301) 294-1779
The Company may from time to time provide notice to Dr. Holaday that
notices required under this Agreement shall be provided to a different
person or to a different address.
24. Dr. Holaday fully understands, acknowledges and agrees that, (a) in the
event that he becomes liable for any personal income tax payments or the
employee's share of FICA and Medicare payments in addition to sums that
shall be or that have been withheld by the Company and paid to the
government for such purposes arising out of any portion of the
consideration provided for under this Agreement or (b) in the event the
Company becomes liable to any taxing authority in connection with any
portion of the employee's share of taxes relating to such consideration,
including, without limitation, for any personal income tax payments, the
employee's share of FICA and Medicare payroll taxes, interest and penalties
(collectively, "Employee Taxes"), Dr. Holaday shall pay the
EntreMed, Inc. (signature) JWH (signature)
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-11-
<PAGE>
taxing authorities such taxes, interest and penalties and shall reimburse
the Company within thirty (30) days for any Employee Taxes that have been
paid by the Company as well as all costs and attorneys' fees incurred by
the Company in connection with such claims from taxing authorities. In
order to invoke this indemnification provision, the Company must provide
written notice to Dr. Holaday within sixty (60) days of the receipt by the
Company of notification from any taxing authority that the Company may be
liable to that taxing authority for Employee Taxes on any portion of the
consideration provided to Dr. Holaday pursuant to this Agreement.
25. Dr. Holaday represents and warrants that he has not heretofore assigned or
transferred or purported to assign or transfer and shall not assign or
transfer any claim or obligation herein released to any person or entity.
Dr. Holaday agrees to indemnify the Company and any third person released
by Dr. Holaday in Paragraph 9 above, and holds them harmless from and
against any claim or obligation, including without limitation, for
attorneys' fees actually paid or incurred, arising out of any such transfer
or assignment made by Dr. Holaday or any transfer or assignment that is
claimed to have been made by Dr. Holaday.
26. In deciding to execute this Agreement, Dr. Holaday has not relied on and
does not rely on any representation with respect to the subject matter of
this Agreement or any representation inducing the execution of this
Agreement except such representations as are expressly set forth in or as
are incorporated by reference into this Agreement, and Dr. Holaday
acknowledges that he has relied on his own judgment in entering into this
Agreement.
27. This Agreement shall be construed as if both parties participated equally
in its negotiation and drafting, and both parties agree that any ambiguity
contained in any provision of this Agreement shall not be construed against
any party to the Agreement by virtue of that party's role in the
negotiation or drafting of the Agreement.
28. Any failure by any part on any occasion to enforce or to require the strict
adherence to and performance of any term or condition of this Agreement
shall not constitute a waiver of any such term or condition and shall not
prevent any party from insisting on the strict adherence to and performance
of such term or condition on any other or future occasion.
29. The use of the world "and" is understood to include its conjunctive and
also its disjunctive meaning, whenever such a disjunctive meaning would
expand the reach of this Agreement's protections to the Company or to any
third person released in Paragraphs 9 above. Use of the masculine gender is
intended to include the feminine. All examples used in this Agreement are
intended as illustrative and not intended to limit the nature of the
claims, obligations or persons released. All grammatical forms, including
the use of singular and plural words, used in this Agreement are to be
interpreted to provide the maximum protections legally permitted to the
Company and any third person released in Paragraph 9 above.
EntreMed, Inc. (signature) JWH (signature)
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- 12 -
<PAGE>
30. All obligations undertaken by the Company in this Agreement shall be
binding upon and fully enforceable against its successors and assigns, but
any such successorship or assignment shall in no way expand or otherwise
modify the scope of its obligations set forth in this Agreement, and all
rights of the Company specified in this Agreement shall inure to the
benefit of its successors and assigns.
31. The parties expressly acknowledge and agree that nothing in this Agreement
shall be read to require or allow Dr. Holaday, the Company or any person
acting for or on the behalf of either to violate any court order, law or
regulation or to engage in any action or inaction that would constitute or
otherwise involve a violation of any court order, law or regulation.
32. This Agreement shall be construed and enforced under Maryland law without
regard to conflict of law principles, to the extent not governed by federal
law.
33. The parties agree that the covenants and provisions of this Agreement are
severable and that if any covenants, provision or clause or portion thereof
shall be found unenforceable by any court, only that part will be severed
from the Agreement, and the remaining covenants, provisions and clauses
shall continue in force in accordance with the tenor of the Agreement so
long as the release, settlement and waiver provisions of this Agreement
that remain enforceable are acceptable to the Company.
34. DR. HOLADAY EXPRESSLY ACKNOWLEDGES AND AGREES THAT HE HAS READ THIS
AGREEMENT IN ITS ENTIRETY AND THAT HE UNDERSTANDS AND AGREES TO ITS TERMS;
(a) DR. HOLADAY HEREBY IS ADVISED TO CONSULT WITH AN ATTORNEY REGARDING
ANY POTENTIAL CLAIM OF AGE DISCRIMINATION UNDER THE ADEA AS WELL AS
THE TERMS OF THIS AGREEMENT BEFORE EXECUTING THIS AGREEMENT, HE
ACKNOWLEDGES THAT HE HAS BEEN SO ADVISED BY THE COMPANY TO CONSULT
WITH AN ATTORNEY BEFORE SIGNING THIS AGREEMENT, AND HE AGREES THAT
THIS PARAGRAPH CONSTITUTES SUCH ADVICE IN WRITING; DR. HOLADAY ASSURES
THE COMPANY THAT HE HAS OBTAINED LEGAL COUNSEL REGARDING THESE
SUBJECTS FROM STEPHEN FELDHAUS, ESQUIRE, AND AGREES THAT HE IS
PERSONALLY RESPONSIBLE FOR THE PAYMENT OF ALL FEES AND EXPENSES
ASSOCIATED WITH OBTAINING ADVICE FROM MR. FELDHAUS AND FROM OTHER
COUNSEL WITH WHOM DR. HOLADAY OR MR. FELDHAUS MAY HAVE CONSULTED,
OTHER THAN THE FIVE THOUSANDS DOLLARS ($5,000) PAID FOR SUCH SERVICES
BY THE COMPANY; AND DR. HOLADAY HEREBY INDEMNIFIES AND HOLDS THE
COMPANY HARMLESS FROM ANY CLAIMS FOR ATTORNEYS' FEES AND EXPENSES
ASSOCIATED WITH SUCH ADVICE;
(b) DR. HOLADAY UNDERSTANDS AND AGREES THAT HE IS AND HAS BEEN PERMITTED
TWENTY-ONE (21) DAYS FROM THE DATE THIS AGREEMENT WAS PRESENTED TO HIM
TO CONSIDER WHETHER HE WISHES TO ENTER INTO THIS AGREEMENT PROVIDING
FOR, AMONG OTHER MATTERS, A RELEASE AND WAIVER OF ALL CLAIMS UNDER THE
ADEA THAT EXIST OR MAY HAVE EXISTED AT THE DATE AND TIME HE EXECUTES
OR EXECUTED THIS AGREEMENT. DR. HOLADAY UNDERSTANDS AND AGREES THAT
EVEN UPON (I) DECIDING
EntreMed, Inc. (signature) -13- JWH (signature)
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<PAGE>
TO ENTER INTO THIS AGREEMENT, (II) SIGNING THIS AGREEMENT ON OR BEFORE
SUCH TWENTY-FIRST (21ST) DAY AFTER SUCH PRESENTATION AND (III)
PROVIDING IT TO THE COMPANY THROUGH ANN MARGARET POINTER, ESQUIRE,
FISHER & PHILLIPS LLP, 1500 RESURGENS PLAZA, 945 EAST PACES FERRY
ROAD, ATLANTA, GEORGIA 30326, TELEPHONE (404) 240-4223, TELEFAX (404)
240-4249, HE MAY REVOKE THIS AGREEMENT BY PROVIDING SUCH REVOCATION IN
WRITING BY PERSONAL DELIVERY OR VIA TELEFAX TO MS. POINTER, PROVIDED
SUCH REVOCATION IS ACTUALLY DELIVERED TO MS. POINTER PERSONALLY AND
RECEIVED BY HER BY TWELVE O'CLOCK NOON E.S.T. OF THE EIGHTH (8TH) DAY
(OR NEXT BUSINESS DAY THEREAFTER) AFTER THE DATE HE SIGNS THIS
AGREEMENT. DR. HOLADAY UNDERSTANDS AND AGREES THAT ANY CHANGES TO THE
TERMS OF THIS AGREEMENT, WHETHER MATERIAL OR IMMATERIAL, THAT MAY HAVE
BEEN MADE AFTER THE DATE A PROPOSED AGREEMENT HAS BEEN PRESENTED TO
HIM BY THE COMPANY SHALL NOT RESTART THE TWENTY-ONE (21) DAY PERIOD
DURING WHICH HE MAY CONSIDER WHETHER HE WISHES TO ENTER INTO THIS
AGREEMENT. THIS AGREEMENT SHALL NOT BECOME EFFECTIVE AND ENFORCEABLE
UNTIL (I) DR. HOLADAY HAS EXECUTED THIS AGREEMENT AND HAS PROVIDED A
SIGNED ORIGINAL OF THIS AGREEMENT TO THE COMPANY AS PROVIDED IN THIS
PARAGRAPH AND (II) THE REVOCATION PERIOD HAS EXPIRED WITHOUT
REVOCATION OF THIS AGREEMENT BY THE EIGHTH (8TH) DAY AFTER EXECUTION
OF THE AGREEMENT BY DR. HOLADAY AS PROVIDED IN THIS PARAGRAPH; AND
(c) DR. HOLADAY ASSURES THE COMPANY THAT HE HAS ENTERED THIS AGREEMENT OF
HIS OWN FREE WILL, KNOWINGLY AND VOLUNTARILY, WITHOUT DURESS OR
RESERVATION OF ANY KIND, AND AFTER HAVING GIVEN THE MATTER FULL AND
CAREFUL CONSIDERATION, AND DR. HOLADAY RECOGNIZES AND AGREES THAT HE
HAS RECEIVED CONSIDERATION FOR THE ENTRY INTO THIS AGREEMENT THAT IS
IN ADDITION TO RIGHTS AND BENEFITS THAT HE IS ALREADY ENTITLED TO
RECEIVE FROM THE COMPANY.
35. DR. HOLADAY ASSURES THE COMPANY THAT HE HAS READ THIS NOTICE CAREFULLY AND
HAS TAKEN NOTICE THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL CLAIMS,
WHETHER KNOWN OR UNKNOWN, THAT DR. HOLADAY MAY HAVE IN CONNECTION WITH HIS
EMPLOYMENT WITH THE COMPANY UP TO AND INCLUDING THE DATE AND TIME OF HIS
EXECUTION OF THIS AGREEMENT.
WHEREFORE, having been presented a copy of this Agreement as a proposal for my
consideration on January 23, 2003, having fully read this Agreement and now
agreeing to all of its terms and provisions, I, John W. Holaday, Ph.D., execute
this Agreement on this 29 January, 2003, at 2:00 p.m. E.S.T.
/s/ John W. Holaday
_____________________________
John W. Holaday, Ph.D.
EntreMed, Inc. (signature) -14- JWH (signature)
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<PAGE>
WHEREFORE, having read this Agreement and now agreeing to all of its terms and
provisions, EntreMed, Inc., executes this Agreement on this January 31st, 2003,
at 4:50 p.m. E.S.T.
ENTREMED, INC.
/s/ Wendell M. Starke
---------------------------------------
By: Wendell M. Starke, Vice Chairman of
the Board of Directors of EntreMed, Inc.
Originally executed on January 29, 2003
at 6:30 p.m. E.S.T. and re-executed
January 31st at 4:50 p.m. E.S.T. as
indicated above.
EntreMed, Inc. (signature) -15- JWH (signature)
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<PAGE>
SCHEDULE A
EntreMed, Inc.
JOHN HOLADAY
JANUARY 23, 2003
Modify option grants to accelerate vesting and convert all to non-qualified
options. All listed options include the right to exercise options for a period
of 10 years from date of grant.
<Table>
<Caption>
EXERCISE
GRANT DATE EXPIRATION DATE OPTIONS VESTING TYPE PRICE
---------- --------------- ------- ------- ---- --------
<S> <C> <C> <C> <C> <C>
12/31/1993 12/31/2003 3,334 Previously NQ $6.000
12/31/1994 12/30/2004 3,334 Previously NQ $6.375
11/2/1995 11/1/2005 266,667 Previously NQ $6.375
12/31/1995 12/30/2005 3,334 Previously NQ $12.000
12/23/1996 12/23/2006 28,568 Previously I $14.000
12/23/1996 12/23/2006 71,432 Previously NQ $14.000
12/31/1996 12/31/2006 5,000 Previously NQ $16.250
7/1/1997 7/1/2007 10,000 Previously NQ $12.000
11/20/1997 11/20/2007 250,000 Previously NQ $10.000
6/26/1998 6/26/2008 5,000 Previously NQ $31.938
2/25/1999 2/25/2009 16,107 Previously I $18.625
2/25/1999 2/25/2009 33,893 Previously NQ $18.625
6/24/1999 6/24/2009 10,000 Previously NQ $21.500
6/24/1999 6/24/2009 37,500 Previously NQ $21.500
6/24/1999 6/24/2009 12,500 6/24/2002 NQ $21.500
1/1/2000 1/1/2010 3,902 1/1/2003 I $25.625
1/1/2000 1/1/2010 60,000 Previously I $25.625
1/1/2000 1/1/2010 16,098 1/1/2003 NQ $25.625
6/22/2000 6/22/2010 30,000 Previously NQ $29.125
11/30/2000 11/30/2010 20,000 Previously NQ $17.563
11/30/2000 11/30/2010 10,000 11/30/2002 NQ $17.563
11/30/2000 11/30/2010 10,000 11/30/2003 NQ $17.563
4/6/2001 4/6/2011 10,000 Previously NQ $14.125
4/6/2001 4/6/2011 10,000 4/6/2002 NQ $14.125
4/6/2001 4/6/2011 10,000 4/6/2003 NQ $14.125
4/6/2001 4/6/2011 2,921 4/6/2004 NQ $14.125
4/6/2001 4/6/2011 7,079 4/6/2004 I $14.125
8/21/2001 8/21/2011 10,250 Previously NQ $11.990
8/21/2001 8/21/2011 10,250 8/21/2002 NQ $11.990
8/21/2001 8/21/2011 10,250 8/21/2003 NQ $11.990
8/21/2001 8/21/2011 10,250 8/21/2004 NQ $11.990
10/1/2001 10/1/2011 37,499 Previously NQ $8.970
10/1/2001 10/1/2011 37,500 10/1/2002 NQ $8.970
10/1/2001 10/1/2011 37,499 10/1/2003 NQ $8.970
10/1/2001 10/1/2011 37,500 10/1/2004 NQ $8.970
10/1/2001 10/1/2011 1 10/1/2003 I $8.970
10/1/2001 10/1/2011 1 10/1/2004 I $8.970
10/1/2001 10/1/2011 4,750 7/1/2002 NQ $8.970
10/1/2001 10/1/2011 4,750 7/1/2003 NQ $8.970
10/1/2001 10/1/2011 4,750 7/1/2004 NQ $8.970
10/1/2001 10/1/2011 4,750 7/1/2005 I $8.970
2/25/2002 2/25/2012 10,000 Previously NQ $6.330
6/6/2002 6/6/2012 20,000 Previously NQ $4.850
9/25/2002 9/25/2012 125,000 Previously NQ $1.090
9/25/2002 9/25/2012 62,500 9/25/2003 NQ $1.090
9/25/2002 9/25/2012 62,500 9/25/2004 NQ $1.090
---------
1,436,669
---------
</Table>
EntreMed, Inc. (signature) -16- JWH (signature)
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<PAGE>
SCHEDULE B
TRANSITION AGREEMENT
1. Big paintings in Board Room and Lobby
2. Small painting Board Room
3. Small lithograph above green chair
4. Block print on Bathroom Wall
5. Various paintings in Dr. Holaday's office
6. Two Glass artworks in Dr. Holaday's office
7. Indian vase in entrance hall near Benjamin's office
8. Fathiya Baabde's sculpture in old office
9. Lamps in Dr. Holaday's office
10. Green chair and ottoman in Dr. Holaday's old office
11. Big plant pot and stand in Dr. Holaday's old office
12. Glass tables in Dr. Holaday's office
13. Coat rack
14. Chest under the desk in old office
15. Artificial flowers and pot in old office
16. Misc. keepsakes on shelves and drawers in offices
EntreMed, Inc. (signature) -17- JWH (signature)
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