Exhibit 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") is made
and entered into as of this 1st day of January, 2004, between HEMISPHERX
BIOPHARMA, INC., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
M.D., of Tavernier, Florida (the "Employee").
WHEREAS, the Employee is employed by the Company pursuant to an Amended And
Restated Employment Agreement dated December 3, 1998, (the "Existing
Agreement");
WHEREAS, the Employee and the Company wish to amend and restate the terms
and conditions of the Existing Agreement;
NOW, THEREFORE, the Company and the Employee hereby amend and restate the
Existing Agreement in its entirety and agree as follows:
1. Duties of Employee. The Employee shall, during the Employment Period
(as defined below), be designated as the Chief Executive Officer and Chief
Scientific Officer of the Company. In the Employee's capacity as such, he shall
perform such general management and administrative duties and functions for the
Company as are customarily performed by the chief executive officer of
corporations of a similar size in the medical research field.
The Employee's duties and functions shall include the
supervision and direction of all scientific and technical activities of the
Company and such other administrative duties or functions as the Board of
Directors of the Company may from time to time reasonably assign the Employee.
The Employee shall report to the Board of Directors of the Company in connection
with all of his duties and functions. The Employee, subject to services he
performs relating to patent development and serving on the Board of Directors of
the Company, agrees to devote his full working time to the performance of his
duties under this Agreement, to exert his best efforts in the performance of his
duties, and to perform his technical, scientific, and administrative duties so
as to promote the profit, benefit and advantage of the business of the Company.
2. Term. This Agreement shall commence on the date hereof and shall
terminate on May 8, 2008 (the "Initial Termination Date") unless sooner
terminated in accordance with Section 5 hereof or unless renewed as hereinafter
provided (such period of employment together with any extension thereto
hereinafter being called the "Employment Period"). This Agreement shall be
automatically renewed for successive one (1) year periods after the initial
Termination Date unless written notice of refusal to renew is given by one party
to the other at least ninety days prior to the Initial Termination Date or the
expiration date of any renewal period.
3. Compensation. (a) As compensation for the services to be performed
----------------------
hereunder, the Company shall pay to the Employee a salary (the "Salary"), as
hereinafter provided, payable at such times as salaries of other senior
executives of the company are paid but no less frequently than monthly. The
Salary shall be at a rate of Two Hundred Eighty Two Thousand Four Hundred and
Fifteen and 28/100-----Dollars ($282,415.28) per year (the "Base Salary"), which
shall be subject to cost-of-living adjustments, as provided in the succeeding
subsection (b).
(b) The Salary shall consist of the Base Salary, adjusted as provided
in this subsection. On January 1, 2005, and on January 1 of each succeeding
calendar year during the Employment Period, the Base Rate shall be increased or
decreased by a percentage equal to the percentage average increase or decrease
in the Bureau of Labor Statistics "Consumer Price Index -- U.S. City Average --
All Items" from the December of the preceding year to the December of the second
preceding year.
(c) For each calendar year (or part thereof) during which the Agreement
is in effect, the Employee shall be eligible to be paid the following bonuses:
(i) a performance bonus in an amount up to twenty-five percent
(25%) of his Salary as then in effect, in the sole discretion
of the Compensation Committee of the Board of Directors based
on the Employee's performance and/or the Company's operating
results for such year; and
(ii) an incentive bonus in an amount equal to .5% of the Gross
Proceeds paid to the Company during such year from any joint
ventures or corporate partnering arrangements. For purposes
herein, Gross Proceeds shall mean those cash amounts paid to
the Company by the other parties to the joint -venture or
corporate partnering arrangement, but shall not include (i)
any amounts paid to the Company as a result of sales of
Ampligen or other Company products, whether to such joint
venture or partnership, or to third parties; (ii) any amounts
paid to the Company as reimbursement of expenses incurred; and
(iii) any amounts paid to the Company in consideration for the
Company's equity or other securities. After the termination of
this Agreement, the Employee shall be entitled to receive the
incentive bonus provided for in this subsection 3(c)(ii) based
upon Gross Proceeds received by the Company during the 2 year
period commencing on the termination of this Agreement with
respect to any joint ventures or corporate partnering
arrangements entered into by the Company during the term of
this Agreement. The maximum aggregate amount to which the
Employee shall be entitled under this subsection 3(c)(ii)
shall in no event exceed $250,000.
The performance bonus shall be eligible to be paid in cash within 60 days of the
close of the calendar year. The incentive bonus shall be paid in cash within 60
days of the receipt of the Gross Proceeds by the Company.
(d) The Employee has been granted non-qualified stock options to
purchase 80,000 shares of the Company's Common Stock, $.01 par value, (the
"Common Stock"), in accordance with the terms of the Stock Option Agreement
dated August 8, 1991, which is attached hereto as Exhibit A, provided, however,
section 4 thereof is hereby deleted in its entirety and in lieu thereof the
following is hereby substituted therefor:
"The options shall, to the extent not theretofore exercised
and, subject to the provisions of section 5, expire and
become void on May 8, 2008, unless the employment period of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. is extended beyond May 8, 2008, in
which event the options shall, subject to the provisions of
section 5, expire on the last day of the extended employment
period of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D."
4. Fringe Benefits. During the Employment Period, the Employee shall be
entitled to receive such fringe benefits as shall be applicable from time to
time to the Company's executives generally, including but not limited to such
pension, vacation, group life and health insurance, and disability benefit plans
as may be maintained by the Company from time to time. Additionally, during the
Employment Period, the Company shall pay, for the benefit of the Employee, the
premiums for a disability insurance policy in the face amount of $200,000 and
the premiums for term life insurance policies in the aggregate face amount of
$1,800,000 insuring the life of the Employee, with the Employee having the right
to designate the beneficiary or beneficiaries thereof.
5. Termination.
(a) The Company may discharge the Employee for cause at any time as
provided herein, For purposes ----------- hereof, "cause" shall refer to (i)
habitual neglect by the Employee of his duties hereunder, or (ii) his neglect or
refusal to comply with written directives of the Board of Directors.
(b) The employment of the Employee shall terminate upon the death or
disability of the Employee. For purposes of this subsection (b), "disability"
shall mean the inability of the Employee effectively to carry out substantially
all of his duties hereunder by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than twelve (12)
months.
(c) The Employee shall have the right to terminate this Agreement upon not
less than thirty (30) days, prior written notice of termination.
6. Effect of Termination. ---------------------
(a) In the event that the Employees employment is terminated for "cause"
pursuant to subsection 5(a) or at his election pursuant to subsection 5(c), the
Company shall pay to the Employee only the compensation and benefits otherwise
due and payable to him under Sections 3 and 4 through the last day of his actual
employment by the Company.
(b) In the event that the Employee is terminated at any time without
"cause", as defined in subsection 5(a), the Company shall pay to the Employee
the compensation and benefits otherwise due and payable to him under Sections 3
and 4 through the last day of the then current term of this Agreement.
(c) In the event the Employee's employment is terminated due to his death
or disability pursuant to 5(b), the Company shall pay to the Employee only the
compensation and benefits otherwise due and payable to him under Sections 3 and
4 through the last day of the month in which such termination occurs.
(d) Upon termination of Employee's employment, with or without cause, in
accordance with the terms hereof, Employee shall resign from the Company's Board
of Directors.
7. Employee's Representations and Warranties.
-----------------------------------------------
The Employee hereby represents and warrants to the Company that he has the
right to enter into this Agreement, and his execution, delivery and performance
of this Agreement (a) will not violate any contract to which the Employee is a
party or any applicable law or regulation nor give rise to any rights in any
other person or entity and (b) are not subject to the consent of any other
person or entity, including, without limitation, Hahnemann University.
8. Confidentiality, Invention and Non-Compete Agreement.
---------------------------------------------------------
The Employee confirms his obligation to be bound by the terms of the
Confidentiality, Invention and Non-Compete Agreement attached hereto as Exhibit
B, executed as of July 1, 1993.
9. Notices.
--------
Any notice or other communication pursuant to this Agreement shall be in
writing and shall be sent by telecopy or by certified or registered mail
addressed to the respective parties as follows:
(i) If to the Company, to:
HEMISPHERX BIOPHARMA, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ 1910
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
(ii) If to the Employee, to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the parties shall have designated by notice to the
other parties given in accordance with this section. Any notice or other
communication shall be deemed to have been duly given if personally delivered or
mailed via registered or certified mail, postage prepaid, return receipt
requested, or, if sent by telecopy, when confirmed.
10. Survival.
-----------
Notwithstanding anything in section 2 hereof to the contrary, the
Confidentiality, Invention and Non-Compete Agreement shall survive any
termination of this Agreement or any termination of the Employee's services.
11. Modification.
-------------
No modification or waiver of this Agreement or any provision hereof shall
be binding upon the party against whom enforcement of such modification or
waiver is sought unless it is made in writing and signed by or on behalf of both
parties hereto.
12. Miscellaneous.
-------------
(a) This Agreement shall be subject to and construed in accordance with the
laws of the Commonwealth of Pennsylvania.
(b) The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate and be construed as a waiver or a
continuing waiver by that party of the same or any subsequent breach of any
provision of this Agreement by the other party.
(c) If any provisions of this Agreement or the application thereof to any
person or circumstance shall be determined by an arbitrator (or panel or
arbitrators) or any court of competent jurisdiction to be invalid or
unenforceable to any extent, the remainder hereof, or the application of such
provision to persons or circumstances other than those as to which it is so
determined to be invalid or unenforceable, shall not - be affected thereby, and
each provision hereof shall be valid and shall be enforced to the fullest extent
permitted by law.
(d) This Agreement shall be binding on and inure to the benefit of the
parties hereto and their respective heirs, executors and administrators,
successors and assigns.
(e) This Agreement shall not be assignable in whole or in part by either
party, except that the Company may assign this Agreement to and it shall be
binding upon any subsidiary or affiliate of the Company or any person, firm or
corporation with which the Company may be merged or consolidated or which may
acquire all or substantially all of the assets of the Company.
IN WITNESS WHEREOF, this Agreement has been signed by the parties hereto as
of the date first above written.
HEMISPHERX BIOPHARMA, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Secretary
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇