EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
EMPLOYMENT AGREEMENT (the “Agreement”) was made and entered into as of this 3rd
day of December 2010, between HEMISPHERX BIOPHARMA, INC., a Delaware corporation
(the “Company”), and Xxxxxxx X. Xxxxxxxxx (the “Employee” or “Xx.
Xxxxxxxxx”).
WHEREAS,
the Company desires to continue its employment of Xxxxxxx X. Xxxxxxxxx as its
Chief Financial Officer;
WHEREAS,
the Employee and the Company wish to state the terms and conditions of the
Agreement herein;
NOW,
THEREFORE, the Company and the Employee hereby agree as follows:
1. Duties of
Employee. The Employee shall, during the Employment Period (as defined
below), be designated as Chief Financial Officer of the Company. In the
Employee's capacity as such, he shall perform such duties and functions for the
Company as are customarily performed in corporations of a similar size in the
medical research field.
2. Term.
This Agreement shall commence on 3rd day of December 2010 and shall terminate on
December 31, 2011 (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
120 days prior to the Initial Termination Date or the expiration date of any
renewal period. In the event of a change in control as defined in the Company’s
10-K/A filing of April 30, 2010, the term of this agreement shall automatically
be extended for three additional years.
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 Thousand dollars ($200,000) 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, increased as provided in this
subsection. On January 1, 2011, and on January 1 of each succeeding calendar
year during the Employment Period, the Base Rate shall be increased by a
percentage equal to the greater of the percentage average increase in the Bureau
of Labor Statistics "Consumer Price Index — U.S. City Average — All Items" from
the December 31st
of the preceding year to January 1st
of the preceding year or a universal, non-discriminatory Cost Of Living salary
adjustment as approved by the Compensation Committee.
1
(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 current
Base 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
The
performance bonus shall be eligible to be paid in cash within 90 days of the
close of the calendar year.
(d) The
Employee is hereby granted non-qualified stock options as additional
compensation for the services to be performed hereunder, the Company shall issue
to the Employee, non-qualified annual options valid for a ten year period to
purchase 100,000 shares of the Company common stock with an exercise price equal
to 110% of the closing price of the Company stock on the NYSE/ Amex on the
effective trading date immediately preceding the date this agreement was
effectively approved by the Board of Directors.
(e) Notwithstanding
any provision of this Agreement to the contrary, if the Employee is considered a
“specified employee” as defined in the Internal Revenue Code section 409A
regulations upon his “separation from service” (as defined in the section 409A
regulations), the provisions of this section shall govern all distributions of
deferred compensation hereunder that are subject to Internal Revenue Code
section 409A. Benefit distributions that are made due to a “separation from
service” occurring while the Employee is a “specified employee” shall not be
made during the first six (6) months following “separation from service”.
Rather, any distribution which would otherwise be paid to the Employee during
such period shall be accumulated and paid to the Employee in a lump sum on the
first day of the seventh month following the “separation from service”. All
subsequent distributions shall be paid in the manner specified.
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 401(k),
vacation, group life and health insurance, and disability benefit plans as may
be maintained by the Company from time to time.
5. Termination.
(a) The Company may discharge the Employee for cause at any time as provided
herein, for purposes hereof, “cause” shall mean the willful engaging by Employee
in illegal conduct or gross misconduct or gross violation of the Company’s Code
of Ethics And Business Conduct for Officers which is demonstrably and materially
injurious to the Company. For purposes of this Agreement, no act, or failure to
act, on Employee's part shall be deemed "willful" unless done intentionally by
Employee and not in good faith and without reasonable belief that Employee's
action or omission was in the best interest of the Company. Notwithstanding the
foregoing, Employee shall not be deemed to have been terminated for Cause unless
and until the Company delivers to Employee a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of the directors of the
Board at a meeting of the Board called and held for such purpose (after
reasonable notice to Employee and an opportunity for Employee, together with
counsel, to be heard before the Board) finding that, in the good faith opinion
of the Board, Employee was guilty of conduct set forth above and specifying the
particulars thereof in detail.
2
(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 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), the Company shall pay to the Employee,
at the time of such termination, 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, at the time
of such termination, 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 at his election pursuant to
subsection 5(c) or due to his death or disability pursuant to 5(b), the Company
shall pay to the Employee, at the time of such termination, the Base Salary and
applicable benefits otherwise due and payable to him under Sections 3 and 4
through the last day of the month in which such termination occurs and for an
additional twelve month period.
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.
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 3rd day of December 2010.
3
9. Offices.
Xx. Xxxxxxxxx may conduct the business of the Company from a variety of
locations, including but not limited to those offices of at the Company
Headquarters in Philadelphia or his home office in Malvern, PA. The Company
shall supply that equipment necessary for full telephone, telefax and internet
access at all these locations and supply a portable computer capable of remote
access while employee travels domestically and internationally on Company
business.
10. Expenses.
The Company shall be responsible for all travel and business
entertainment expenses of Xx. Xxxxxxxxx. The expenditures shall be as prescribed
or limited by the Company’s Travel & Expense policies and
procedures.
11. 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.
One
Penn Center
0000
XXX Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
Telecopier
No.: (000) 000-0000
Attention:
Xxxxxxx X. Xxxxxx
Chairman
and Chief Executive Officer
(ii) If
to the Employee, to:
Xxxxxxx
X. Xxxxxxxxx, Chief Financial Officer
HEMISPHERX
BIOPHARMA, INC.
One
Penn Center
0000
XXX Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
Telecopier
No.: (000) 000-0000
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.
12. 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.
13. 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.
14. 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.
4
(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.
(f)
This Agreement is intended to comply with Section 409A of the Internal Revenue
Code and accompanying Treasury Regulations and guidance and any ambiguous
provision shall be construed and administered in a manner that is compliant with
or exempt from the application of Code section 409A. If any provision of this
Agreement would cause the Employee to incur any additional tax or interest under
Code section 409A, the Company shall, to the extent permitted under 409A and
after consulting with the Employee, reform such provision to comply with 409A.
The Agreement shall be administered in compliance with Section 409A of the
Internal Revenue Code and regulations issued there under to the extent they are
applicable.
IN WITNESS WHEREOF, this Agreement has been signed by the
parties hereto as of the date of the 3rd day of December
2010.
HEMISPHERX
BIOPHARMA, INC.
|
By:
|
/s/ Xxxxxxx X.
Xxxxxxxxx
|
|
Xxxxxxx
X. Xxxxxxxxx, Chief Financial Officer
|
|
|
By:
|
/s/ Xxxxxxx X.
Xxxxxx
|
|
Xx.
Xxxxxxx X. Xxxxxx, M.D.
|
|
|
Chairman
and Chief Executive
Officer
|
5
