AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.1
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered
into as of this 11th day of March 2005, between HEMISPHERX BIOPHARMA, INC., a
Delaware corporation (the “Company”), and Xxxxxxx X. Xxxxxx, 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, retroactively on January 1, 2005 and shall
terminate on December 31, 2010 (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 Ninety Thousand Eight Hundred and Eighty Seven
and 68/100——Dollars ($290,887.68) per year (the "Base Salary"), which shall be
subject to cost-of-living adjustments, as provided in the succeeding subsection
(b).
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(b) The
Salary shall consist of the Base Salary, adjusted as provided in this
subsection. On January 1, 2006, 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
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:
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“The
options shall, to the extent not theretofore exercised and, subject to the
provisions of section 5, expire and become void on December 31, 2010,
unless the employment period of Xxxxxxx X. Xxxxxx, M.D. is extended beyond
December 31, 2010, in which event the options shall, subject to the
provisions of section 5, expire on the last day of the extended employment
period of Xxxxxxx X. Xxxxxx, M.D.”
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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 mean the willful engaging by Employee in illegal
conduct or gross misconduct 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, or omitted to be done, by
Employee 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 entire
membership 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.
(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) , 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 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 and for an additional twelve month period.
(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.
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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:
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(i)
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If
to the Company, to:
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HEMISPHERX
BIOPHARMA, INC.
Xxx
Xxxx Xxxxxx
0000
XXX Xxxxxxxxx
Xxxxxxxxxxxx,
Xxxxxxxxxxxx 1910
Telecopier
No.: (000) 000-0000
Attention:
President
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(ii)
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If
to the Employee, to:
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Xxxxxxx
X. Xxxxxx, M.D.
00000
Xxx Xxxxxxx
Xxxxxxxxx,
Xxxxxxx 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.
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.
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(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.
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By:
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/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx
X. Xxxxxxxxx, Secretary
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By:
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/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx
X. Xxxxxx
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