Exhibit 10.38
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 January 1, 2004, (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
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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).
(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:
"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."
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.
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(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.
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
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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
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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.
Xxx Xxxx Xxxxxx
0000 XXX Xxxxxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 1910
Telecopier No.: (000) 000-0000
Attention: President
(ii) If to the Employee, to:
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
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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
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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
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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/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx, Secretary
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
