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AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(the "Agreement") is made and entered into as of this 3rd
day of December, 1998, between HEMISPHERX BIOPHARMA, INC., a
Delaware corporation (the "Company"), and William A. Carter, M.D., of
Birchrunville, Pennsylvania (the "Employee").
WHEREAS, the Employee is employed by the Company pursuant
to an Amended And Restated Employment Agreement dated July 1, 1993,
(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 Chairman of
the Board 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 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. Subject to the Employee's Confidentiality, Invention and
NonCompete Agreement referred to in Section 7 hereof, and
notwithstanding the foregoing, nothing herein shall prevent the Employee
from maintaining his appointment as professor at Hahnemann University,
and performing his duties in connection therewith.
2. Term. This Agreement shall commence on the date hereof
and shall terminate on May 8, 2004 (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
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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 Three Hundred Sixty One
Thousand Five Hundred and Eighty Six Dollars ($361,586) 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 May 9, 1999, and on May 9 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.
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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, 2004, unless the
employment period of William A. Carter, M.D. is
extended beyond May 8, 2004, in which event the
options shall, subject to the provisions of section 5,
expire on the last day of the extended employment
period of William A. Carter, 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 if 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) 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.
One Penn Center
1617 JFK Boulevard
Philadelphia, Pennsylvania 1910
Telecopier No.: (215) 988-1739
Attention: President
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(ii) If to the Employee, to:
William A. Carter, M.D.
Jaine Lane
Birchrunville, Pennsylvania 19421
Telecopier No.: (215) 469-0521
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 patent, subsidiary or affiliate of the Company
or any person, firm or corporation with
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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/ William A. Carter, M.D.
_________________________________
William A. Carter, M.D.
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