UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
September 15, 2004 (September 9, 2004)
HEMISPHERX BIOPHARMA, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-27072 52-0845822
(state or other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) (Identification No.)
1617 JFK Boulevard, Philadelphia, Pennsylvania 19103
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 988-0080
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Section 1 - Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement.
On September 9, 2004, our board of directors, at the recommendation of the
Compensation Committee, approved an amended and restated employment agreement
and an engagement agreement with Dr. William A. Carter. These two agreements
primarily reflect a clarification and separation of Dr. Carter's exiting
responsibilities, with compensation in the aggregate equal to that contained in
the old employment agreement and in our arrangement with Dr. Carter since 1998
to pay him the fees previously paid to him by Hahnemann Medical University.
The amended and restated employment agreement provides for Dr. Carter's
employment as our Chief Executive Officer and Chief Scientific Officer until May
8, 2008 unless sooner terminated for cause or disability. The agreement
automatically renews for successive one year periods after the initial
termination date unless we or Dr. Carter give written notice otherwise at least
ninety days prior to the termination date or any renewal period. Dr. Carter has
the right to terminate the agreement on 30 days' prior written notice. The
initial base salary retroactive to January 1, 2004 is $282,415, subject to
adjustment based on the average increase or decrease in the Consumer Price Index
for the prior year. In addition, Dr. Carter could receive an annual performance
bonus of up to 25% of his base salary, at the sole discretion of the
Compensation Committee of the board of directors, based on his performance or
our operating results. Dr. Carter will not participate in any discussions
concerning the determination of his annual bonus. Dr. Carter is also entitled to
an incentive bonus of 0.5% of the gross proceeds received by us from any joint
venture or corporate partnering arrangement, up to an aggregate maximum
incentive bonus of $250,000 for all such transactions. Dr. Carter's agreement
also provides that he be paid a base salary and benefits through the last day of
the then term of the agreement if he is terminated without "cause", as that term
is defined in the agreement. Pursuant to his original agreement, Dr. Carter was
granted options to purchase 73,728 (post split) shares in 1991.
The engagement agreement, retroactive to January 1, 2004, provides for our
engagement of Dr. Carter as a consultant related to patent development, as one
of our directors and as chairman of the Executive Committee of our board of
directors until May 8, 2008 unless sooner terminated for cause or disability.
The agreement automatically renews for successive one year periods after the
initial termination date unless we or Dr. Carter give written notice otherwise
at least ninety days prior to the termination date or any renewal period. Dr.
Carter has the right to terminate the agreement on 30 days' prior written
notice. The initial base fee as of January 1, 2004 is $201,725, subject to
annual adjustments equal to the percentage increase or decrease of annual dollar
value of directors' fees provided to our directors during the prior year. The
annual fee is further subject to adjustment based on the average increase or
decrease in the Consumer Price Index for the prior year. In addition, Dr. Carter
could receive an annual performance bonus of up to 25% of his base fee, at the
sole discretion of the Compensation Committee of the board of directors, based
on his performance. Dr. Carter will not participate in any discussions
concerning the determination of this annual bonus. Dr. Carter's agreement also
provides that he be paid his base fee through the last day of the then term of
the agreement if he is terminated without "cause", as that term is defined in
the agreement.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
10.1 Amended and Restated Employment Agreement of Dr. William A. Carter.
10.2 Engagement Agreement with Dr. William A. Carter.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HEMISPHERX BIOPHARMA, INC.
September 15, 2004 By: /s/Ransom W. Etheridge
--------------------------
Ransom W. Etheridge, Secretary