EMPLOYMENT AGREEMENT
EXHIBIT 10(d.2)
This Agreement (“Agreement”) made this 20th day of March, 1997, between DUSA Pharmaceuticals,
inc., a New Jersey corporation (the “Corporation”) and D. Xxxxxxxx Xxxxxxx, MD, FRCPC (“Xx.
Xxxxxxx”).
WHEREAS, the parties entered into an Employment Agreement dated October 1, 1991 whereby Xx.
Xxxxxxx was appointed as Chairman, President, and Chief Executive Officer and Chief Operating
Officer of the Corporation.
WHEREAS, such Employment Agreement was amended on April 14, 1994.
WHEREAS, the parties now wish to renew such Employment Agreement.
NOW THEREFORE, in consideration of the mutual covenants and promises, the parties agree as
follows:
1. Employment: The Corporation hereby employs Xx. Xxxxxxx and he hereby accepts such
employment as the Chairman, President, Chief Executive Officer and Chief Operating Officer of the
Corporation. Xx. Xxxxxxx agrees to devote his best efforts and spend as much time and attention as
is necessary to manage the affairs of the Corporation.
2. Medical Practice: The Corporation agrees that Xx. Xxxxxxx shall be entitled to conduct his
medical practice during one (1) day each week, Monday through Friday, at his discretion.
3. Board of Directors: So long as this Agreement remains in effect, Xx. Xxxxxxx will be a
member of the Board of Directors (the “Board”) and an officer of the Corporation and shall possess
the powers set forth in the Corporation’s Certificate of Incorporation and By-Laws.
4. Term of Office and Employment: The term of this Agreement shall be effective as of October
1, 1996, nunc pro tunc, and continue for a period of five (5) years until
September 30, 2001 and shall automatically renew for successive one (1) year periods thereafter,
unless earlier terminated in accordance with the provisions of this Agreement.
5. Duties and Responsibilities: Notwithstanding any language contained herein to the
contrary, Xx. Xxxxxxx shall be responsible (by way of example and not by way of limitation) for:
| a) | the general direction and operations of the business of the Corporation; | ||
| b) | the management of the financial affairs of the Corporation; | ||
| c) | the custody of corporate funds and securities; | ||
| d) | the hiring, training, direction, discipline and compensation of the employees and other officers of the Corporation, subject to approval by the Board of the salaries and benefits, including stock options which may be offered to other officers and executives; and |
6. Remuneration: The Corporation will pay to Xx. Xxxxxxx a base salary equal to U.S. $250,000
per annum. This base salary shall be reviewed by the Board from time to time,
not less than on an annual basis. Any salary increases from time to time, shall be determined
by, and at the discretion of the Board. Following the end of each fiscal year, the Board may award
a cash bonus to Xx. Xxxxxxx in an amount up to 50% of Xx. Xxxxxxx’x current base salary for such
year, as determined by the Board in its sole discretion. The Board may award annual cash bonuses
above 50% of his current base salary for outstanding performance.
All salary and other payments and allowances outlined in this Agreement shall be subject to
such withholding taxes and deductions at source as may be required by law. All monetary references
made herein shall refer to U.S. dollars.
7. Benefits: Xx. Xxxxxxx will be entitled to participate in the medical, disability, life and
other insurance benefit plans which will be made available to the officers and employees of the
Corporation from time to time, subject to applicable eligibility rules thereof. Further, the
Corporation shall maintain for Xx. Xxxxxxx key man life insurance with the Corporation named as
beneficiary throughout the term of this Agreement, assuming reasonable quotations are available.
8. Stock Purchase and Bonus Plans: Xx. Xxxxxxx will be entitled to participate in the stock
purchase and bonus plans that the Corporation shall from time to time make available to its
officers and employees, subject to applicable eligibility rules thereof.
9. Vacation: Each calendar year, Xx. Xxxxxxx shall be entitled to four (4) weeks of vacation
per annum to be taken at a time or times acceptable to the Corporation, having regard to its
operations. Xx. Xxxxxxx shall be entitled to carry over any unused vacation from one (1) calendar
year into the following calendar year, so long as such vacation policy is consistent for all
employees.
10. Expenses: The Corporation agrees that it will reimburse Xx. Xxxxxxx for all reasonable
and authorized traveling and other out-of-pocket expenses actually and properly incurred by Xx.
Xxxxxx in connection with his employment duties upon provision of appropriate statements, vouchers,
bills and invoices as and when required by the Corporation. Xx. Xxxxxxx shall be paid $4,000.00
per year as an automobile allowance in recognition of his regular business acquired by the
Corporation.
11. Confidential Information:
| a) | Xx. Xxxxxxx shall not (either during the continuance of his employment with the Corporation or for two (2) years thereafter): (i) disclose to any person, other than it the necessary course of business, any private, confidential or secret information that belongs to the Corporation; or (ii) engage in any business substantially similar to that of the Corporation’s in any area in which the Corporation conducted business during the term of this Agreement. Without limiting the generality of the foregoing, Xx. Xxxxxxx will not disclose, among other things, any information about: |
| i) | newly developed products of the Corporation; | ||
| ii) | manufacturing processes and technologies; | ||
| iii) | research in progress and any unpublished formula, findings, manuals, or know-how; | ||
| iv) | regulatory filings; |
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| v) | identity of and relationships to licensees of the Corporation; | ||
| vi) | finances, financial information and financial management systems of the Corporation and any other research, information or documents which he knows or reasonably ought to know that the Corporation regards as proprietary or confidential to any person other than for the Corporation’s purposes and shall not use for his purposes or for any purposes of the Corporation any such information or secrets which he may acquire in relation to the business of the Corporation. |
| b) | Notwithstanding any of the foregoing in this section, information, whether confidential or proprietary or not, shall be exempt from the above confidentiality provisions if said information: |
| i) | was known to Xx. Xxxxxxx prior to his employment with the Corporation; | ||
| ii) | was in the public domain on the date of employment; | ||
| iii) | becomes public at any time through no fault of Xx. Xxxxxxx; or | ||
| iv) | is or in the future becomes readily available from third parties who have no confidentiality obligations to the Corporation. |
12. Termination of Employment:
| a) | Termination for Cause: The Corporation may terminate this Agreement at any time for cause without notice Cause shall include, but not be limited to, Xx. Xxxxxxx’x inability to perform the duties of his job for any cause for a period in excess of six (6) consecutive months. In the event of a termination for cause, Xx. Xxxxxxx shall be paid his base salary, pro rated to the date of termination. | ||
| b) | Termination without Cause: If Xx. Xxxxxxx’x employment is terminated without cause, the Corporation shall: |
| i) | pay Xx. Xxxxxxx a severance allowance equivalent to one (1) year’s then current base salary, payable as a lump sum, within sixty (60) days following the date of such termination; | ||
| ii) | pay to Xx. Xxxxxxx within two (2) weeks of the date of termination all outstanding vacation pay and any earned but unpaid salary or bonuses to the date of such termination and reimburse Xx. Xxxxxxx for any business expense incurred by him up to and including the date of such termination following provision by Xx. Xxxxxxx of all applicable and necessary receipts; | ||
| iii) | allow Xx. Xxxxxxx the right to exercise for a period of one (1) year from the date of termination all stock options granted to him pursuant to the terms of this Agreement or otherwise, or any stock option plan in effect prior to his termination as to all or any part of the shares covered by such options, including shares with respect to which such options would not otherwise be exercisable, subject to restrictions under U.S. or Canadian law, as applicable; |
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| The payments referred to in (i) and (ii) above shall not be subject to set-off or deduction as a result of Xx. Xxxxxxx obtaining alternate employment following such termination or otherwise mitigating any damages arising from such termination. | |||
| c) | Fair and Reasonable: The parties confirm that the payments described above are fair and reasonable and the parties agree that upon any termination without cause, Xx. Xxxxxxx shall have no action, cause of action, claim or demand, either statutory or at common law against the Corporation or any other person as a consequence of such termination without cause. | ||
| d) | Termination upon Death: Xx. Xxxxxxx’x employment with the Corporation will cease without further notice or further compensation if Xx. Xxxxxxx dies. Upon his death, his heirs or beneficiaries will be entitled to any Corporation paid death benefit in force at the time of such death. Likewise, Xx. Xxxxxxx’x heirs will be entitled to exercise any vested but unexercised stock options that were held by him at the time of his death. His heirs must exercise such options within one (1) year from the date of death. | ||
| e) | Termination Upon Change in Control: If prior to the expiration of this Agreement there shall occur a “change in control” as defined herein, Xx. Xxxxxxx shall receive, within five (5) days after such termination from the Corporation or its successor, a lump sum payment equal to three (3) times his base salary during the last fiscal year in which Xx. Xxxxxxx is associated with the Corporation. For the purposes hereof, “change in control” shall mean a change in control of a nature that would be required to be reported in response to Item 5 of Schedule 14D promulgated pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “1934 Act”), whether or not the Corporation is then subject to such reporting requirements; provided that, without limitations, such a change in control shall be deemed to have occurred if (i) any person other than a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation is or becomes the beneficial owner, directly or indirectly, of securities of the Corporation representing twenty percent (20%) or more of the combined voting power of the Corporation’s then outstanding securities and thereafter the Board adopts a resolution to the effect that, for the purposes of this Agreement, a change in control of the Corporation has occurred; such ownership shall be as defined pursuant to Rule 13d-3 of the 1934 Act and includes mergers or acquisitions whereby an outside party has in excess of twenty percent (20%) of the combined voting power; (ii) when the Corporation merges or consolidates with any other person or, entity other than a subsidiary and, upon consummation of such transaction, holders of the Corporation’s common stock immediately prior to such transaction own less than fifty percent (50%) of the equity securities of the surviving or consolidated entity; or (iii) a substantial portion of the assets of the Corporation are sold or transferred to another person or entity. | ||
| f) | Resignation: Xx. Xxxxxxx will provide the Corporation with three (3) months’ notice, in writing, of his resignation from the Corporation. |
13. Indemnification: The Corporation will, to the extent permitted by the laws of the State
of New Jersey, U.S.A., indemnify Xx. Xxxxxxx against any actual or threatened action, suit or
proceeding, whether civil, criminal, administrative or investigative, that arises as a consequence
of his duties as an officer of the Corporation. Such indemnification will include such expenses as
attorneys fees, judgments, fines and amounts awarded or agreed to in settlement, provided that Xx.
Xxxxxxx acted legally and in good faith, or reasonably believed that
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his actions were legal and performed in good faith. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendre shall not,
of itself, create a presumption that his actions were illegal or not performed in good faith.
14. Provisions Operating Following Termination: Notwithstanding any termination of Xx.
Xxxxxxx’x employment with or without cause, any provision of this Agreement necessary to give it
efficacy shall continue in full force and effect following such termination.
15. Notices: Any notice to be given in connection with this Agreement shall be given in
writing and may be given by personal delivery, by certified mail, postage prepaid, or by facsimile
transmission, so long as receipt of such transmission is available, addressed to the recipient as
follows:
To:
|
D. Xxxxxxxx Xxxxxxx, MD, FRCPC | |
| 000 Xxxxxxx Xxxx Xxxx | ||
| Xxxxxxx, Xxxxxxx X0X 0X0 | ||
| XXXXXX | ||
To:
|
Xxxxxxx Xxxxxxxxxxx, | |
| Vice President of Corporate Development | ||
| 000 Xxxxxxxxxx Xxxxxx | ||
| Xxxxx 0000 | ||
| Xxxxxxx, Xxxxxxx X0X-0X0 | ||
| XXXXXX |
or to such other address or individual as may be designated by notice by either party to the other.
Any notice given by personal delivery shall be deemed to have been given on the day of actual
delivery and, if made or given by certified mail, on the third day, other than a Saturday, Sunday,
or a statutory holiday in Xxxxxxx, Xxxxxxx, XXXXXX following the deposit thereof with the U.S.
Postal Service.
16. Governing Law: This Agreement shall be governed by and construed in accordance with the
laws of the State of New Jersey, U.S.A.
17. Benefit of Agreement: This Agreement shall enure to the benefit of and be binding upon
the heirs, executives, administrators and legal personal representatives of Xx. Xxxxxxx and to and
upon the successors and assigns of the Corporation, respectively.
18. Entire Agreement: This Agreement constitutes the entire agreement between the parties
hereto with respect to the terms and conditions of employment of Xx. Xxxxxxx and cancels and
supersedes any prior understandings and agreements between the parties to this Agreement. There
are no representations, warranties, forms, conditions, undertakings or collateral agreements
expressed, implied or statutory between the parties hereto other than as expressly set forth in
this Agreement.
19. Severability: Whenever possible, each provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any
other provision of any other jurisdiction but this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been
contained herein.
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20. Amendments and Waivers: Any provision of this Agreement may be amended or waived only
with prior written consent of the Corporation and Xx. Xxxxxxx.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above
written.
| ATTEST: |
DUSA PHARMACEUTICALS, INC. |
||||||
| /s/ Xxxxx Xxxxxxxx | By: | /s/ Xxxxxxx Xxxxxxxxxxx | |||||
| Xxxxx Xxxxxxxx | Xxxxxxx Xxxxxxxxxxx | ||||||
| Vise-President of Corporate Development | |||||||
| WITNESS: |
|
||||||
| /s/ Xxxxx Xxxxxx | /s/ D. Xxxxxxxx Xxxxxxx | ||||||
| Xxxxx Xxxxxx | D. Xxxxxxxx Xxxxxxx, MD, FRCPC | ||||||
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