Exhibit 10.4

 

AGREEMENT

 

 

THIS AGREEMENT, made effective the 8th day of March, 2012 by and between Derma
Sciences, Inc., a business corporation organized under the laws of the
Commonwealth of Pennsylvania (“Employer”), and Barry J. Wolfenson (“Employee”).

 

WHEREAS, Employee is currently employed by Employer as its Executive Vice
President for Global Business Development and Marketing, and

 

WHEREAS, the parties desire to enter into this Employment Agreement.

 

NOW, THEREFORE, the parties hereto, in consideration of the mutual promises and
covenants herein contained, hereby agree as follows:

 

1.   Employment. Employer hereby employs Employee, and Employee agrees to be
employed by Employer, as Employer’s Executive Vice President for Global Business
Development and Marketing with such duties appropriate to his office as may be
assigned, from time to time, by the Board of Directors of Employer and upon the
terms and conditions hereinbelow set forth.

 

2.   Time and Efforts. Employee will devote substantially all of his business
time and efforts to his duties hereunder.

 

3.   Compensation. During the Term hereof Employer shall pay compensation to
Employee as follows:

 

 (a)   Base compensation at the rate of Two Hundred Thirty Five Thousand Dollars
($235,000.00) per year effective January 1, 2012;

 

 (b)   Bonus, stock options and/or such other incentive compensation as may be
determined by Employer’s board of directors upon recommendation of its
compensation committee.

 

 

 

 

Reviews by the compensation committee of Employee’s base compensation and
incentive compensation shall be undertaken not less often than annually. The
principal criteria utilized by the compensation committee in the conduct of its
reviews shall be the extent to which Employer attains its performance objectives
and the extent of Employee’s contributions thereto.

 

5.   Term. This Agreement shall be effective as of the date hereof and shall
expire on March 31, 2013 unless sooner terminated pursuant to Sections 6 or 7
hereinbelow or unless renewed or extended by mutual agreement of the parties
hereto.

 

6.   Severance. In the event that Employer, without cause, either terminates the
Employment of Employee or fails to renew this Agreement upon expiration hereof,
Employer shall pay to Employee severance compensation in the amount of
$235,000.00. The severance shall be paid in twelve equal monthly installments of
$19,583.33 commencing on the first day of the month following the date of
termination or expiration, as applicable. In addition, during the twelve month
period following the date of termination or expiration, as applicable, Employer
shall provide Employee with the same health care benefits provided by Employer
to its active employees at the Employer’s cost.

 

7.   Change in Control. Within six months of the occurrence of a “change in
control” of Employer (defined below), Employee may, but shall have no obligation
to, tender his resignation from Employer and receive severance compensation as
provided in paragraph 6 above to the same extent as if Employer had terminated
Employee without cause as of the date of Employee’s resignation. For purposes of
this paragraph, a “change in control” shall be a “change in control event” as
defined in accordance with Section 409A of the Internal Revenue Code and the
regulations thereunder (“Section 409A”).

 

2

 

 

8.   Taxation. Any payments made pursuant to this Agreement shall be subject to
any tax or similar withholding requirements under applicable federal, state or
local employment or income tax laws or similar statutes or other provisions of
law then in effect. This Agreement is intended to comply with the requirements
of Section 409A. To the extent that any provision in this Agreement is ambiguous
as to its compliance with Section 409A, the provision shall be interpreted in a
manner so that no payment due to Employee hereunder shall be deemed subject to
an “additional tax” within the meaning of Section 409A(a)(1)(B) of the Code. For
purposes of Section 409A, each payment made under this Agreement shall be
treated as a separate payment. In addition, the right to a series of installment
payments under this Agreement is to be treated as a right to a series of
separate payments. Notwithstanding anything contained herein to the contrary,
Employer shall not be considered to have terminated employment with Employer for
purposes of this Agreement unless Employee has incurred a “termination of
employment” from the Company within the meaning of Treasury Regulation
§l.409A-l(h)(l)(ii) promulgated under Section 409A. Notwithstanding the
foregoing, if applicable and necessary to comply with the restriction in Section
409A(a)(2)(B) of the Code concerning payments to “specified employees,” any
payment made to Employee pursuant to this Agreement on account of the Employee’s
separation from service that would otherwise be due hereunder within six months
after such separation from service shall nonetheless be delayed until the first
business day of the seventh month following Employee’s separation from service
(or, if earlier, the date of his death). The first payment that can be made to
Employee following such period shall include the cumulative amount of any
payments or benefits that could not be paid or provided during such period due
to the application of Code Section 409A(a)(2)(B)(i). In no event may Employee,
directly or indirectly, designate the calendar year of any payment. All
reimbursements provided under this Agreement shall be made or provided in
accordance with the requirements of Section 409A, including, where applicable,
the requirement that (i) any reimbursement is for expenses incurred during
Employee’s lifetime (or during a shorter period of time specified in this
Agreement), (ii) the amount of expenses eligible for reimbursement during a
calendar year may not affect the expenses eligible for reimbursement in any
other calendar year, (iii) the reimbursement of an eligible expense will be made
on or before the last day of the calendar year following the year in which the
expense is incurred, and (iv) the right to reimbursement is not subject to
liquidation or exchange for another benefit. Employee further acknowledges that,
while this Agreement is intended to comply with Section 409A, any tax liability
incurred by Employee under Section 409A is solely the responsibility of
Employee.

 

3

 

 

9.   Option Exercise Extension. In the event that Employer, without cause,
either terminates Employee’s employment or fails to renew this Agreement upon
expiration hereof, or in the event Employee tenders his resignation upon a
“change in control,” then the period to exercise any option to purchase the
securities of Employer of which Employee may be possessed shall be extended to
the earlier to occur of (i) the expiration thereof as set forth in the option
instrument or (ii) the 10th anniversary of the original date of grant.

 

10.   Clawback of Bonus and/or Incentive Compensation. In the event that
Employer accords to Employee bonus and/or incentive compensation hereunder and
in the further event that the financial statements upon which such bonus and/or
incentive compensation was predicated contained material errors and/or omissions
that served as the basis for, or influenced, the granting of such bonus or
incentive compensation, then Employee shall repay to Employer any and all
amounts of bonus and/or incentive compensation reasonably attributable to the
aforesaid errors or omissions. Repayment of the aforesaid bonus and/or incentive
compensation shall be required regardless of whether or not Employee had
knowledge of, or participated in, the conduct that resulted in the
aforereferenced errors in the Corporation’s financial statements.

 

4

 

 

11.   Prior Agreements. This Agreement shall supersede any and all prior
agreements between Employer and Employee relating to his employment.

 

[Signatures on Following Page]

 

 

5

 

 

IN WITNESS WHEREOF, this Agreement has been executed by Employer and Employee as
of the date first hereinabove written.

 

 

  EMPLOYER:             DERMA SCIENCES, INC.                     By: /s/ Edward
J. Quilty       Edward J. Quilty       President and Chief Executive Officer  

 

 

  EMPLOYEE:                   By: /s/ Barry J. Wolfenson       Barry J.
Wolfenson  

  

  

6