EXHIBIT 10.(y)

 

EMPLOYMENT AGREEMENT

 

This Agreement (“Agreement”) made as of this 1st day of January, 2004, between
DUSA Pharmaceuticals, Inc., a New Jersey corporation (“DUSA”) and Richard C.
Christopher (“Christopher”).

 

WHEREAS, Christopher has been employed by DUSA since December 18, 2000 and DUSA
wishes to promote Christopher;

 

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

 

1.             Employment:  DUSA hereby employs Christopher and he hereby
accepts such employment as the Vice President, Financial Planning and Business
Analysis.  Christopher agrees to work on a full-time basis and to devote his
best efforts and spend as much time and attention as is necessary to manage the
financial affairs of DUSA for which he is responsible.  Christopher shall report
to the President of DUSA.

 

2.             Duties and Responsibilities:  Notwithstanding any language
contained herein to the contrary, Christopher shall be responsible (by way of
example and not by way of limitation) for:

 

A.            supervision and oversight of the financial planning, modeling and
analysis for DUSA, including but not limited to, the evaluation of business
plans and/or opportunities and their impact on the financial results, the budget
process, and financial system operations of DUSA;

 

B.                                     preparation and coordination of the
annual budget and strategic plans; and

 

C.            any additional employment responsibilities as deemed appropriate
by the Board of Directors and DUSA’s senior management, from time to time.

 

3.             Remuneration:  DUSA will pay to Christopher a base salary equal
to One Hundred Twenty-Two Thousand, Five Hundred Dollars ($122,500.00) per annum
at intervals consistent with DUSA’s administrative practices, from time to
time.  This base salary shall be reviewed by the Board of Directors of DUSA from
time to time, not less than on an annual basis, beginning in January 2005. Any
salary increases shall be determined by, and shall be made at the sole
discretion of the Board. Following the end of each fiscal year, the Board may
award a cash bonus to Christopher in an amount up to 30% of his current base
salary for such year, as determined by the Board in its sole discretion. For
purposes of awarding the total amount of such bonus, mutually agreeable
performance objectives will be set at the beginning of any calendar year during
Christopher’s employment.  The Board may award annual cash bonuses above 30% of
then 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 as may be required by law.

 

4.             Place of Employment:  As Vice President, Financial Planning and
Business Analysis, Christopher will operate primarily from the offices of DUSA
located in Wilmington, MA. Christopher acknowledges, however, that there may be
domestic and international travel

 

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required on a periodic basis.  Such travel is understood to be necessary in
order to promote the business of DUSA.

 

5.             Benefits:  Christopher will be entitled to participate in the
medical, dental, life, disability and other insurance benefit plans or pension,
profit sharing, or 401K plans which may be made available to the officers and
employees of DUSA from time to time, subject to applicable eligibility rules
thereof.

 

6.             Stock Options:  Christopher shall be entitled to participate in
the 1996 Omnibus Plan, as amended, and any subsequent stock purchase and bonus
or incentive plans that DUSA shall from time to time make available to its
officers and employees, subject to applicable eligibility rules thereof.

 

7.             Vacation: Christopher shall be entitled to four (4) weeks of
vacation during each year of employment, to be taken at a time or times
acceptable to DUSA, having regard to its operations. Christopher shall be
entitled to carry over up to 80 hours of any unused vacation from one (1)
calendar year into the following calendar year, so long as such a vacation
policy is consistent for all employees.

 

8.             Expenses:  All reasonable travel and other expenses incident to
the rendering of services by Christopher on behalf of and in promoting the
interests of DUSA shall be paid by DUSA, including but not limited to an
automobile allowance in the amount of $6,000 per year and cell phone
reimbursement.  If such expenses are paid in the first instance by Christopher,
DUSA agrees that it will reimburse him therefore upon presentation of
appropriate statements, vouchers, bills and invoices as and when required by
DUSA to support the reimbursement request.

 

9.             Confidential Information:

 

A.            Christopher understands that in the performance of his services
hereunder he may obtain knowledge of “confidential information”, as hereinafter
defined, relating to the business of DUSA.  As used herein, “confidential
information” means any information (whether clinical, financial, administrative
or otherwise), written or oral, (including without limitation, any formula,
pattern, device, plan, process, or compilation of information) which (i) is, or
is designed to be, used in the business of DUSA or results from its research
and/or development activities, or (ii) is private or confidential in that it is
not generally known or available to the public, or (iii) gives DUSA an
opportunity to obtain an advantage over competitors who do not know or use it. 
Christopher shall not, without the written consent of the Board, either during
the term of his employment or thereafter, (a) use or disclose any such
confidential information outside of DUSA (except to consultants or other agents
or representatives of DUSA who are similarly bound to DUSA by confidentiality
obligations), (b) publish any article with respect thereto, (c) except in the
performance of his services hereunder, remove or aid in the removal from the
premises of DUSA any such confidential information or any property or material
which relates thereto.

 

B.            Upon the termination of his employment with DUSA, all documents,
records, notebooks and similar repositories of or continuing information
concerning DUSA, or its products, services or customers, including any copies
thereof, then in Christopher’s possession or under his control, whether prepared
by Christopher or others, will be left with or immediately returned to DUSA by
Christopher.

 

C.            (i)            Christopher shall promptly disclose to DUSA any and
all prescription drug products, devices, machines, methods, inventions,
discoveries,

 

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improvements, processes, works or the like (all of which are referred to herein
as “inventions”) which he may invent, conceive, produce, or reduce to practice,
either solely or jointly with others, at any time (whether or not during work
hours) during his employment hereunder.

 

(ii)           All such inventions which in any way relate to the products
manufactured, sold or used by DUSA or to any methods, processes or apparatus
used in connection with the manufacture of such products or treatment of disease
or conditions, or in either case which are or may be or may become capable of
use in the business of DUSA, shall at all times and for all purposes be regarded
as acquired and held by Christopher in a fiduciary capacity for, solely for the
benefit of, DUSA.

 

(iii) With respect to all such inventions, Christopher shall:

 

(a)           treat all information with respect thereto as confidential
information within the meaning of, and subject to this paragraph 9;

 

(b)           keep complete and accurate records thereof, which records shall be
the property of DUSA;

 

(c)           execute any application for letters patent of the United States
and of any and all other countries covering such inventions, and give to DUSA,
its attorneys and solicitors all reasonable and requested assistance in
preparing such application;

 

(d)           from time to time, upon the request and at the expense of DUSA,
but without charge for services beyond the salary paid to him by DUSA, execute
all assignment or other instruments required to transfer and assign to DUSA (or
as it may direct) all inventions, and all patents and applications for patents,
copyrights or applications for registration of copyrights, covering such
inventions or otherwise required to protect the rights and interests of DUSA;

 

(e)           testify in any proceedings or litigation as to all such
inventions; and

 

(f)            in case DUSA shall desire to keep secret any such invention, or
shall for any reason decide not to have letters patent applied for thereon,
refrain from applying for letters patent thereon.

 

D.            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)                                     is known to Christopher prior to his
employment with DUSA;

 

(ii)                                  is in the public domain on the date of
employment;

 

(iii)                               becomes public at any time through no fault
of Christopher; or

 

(iv)                              is or becomes readily available from third
parties who have no confidentiality obligations to DUSA.

 

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E.             If Christopher’s employment is terminated by Christopher,
Christopher shall not, without the express prior written consent of DUSA,
directly, or indirectly, during the term of this Agreement or for a period of
one (1) year after its termination, render services, or engage in activity
including but not limited to, the activities enumerated in Section 2 hereof or
any similar activity, for any company which relates to the development or sale
of photodynamic therapy (“PDT”) or photodetection (“PD”) products directly
competitive (i.e., medically or therapeutically) with DUSA’s products or
compounds or mixtures thereof, whether alone or as a partner, officer, director,
employee or shareholder of any other corporation, or as a trustee, fiduciary,
consultant or other representative of any other activity. This restriction shall
not apply if Christopher has disclosed to DUSA, in writing, all the known facts
relating to such work or activity and has received a release, in writing from
DUSA, to engage in such work or activity.  The making of passive and personal
investments and the conduct of private business affairs shall not be prohibited
hereunder.  Ownership by Christopher of five percent (5%) or less of the
outstanding shares of stock of any corporation either (i) listed on a national
securities exchange or (ii) having at least 100 stockholders shall not make
Christopher a “stockholder” within the meaning of that term as used in this
paragraph, so long as Christopher has no participation in the management of such
corporation.

 

10.           Termination of Employment:

 

A.            DUSA may terminate this Agreement at any time, with or without
cause on sixty (60) days prior written notice.  For purposes of this Agreement,
cause shall mean (i) Christopher’s physical or mental disability or other
inability to perform the duties of his job for any reason for a period in excess
of six (6) consecutive months, (ii) Christopher’s conviction in a court of law
of a crime or offense, which conviction would prevent Christopher from effective
management of DUSA or materially adversely affect the reputation of DUSA, as
determined by the Board in its sole discretion, exercising its reasonable
judgment, or (iii) Christopher’s malfeasance or misconduct such as fraud,
embezzlement, dishonesty, acts of moral turpitude, or a felony conviction, or
for other good cause materially detrimental to DUSA.  In the event of a
termination for cause, Christopher shall be paid his base salary and unused,
accrued vacation pay, prorated to the date of termination. Nothing contained
herein shall be interpreted to impair or otherwise affect the right of DUSA to
terminate Christopher’s employment, at will, with or without good cause.

 

B.            If Christopher’s employment is terminated by DUSA without cause,
DUSA shall:

 

(i)            pay Christopher a severance allowance equivalent to six (6)
months’ then current base salary, payable as a lump sum, within sixty (60) days
following the date of such termination;

 

(ii)           pay to Christopher 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 Christopher for any
business expense incurred by him up to and including the date of such
termination following provision by Christopher of all applicable and necessary
receipts.

 

C.            Termination upon Death:  Christopher’s employment with DUSA will
cease and this Agreement will terminate without further compensation if
Christopher dies. Upon his death, his estate will be entitled to any Corporation
paid death benefit in force at the time of such death.  In addition,
Christopher’s estate shall be paid any cash bonus to which he would have been
entitled under Paragraph 3 above. Likewise,

 

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Christopher’s beneficiaries as designated by him to DUSA shall be entitled to
receive the benefits, if any, described in Paragraphs 5 and 6 above, and will be
entitled to exercise any vested but unexercised stock options that were held by
him at the time of his death, subject to the terms and conditions of such
options.

 

D.            Resignation:  Christopher will provide DUSA with two (2) months’
advance notice, in writing, of his resignation from DUSA.

 

11.           Change of Control: If Christopher’s employment is terminated by
DUSA without cause upon the consummation of a “change in control” as defined
herein, Christopher shall receive, within five (5) days after such termination
from DUSA or its successor, a lump sum payment equal to three (3) times his base
salary during the last fiscal year in which Christopher is associated with DUSA
(including any amounts due as severance under Paragraph 10B.(i) of this
Agreement).  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 DUSA 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
DUSA is or becomes the beneficial owner, directly or indirectly, of securities
of DUSA representing twenty percent (20%) or more of the combined voting power
of DUSA’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 DUSA has occurred; such ownership shall be 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 DUSA merges or consolidates with any other person or, entity other than a
subsidiary and, upon consummation of 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 DUSA are sold or transferred to
another person or entity.

 

12.           Indemnification:  DUSA will, to the extent permitted by the laws
of the State of New Jersey, indemnify Christopher 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 employer and
officer of DUSA.  Such indemnification will include such expenses as attorneys
fees, judgments, fines and amounts awarded or agreed to in settlement, provided
that Christopher acted legally and in good faith, or reasonably believed that
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.

 

13.           Representation Concerning Prior Employment:  Christopher
represents and warrants to DUSA that none of the duties or obligations for which
he is responsible under this Employment Agreement breaches, or will cause him to
breach in the future, any restrictive covenant or confidentiality obligation
under any former employment agreement.

 

14.           Provisions Operating Following Termination:  Notwithstanding any
termination of Christopher’s 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:

 

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To:          Richard C. Christopher

31 Chester Street

Andover, MA 01810

 

To:          D. Geoffrey Shulman, MD, FRCPC, President and CEO

DUSA Pharmaceuticals, Inc.

25 Upton Drive

Wilmington, Massachusetts 01887

 

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 or Sunday 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.

 

17.           Benefit of Agreement:  This Agreement shall inure to the benefit
of and be binding upon the heirs, executives, administrators and legal personal
representatives of Christopher and to and upon the successors and assigns of
DUSA, respectively.

 

18.           Entire Agreement:  This Agreement constitutes the entire agreement
between the parties hereto with respect to the terms and conditions of
employment of Christopher 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.

 

20.  Amendments and Waivers:  Any provision of this Agreement may be amended or
waived only with prior written consent of DUSA and Christopher.

 

*****

 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement.

 

ATTEST:

DUSA PHARMACEUTICALS, INC.

 

 

 

 

/s/ Mark C. Carota

 

By:

/s/ D. Geoffrey Shulman

 

 

D. Geoffrey Shulman, MD, FRCPC

 

 

President and CEO

 

 

 

 

Dated: 1/30/04 

 

 

 

 

WITNESS:

EMPLOYEE:

 

 

 

 

/s/ Marianne Mullin

 

By:

/s/ Richard C. Christopher

 

 

 

Richard C. Christopher

 

 

 

Dated: 1/16/04

 

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