Exhibit 10.01

 
AGREEMENT
 
THIS AGREEMENT, made this 18th day of March, 2011 by and between Derma Sciences,
Inc., a business corporation organized under the laws of the Commonwealth of
Pennsylvania (“Employer”), and Edward J. Quilty (“Employee”).
 
WHEREAS, Employee is currently employed by Employer as its President and Chief
Executive Officer pursuant to that certain agreement dated as of March 31, 2009,
as amended (the “March 2009 Agreement”), and
 
WHEREAS, the parties desire to further extend the term of, and amend and
restate, the March 2009 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 President and Chief Executive Officer 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.     Amendment and Restatement.  This Agreement amends, restates and replaces
the March 2009 Agreement.
 
3.     Time and Efforts.  Employee will devote substantially all of his business
time and efforts to his duties hereunder.
 
4.     Compensation.  During the Term hereof Employer shall pay compensation to
Employee as follows:
 
 (a)       Base compensation at the rate of Three Hundred Sixty-Seven Thousand
Seven Hundred Ten Dollars ($367,710) per year effective January 1, 2011;
 
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  (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, 2012 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
one year’s base compensation, from the date of said termination or expiration,
as applicable, at the rate most recently in effect pursuant to paragraph 4(a)
hereof.
 
 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 mean a change in ownership of
stock possessing greater than fifty percent (50%) of the total combined voting
power of all classes of stock entitled to vote of Employer.
 
 
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8.     Compensation Subject to IRC Section 409A.  If, and to the extent, any
portion of the severance compensation payable hereunder exceeds the amount
immediately payable upon separation from service under Internal Revenue Code
Section 409A(a)(2) and regulations thereunder (such compensation, “Excess
409A(a)(2) Compensation”), then no portion of the Excess 409A(a)(2) Compensation
shall be payable prior to the earlier of (i) the Employee’s date of death, or
(ii) the date which is six months after the date of the Employee’s separation
from service.
 
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 expiration thereof as set forth in the option instrument.
 
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.
  
 
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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/Stephen T. Wills
 
Stephen T. Wills
 
Lead Director
 
EMPLOYEE:
 
/s/Edward J. Quilty
Edward J. Quilty

 
 
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