EXHIBIT 10.(x)


 


EMPLOYMENT AGREEMENT


 


This Agreement (“Agreement”) made as of this 31st
day of July, 2001, between DUSA Pharmaceuticals, Inc., a New Jersey corporation
(“DUSA”) and Paul A. Sowyrda (“Sowyrda”).


 


WHEREAS, Sowyrda has been employed by DUSA since March 30,
2000, and


 


WHEREAS, DUSA and Sowyrda wish to enter this Agreement
for their mutual benefit.


 


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


 


1.                                       Employment:  DUSA
hereby employs Sowyrda and he hereby accepts such employment as the Vice
President, Product Development and Marketing. 
Sowyrda 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
product development and marketing affairs of DUSA.  Sowyrda shall report to the President of
DUSA.


 


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


 


A.                                   the
supervision and oversight of all product development programs;


 


B.                                     the
supervision and oversight of all marketing initiatives for DUSA’s products;


 


C.                                     identify
opportunities for market penetration, revenue growth and profitability of DUSA’s
products;


 


D.                                    identification
of corporate partnering opportunities to co-develop and market DUSA’s products;
and


 


E.                                      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 Sowyrda a base salary equal to One Hundred Sixty Four Thousand
Eight Hundred ($164,800.00) Dollars 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,
2002.  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 Sowyrda 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
Sowyrda’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 of Product Development and Marketing, Sowyrda will
operate primarily from the offices of DUSA located in Wilmington, MA.  Sowyrda


 





















 


acknowledges,
however, that there will be domestic and international travel required on a
regular basis.  Such travel is understood
to be necessary in order to promote the business of DUSA.


 


5.                                       Benefits:  Sowyrda
will be entitled to participate in the medical, disability, life, 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: 
Sowyrda 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: Sowyrda 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.  Sowyrda shall not be entitled to carry over
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
Sowyrda 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.  If such expenses are
paid in the first instance by Sowyrda, 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.                                   Sowyrda
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.  Sowyrda 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 Sowyrda’s
possession or under his control, whether prepared by Sowyrda or others, will be
left with or immediately returned to DUSA by Sowyrda.


 


C.                                     (i)                                     Sowyrda
shall promptly disclose to DUSA any and all prescription drug products,
devices, machines, methods, inventions, discoveries, improvements, processes,
works or the like (all of which are referred to herein as “inventions”) which
he


 


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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 Sowyrda in a fiduciary capacity for, solely for the benefit of, DUSA.


 


(iii) With respect to all such inventions, Sowyrda
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 Sowyrda prior to his employment or consultancy with DUSA;


 


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


 


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


 


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


 


E.                                      If
Sowyrda’s employment is terminated by Sowyrda, Sowyrda 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


 


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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 Sowyrda
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
Sowyrda 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 Sowyrda a “stockholder” within the
meaning of that term as used in this paragraph, so long as Sowyrda 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) Sowyrda’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) Sowyrda’s conviction in a court
of law of a crime or offense, which conviction would prevent Sowyrda 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) Sowyrda’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,
Sowyrda shall be paid his base salary, pro rated to the date of termination.  Nothing contained herein shall be interpreted
to impair or otherwise affect the right of DUSA to terminate Sowyrda’s
employment, at will, with or without good cause.


 


B.                                     If
Sowyrda’s employment is terminated by DUSA without cause [after he has been
employed by DUSA for at least twelve (12) months], DUSA shall:


 


(i)                                     pay
Sowyrda a severance allowance equivalent to twelve (12) month’s then current
base salary, payable as a lump sum, within sixty (60) days following the date
of such termination;


 


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


 


C.                                     Termination
upon Death:  Sowyrda’s employment with
DUSA will cease and this Agreement will terminate without further compensation
if Sowyrda 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, Sowyrda’s estate shall be paid
any cash bonus to which he would have been entitled under Paragraph 3 above.
Likewise, Sowyrda’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.


 


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


 


11.                                 Change of Control: If Sowyrda’s employment is terminated by
DUSA without cause upon the consummation of a “change in control” as defined
herein, Sowyrda 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 Sowyrda 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
Sowyrda 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 Sowyrda 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:  Sowyrda 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 Sowyrda’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:


 


	
  To:

  	
  Paul A. Sowyrda

  
	
   

  	
  2 Tubwreck Drive

  
	
   

  	
  Medfield, MA 02052

  
	
   

  	
   

  
	
  To:

  	
  D. Geoffrey Shulman, MD, FRCPC, President

  
	
   

  	
  DUSA Pharmaceuticals, Inc.

  
	
   

  	
  25 Upton Drive

  
	
   

  	
  Wilmington, Massachusetts 01887

  



 


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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 enure to the benefit of and be binding upon the
heirs, executives, administrators and legal personal representatives of Sowyrda
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 Sowyrda 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 Sowyrda.


 


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


 


	
  ATTEST:

  	
  DUSA
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  John E. Mattern

  	
   

  	
  By:

  	
  /s/
  D. Geoffrey Shulman

  
	
   

  	
   

  	
  D.
  Geoffrey Shulman, MD, FRCPC

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Dated:
  10/31/01

  
	
   

  	
   

  
	
  WITNESS:

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Marianne Mullin

  	
   

  	
  By:

  	
  /s/
  Paul A. Sowyrda

  
	
   

  	
   

  	
   

  	
  Paul
  A. Sowyrda

  
	
   

  	
   

  
	
   

  	
   Dated:
  10/4/01

  



 


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