Document:

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

 

 

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,

 

2

 

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.

 

3

 

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,

 

4

 

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:

 

5

 

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.

 

*****

 

6

 

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

  

 

7Exhibit 10.(z)

 

EMPLOYMENT AGREEMENT

 

This
Agreement (“Agreement”) made as of this 29th day of December, 2004, between
DUSA Pharmaceuticals, Inc. (the “COMPANY”) having offices at 25 Upton Drive,
Wilmington, Massachusetts 01887 and Robert F. Doman, currently residing at 28
Longview Lane, Newtown Square, Pennsylvania 19073 (“Doman”).

 

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

 

1.             Employment:  The COMPANY hereby employs Doman effective
January 3, 2005 and he hereby accepts such employment as of such date as the
President and Chief Operating Officer of the COMPANY.  Doman 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 operations and day-to-day affairs of the COMPANY. Doman shall
report to the Chief Executive Officer of the COMPANY.  Doman agrees to abide by the COMPANY’s
Business Code of Ethics and Senior Officers Code of Ethics as in force from
time to time.

 

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

 

A.           Be responsible for the general business affairs of the
COMPANY, including the manufacturing, research and development, sales and
marketing activities;

 

B.             Establish strong lines of communication with all key
employees and build an open, positive, highly motivated team with a
customer-focused attitude;

 

C.             Effectively manage all aspects of profits/losses to insure
that financial objectives are met;

 

D.            Provide guidance and direction in critical business
areas including financial analysis, cost control, productivity, process
improvements, business development, marketing, sales and strategic planning;

 

E.              Closely interact with and effectively focus the
development team on developing additional products that will accelerate the
future success of the COMPANY;

 

F.              Be proactive in maximizing business development
efforts including joint business ventures, co-marketing, technology sharing and
product/technology acquisition opportunities;

 

G.             Provide thoughtful and objective input to the Chief
Executive Officer and Board of Directors; and

 

H.            Be
responsible for any additional activities assigned by the Chief Executive Officer
or Board of Directors, from time to time, which are within Doman ‘s expertise.

 

3.             Remuneration:  The COMPANY will pay to Doman an initial base
salary equal to Three Hundred Thousand Dollars ($300,000) per annum at
intervals consistent with the COMPANY’s administrative practices, from time to
time.  This base salary shall be reviewed
by

 

 

the Board of Directors of
the COMPANY from time to time, not less than on an annual basis, beginning in
January, 2006; provided, however, that during his tenure with the COMPANY,
Doman’s base salary shall not be reduced. 
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 Doman in an amount up to Forty percent (40%) 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 his employment.  The Board may, in its sole discretion, award
an annual cash bonus above Forty (40%) of Doman’s 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 President and Chief Operating Officer,
Doman will operate primarily from the offices of the COMPANY  in Wilmington, Massachusetts.  Doman 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 the COMPANY.

 

5.             Benefits: Doman
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 the COMPANY from time to time,
subject to applicable eligibility rules thereof.

 

6.             Stock Options:
Doman shall be entitled to participate in the 1996 Omnibus Plan, which includes
a stock option plan, and any subsequent stock purchase and bonus or incentive
plans that the COMPANY shall from time to time make available to its officers
and employees, subject to applicable eligibility rules thereof.  Management of the COMPANY agrees to recommend
to the Compensation Committee that Doman be granted options for up to One
Hundred Thousand (100,000) shares of the COMPANY’s common stock pursuant to the
vesting and other provisions of the Plan with the exercise price of Fifty
Thousand (50,000) of such options being based upon the closing price of the
Company’s shares on the NASDAQ Stock Market at the close of business on January
3, 2005, and the exercise price of the remaining Fifty Thousand (50,000) being
based upon the closing price on the close of business two (2) business days
following the Company’s press release reporting sales for the year ended
December 31, 2004.

 

7.             Vacation: Doman
shall be entitled to four (4) weeks of vacation during each year of employment,
to be taken at a time or times acceptable to the COMPANY, having regard to its
operations. Doman shall be entitled to carry over up to two (2) weeks of 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:

A.            All reasonable travel and other
expenses incident to the rendering of services by on behalf of and in promoting
the interests of the COMPANY shall be paid by the COMPANY, including but not
limited to an automobile allowance in the amount of  Eight Hundred ($800.00) per month, plus
insurance and mileage reimbursement at rates set by the Internal Revenue Service
for travel relating to business of the COMPANY. 
If such expenses are paid in the first instance by Doman, the COMPANY
agrees that it will reimburse him therefore upon presentation of appropriate
statements, vouchers, bills and invoices as and when required by the COMPANY to
support the reimbursement request.

 

2

 

So long as Doman remains employed by DUSA,  the COMPANY shall provide Doman with
appropriate housing in the Boston vicinity which shall be subject to Doman’s
approval.  The parties expect that
suitable housing shall cost approximately Three Thousand Dollars ($3,000) per
month, but  if such expectation does not
turn out to be accurate, then the parties 
agree to adjust the monthly amount either higher or lower by a
reasonable amount as appropriate.  In
addition, the COMPANY  shall reimburse
Doman for the costs of incidental moving expenses not to exceed the lesser of
(i) the actual incidental moving expenses for furniture and clothing and other
personalty, or (ii) one month’s salary (i.e., $25,000).  DUSA shall pay such amount upon presentation
by Doman of receipts, invoices, etc. to reasonably substantiate such actual
expenses.

 

In the event that the parties cannot agree on
appropriate housing, the length of the term for which this benefit will
continue, or a monthly allowance in lieu of the housing provision above, the
COMPANY will provide the following relocation assistance:

 

All closing costs for the sale and purchase of housing
as listed on the respective

HUD-1, RESPA statements;

Packing and moving costs of household items;

Interim living expenses up until the time of the sale
of Doman’s home;

Mortgage differential costs for housing, similar to
Doman’s current residence, in

the Boston vicinity.

Incidental moving expenses as provided above.

Above expenses to be “grossed up” to Doman.

 

9.             Confidential Information:

 

A. Doman understands that in the performance of his
services hereunder he may obtain knowledge of “confidential information”, as
hereinafter defined, relating to the business of the COMPANY.  As used herein, “confidential information”
means any information (whether clinical, financial, administrative or
otherwise), written or oral, (including without limitation, any formula,
pattern, device, method, plan, process, or compilation of information) which
(i) is, or is designed to be, used in the business of the COMPANY 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 the COMPANY an opportunity to obtain an advantage over competitors
who do not know or use it.  Doman 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 the COMPANY (except to consultants or other agents or
representatives of the COMPANY who are similarly bound to the COMPANY 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 the COMPANY any such confidential information or
any property or material which relates thereto.

 

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

 

C.            (i)            Doman shall promptly disclose to the
COMPANY 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 may invent, conceive,
produce, or reduce to practice, either solely

 

3

 

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 the COMPANY 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 the COMPANY, shall at all times and for all purposes be
regarded as acquired and held by in a fiduciary capacity for, solely for the
benefit of, the COMPANY.

 

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

 

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

 

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

 

(c)           execute
any application for letters patent of the United States and of any and all
other countries covering such inventions, and give to the COMPANY, 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 the COMPANY, but without
charge for services beyond the salary paid to him by the COMPANY, execute all
assignment or other instruments required to transfer and assign to the COMPANY
(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 the
COMPANY;

 

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

 

(f)            in
case the COMPANY 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 Doman prior to his employment with the COMPANY;

 

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

 

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

 

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

 

4

 

E.             If
Doman ‘s employment is terminated by the Company, Doman shall not, without the
express prior written consent of the COMPANY, 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 the COMPANY’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 Doman has disclosed to the COMPANY,
in writing, all the known facts relating to such work or activity and has
received a release, in writing from the COMPANY, 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 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 Doman a “stockholder” within the meaning of that
term as used in this paragraph, so long as Doman has no participation in the
management of such corporation.  Nor
shall Doman solicit or hire, directly or indirectly, any employee of the
COMPANY for a period of two (2) years after the date of termination of his
employment to perform any such activities for his own benefit or the benefit of
any new employer.

 

F.             In
the event of a breach or threatened breach of this Section 9, Doman agrees that
the COMPANY shall be entitled to injunctive relief in a court of appropriate
jurisdiction to remedy any such breach or threatened breach as Doman
acknowledges that damages would be inadequate and insufficient.

 

10.           Termination of Employment:

 

A.            The
COMPANY 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) Doman ‘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) Doman ‘s conviction in a court of law
of a crime or offense, which conviction would prevent Doman from effective
management of the COMPANY or materially adversely affect the reputation of the
COMPANY, as determined by the Board in its sole discretion, exercising its
reasonable judgment, or (iii) Doman ‘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 the COMPANY.  In the event of a termination for cause,
Doman 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 the COMPANY to terminate Doman ‘s
employment, at will, with or without good cause.

 

B.            If
Doman ‘s employment is terminated by the COMPANY without cause  the COMPANY shall:

 

(i)            pay
Doman a severance allowance equivalent to twelve (12) month’s of his then
current base salary, payable in twelve (12) equal installments on the first
business day of each of the twelve (12) month’s following the date of such
termination;

 

(ii)           pay
to Doman 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 Doman for any business expense incurred by

 

5

 

him up
to and including the date of such termination following provision by of all
applicable and necessary receipts.

 

(iii)          Doman will be entitled to continued
medical, life insurance and benefits to the same extent in which he
participated prior to the termination date until the earlier to occur of one
year following the termination date or the day Doman becomes eligible for and
receives similar benefits with a new employer.

 

(iv)          As a condition to receiving the
severance payment and post-employment benefits, Employee agrees to sign a
release of any employment law related claims. 
The release will be signed at the time of termination of employment.

 

C.            Termination
upon Death: Doman ‘s employment with the COMPANY will cease and this Agreement
will terminate without further compensation if Doman 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, Doman ‘s
estate shall be paid any cash bonus to which he would have been entitled under
Paragraph 3 above. Likewise, Doman ‘s beneficiaries as designated by him to the
COMPANY 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:
Doman will provide the COMPANY with two (2) months’ advance notice, in writing,
of his resignation from the COMPANY.

 

11.           Change of Control: If
Doman ‘s employment is terminated by the COMPANY without cause upon the
consummation of a “change in control” as defined herein or at any time within
three (3) years following such consummation, Doman shall receive, within five
(5) days after such termination from the COMPANY or its successor, a lump sum
payment equal to (i) three (3) times his base salary during the last fiscal
year in which Doman is associated with the COMPANY (including any amounts due
as severance under Paragraph 10B.(i) of this Agreement) if such termination is
made effective on the date of consummation of such “change of control”, or (ii)
three (3) times such base salary (including any amounts due as severance under
Paragraph 10B.(i) of this Agreement) less the amount of salary paid from the
date of such consummation to the effective date of termination if such
termination is effective following such consummation but within the three years
of such consummation; provided, however Doman shall be entitled to any  amounts due as severance under Paragraph
10B.(i) of this Agreement, immediate vesting of all stock options, and
continued medical life insurance and benefits to the same extent in which he participated
prior to the “change of control” until the earlier to occur of one (1) year
following the “change of control” or the date Doman becomes eligible for and
receives similar benefits with a new employer. 
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 COMPANY 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 COMPANY is or becomes the beneficial owner, directly or
indirectly, of securities of the COMPANY representing twenty percent (20%) or
more of the combined voting power of the COMPANY’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 COMPANY has occurred;
such ownership shall be defined pursuant to Rule 13d-3 of the

 

6

 

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 COMPANY
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 the COMPANY are sold or transferred to
another person or entity.

 

In the event  a “change
of control” as defined above occurs under subsections (i)-(iii) above and the
surviving entity has conditioned the “change of control” on Doman not being
employed by the COMPANY or Doman has good cause (“Good Cause”), acting in good
faith, not to accept the position offered by the new entity Doman shall receive
within five (5) days after the consummation of 
a “change of control”, as defined above, from the COMPANY or its
successor, a lump sum payment equal to three (3) times his base salary during
the last fiscal year in which Doman is associated with the COMPANY (including
any amounts due as severance under Paragraph 10B.(i) of this Agreement)
immediate vesting of all stock options and continued medical, life insurance
and benefits to the same extent in which he participated prior to the “change
in control” until the earlier to occur of one year following the “change of
control” or the day Doman becomes eligible for and receives similar benefits
with a new employer.  For purposes of
this Section 11, Good Cause shall mean (i) a reduction by the new entity of
Doman’s base salary, compensation and/or benefits in effect immediately prior
to the change in control or (ii) a requirement by the new entity that Doman
physically relocate his home to a place fifty (50) miles or more from Boston,  or Wilmington, MA or (iii) the new position
materially reduces the scope of his current duties and responsibilities at the
COMPANY.

 

12.           Indemnification:  The COMPANY will, to the extent permitted by
the laws of the State of New Jersey, indemnify Doman 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 the COMPANY.  Such indemnification
will include such expenses as attorneys fees, judgments, fines and amounts
awarded or agreed to in settlement, provided that Doman 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.

 

The COMPANY shall maintain its Director’s and Officer
Insurance to cover the corporate indemnity. 
The Directors and Officer Policy shall also include an employment
practices liability endorsement and the policy will survive his death.

 

13.           Representation Concerning
Prior Employment: Doman represents and warrants to the COMPANY 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.           Assistance in Litigation:  Doman shall upon reasonable notice, furnish
such information and proper assistance to the COMPANY as it may reasonably
require in connection with any litigation in which it is, or may become, a
party either during or after employment.

 

15.           Provisions Operating
Following Termination: 
Notwithstanding any termination of 
Doman’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.

 

7

 

16.           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:          Robert F. Doman

28
Longview Lane

Newtown
Square, Pennsylvania 19073

 

To:          DUSA Pharmaceuticals, Inc.

25
Upton Drive

Wilmington,
Massachusetts 01887

Attention:
D. Geoffrey Shulman

 

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.

 

17.           Governing Law:  This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey.

 

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

 

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

 

20.           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.

 

21.  Amendments and Waivers:  Any provision of this Agreement may be
amended or waived only with prior written consent of the COMPANY and Doman.

 

8

 

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

 

	
   

  	
  DUSA
  Pharmaceuticals, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/
  D. Geoffrey Shulman

  	
   

  
	
   

  	
   

  	
  D. Geoffrey
  Shulman, Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: March 15,
  2005

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Robert F. Doman

  	
   

  
	
   

  	
   

  	
  Robert F. Doman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated: March 15,
  2005

  

 

9

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