Document:

EXHIBIT 10.(aa)

 

EMPLOYMENT AGREEMENT

 

This
Agreement (“Agreement”) made as of this 15th day of  February, 2005, between DUSA Pharmaceuticals,
Inc. (the “COMPANY”) having offices at 25 Upton Drive, Wilmington,
Massachusetts 01887 and Gary Talarico, currently residing at  8 Baer Court, Morristown, New Jersey 07960 (“Talarico”).

 

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

 

1.                                       Employment:  The
COMPANY hereby employs Talarico effective February 16, 2005 and he hereby
accepts such employment as of such date as the Vice President, Sales of the
COMPANY.  Talarico 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 sales activities of the COMPANY.
Talarico shall report to the President and Chief Operating Officer of the
COMPANY.  Talarico 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, Talarico
shall (by way of example and not by way of limitation):

 

A.           Be responsible for the management of  all sales activities and sales employees,
including without limitation, management of foreign sales and distribution
relationships of the COMPANY;

 

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

 

C.             Effectively manage all aspects of budget and reporting
of sales activities in order to meet financial objectives;

 

D.            Work with the COMPANY’s management team to establish
annual sales goals and budgets;

 

E.              Provide thoughtful and objective input to the
President and Chief Operating Officer and other members of the management team;
and

 

F.              Be
responsible for any additional activities assigned by the President and Chief
Operating Officer, from time to time, which are within Talarico’s expertise.

 

3.                                       Remuneration:  The
COMPANY will pay to Talarico an initial base salary equal to One Hundred
Seventy-five Thousand Dollars ($175,000) 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, Talarico’s base salary, and the potential maximum amount of his
commission shall not be reduced assuming the COMPANY’s sales targets are
achieved (although it is understood that the tiers and commission schedule
shall likely change on no less than an annual basis depending on the COMPANY’s
needs) unless mutually agreed upon by the parties, in writing.

 

 

In addition, you shall
receive a sign-on bonus in the amount of Fifteen Thousand Dollars ($15,000)
which shall be payable in the first payroll after the effective date of your employment.
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, Talarico may be
entitled to commissions of up to an additional One Hundred Fifty Thousand
Dollars ($150,000) based on the sales targets to be set by DUSA.  The Kerastick® unit
sales targets, together with the commission to be earned per Kerastick® and the applicable range (tiers) of actual volume sales
achieved for calendar year 2005 are set forth on the quarterly schedules
attached to and made a part of this Agreement as Schedule A. Commissions shall
be earned on a per unit sale basis of each Kerastick® at
the rate set forth opposite the appropriate sales volume achieved (by Tier);
provided, however that Talarico must be employed by the COMPANY at the end of
each quarter in order to be eligible to receive any commissions for such
quarter.  Commissions shall be calculated
on a year-to-date basis at the end of each fiscal quarter and shall be
cumulative from January 1, 2005 through the end of the quarter for which the
commission calculation is being performed. 
Commissions earned in prior quarters will be deducted from the current
quarter calculation.  DUSA may hold back
up to Twenty percent (20%) of the commissions earned in any quarter, provided,
however, that at the end of the third fiscal quarter of any year, DUSA will
reexamine Talarico’s volume achievement and may reduce such hold back.  For 2005, DUSA agrees to award commissions to
you in the amount of at least Twenty-five Thousand Dollars ($25,000).  The Board may award additional cash bonuses
to Talarico 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.

 

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: 
Talarico will operate primarily from his home office. Talarico
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 and sell the COMPANY’s products.

 

5.                                       Benefits: Talarico 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: Talarico 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 Talarico be granted
options for up to Thirty Thousand (30,000) shares of the COMPANY’s common stock
pursuant to the vesting and other provisions of the Plan with the exercise
price of being based upon the closing price of the Company’s shares on the
NASDAQ Stock Market at the close of business on his full day of employment.

 

7.                                       Vacation: Talarico 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. Talarico 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.

 

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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
Six Thousand ($6,000.00) per year, plus 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 Talarico, 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.

 

9.                                       Confidential Information:

 

A.
Talarico 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.  Talarico 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 Talarico’s possession or under his control, whether prepared by
Talarico or others, will be left with or immediately returned to the COMPANY by
Talarico.

 

C.                                     (i)                                     Talarico
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                                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, Talarico
shall:

 

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

 

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(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 if such
testimony is required subsequent to a termination of his employment, Talarico
shall be compensated at a reasonable hourly rate for his time; 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 Talarico prior to his employment or consultancy with the COMPANY;

 

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

 

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

 

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

 

E.                                      If
Talarico ‘s employment is terminated by the Company, Talarico 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 Talarico
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

 

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exchange or (ii) having
at least 100 stockholders shall not make Talarico a “stockholder” within the
meaning of that term as used in this paragraph, so long as Talarico has no
participation in the management of such corporation.  Nor shall Talarico 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, Talarico 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 Talarico
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) Talarico ‘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) Talarico ‘s conviction in a court of
law of a crime or offense, which conviction would prevent Talarico 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) Talarico ‘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, Talarico 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 Talarico’s employment, at will, with or without good cause.

 

B.                                     If
Talarico’s employment is terminated by the COMPANY without cause (which shall
include by way of example, and not limitation, a reduction of Talarico’s base
salary or potential maximum commission without his agreement, or a material
reduction in the scope of his current duties and responsibilities), the COMPANY
shall:

 

(i)                                     pay
Talarico a severance allowance equivalent to six (6) month’s of his then
current base salary, payable in six (6) equal installments on the first business
day of each of the six (6) months following the date of such termination;

 

(ii)                                  pay
to Talarico within two (2) weeks of the date of termination all outstanding
vacation pay and any earned but unpaid salary, commissions or bonuses to the
date of such termination and reimburse Talarico for any business expense
incurred by him up to and including the date of such termination following
provision by of all applicable and necessary receipts.

 

(iii)                               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: Talarico’s employment with the COMPANY will cease and this Agreement
will terminate without further compensation if Talarico 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,
Talarico’s estate shall be paid any commissions earned or cash bonus to which
he would have been entitled under Paragraph 3 above. Likewise, Talarico ‘s
beneficiaries as designated by him to the COMPANY shall

 

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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:
Talarico will provide the COMPANY with two (2) months’ advance notice, in
writing, of his resignation from the COMPANY.

 

11.                                 Change of Control: If Talarico ‘s employment is terminated
by the COMPANY without cause (which shall include by way of example, and not
limitation, a reduction of Talarico’s base salary or potential maximum
commission without his agreement, or a material reduction in the scope of his
current duties and responsibilities) upon the consummation of a “change in
control” as defined herein or at any time within three (3) years following such
consummation, Talarico shall receive, within five (5) days after such
termination 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 Talarico
is associated with the COMPANY (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 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 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.

 

12.                                 Indemnification:  The
COMPANY will, to the extent permitted by the laws of the State of New Jersey,
indemnify Talarico 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 Talarico 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: Talarico
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: 
Talarico 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.

 

6

 

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

 

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:                              Gary
Talarico

8 Baer
Court

Morristown,
New Jersey 07960

 

To:                              DUSA
Pharmaceuticals, Inc.

25
Upton Drive

Wilmington,
Massachusetts 01887

Attention:
Robert F. Doman

 

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
Talarico 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 Talarico and
cancels and supersedes any prior understandings and agreements between the
parties to this Agreement, including, but not limited to a certain Consulting
Agreement dated November 30, 2004.  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 Talarico.

 

7

 

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

 

	
   

  	
  DUSA
  Pharmaceuticals, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert F.
  Doman

  	
   

  
	
   

  	
   

  	
  Robert F. Doman,
  President and

  	
   

  
	
   

  	
   

  	
  Chief Operating
  Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dated:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary Talarico

  	
   

  
	
   

  	
   

  	
  Gary Talarico

  
	
   

  	
   

  
	
   

  	
  Dated: 

  	
  2/15/05

  	
   

  
							

 

8EXHIBIT
10.(bb)

 

SEVERANCE
AGREEMENT AND GENERAL RELEASE

 

This Agreement and
General Release (“Agreement and Release”) is made by and between Peter
Chakoutis (“Chakoutis”) and DUSA Pharmaceuticals, Inc. (“DUSA”) as of February
25, 2005.

 

WHEREAS,
DUSA has employed Chakoutis full-time as its Vice President and Chief Financial
Officer since January 1, 2004; and

 

WHEREAS, DUSA
and Chakoutis entered into a certain letter agreement dated November 3, 2004
(the “November 3rd Letter”) providing for the eventual termination
of Chakoutis’ employment with DUSA and provided the form of certain severance
arrangements in Exhibits 2 and 3 attached thereto to be signed on or about
January 1, 2005 and March 31, 2005 respectively; and

 

WHEREAS,
DUSA and Chakoutis wish to replace, in their entirety, such Exhibits with this
Agreement and Release; and

 

WHEREAS,
DUSA and Chakoutis wish to confirm the exclusive terms of Chakoutis’ separation
from his full-time employment with DUSA, and to settle, release and discharge
with prejudice, any and all claims or issues arising out of Chakoutis’
employment with DUSA and his separation from that employment.

 

NOW
THEREFORE, in consideration of the mutual commitments set
forth in this Agreement and Release, DUSA and Chakoutis agree as follows:

 

1.                                       Separation from Employment.

 

1.1                                 Chakoutis’
full-time employment with DUSA will end by mutual agreement as of March 31,
2005 (hereinafter, the “Separation Date”). 
Until that time, Chakoutis agrees that he will remain employed on a
full-time basis and will continue to serve as Vice President and Chief
Financial Officer, without interruption from service, during the period from
January 1, 2005 (nunc pro tunc) through March 31, 2005 (the “Extended
Employment Period”) should DUSA, in its sole and independent discretion, wish
to employ or otherwise utilize Chakoutis’ services during that period.  Notwithstanding the foregoing, Chakoutis
agrees that he will relinquish the title of Chief Financial Officer before
March 31, 2005 if an internal candidate is selected by DUSA to assume the
position of Chief Financial Officer. 
Chakoutis will be paid a base salary at the rate of $155,000 per year,
and car allowance, less all applicable taxes and other required or elected
withholdings, and will accrue vacation or otherwise receive benefits in
accordance with DUSA’s policies and practices.

 

1.2                                 Except
as otherwise specifically provided in this Agreement and Release, any duties

 

 

or obligations of DUSA
pursuant to Chakoutis’ employment or his separation from that employment, are
completely extinguished as of the Separation Date.

 

1.3                                 Additionally,
all of Chakoutis’ duties and obligations to DUSA are extinguished as of the
Separation Date, with the exception of the non-compete, confidentiality
obligations and the indemnification provisions more fully set forth in
Paragraphs 9 and 12, respectively, of the Employment Agreement dated January 1,
2004 which remain in full force and effect pursuant to their terms.

 

2.                                       Payments and Other Benefits to Be Provided by DUSA
in Consideration of this Agreement and Release and Chakoutis’ Agreement to Sign
the Final Agreement.

 

2.1                                 In
exchange for and in consideration of Chakoutis’ promises and covenants as set
forth in this Agreement and Release, and contingent upon DUSA’s receipt of an
unrevoked original thereof, fully-executed by Chakoutis, DUSA agrees to provide
Chakoutis, on behalf of all Released Parties, with a Severance Payment and
other benefits, as further defined herein, which Chakoutis agrees constitute
good and adequate consideration in exchange for his promises contained herein.

 

2.2                                 In
exchange for and in consideration of Chakoutis’ promises, covenants and general
release set forth in the November 3rd Letter which were fulfilled as
of December 31, 2004, subject to the terms stated therein, and within fourteen
(14) calendar days following the Effective Date (as defined herein) of this
Agreement and Release, DUSA agrees to provide Chakoutis with a gross payment in
the amount of $33,750, less all
applicable federal, state and local taxes and other required or elected
withholdings, representing an amount equal to three (3) months of pay at the
annualized salary rate of One Hundred Thirty-Five Thousand and 00/100
($135,000) per year (the “Severance Payment”). Receipt of such payment is
hereby acknowledged.

 

2.3                                 In
further consideration of Chakoutis’ promises, covenants and general release set
forth in the November 3rd Letter which were fulfilled as of December
31, 2004, subject to the terms stated therein, DUSA confirms that the terms of
Chakoutis’ existing options to purchase DUSA common stock have been extended as
described in Exhibit 1 to this Agreement and Release.

 

2.4                                 In
further consideration of Chakoutis’ promises, covenants and general release set
forth in this Agreement and Release, DUSA will also make a payment to Chakoutis
in the amount of $9,355.98, less taxes and other required or elected
withholdings, representing payment for 144.16 hours of accrued, unused vacation
time at the annual salary rate of One Hundred Thirty-Five Thousand and 00/100
($135,000), which was the value of Chakoutis’ vacation time accrued through
December 31, 2004.  Receipt of such
payment is hereby acknowledged.

 

2

 

2.5                                 Provided
that Chakoutis remains available to work during the Extended Employment Period
as requested by DUSA, and contingent upon his good faith execution of any
duties assigned to him by DUSA during that period, DUSA also agrees to present
and offer to Chakoutis on March 31, 2005 the Final Agreement that is attached
as “Exhibit 2” to this Agreement and Release, for his consideration, acceptance
and execution in accordance with its terms.

 

2.6                                 Chakoutis
acknowledges that the payments and benefits afforded to him through this
Agreement and Release, including the Severance Payment, are greater than any
payments, benefits or other consideration to which he may presently be
entitled, including: (1) pursuant to any express or implied agreement, contract
or understanding with DUSA; or (2) under any prior or current DUSA policies,
practices or employee benefit plans, including but not limited to compensation,
vacation, bonus, severance, or other fringe benefit plans. In addition, DUSA
acknowledges that the transition period and offer to remain employed during the
Extended Employment Period is significant and exceed what would normally be
provided as notice. Further, except as expressly provided in this Agreement and
Release, after the Separation Date, Chakoutis will not accrue or be entitled to
any employee benefit, bonus, award, vacation, scheduled time off, or other
fringe benefit under any policy or plan maintained by DUSA for full-time
employees.

 

3.                                       Release and Covenant Not to Sue.

 

3.1                                 Upon
execution of this Agreement and Release and its Effective Date, and in
consideration of the payments and other benefits described herein, Chakoutis,
on behalf of himself, his spouse, his heirs, executors, administrators,
assigns, agents and representatives, hereby unconditionally releases and
completely and forever discharges DUSA, as well as the present and former
officers, directors, employees, attorneys, and agents of each of these
entities, individually and in their official capacities, and any of their
employee 401(k) or other employee benefit plans as well as the administrators,
fiduciaries, parties-in-interest, employees, agents, attorneys and trustees of
any such plans (collectively referenced throughout this Agreement and Release
as the “Released Parties”), from any and all of the following claims, prayers
for relief  or alleged damages that arose
or existed before the date Chakoutis executes this Agreement and Release
for:  (1) any and all claims, issues,
prayers for relief and any other causes of action including, but not limited
to, all claims relating to common law tort, harassment, retaliation, promissory
or equitable estoppel, negligence, wrongful or constructive discharge,
defamation, tortious interference with economic advantage, negligent or
intentional infliction of emotional distress, invasion of privacy, breach of
any express or implied agreement, contract, policy or other understanding,
breach of any covenant of good faith and fair dealing, breach of public policy,
loss of consortium, fraud, battery, assault, medical, physical, emotional and
psychological injuries or damages, including all claims for attorneys’ fees and
costs;

 

3

 

and (2) any and all
claims, issues, prayers for relief and any other causes of action arising under
any federal, state and/or local employment laws, regulations or ordinances,
including, but not limited to, claims under the Employee Retirement Income
Security Act, 29 U.S.C. 1001, et seq. (“ERISA”),
Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000 (e), et seq. (“Title VII”); the Civil
Rights Act of 1991, 42 U.S.C. §§ 1981, 1983, 1985, 1986 and 1988; the Age
Discrimination in Employment Act, 29 U.S.C. § 621, et seq.
(“ADEA”); the Vietnam Era Veterans Readjustment Assistance Act of 1974, 38
U.S.C. § 2012, et seq. (“VERRAA”); the
Americans With Disabilities Act, 42 U.S.C. § 12101, et seq.
(“ADA”); the Occupational Safety and Health Act, 29 U.S. § 651, et seq. (“OSHA”); the Older Workers Benefit Protection Act,
29 U.S.C. § 626(f), et seq. (“OWBPA”);
the Consolidated Omnibus Budget Reconciliation Act, 29 U.S.C. § 1161, et seq. (“COBRA”); the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. § 2101, et seq. (“WARN”); the Federal Family and Medical Leave Act, 29 U.S.C. §2601,
et seq. (“FMLA”); the Equal Pay Act of
1963, et seq. (“EPA”); the Rehabilitation Act
of 1973, 29 U.S.C. § 701, et seq.; the
Fair Labor Standards Act, 29 U.S.C.§ 215(a)(3), et seq.
(“FLSA”); the Massachusetts Fair Employment Practices Act, Mass Gen. Laws Ann.
ch. 151B, § 1, et seq. (“FEPA”), the
Massachusetts Whistleblower Statute, Mass Gen. Laws Ann. ch. 149, § 185, et seq.; the Massachusetts Privacy Act, Mass. Gen. Laws ch.
214, § 1B, et seq.; the Massachusetts Wage and
Hour Laws, Mass. Gen. Laws ch. 151, § 1, et seq.; the Massachusetts
Civil Rights Act, Mass. Gen. Laws ch. 12, § 11H, et seq.;
the Massachusetts Right-to-Know Law, Mass. Gen. Laws Ann. ch. 111F, et seq.; the United States and Massachusetts Constitutions;
and all claims under any other federal, state or local statute, regulation,
ordinance, law or judicial decision establishing or providing any other
employment-related or civil right which Chakoutis may have on or before the
date he signs this Agreement and Release, including those claims which he knows
about and those claims which he may not know about.  Chakoutis understands that these laws give
him important remedies that relate to claims he has or may have arising out of
or in connection with his employment by any Released Party or the termination
of that employment, and he freely and voluntarily gives up those remedies and
claims after being encouraged to and having had the opportunity to consult with
legal counsel.

 

3.2                                 Upon
execution of this Agreement and Release and its Effective Date, Chakoutis, for
full consideration as recited above and below, and on behalf of himself, his
spouse, his heirs, executors, administrators, assigns, agents and
representatives, hereby agrees not to file a lawsuit or claim against any
Released Party in any court of the United States, any state or local
governmental unit thereof, or with any arbitration panel concerning any claim,
demand, issue or cause of action covered by this Agreement and Release.  Notwithstanding any other language in this
Agreement and Release, the parties understand that this Agreement does not
prohibit Chakoutis from filing any claim or action seeking to enforce the terms
of this Agreement and Release.  The
parties further understand that this Agreement and Release shall not be
construed  as prohibiting Chakoutis from
filing an administrative charge of alleged employment

 

4

 

discrimination or
participating or cooperating with any administrative agency in the
investigation of an administrative charge of alleged employment discrimination
under Title VII, the ADEA, the ADA, the EPA or FEPA.  Chakoutis, however, waives his right to any
individual monetary, injunctive relief, or other recovery should any federal,
state or local administrative agency pursue any claims on his behalf arising
out of or relating to his employment with and/or separation from employment
with DUSA or any of the Releases in this Separation Agreement.  This means that by signing this Agreement and
Release, Chakoutis will have waived any right he had to bring a lawsuit or
obtain an individual recovery if an administrative agency pursues a claim
against DUSA based on any actions taken by any of them up to the date of
Chakoutis’ execution of this Agreement and Release, and that Chakoutis will
have released and discharged DUSA of any and all claims of any nature arising
up to the date he has executed this Agreement and Release.

 

4.                                       Return of Confidential Information.

 

4.1                                 Chakoutis
acknowledges and agrees that all confidential information and other proprietary
business information (collectively referenced as “Confidential Information”) of
DUSA and other documents and records, whether printed, typed, handwritten,
videotaped, transmitted or transcribed on data files or on any other type of
media, and whether or not labeled or identified as confidential or proprietary,
made or compiled by Chakoutis, or made available to Chakoutis during the period
of his employment with DUSA is the sole property of DUSA.  Chakoutis warrants and represents that, as of
his Separation Date, he will deliver all originals and copies of such
Confidential Information, regardless of format, to Marianne Mullin of DUSA, or
any successor.

 

5.                                       Confidentiality of Terms.

 

5.1                                 As
further material consideration for DUSA’s promises herein and except as
specifically provided in Paragraph 3 above, Chakoutis agrees not to disclose to
any person or entity the terms and conditions of this Agreement and Release,
unless compelled to do so by an order issued by a court of competent
jurisdiction.  However, nothing in this
Agreement and Release shall prohibit Chakoutis from disclosing or discussing
the terms and conditions of this Agreement and Release with his: (a) current
spouse; (b) attorneys; or (c) financial or tax advisors, providing that such advisors
regularly provide advice to the general public and that said individuals are
instructed not to further disclose the information.

 

6.                                       Cooperation.

 

6.1                                 Chakoutis
further agrees to cooperate fully and in good faith in assisting in defending

 

5

 

any and all pending or
future lawsuits against DUSA which arose or may arise from activities which
occurred during the course of his employment. 
If any such lawsuits arise subsequent to Separation Date, DUSA will compensate
Chakoutis at a rate of $100 per hour plus reasonable expenses, as
necessary.  If any such lawsuits occur
during the Extended Employment Period, compensation paid during this Extended
Employment Periods will be deducted from such lawsuit compensation.

 

7.                                     No Admission of Liability.

 

7.1                                 Chakoutis
acknowledges and agrees that DUSA’s entry into this Agreement and Release is
not to be construed as, and is not admission that, any Released Party violated
any duties or obligations owed to Chakoutis, or treated Chakoutis improperly,
unlawfully or unfairly in any manner whatsoever.  Neither shall this Agreement and Release be
construed to be, or be admissible in any proceedings as, evidence of any such
admission by DUSA as to any alleged violation of any federal, state or local
law, common law, agreement, rule, regulation or order.

 

8.                                       Other Provisions.

 

8.1                                 The
parties agree and acknowledge that this Agreement and Release contains the
full, final and complete agreements, understandings and representations of the
parties with regard to the subject matter stated herein, and that no other
terms or obligations exist between them which are not expressly set forth
herein.

 

8.2                                 The
parties agree that this Agreement and Release is to be governed by, construed
and enforced, in all respects, in accordance with the laws of the Commonwealth
of Massachusetts, exclusive of any choice of law rules.  Any dispute concerning this Agreement and
Release shall be brought in, and the parties hereby consent to the personal
jurisdiction of the courts of the Commonwealth of Massachusetts (to the extent
that subject matter jurisdiction exists only).

 

8.3                                 The
parties also agree that the terms and provisions of this Agreement and Release
are severable and that if any term or provision herein is found unenforceable
by a court of competent jurisdiction, the remaining terms shall remain in full
force and effect.  The parties further
agree that the terms and provisions of this Agreement and Release shall not be
construed against the drafter in any respect.

 

8.4                                 Chakoutis
further warrants that he has had the opportunity to review and consider this
Agreement and Release for twenty-one (21) days, and that any material or
immaterial changes to this Agreement and Release will not restart the running
of the twenty-one (21) day period. 
Chakoutis also acknowledges and agrees that, by this writing, he has
been advised to seek the guidance and advice of legal counsel in considering
the terms and effect of this Agreement and Release, and that he has had been
provided with the

 

6

 

opportunity to do so
prior to executing this Agreement and Release. 
Chakoutis also acknowledges by signing this Agreement and Release that
he has carefully read this Agreement and Release, that he understands
completely its contents, that he has had an opportunity to have an attorney
explain those contents to him, and that he has executed this Agreement and
Release of his own free will, act and deed.

 

8.5                                 To
the extent Chakoutis signs the Agreement and Release prior to the expiration of
the twenty-one (21) day period and delivers an executed original to DUSA, he
additionally acknowledges and warrants that he has voluntarily and knowingly
waived the twenty-one (21) day review period and that the decision to accept
such a shortened period of time is not induced by DUSA or any Released Party
through fraud, misrepresentation, a threat to withdraw or alter the offer prior
to the expiration of the twenty-one (21) day time period, or by providing
different terms to workers who sign releases prior to the expiration of such
time period.

 

8.6                                 Chakoutis
understands and expressly agrees that, following his execution of this
Agreement and Release and delivery of same to DUSA, he shall have a period of
seven (7) days during which time he may revoke the Agreement and Release by
delivering written notification to DUSA, no later than the close of business on
the seventh (7th) calendar day after he signs this Agreement and
Release, and that this Agreement and Release shall not be effective or
enforceable prior to the expiration of that period.  This Agreement and Release shall be forever
binding and enforceable once the seven (7) day period has expired.  For purposes of this Agreement and Release,
the term “Effective Date” referenced throughout this Agreement and Release,
shall mean the eighth (8th) calendar day after Chakoutis executes
this Agreement and Release and DUSA receives an effective, unrevoked original
copy.  If Chakoutis revokes this Agreement
and Release, the Agreement and Release will not be effective and enforceable
and he will not receive the benefits described in this Agreement and Release.

 

8.7                                 All
notices, requests, demands and other communications hereunder to DUSA must be
in writing and shall be deemed to have been given if delivered by hand or sent via regular and certified mail, return receipt requested,
addressed as follows:

 

Marianne Mullin

DUSA Pharmaceuticals,
Inc.

25 Upton Drive

Wilmington, Massachusetts
01887

 

7

 

IN WITNESS WHEREOF,
intending to be forever legally bound hereby and for full consideration, the
parties have executed this Agreement and Release, being seven (7) pages in
length, on the date(s) set forth below.

 

 

	
  /s/ Peter Chakoutis

  	
   

  	
  DUSA Pharmaceuticals,
  Inc.

  
	
  Peter Chakoutis

  	
   

  
	
   

  	
   

  
	
  Date

  	
   

  	
   

  	
  /s/ Robert F. Doman

  	
   

  
	
   

  	
  By: Robert F. Doman,
  President

  
	
  Witness:

  	
  Date 2/28/05

  
	
  /s/ Marianne Mullin

  	
   

  	
   

  
	
  Date 2/28/05

  	
   

  
						

 

8

 

EXHIBIT 1

 

STOCK OPTIONS
OF PETER CHAKOUTIS

 

 

	
  OPTION

  	
   

  	
  DATE

  	
   

  	
  NO. OF OPTIONS

  	
   

  	
  EXERCISE PRICE

  	
   

  	
  TOTAL VESTED

  as of 12/31/04*

  	
   

  	
  TOTAL VESTED

  as of 3/31/05**

  	
   

  
	
  Incentive

  	
   

  	
  12/18/00

  	
   

  	
  12,000

  	
   

  	
  $16.94

  	
   

  	
  12,000

  	
   

  	
  12,000

  	
   

  
	
  Incentive

  	
   

  	
  4/26/02

  	
   

  	
  2,500***

  	
   

  	
  $3.87

  	
   

  	
  0

  	
   

  	
  1,250

  	
   

  
	
  Incentive

  	
   

  	
  3/13/03

  	
   

  	
  5,625

  	
   

  	
  $1.60

  	
   

  	
  0

  	
   

  	
  1,875

  	
   

  
	
  Nonqualified

  	
   

  	
  3/18/04

  	
   

  	
  20,000

  	
   

  	
  $9.92

  	
   

  	
  0

  	
   

  	
  5,000

  	
   

  

 

*                                         Assuming
Peter Chakoutis remains employed at DUSA through December 31, 2004, these
options will expire on the later of (i) December 31, 2005, rather than March
31, 2005, or (ii) on the date which is one (1) year following his last day of
employment only if he has remained available for part-time employment from
January 1, 2005 through March 31, 2005.

 

**                                  These
options will expire one (1) year following his last day of employment only if
he has remained available for part-time employment from January 1, 2005 through
March 31, 2005, whether or not such part-time employment is warranted by DUSA.

 

***                           Of
this amount 1,250 options will vest as of March 31, 2005, rather than on April
26, 2005 as currently provided in the applicable stock option agreement.

 

All unvested options will
lapse in accordance with their terms.

 

1

 

EXHIBIT 2

 

FINAL
AGREEMENT AND GENERAL RELEASE

 

This Final Agreement and
General Release (the “Final Agreement”) is made by and between Peter Chakoutis
(“Chakoutis”) and DUSA Pharmaceuticals, Inc. (“DUSA”).

 

WHEREAS,
Chakoutis has remained employed by DUSA from the period of time from January 1,
2005 through March 31, 2005, and has faithfully executed his duties as assigned
to him by DUSA during this time period;

 

WHEREAS,
DUSA and Chakoutis wish to confirm the exclusive terms of Chakoutis’
resignation and final separation from employment with DUSA, and to settle,
release and discharge with prejudice, any and all claims or issues arising out
of Chakoutis’ employment with DUSA and his final separation from that
employment.

 

NOW
THEREFORE, in consideration of the mutual commitments set
forth in this Final Agreement, and intending to be legally and forever bound,
DUSA and Chakoutis agree as follows:

 

1.                                       Separation from Employment.

 

1.1                                 Chakoutis’
employment with DUSA, for all purposes, is ended effective March 31, 2005.  As of the close of business on March 31,
2005, Chakoutis will cease to be an employee and officer of DUSA or any
Released Party and Chakoutis hereby resigns from his officer position and his
employment with DUSA as of March 31, 2005.

 

1.2                                 Accordingly,
after March 31, 2005, Chakoutis will not accrue or be entitled to any form of
compensation, wages, commissions, bonuses, severance, vacation, sick time or
other paid time off, expense accounts, health, accident, welfare, disability or
life insurance, or participation in any employee benefit plans including but
not limited to pension, retirement, deferred compensation, salary continuation,
stock option, stock ownership, stock appreciation, incentive or other form of
employee fringe or other benefit plan, policy or practice.

 

1.3                                 Except
as otherwise specifically provided in this Final Agreement, any duties or
obligations of DUSA pursuant to Chakoutis’ employment or his separation from
that employment, whether by written agreement or otherwise, are and were
completely extinguished as of March 31, 2005. Additionally, nothing in this
Final Agreement may be relied upon as in any way modifying, altering or
changing the terms of any applicable health, life, medical dental or other
employee benefit or long term incentive plans. 
Moreover, nothing in this Final Agreement is intended to reduce, in

 

1

 

any manner, Chakoutis’
rights with regard to insurance conversion under any applicable federal, state
or local law or regulation.

 

1.4                                 Notwithstanding
anything contained in this Final Agreement, the non-compete, confidentiality
and indemnification obligations more fully set forth in Paragraphs 9 and 12 of
Chakoutis’ Employment Agreement dated January 1, 2004 remain in full force and
effect pursuant to their terms.

 

2.                                       Payments and Other Benefits to Be Provided by DUSA
in Consideration of this Final Agreement.

 

2.1                                 In
exchange for and in consideration of Chakoutis’ promises and covenants as set
forth in this Final Agreement, and contingent upon DUSA’s receipt of an
unrevoked original thereof, fully-executed by Chakoutis, DUSA agrees to provide
Chakoutis, on behalf of all Released Parties, with a Supplemental Severance
Payment and other benefits, as further defined herein, which Chakoutis agrees
constitute good and adequate consideration in exchange for his promises
contained herein.

 

2.2                                 In
exchange for and in consideration of Chakoutis’ promises, covenants and general
release set forth in this Final Agreement, subject to the terms stated herein
and within fourteen (14) calendar days following the Effective Date (as defined
herein) of this Final Agreement, DUSA agrees to provide Chakoutis with a gross
payment in the amount of $33,750, less all
applicable federal, state and local taxes and other required or elected withholdings,
representing an amount equal to three (3) months of pay at the annualized
salary rate of One Hundred Thirty-Five Thousand and 00/100 ($135,000) per year
(the “Supplemental Severance Payment”).

 

2.3                                 In
further consideration of Chakoutis’ promises, covenants and general release set
forth in this Final Agreement, DUSA will also make a payment to Chakoutis for
all vacation time accrued but unused as of March 31, 2005, in accordance with
DUSA’s policies and practices (the “Supplemental Vacation Payment”). The hourly
rate on this unused vacation time will be $64.90 per hour based on the annual
salary rate of One Hundred Thirty-Five Thousand and 00/100 ($135,000).

 

2.4                                 Chakoutis
acknowledges that the payments and benefits afforded to him through this Final
Agreement, including the Supplemental Severance Payment, are greater than any
payments, benefits or other consideration to which he may presently be
entitled, including: (1) pursuant to any express or implied agreement, contract
or understanding with DUSA; or (2) under any prior or current DUSA policies,
practices or employee benefit plans, including but not limited to compensation,
vacation, bonus, severance, or other fringe benefit plans. In addition, DUSA
acknowledges that the transition period and offer to remain employed during the
Extended Employment Period is significant and exceeds what would normally be
provided as notice.

 

2

 

3.                                       Release and Covenant Not to Sue.

 

3.1                                 Upon
execution of this Final Agreement and its Effective Date, and in consideration
of the payments and other benefits described herein, Chakoutis, on behalf of
himself, his spouse, his heirs, executors, administrators, assigns, agents and
representatives, hereby unconditionally releases and completely and forever
discharges DUSA, as well as the present and former officers, directors,
employees, attorneys, and agents of each of these entities, individually and in
their official capacities, and any of their employee 401(k) or other employee
benefit plans as well as the administrators, fiduciaries, parties-in-interest,
employees, agents, attorneys and trustees of any such plans (collectively
referenced throughout this Final Agreement as the “Released Parties”), from any
and all of the following claims, prayers for relief  or alleged damages that arose or existed
before the date Chakoutis executes this Final Agreement for:  (1) any and all claims, issues, prayers for
relief and any other causes of action including, but not limited to, all claims
relating to common law tort, harassment, retaliation, promissory or equitable
estoppel, negligence, wrongful or constructive discharge, defamation, tortious
interference with economic advantage, negligent or intentional infliction of
emotional distress, invasion of privacy, breach of any express or implied
agreement, contract, policy or other understanding, breach of any covenant of
good faith and fair dealing, breach of public policy, loss of consortium,
fraud, battery, assault, medical, physical, emotional and psychological
injuries or damages, including all claims for attorneys’ fees and costs; and
(2) any and all claims, issues, prayers for relief and any other causes of
action arising under any federal, state and/or local employment laws,
regulations or ordinances, including, but not limited to, claims under the
Employee Retirement Income Security Act, 29 U.S.C. 1001, et seq.
(“ERISA”), Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §
2000 (e), et seq. (“Title VII”); the Civil Rights Act of 1991, 42 U.S.C. §§ 1981, 1983,
1985, 1986 and 1988; the Age Discrimination in Employment Act, 29 U.S.C. § 621,
et seq. (“ADEA”); the Vietnam Era
Veterans Readjustment Assistance Act of 1974, 38 U.S.C. § 2012, et seq. (“VERRAA”); the Americans With Disabilities Act, 42
U.S.C. § 12101, et seq. (“ADA”); the Occupational
Safety and Health Act, 29 U.S. § 651, et seq. (“OSHA”);
the Older Workers Benefit Protection Act, 29 U.S.C. § 626(f), et seq. (“OWBPA”); the Consolidated Omnibus Budget
Reconciliation Act, 29 U.S.C. § 1161, et seq. (“COBRA”);
the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et seq. (“WARN”); the Federal
Family and Medical Leave Act, 29 U.S.C. §2601, et seq.
(“FMLA”); the Equal Pay Act of 1963, et seq. (“EPA”);
the Rehabilitation Act of 1973, 29 U.S.C. § 701, et seq.;
the Fair Labor Standards Act, 29 U.S.C.§ 215(a)(3), et seq.
(“FLSA”); the Massachusetts Fair Employment Practices Act, Mass Gen. Laws Ann.
ch. 151B, § 1, et seq. (“FEPA”), the
Massachusetts Whistleblower Statute, Mass Gen. Laws Ann. ch. 149, § 185, et seq.; the Massachusetts Privacy Act, Mass. Gen. Laws ch.
214, § 1B, et seq.; the Massachusetts Wage and
Hour Laws, Mass. Gen. Laws ch. 151, § 1, et seq.; the
Massachusetts Civil Rights Act, Mass. Gen. Laws ch. 12, § 11H, et seq.; the Massachusetts Right-to-Know Law, Mass. Gen.
Laws Ann. ch. 111F, et seq.; the

 

3

 

United States and
Massachusetts Constitutions; and all claims under any other federal, state or
local statute, regulation, ordinance, law or judicial decision establishing or
providing any other employment-related or civil right which Chakoutis may have
on or before the date he signs this Final Agreement, including those claims
which he knows about and those claims which he may not know about.  Chakoutis understands that these laws give
him important remedies that relate to claims he has or may have arising out of
or in connection with his employment by any Released Party or the termination
of that employment, and he freely and voluntarily gives up those remedies and
claims after being encouraged to and having had the opportunity to consult with
legal counsel.

 

3.2                     Upon
execution of this Final Agreement and its Effective Date, Chakoutis, for full
consideration as recited above and below, and on behalf of himself, his spouse,
his heirs, executors, administrators, assigns, agents and representatives,
hereby agrees not to file a lawsuit or claim against any Released Party in any
court of the United States, any state or local governmental unit thereof, or
with any arbitration panel concerning any claim, demand, issue or cause of
action covered by this Final Agreement. 
Notwithstanding any other language in this Final Agreement, the parties
understand that this Agreement does not prohibit Chakoutis from filing any
claim or action seeking to enforce the terms of this Final Agreement.  The parties further understand that this
Final Agreement shall not be construed as prohibiting Chakoutis from filing an
administrative charge of alleged employment discrimination or participating or
cooperating with any administrative agency in the investigation of an
administrative charge of alleged employment discrimination under Title VII, the
ADEA, the ADA, the EPA or FEPA.  Chakoutis,
however, waives his right to any individual monetary, injunctive relief, or
other recovery should any federal, state or local administrative agency pursue
any claims on his behalf arising out of or relating to his employment with
and/or separation from employment with DUSA or any of the Releases in this
Separation Agreement.  This means that by
signing this Final Agreement, Chakoutis will have waived any right he had to
bring a lawsuit or obtain an individual recovery if an administrative agency
pursues a claim against DUSA based on any actions taken by any of them up to
the date of Chakoutis’ execution of this Final Agreement, and that Chakoutis
will have released and discharged DUSA of any and all claims of any nature
arising up to the date he has executed this Final Agreement.

 

4.                                       Return of Confidential Information.

 

4.1                                 Chakoutis
acknowledges and agrees that all confidential information and other proprietary
business information (collectively referenced as “Confidential Information”) of
DUSA and other documents and records, whether printed, typed, handwritten,
videotaped, transmitted or transcribed on data files or on any other type of
media, and whether or not labeled or identified as confidential or proprietary,
made or compiled by Chakoutis, or made available to Chakoutis during the period
of his employment with

 

4

 

DUSA,
is the sole property of DUSA.  Chakoutis
warrants and represents that, as of March 31, 2005, he has delivered all
originals and copies of such Confidential Information, regardless of format, to
Marianne Mullin of DUSA, or her successor.

 

5.                                       Confidentiality of Terms.

 

5.1                                 As
further material consideration for DUSA’s promises herein and except as
specifically provided in Paragraph 3 above, Chakoutis agrees not to disclose to
any person or entity the terms and conditions of this Final Agreement, unless
compelled to do so by an order issued by a court of competent
jurisdiction.  However, nothing in this
Final Agreement shall prohibit Chakoutis from disclosing or discussing the
terms and conditions of this Final Agreement with his: (a) current spouse; (b)
attorneys; or (c) financial or tax advisors, providing that such advisors
regularly provide advice to the general public and that said individuals are
instructed not to further disclose the information.

 

6.                                       Cooperation.

 

6.1                                 Chakoutis
further agrees to cooperate fully and in good faith in assisting in defending
any and all pending or future lawsuits against DUSA which arose or may arise
from activities which occurred during the course of his employment.  If any such lawsuits arise subsequent to
Separation Date, DUSA will compensate Chakoutis at a rate of $100 per hour plus
reasonable expenses, as necessary.  If
any such lawsuits occur during the Extended Employment Period, compensation
paid during this Extended Employment Periods will be deducted from such lawsuit
compensation.

 

7.                                       No Admission of Liability.

 

7.1                                 Chakoutis
acknowledges and agrees that DUSA’s entry into this Final Agreement is not to
be construed as, and is not admission that, any Released Party violated any
duties or obligations owed to Chakoutis, or treated Chakoutis improperly,
unlawfully or unfairly in any manner whatsoever.  Neither shall this Final Agreement be
construed to be, or be admissible in any proceedings as, evidence of any such
admission by DUSA as to any alleged violation of any federal, state or local
law, common law, agreement, rule, regulation or order.

 

8.                                       Other Provisions.

 

8.1                                 The
parties agree and acknowledge that this Final Agreement contains the full,
final and complete agreements, understandings and representations of the
parties with regard to the subject matter stated herein, and that no other
terms or obligations exist between them which are not expressly set forth
herein.

 

5

 

8.2                                 The
parties agree that this Final Agreement is to be governed by, construed and
enforced, in all respects, in accordance with the laws of the Commonwealth of
Massachusetts, exclusive of any choice of law rules.  Any dispute concerning this Final Agreement
shall be brought in, and the parties hereby consent to the personal
jurisdiction of the courts of the Commonwealth of Massachusetts (to the extent
that subject matter jurisdiction exists only).

 

8.3                                 The
parties also agree that the terms and provisions of this Final Agreement are
severable and that if any term or provision herein is found unenforceable by a
court of competent jurisdiction, the remaining terms shall remain in full force
and effect.  The parties further agree
that the terms and provisions of this Final Agreement shall not be construed
against the drafter in any respect.

 

8.4                                 Chakoutis
further warrants that he has had the opportunity to review and consider this
Final Agreement for twenty-one (21) days, and that any material or immaterial
changes to this Final Agreement will not restart the running of the twenty-one
(21) day period.  Chakoutis also
acknowledges and agrees that, by this writing, he has been advised to seek the
guidance and advice of legal counsel in considering the terms and effect of
this Final Agreement, and that he has had been provided with the opportunity to
do so prior to executing this Final Agreement. 
Chakoutis also acknowledges by signing this Final Agreement that he has
carefully read this Final Agreement, that he understands completely its
contents, that he has had an opportunity to have an attorney explain those
contents to him, and that he has executed this Final Agreement of his own free will,
act and deed.

 

8.5                                 To
the extent Chakoutis signs the Final Agreement prior to the expiration of the
twenty-one (21) day period and delivers an executed original to DUSA, he
additionally acknowledges and warrants that he has voluntarily and knowingly waived
the twenty-one (21) day review period and that the decision to accept such a
shortened period of time is not induced by DUSA or any Released Party through
fraud, misrepresentation, a threat to withdraw or alter the offer prior to the
expiration of the twenty-one (21) day time period, or by providing different
terms to workers who sign releases prior to the expiration of such time period.

 

8.6                                 Chakoutis
understands and expressly agrees that, following his execution of this Final
Agreement and delivery of same to DUSA, he shall have a period of seven (7)
days during which time he may revoke the Final Agreement by delivering written
notification to DUSA, no later than the close of business on the seventh (7th)
calendar day after he signs this Final Agreement, and that this Final Agreement
shall not be effective or enforceable prior to the expiration of that
period.  This Final Agreement shall be
forever binding and enforceable once the seven (7) day period has expired.

 

6

 

For purposes of this
Final Agreement, the term “Effective Date” referenced throughout this Final
Agreement, shall mean the eighth (8th) calendar day after Chakoutis
executes this Final Agreement and DUSA receives an effective, unrevoked original
copy.  If Chakoutis revokes this Final
Agreement, the Final Agreement will not be effective and enforceable and he
will not receive the benefits described in this Final Agreement.

 

8.7                                 All
notices, requests, demands and other communications hereunder to DUSA must be
in writing and shall be deemed to have been given if delivered by hand or sent via regular and certified mail, return receipt requested,
addressed as follows:

 

Marianne Mullin

DUSA Pharmaceuticals,
Inc.

25 Upton Drive

Wilmington, Massachusetts
01887

 

IN WITNESS WHEREOF,
intending to be forever legally bound hereby and for full consideration, the
parties have executed this Final Agreement, being seven (7) pages in length, on
the date(s) set forth below.

 

 

	
   

  	
  DUSA Pharmaceuticals,
  Inc.

  
	
   

  	
   

  	
   

  
	
  Peter Chakoutis

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
   

  	
  By: D. Geoffrey
  Shulman,

  
	
   

  	
   

  	
  CEO and Chairman of the
  Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  	
  Date

  	
   

  	
   

  
						

 

7

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