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EXHIBIT 10.2

 

 

 

 

2012 EQUITY INCENTIVE PLAN

PERFORMANCE-BASED RESTRICTED SHARE UNIT
AGREEMENT

(Executive Officer)

 

THIS PERFORMANCE-BASED RESTRICTED SHARE UNIT AGREEMENT
(this “Agreement”), hereby made between Derma Sciences, Inc., a Delaware corporation (the “Company”) and
the individual named below (the “Awardee”) evidences a Restricted Share Unit award, pursuant to the Derma Sciences,
Inc. 2012 Equity Incentive Plan (the “Plan”), and is in all respects limited as provided herein. Capitalized terms
used but not defined in this Agreement shall have the meanings given to such terms in the Plan.

 

WHEREAS, the Awardee is an executive
officer of the Company,

 

WHEREAS, the Company desires to recognize
and compensate its executive officers for their services to the Company, and

 

WHEREAS, the Compensation Committee
of the Board of Directors of the Company (the “Committee”) has, by resolution duly adopted on [_____] (the “Date
of Grant”), authorized the grant to the Awardee of restricted share units relating to the common stock of the Company as
hereinbelow provided,

 

NOW, THEREFORE, the parties hereto,
intending to be legally bound, agree as follows:

 

	1.	Name of Awardee:	[_____]
	 	 	 
	2.	Date of Grant:	[_____]
	 	 	 
	3.	Restricted Share Units:	[_____]

 

	4.     	Performance Period:	The period beginning on the Date of Grant and ending on the third anniversary of the Date of Grant.

 

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	5.     	Performance Objectives:	The achievement and maintenance, for a period of sixty (60) consecutive trading days, which period begins and ends during
the Performance Period, of a closing price per Share equal to or greater than one or more of the prices to be specified by the
Committee within the first thirty (30) days of the Performance Period. Notwithstanding the foregoing, in the event of a Change
in Control of the Company during the Performance Period and while the Awardee remains employed by the Company, the level of achievement
of the Performance Objectives shall be determined based upon the higher of (i) the per Share consideration paid to shareholders
of the Company in the Change in Control transaction, and (ii) the highest closing price per Share maintained for any sixty (60)
consecutive trading days during the period beginning on the Date of Grant and ending on the date of the Change in Control.
	 	 

	6.	No Present Rights. Unless and until the Restricted Share Units vest and become non-forfeitable and the underlying Shares
are delivered to the Awardee in accordance with the terms hereof, the Awardee shall not have any of the rights of a shareholder
of the Company, including the right to vote the Shares underlying the Restricted Share Units or receive dividends with respect
thereto.
	 	 

	7.	Vesting of the Award. The Awardee’s right to earn all or a portion of the Restricted Share Units shall be contingent
upon the level of achievement of one or more of the Performance Objectives, as determined by the Committee in accordance with a
performance schedule to be established by the Committee within the first thirty (30) days of the Performance Period (the “Performance
Matrix”). To the extent, if any, that the Restricted Share Units are earned in accordance with the Performance Matrix, such
Restricted Share Units shall vest and become non-forfeitable, if at all, on the third anniversary of the Date of Grant (the “Vesting
Date”), provided that the Awardee remains employed with the Company through the Vesting Date. Notwithstanding the foregoing,
to the extent, if any, that the Committee determines that the Performance Objectives have been achieved during the Performance
Period and while the Awardee remains employed by with the Company, the Restricted Share Units that have been earned in accordance
with the Performance Matrix shall vest and become non-forfeitable if, prior to the Vesting Date, (i) the Awardee dies, (ii) the
Company terminates the Awardee’s employment without Cause, or (iii) a Change in Control of the Company occurs while the Awardee
remains employed with the Company. Except as otherwise provided in the preceding sentence, the Awardee’s right to receive
the Shares underlying the Restricted Share Unit award shall be forfeited automatically and without further notice if, prior to
the Vesting Date, (x) the Awardee ceases to be an employee of the Company or (y) a Change in Control of the Company occurs. Within
thirty (30) days after vesting, as set forth above, the Awardee shall be entitled to receive such number of Shares equivalent to
the number of vested Restricted Share Units.

 

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	8.	Relation to the Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency
between the provisions of this Agreement and the Plan, the terms of the Plan shall govern.
	 	 

	9.	Non-Transferability of Award. This award of Restricted Share Units is not assignable or transferable, in whole or in
part, by the Awardee, other than by will or by the laws of descent and distribution.
	 	 

	10.	Withholding of Taxes. The obligation
                                                                of the Company to deliver Shares resulting from the vesting of
                                                                the Restricted Share Units shall be subject to any applicable
                                                                federal, state and local tax withholding requirements. To the
                                                                extent the Company is required to withhold any federal, state,
                                                                local, foreign or other taxes in connection with the delivery
                                                                of Shares under this Agreement, the Company shall have the right
                                                                in its sole discretion to (a) retain a number of Shares otherwise
                                                                deliverable hereunder with a value equal to the required withholding
                                                                (based on the Fair Market Value of the Shares on the date of delivery),
                                                                provided that in no event shall the value of the Shares retained
                                                                exceed the minimum amount of taxes required to be withheld or
                                                                such other amount that will not result in a negative accounting
                                                                impact; (b) require the Awardee to pay or provide for payment
                                                                of the required tax withholding
                                                                in advance of the issuance of Shares; or (c) deduct
                                                                the required tax withholding from any amount of salary, bonus,
                                                                incentive compensation or other amounts otherwise payable in cash
                                                                to the Awardee
                                                                in advance of the issuance of Shares (other than deferred
                                                                compensation subject to Section 409A of the Code).

 

 

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	11.	Adjustments. The number and kind of Shares subject to this award of Restricted Share Units are subject to adjustment
pursuant to the provisions of Section 15 of the Plan.
	 	 

	12.	Section 409A of the Code. It is the intent of the parties that this award of Restricted Share Units shall be exempt
from the application of, or comply with, the rules applicable to nonqualified deferred compensation under Section 409A of the Code,
and this Agreement shall be interpreted and administered in accordance with such intent. In particular, to the extent that the
Restricted Share Units constitute a deferral of compensation subject to Section 409A of the Code, then,
to the extent required to comply with Section 409A of the Code, payment of the Shares underlying the Restricted Share Units shall
be subject to the following rules, notwithstanding any other provision of this Agreement to the contrary: (a)
the Shares (if any) underlying the vested Restricted Share Units will be delivered to the Awardee within thirty (30) days after
the earlier of (i) the Awardee’s “separation from service” within the meaning of Section 409A of the Code, (ii)
the Vesting Date, or (iii) the occurrence of a “change in the ownership,” a “change in the effective control”
or a “change in the ownership of a substantial portion of the assets” of the Company within the meaning of Section
409A of the Code; and (b) notwithstanding the foregoing, if any Shares underlying the Restricted Share Units become payable as
a result of the Awardee’s “separation from service” within the meaning of Section 409A of the Code (other than
as a result of death), and the Awardee is a “specified employee” within the meaning of Section 409A of the Code and
as determined by the Company, such Shares will be delivered to the Awardee on the first business day after the date that is six
months following the Awardee’s separation from service.
	 	 

	13.	Performance-Based Exemption. The Company intends that, to the maximum extent possible, the Restricted Share Units shall
qualify for the Performance-Based Exemption, and this Agreement shall be interpreted and administered in accordance with such intent.

 

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	14.	Compensation Recovery Policy. By signing this Agreement, the Awardee acknowledges and agrees that, notwithstanding any
other provision of this Agreement to the contrary, the Awardee may be required to forfeit or repay any or all of the Restricted
Share Units pursuant to the terms of the Awardee’s Employment Agreement with the Company or any compensation recovery or
recoupment policy maintained by the Company, as the same may be amended to comply with the Dodd-Frank Wall Street Reform and Consumer
Protection Act or any rules or regulations issued by the Securities and Exchange Commission or applicable securities exchange.
	 	 

	15.	Governing Law. This Agreement shall be governed by New Jersey law, without regard to any conflicts or choice of law
rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another
jurisdiction.
	 	 

	16.	Electronic Delivery. The Awardee
                                                                hereby consents and agrees to electronic delivery of any documents
                                                                that the Company may elect to deliver (including, but not limited
                                                                to, prospectuses, prospectus supplements, grant or award notifications
                                                                and agreements, account statements, annual and quarterly reports,
                                                                and all other forms of communications) in connection with this
                                                                and any other award made or offered under the Plan. The Awardee
                                                                understands that, unless earlier revoked by the Awardee by giving
                                                                written notice to the Chief Financial
                                                                Officer of the Company, this consent shall be effective
                                                                for the duration of the Agreement. The Awardee also understands
                                                                that he or she shall have the right at any time to request that
                                                                the Company deliver written copies of any and all materials referred
                                                                to above at no charge. The Awardee hereby consents to any and
                                                                all procedures the Company has established or may establish for
                                                                an electronic signature system for delivery and acceptance of
                                                                any such documents that the Company may elect to deliver, and
                                                                agrees that his or her electronic signature is the same as, and
                                                                shall have the same force and effect as, his or her manual signature.
                                                                The Awardee consents and agrees that any such procedures and delivery
                                                                may be effected by a third party engaged by the Company to provide
                                                                administrative services related to the Plan.

 

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IN WITNESS WHEREOF, the Company has
caused this Agreement to be executed by a duly authorized officer, and the Awardee has hereunto set his hand, all as of the day
and year first hereinabove written.

 

	 	DERMA SCIENCES, INC.
	 	 
	 	By: 	
	 	 	Edward J. Quilty
President and Chief Executive Officer

The undersigned Awardee acknowledges
that a copy of the Plan, Plan Summary and Prospectus, and the Company's most recent Annual Report and Proxy Statement (the “Prospectus
Information”) either have been received by the Awardee or are available for viewing on the Company’s network at Global/HR&Payroll/StockOption-EquityIncentivePlan,
and the Awardee consents to receiving this Prospectus Information electronically, or, in the alternative, agrees to contact the
Company’s Chief Financial Officer at 214 Carnegie Center, Suite 300, Princeton, New Jersey 08540, (609) 514-4744, to request
a paper copy of the Prospectus Information at no charge. The Awardee also represents that he or she is familiar with the terms
and provisions of the Prospectus Information and hereby accepts the award on the terms, and subject to the conditions, set forth
herein and in the Plan.

 

 

	 	 	AWARDEE.
	 	 	
	 	 	 
	 	 	[____]

  

    	6 of 6EXHIBIT 10.3

 

 

 

AMENDMENT TO

EMPLOYMENT AGREEMENT

 

WHEREAS, Derma Sciences, Inc. (“Employer”)
and Edward J. Quilty (“Employee”) are parties to that certain Employment Agreement dated as of March 7, 2012
(the “Agreement”).

 

WHEREAS, Employer and Employee desire to
amend the Agreement to remove Employee’s ability to receive severance benefits upon Employee’s voluntary termination
of employment within six months of the occurrence of a change in control of Employer.

 

NOW, THEREFORE, in consideration of the
recitals set forth above, and for other good and valuable consideration, the adequacy and sufficiency of which are hereby acknowledged,
Employer and Employee agree that the Agreement be amended as follows:

 

1.      Section 7 of the Agreement is hereby
deleted in its entirety.

 

2.      Sections 8, 9, 10 and 11 of the Agreement
are hereby re-numbered as Sections 7, 8, 9 and 10, respectively.

 

3.      The second sentence of Section 7 of the Agreement is
hereby amended to read in its entirety as follows:

 

This Agreement is intended to comply with the requirements
of Section 409A of the Internal Revenue Code and the regulations thereunder (“Section 409A”).

 

4.      Section 8 of
the Agreement (Option Exercise Extension) is hereby amended to read in its entirety as follows:

 

In the event that Employer, without cause, either terminates
Employee’s employment or fails to renew this Agreement upon expiration hereof, then the period to exercise any option to
purchase the securities of Employer of which Employee may be possessed shall be extended to the earlier to occur of (i) the expiration
thereof as set forth in the option instrument or (ii) the 10th anniversary of the original date of grant.

 

Except as set forth herein, all of the other provisions of the
Agreement shall remain in effect.

 

This amendment may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together shall be considered one and the same agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

    	 

    	 

    

 

 

 

IN WITNESS WHEREOF, the parties have signed
this amendment on the 20th day of December, 2012.

 

	 	 	DERMA SCIENCES, INC.
	 	 	 
	 		/s/  Stephen T. Wills
	 	 	By: Stephen T. Wills
Title: Lead Director, Derma Sciences
Board of Directors

	 	 	EMPLOYEE.
	 	 	 
	 		/s/   Edward J. Quilty
	 	 	Name: Edward J. Quilty

  

 

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