UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 1, 2008
DUSA PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
| |
|
|
|
|
New Jersey
(State or other
|
|
0-19777
(Commission File
|
|
22-3103129
(IRS Employer |
| jurisdiction of
|
|
Number)
|
|
Identification |
| incorporation)
|
|
|
|
Number) |
25 Upton Drive
Wilmington, Massachusetts 01887
(Address of principal executive offices, including ZIP code)
(978) 657-7500
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
| o |
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
| o |
|
Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
| o |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
|
|
|
| Item 5.02. |
|
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Shulman Consulting Agreement
As previously reported, D. Geoffrey Shulman, MD, DUSA Pharmaceuticals, Inc.’s founder, current
Chief Strategic Officer, Chief Executive Officer from 1991 to 2007, and Chairman of the Board from
1991 to 2003 and since 2005, commenced a disability leave in June 2008 as a result of a
serious health condition. As of December 1, 2008, Dr. Shulman has resigned from full-time
management and his officer position and has agreed to become a part time consultant to DUSA. As a
consequence of his new role, DUSA and Dr. Shulman terminated Dr. Shulman’s Employment Agreement,
dated March 20, 1997 (the “Employment Agreement”), and entered into a two-year consulting agreement
effective December 1, 2008 (the “Consulting Agreement”).
Under the terms of the Employment Agreement, Dr. Shulman will receive twelve months severance in
the amount of $379,080, his current salary. Also, Dr. Shulman becomes vested in all of his stock
options and DUSA has agreed to vest his shares of restricted stock. Dr. Shulman has the right to
exercise all such options for one year.
Pursuant to the Consulting Agreement, Dr. Shulman will devote his best efforts (health permitting)
on a part-time basis to further the goals of DUSA. His duties will include, among others,
consulting on matters requested by the Chief Executive Officer of DUSA, and monitoring the
dermatology community with respect to photodynamic therapy and photodetection technologies and
products and other issues of interest to DUSA. Dr. Shulman will receive annual consulting fees of
$175,000. If Dr. Shulman’s time is requested in excess of 33 hours per month and Dr. Shulman
wishes to provide such services, he will be paid at a rate of $250.00 per hour. DUSA has agreed to
reimburse Dr. Shulman for out-of-pocket expenses incurred in connection with his consulting
services.
Additionally, DUSA will reimburse Dr. Shulman for up to CDN $30,000 for professional services,
including legal, accounting and tax planning services incurred in connection with the negotiation
and preparation of the Consulting Agreement. Furthermore, DUSA has agreed to reimburse Dr. Shulman
for direct medical-related expenses and prescription drug expenses to the extent not covered by Dr.
Shulman’s health plans up to US $50,000 per year for the period from March 1, 2008 through February
28, 2013.
Dr. Shulman, or his beneficiaries, will receive a payment on a change of control of DUSA in an
amount based on his annual consulting fees, on terms similar to that which were provided in his
Employment Agreement though with certain additional limitations, if such event should occur during
the term of his consultancy, regardless of whether he continues to consult for a
successor-in-interest.
The Consulting Agreement contains a non-compete provision during the term of the consultancy and a
non-disclosure of confidential information which survives the term of the Consulting Agreement for
two years. Dr. Shulman also entered into a general release of DUSA in connection with the
execution of the Consulting Agreement. The Consulting Agreement may be
renewed by mutual agreement of the parties. Pursuant to law, Dr. Shulman has until December 8,
2008 to rescind his agreement.
Except for historical information, this report contains certain forward-looking statements that
involve known and unknown risk and uncertainties. These forward-looking statements include the
nature and length of Dr. Shulman’s consulting activities for DUSA and to the actual amount Dr.
Shulman will receive under the consulting agreement, including any potential change of control
payment. These risks and uncertainties are further qualified by important factors that could cause
actual results to differ materially from future results, performance or achievements expressed or
implied by those in the forward-looking statements made in this release. These factors include,
without limitation, Dr. Shulman’s medical condition, and other risks and uncertainties identified
in DUSA’s Form 10-Q for the quarter ended September 30, 2008.
Resignation from the Board of Directors
In addition to resigning from his management position, Dr. Shulman has resigned as Chairman of the
Board and from the Board of Directors effective December 1, 2008. The Board of Directors has
elected Jay M. Haft, Esq. as the Chairman of the Board. Mr. Haft has been a director of DUSA since
1996. Prior to his appointment as Chairman of the Board, Mr. Haft served as the Vice Chairman of
the Board and Lead Director. He also serves as Chairman of DUSA’s Compensation Committee, a
position he will continue to hold. In connection with his election, the Compensation Committee has
increased the fees for service as Chairman of the Board by $10,000.