def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Filed by a Party other than the Registrant
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Soliciting Material Pursuant to §240.14a-12 |
DUSA Pharmaceuticals, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
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June 23,
2010
Dear Shareholder:
You are invited to attend the Annual Meeting of Shareholders of
DUSA Pharmaceuticals, Inc. to be held at the Companys
headquarters at 25 Upton Drive, Wilmington, Massachusetts on
Thursday, July 29, 2010 at 11:00 a.m. Eastern
Time.
The business of the meeting is described in the accompanying
Notice of Meeting and proxy statement. We are also enclosing our
2009 Annual Report on
Form 10-K
and a proxy card.
There will be a management presentation at the meeting to those
shareholders who attend the meeting.
Your participation in the meeting is important regardless of the
number of shares you hold. If you cannot attend the meeting,
please grant a proxy to vote your shares by marking, signing and
dating the proxy card and returning it by no later than
5:00 p.m. Eastern Time on Wednesday, July 28, 2010 in
the manner described in the proxy statement. Your proxy may be
revoked at any time before it is exercised as explained in the
proxy statement.
If you plan to attend, please bring photo identification. Also,
if your shares are held in the name of a broker or other
nominee, please bring with you a proxy or letter from the broker
or nominee confirming your ownership as of the record date.
Sincerely,
Robert F. Doman
President and
Chief Executive Officer
CORPORATE HEADQUARTERS 25 Upton Drive, Wilmington, MA
01887 - Phone 978.657.7500, Fax 978.657.9193
DUSA
Pharmaceuticals, Inc.
25 Upton Drive
Wilmington, Massachusetts 01887
TO THE SHAREHOLDERS OF
DUSA PHARMACEUTICALS, INC.
YOU ARE HEREBY NOTIFIED that the Annual Meeting of Shareholders
of DUSA Pharmaceuticals, Inc. will be held on Thursday,
July 29, 2010, at 11:00 a.m. at the Companys
offices located at 25 Upton Drive, Wilmington, Massachusetts to
consider and act upon the following matters:
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(1)
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Election of eight (8) directors;
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Ratification of the selection of Deloitte & Touche LLP
as the Companys independent registered public accounting
firm for fiscal year 2010; and
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Transaction of any other business that may properly come before
the meeting or any adjournments thereof.
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Only shareholders of record at the close of business on
June 16, 2010 are entitled to notice of, and to vote at the
meeting, or any adjournment or adjournments thereof.
The proxy statement for our 2010 Annual Meeting of Shareholders
and our annual report to shareholders on
Form 10-K
for the year ended December 31, 2009 are available on our
website at www.dusapharma.com under For Investors.
Whether or not you plan to attend the meeting, please vote.
If you hold shares in your own name, please fill in, date and
sign the enclosed proxy and return it promptly in the enclosed
envelope. If your broker or other nominee holds your shares,
please follow their instructions to vote. The prompt return of
your proxy will assist us in preparing for the Annual Meeting.
The proxy does not require any postage if it is mailed in the
United States or Canada.
By Order of the Board of Directors,
Nanette W. Mantell, Esq.
Secretary
Dated: June 23, 2010
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TABLE
OF CONTENTS
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ii
PROXY
STATEMENT
QUESTIONS
AND ANSWERS
Why I am
receiving these proxy materials?
You are receiving these proxy materials because the Board of
Directors of DUSA Pharmaceuticals, Inc. (DUSA or the
Company), a New Jersey corporation, is soliciting
your proxy to vote at the Companys 2010 Annual Meeting of
Shareholders and at any adjournments or postponements thereof.
The Annual Meeting will be held on Thursday, July 29, 2010,
at 11:00 a.m., at the Companys principal executive
offices at 25 Upton Drive, Wilmington, Massachusetts 01887. If
properly signed and returned, and not revoked, your proxy will
be voted in accordance with the instructions it contains. The
persons named in the accompanying proxy will vote the proxy for
the Board of Directors slate of directors and for the
other matters listed on the proxy as recommended by the Board of
Directors unless contrary instructions are given.
This proxy statement and the accompanying form of proxy are
being mailed to shareholders on or about June 23, 2010.
DUSAs Annual Report on
Form 10-K
for 2009, including financial statements for the year ended
December 31, 2009, but excluding certain exhibits, is being
mailed to shareholders at the same time. A copy of the exhibits
will be provided upon request and payment to DUSA of reasonable
expenses.
Who can
vote at the Annual Meeting?
Only shareholders of record of shares of DUSA common stock at
the close of business on June 16, 2010 are entitled to
notice of and to vote at the Annual Meeting and at any and all
adjournments or postponements of the meeting. On the record
date, there were 24,207,965 shares of common stock without
par value (Common Stock) outstanding and entitled to
vote. These shares were the only shares outstanding of the
Company.
What am I
voting on?
There are two matters scheduled for a vote at the annual meeting:
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the election of directors, and
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the ratification of the selection by the Audit Committee of our
Board of Directors of Deloitte & Touche LLP as our
independent registered public accounting firm for the fiscal
year ending December 31, 2010.
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How many
votes do I have?
Each share owned on June 16, 2010, the record date for the
meeting, entitles its owner to one vote on each matter to be
voted upon. As of the record date, the Companys management
owned approximately 0.54% of the Companys outstanding
Common Stock.
What is
the quorum requirement?
The holders of one-third of the shares that are outstanding and
entitled to vote at the Annual Meeting must be present, in
person or represented by proxy, to constitute a quorum for all
matters to come before the meeting.
How do I
vote?
Shareholder of Record: Shares Registered in your name.
If you are a shareholder of record (that is, a shareholder who
holds shares in your own name with our transfer agent, American
Stock Transfer and Trust Company), you can vote by
attending the Annual Meeting in person, or at any adjournment
thereof, or by signing, dating and returning your proxy card in
the enclosed postage-paid envelope. If you sign and return your
proxy card but do not give voting instructions, the shares
represented by that proxy will be voted FOR
Proposals 1 and 2 and will be voted in the proxy
holders discretion as to other matters that may come
before the Annual Meeting.
Beneficial Owner: Shares Registered in the Name of a
Broker, Bank or Other Nominee.
If your shares are held in street name (that is, in
an account at a bank, brokerage firm or other holder of record),
then you are the beneficial owner of the shares and these proxy
materials, including instructions that you must follow in order
for your shares to be voted are being forwarded to you by that
organization. The organization holding your account is
considered the shareholder of record for purposes of voting at
the Annual Meeting. As a beneficial owner, you have the right to
direct your broker or other agent on how to vote the shares in
your account. You are also invited to attend the Annual Meeting.
However, since you are not the shareholder of record, you may
not vote your shares in person at the meeting unless you request
and obtain a valid proxy from your broker or other agent.
How are
votes counted?
Other than the vote for the election of directors, which
requires a plurality of the votes cast, each matter to be
submitted to the shareholders requires the affirmative vote of a
majority of the votes cast at the meeting for such matter. For
purposes of determining the number of votes cast with respect to
a particular matter, only those votes cast FOR OR
AGAINST are included. Abstentions and broker
non-votes are counted only for purposes of determining whether a
quorum is present at the meeting. A broker non-vote
occurs when a nominee holding shares for a beneficial owner does
not vote on a particular proposal because the nominee does not
have discretionary voting power with respect to that item and
has not received voting instructions from the beneficial owner.
If you do not give instructions to your broker, bank, or other
agent, it can vote your shares with respect to discretionary
items, but not with respect to non-discretionary items.
Discretionary items are proposals considered routine under the
rules of the New York Stock Exchange on which your broker, bank
or other agent may vote shares held in street name in the
absence of your voting instructions, and include the
ratification of the selection of our independent registered
public accounting firm. On non-discretionary items for which you
do not give instructions to your broker, bank or other agent,
which include the election of directors, the shares will be
treated as broker non-votes. With respect to the election of
directors, a shareholder may vote FOR OR
WITHHOLD AUTHORITY. Votes indicating WITHHOLD
AUTHORITY will be counted as a vote against the nominee.
For all other proposals, a shareholder may indicate
FOR, AGAINST OR ABSTAIN.
Management knows of no other matter to be voted upon other than
with respect to the election of directors and ratification of
the selection of Deloitte and Touche LLP. However, if any other
matter is properly presented at the meeting, one of the
individuals named on your proxy card as your proxy will vote
your shares using his or her best judgment.
Can I
change my vote after submitting my proxy?
Yes. If you are a shareholder of record, you may change your
vote at any time before the proxy is exercised, by executing and
delivering a timely and valid later-dated proxy, by voting by
ballot at the Annual Meeting or by giving written notice to the
Secretary of the Company. Attendance at the Annual Meeting will
not have the effect of revoking a proxy unless you give proper
written notice of revocation to the Secretary before the proxy
is exercised or you vote by written ballot at the Annual Meeting.
If you are a beneficial owner of shares in street name, you may
change your vote by submitting new voting instructions to your
broker, bank or other agent, or, if you have obtained a valid
proxy card from your broker, bank or other agent giving you the
right to vote your shares, by attending the Annual Meeting and
voting in person.
Who is
paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In
addition to these mailed proxy materials, our directors and
employees may also solicit proxies in person, by telephone, or
by other means of communication. Directors and employees will
not be paid any additional compensation for soliciting proxies.
We may also reimburse brokerage firms, banks and other agents
for the cost of forwarding proxy materials to beneficial owners.
In addition, we have retained our transfer agent, American Stock
Transfer and Trust Company to assist in the distribution of
proxy materials and solicitation of votes for a fee not to
exceed $10,000 plus reimbursement of
out-of-pocket
expenses.
How can I
find out the results of the voting at the Annual
Meeting?
Preliminary voting results will be announced at the Annual
Meeting. Final voting results will be published in our Current
Report on
Form 8-K
to be filed with the Securities and Exchange Commission within
three business days after the conclusion of the Annual Meeting
of Shareholders. If the final voting results are not available
within three business days after the conclusion of the meeting,
we will provide the preliminary results in the
Form 8-K
and the final results in an amendment to the
Form 8-K
within four business days after the final voting results are
known to us.
PROPOSAL NO. 1 -
ELECTION OF DIRECTORS
There are eight (8) nominees for election as directors who
will hold office until the next Annual Meeting of Shareholders
and/or until
their successors have been duly elected and qualified. The
persons named on the accompanying proxy will vote all shares for
which they have received proxies FOR the election of the
nominees named below unless contrary instructions are given. In
the event that any nominee should become unavailable, shares
will be voted for a substitute nominee unless the number of
directors constituting a full board is reduced. Directors are
elected by plurality vote. All of the nominees were elected to
the Board of Directors at the 2009 Annual Meeting of
Shareholders and are currently serving, except for Alfred
Altomari, Paul J. Hondros and David M. Wurzer.
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THE BOARD
OF DIRECTORS RECOMMENDS A VOTE FOR EACH
NOMINEE.
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Date First
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Name
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Age
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Position
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Elected
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Jay M.
Haft, Esq.(1)(2)(3)
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74
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Chairman of the Board
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9/16/1996
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Alfred Altomari
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Director Candidate
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David M.
Bartash(1)(2)(4)
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Lead Director and Vice-Chairman of the Board
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11/16/2001
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Alexander W.
Casdin(1)(4)
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Director
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1/29/2009
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Robert F. Doman
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Director, President and Chief Executive Officer
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6/15/2006
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Paul J. Hondros
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Director Candidate
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Magnus
Moliteus(1)(2)(4)
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Director
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7/25/2003
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David M. Wurzer, CPA
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Director Candidate
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Member of the Audit Committee.
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Member of the Compensation
Committee.
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Member of the Nominating and
Corporate Governance Committee.
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Member of the Acquisition and
Business Development Committee.
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Jay M. Haft, Esq., 74, who serves as the Chairman of
the Board and Chairman of our Compensation Committee is also a
member of our Audit and Nominating and Corporate Governance
Committees. He was first elected to the Board on
September 16, 1996. He is a strategic and financial
consultant for growth-stage companies. He has served as Chairman
of the Board since December 1, 2008. Mr. Haft also
served as Chairman of the Board from June 2003 to December 2004
and Vice Chairman and Lead Director from December 2004 to
December 2008. Since 2005, Mr. Haft has been a partner and
a member of the Investment Committee of Columbus Nova, a private
investment arm of the Renova Group. He was a senior corporate
partner of the law firm of Parker, Duryee, Rosoff &
Haft from 1989 to 1994 and was of counsel to Parker, Duryee,
Rosoff & Haft from 1994 until 2002. Mr. Haft was
a director of Encore Medical prior to its acquisition by the
Blackstone Group in 2006 and is a current member of the Board of
Directors of Kingstone Companies Inc. He is also active in
international corporate finance mergers and acquisitions, having
extensive experience in the Russian market, where he has worked
on growth strategies for companies looking to internationalize
their business assets and enter international capital markets.
Mr. Haft has served on approximately 30 corporate boards,
including his tenure as Chairman of the Emerson Radio
Corporation, and director at CompuComp Systems, Inc. He has
served as a founder, consultant
and/or
director of Imatron Inc. (a CT scanner company whose technology
is now owned by GE), Cardiac Resuscitator Corp. (technology now
own by Medtronic, Inc.) and Encore Orthopedics Corp. (technology
acquired by the Blackstone Group). Currently Mr. Haft is a
director of Ballantyne Cashmere, SpA as well as an advisor to
Montezemolo & Partners, an Italian family investment
group. He also serves on the board of the
U.S.-Russia
Business Council, and The Link of Times Foundation, a private
cultural historical foundation. Mr. Haft is also active in
the non-profit sector as well, particularly in the areas of
education and art. He has served as a director of the Florida
International University (FIU) Foundation and a member of the
Advisory Board of the Wolfsonian Museum and the FIU Law School.
He was previously appointed by Governor Lawton Chiles to the
Florida Commission for the Governmental Accountability to the
People, and served as a National Trustee and Treasurer of the
Miami City Ballet and on the board of the Concert Association of
Florida. Mr. Haft earned his Bachelors degree and
graduated Phi Beta Kappa from Yale University and earned his law
degree from Yale Law School. The Board believes that
Mr. Haft is qualified to serve as a director due to his
wealth of knowledge and insight into the challenges faced by
emerging growth companies, including successful companies in the
medical device field as well as his expertise in counseling
companies on strategic matters.
Alfred Altomari 51, who is a candidate for election to
the Board of Directors, is not currently a member of the Board
of Directors or any of the Committees of the Company. Most
recently Mr. Altomari was Chief Executive Officer of
Barrier Therapeutics, Inc., a specialty pharmaceutical company,
since April of 2008 and a member of the companys Board of
Directors since January 2008, until the sale of the company to
GlaxoSmithKline plc in August 2008. Mr. Altomari joined
Barrier as a Chief Commercial Officer in 2003 and became Chief
Operating Officer in 2006. Prior to joining Barrier, he had
served in numerous executive roles in general management,
commercial operations, business development, product launch
preparation and finance within Johnson & Johnson from
1982 to 2003. Prior to his tenure at Johnson &
Johnson, Mr. Altomari was Vice President/Franchise Head of
Ortho-McNeil Pharmaceuticals Womens Health Care
Franchise. He completed his undergraduate studies at Drexel
University earning a Bachelors of Science degree with a dual
major in finance and accounting, and subsequently received a
Masters in Business Administration from Rider University.
Mr. Altomari currently serves as a member of the Board of
Directors of Auxilium Pharmaceuticals Inc. and three privately
held companies including Agile Therapeutics, Quinnova
Pharmaceutical, and Signum Biosciences. Mr. Altomari is
also currently serving as a member of the advisory board of Le
Bow College, the Business School of Drexel
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University. The Board believes that Mr. Altomari is
qualified to serve as a director due to his prior senior
management experience in the pharmaceutical industry, as well as
his breadth of experience in the development and marketing of
specialty pharmaceuticals.
David M. Bartash, 67, retired, who serves as the Vice
Chairman, Lead Director and Chairman of our Acquisition and
Business Development Committee and is also a member of our Audit
and Compensation Committees. He was first elected to the Board
on November 16, 2001. He was the President and founder of
Bartash and Company, a consulting company which, from 1990 to
2009, provided financial and scientific consulting services to
the healthcare industry. He has personally advised
pharmaceutical and biotechnology companies in the United States,
Canada, and Australia; investment firms in the United States and
Great Britain; and investment banking firms in the United
States. Mr. Bartash also serves on the Board of Directors
of the Developmental Disabilities Institute, a
not-for-profit
organization providing educational, residential, and medical
services to over 1500 individuals with autism spectrum
disorders. He served as Chairman for the Board of DDI until
2009, and currently serves on the Executive, Finance, and
Building Committees. Mr. Bartash also serves on the Board
of Directors of the DDI Foundation. Prior to founding
Bartash & Company, Mr. Bartash spent over
20 years as a research analyst, and primarily as a
pharmaceutical analyst, at several major investment firms
representing both the buy and the sell sides of Wall Street. His
last two positions, prior to forming Bartash &
Company, were as senior pharmaceutical analyst at Dean Witter
and Citibank. Mr. Bartash earned his Bachelors degree
from the University of Pennsylvania and his Masters degree
from Bryn Mawr College. The Board believes that Mr. Bartash
is qualified to serve as a director as a result of his
significant experience in the pharmaceutical industry,
particularly stemming from his years of providing investment
advice and financial analysis of business and product
opportunities, as well as his diversity of view-points.
Alexander W. Casdin, 42, who is a member of our Audit,
Compensation and Acquisition and Business Development
Committees, was first elected to the Board on January 29,
2009. He is also Vice President, Finance of Amylin
Pharmaceuticals, Inc., a position he has held since November,
2009. Prior to his position at Amylin, Mr. Casdin was
founder of Casdin Advisors LLC, formed in 2007, where he served
as a strategic advisor to companies in the life sciences
industry. From October 2005 until he founded Casdin Advisors,
Mr. Casdin was Chief Executive Officer and Portfolio
Manager of Cooper Hill Partners, LLC, a healthcare investment
fund, and from 2001 to October 2005, he was Co-Portfolio Manager
at Cooper Hill Partners. From 1999 to 2001, Mr. Casdin was
employed by Pequot Capital Management, LLC as an analyst and
then portfolio manager where he oversaw the Pequot Capital
Healthcare Fund. Prior to joining Pequot Capital Management,
Mr. Casdin was a Senior Managing Analyst at Dreyfus
Corporation focusing on the healthcare industry. In the
non-profit sector, Mr. Casdin is a member of the Social
Enterprise Program at Columbia Business School, a member of the
Advisory Board of Hassenfeld Center for Cancer & Blood
Disorders based at New York Universitys Langone Medical
Center and a member of the Artists Council of the Whitney Museum
of American Art. Mr. Casdin earned his Bachelors
degree from Brown University and earned his Masters in
Business Administration, Beta Gamma Sigma, from Columbia
Business School. The Board believes Mr. Casdin is qualified
to serve as a director due to his extensive knowledge of the
pharmaceutical industry and his business and financial
expertise, particularly arising from his years analyzing
investment opportunities in the healthcare field.
Robert F. Doman, 60, has served as our President and
Chief Executive Officer since June 2007 and as our President and
Chief Operating Officer from January 2005 to June 2007. He was
first elected to the Board on June 15, 2006. From 2000
until 2004, Mr. Doman served as President of Leach
Technology Group, the medical device division of Leach Holding
Corporation which was sold to Easterline Technologies in 2004.
From 1999 to 2000, he was President, Device Product Development
of West Pharmaceutical Services, a manufacturer of systems
and device components for parentally administered medicines and
drugs. Prior to joining West Pharmaceutical Services, he worked
for the Convatec division of Bristol-Myers Squibb from 1991 to
1999 in positions that included: Vice President, Worldwide
Marketing and Business Development; Vice President and General
Manager, U.S. Wound and Skin Care; and Vice President,
U.S. Operations. From 1976 to 1990, he held sales,
marketing and business development roles of increasing
responsibilities at Critikon, Inc., a Johnson &
Johnson company. Mr. Doman earned his Bachelors
degree from Saint Josephs University. The Board believes
that Mr. Doman is qualified to serve as a director due to
his prior extensive diverse international and domestic
experience in senior management positions at pharmaceutical and
medical device companies, including in the field of dermatology,
with respect to general management, business development,
building sales and marketing capabilities, new product
development and strategic planning.
Paul J. Hondros, 61, who is a candidate for election to
the Board of Directors, is not currently a member of the Board
of Directors or any of the Committees of the Company. He is the
current President and Chief Executive Officer of AlphaOne
Capital Partners, LLC, and its affiliate companies. Prior to
founding AlphaOne in December 2008, he was the founding
President and Chief Executive Officer of Gartmore Global
Investments and President and Chief Executive Officer of the
Gartmore Group, a global asset management company. In 1998 he
founded Villanova Capital, Inc., which operated until 2003, when
it was
4
merged into Gartmore Investment Management plc. Prior to
founding Villanova Capital, Inc., he served briefly as President
and Chief Operating Officer of Pilgrim Baxter &
Associates, Ltd. From 1990 to 1997 he was President and Chief
Executive Officer of Fidelity Investments Institutional
Services Company and President and Chief Executive Officer of
its Individual Investors groups. Early in his career,
Mr. Hondros worked with SEI Investments, Inc., a global
investment management, software, and mutual fund services
company, where he was employed as a computer programmer,
eventually rising to Executive Vice President of its Financial
Services Division. Mr. Hondros also serves as the Chairman
of the board of trustees of St. Josephs University,
from which he earned his bachelors degree in history, and
where he and his wife recently founded The Kinney Center for
Autism Studies. The Board believes that Mr. Hondros is
qualified to serve as a director due to his management
experience and his investment expertise regarding the analysis
of corporate performance.
Magnus Moliteus, 71, who is a member of our Audit,
Compensation and Acquisition and Business Development
Committees, was first elected to the Board on July 25,
2003. He also has been a consultant to the healthcare industry
and Chairman of COM Consulting, a privately held firm, which
enhances
Swedish-American
relations particularly between health care companies, since
2001. From 1995 to 2001, Mr. Moliteus served as Executive
Director of Invest in Sweden Agency, U.S., a Swedish government
agency. From 1973 to 1976 he was President of Pharmacia France
S.A. From 1977 to 1990, he was the Chief Executive Officer of
Pharmacia, Inc. (now owned by Pfizer, Inc.) and from 1990 to
1995 he was Chief Executive Officer of Procordia US Inc.
Mr. Moliteus served as Chairman of the
Swedish-American
Chamber of Commerce, Inc. between 1988 and 1991 and remains an
honorary director. Also, from 1989 to 1995, Mr. Moliteus
was a member of the Board of the Health Industry Manufacturers
Association (HIMA). Currently Mr. Moliteus is a member of
the Advisory board of Eon Reality, Inc. and of
e-pill, LLC.
He is also senior advisor to Pharmadule Inc. and head of
KAEL-Gemvax US and European operations. Mr. Moliteus earned
his Masters degree from Uppsala University. The Board
believes that Mr. Moliteus is qualified to serve as a
director based on his extensive senior executive management
positions with a global pharmaceutical company and his role as
an advisor to numerous other companies in the industry.
David M. Wurzer, CPA, 51, who is a candidate for election
to the Board of Directors, is not currently a member of the
Board of Directors or any of the committees of the Company. He
is currently the Managing Director of Investments at Connecticut
Innovations, the State of Connecticuts venture
capital arm, where he has been in such a position since
November 2009. From September 1997 until December 2007, he
served as the Executive Vice President, Treasurer and Chief
Financial Officer of CuraGen Corporation, a publically traded
bio-pharmaceutical company developing protein, antibody and
small molecule therapeutics in oncology. Prior to his employment
with CuraGen, from 1991 to 1997, he held management and
executive level positions with Value Health, Inc., focusing on
business synergy, cost savings, and mergers and acquisitions,
including being named the Senior Vice President, Treasurer and
Chief Financial Officer from February 1994 until September 1997.
Additionally, from 1980 to 1991, Mr. Wurzer held managerial
and accounting positions at Coopers & Lybrand, and its
successor by merger PricewaterhouseCoopers. Mr. Wurzer
graduated in 1980 from the University of Notre Dame, with a BBA
in Accounting. He is currently a member of the board of
directors of Strategic Diagnostics, Inc., a NASDAQ listed public
company, three privately held life sciences companies, including
Polybiotics, LLC, Axerion Therapeutics, Inc., and CyVek, Inc.,
and the
not-for-profit
theatre management company Playhouse Theatre Group. Since 2008
Mr. Wurzer has periodically provided consulting services
relating to capital raising, expense reductions cost analysis
and business productivity strategies. The Board believes that
Mr. Wurzer is qualified to serve as a director due to his
prior accounting experience, investment managers
perspective on the analysis of corporate performance and his
senior management experience in the bio-pharmaceutical industry.
According to the terms of an agreement dated as of May 13,
2010 by and among DUSA and SRB Management, L.P., SRB Greenway
Opportunity Fund, (QP), L.P., SRB Greenway Opportunity Fund,
L.P., BC Advisors, LLC, Steven R. Becker and Matthew A. Drapkin,
DUSA has agreed to nominate Mr. Wurzer, as well as
Mr. Altomari and Mr. Hondros for election to the Board
at the Companys 2010 and 2011 Annual Meetings of
Shareholders.
Additionally, pursuant to the terms of the merger agreement
dated as of December 30, 2005, as amended, by and among
DUSA, Sirius Laboratories, Inc. and certain shareholders of
Sirius, Sirius has the right to nominate one director to our
Board. Siriuss initial representative on our Board,
Dr. Neal Penneys, resigned on April 10, 2007 for
personal reasons and has not been replaced by the Sirius
shareholder representatives. DUSAs obligation to nominate
a director candidate recommended by the Sirius shareholder
representatives, continues through the expiration of the period
of time that any milestone payment may be paid to former Sirius
shareholders under the terms of the merger agreement.
5
Directors
Whose Term Will End As of the 2010 Annual Meeting
Set forth below are the names of each of our other current
directors whose term will end as of the 2010 Annual Meeting.
John H. Abeles, MD, 64, who serves as the Chairman of our
Nominating and Corporate Governance Committee and is also a
member of our Audit, Compensation and Acquisition and Business
Development Committees, was first elected to the Board on
August 2, 1994. He is also the President and founder of
MedVest, Inc. which, since 1980, has provided consulting
services to health care and high technology companies.
Dr. Abeles practiced medicine before joining the
pharmaceutical industry as a senior medical executive with
Sterling Drug, Pfizer Inc. and Revlon Health Care in the early
1970s. In 1975, he became the first, full-time healthcare
analyst in Wall Street with medical degree qualifications, at
Kidder Peabody, where he worked until 1980 when he formed
MedVest Inc. MedVest is a privately owned healthcare consulting
firm concentrating in medical product development, research and
development strategy and venture financing. He is the General
Partner of Northlea Partners, a family office fund with numerous
venture and private equity investments in emerging medical
companies. Since 2005, Dr. Abeles has been a Managing
Member of ProMed Capital LLC, a New York investment group
promulgating Israeli medical venture companies and investments.
He also serves on several boards of private companies in the
healthcare industry. Dr. Abeles serves as an Advisory Board
Member of the College of Chemistry, University of California,
Berkeley. He is a Fellow of the Royal Society of Medicine,
London. He is a professor of Clinical Pharmacology and
Therapeutics of the International University of the Health
Sciences since 1998 and was Adjunct Instructor, Clinical
Pharmacology, Mt. Sinai Medical School from 1978 to 1982. In the
non-profit sector, Dr. Abeles is a Director of the
International Opera Alliance in New York and a member of the
Players Club in New York. He is also on the board of The New
Group, a theater organization in New York. Dr. Abeles is
also a member of the Boards of Directors of Oryx Technology,
CytoCore, Inc. and CombiMatrix Corporation. He was a member of
the Boards of Directors of I-Flow Corporation, a manufacturer of
medical infusion devices, prior to its sale to Kimberly-Clark
Corporation in 2009. He earned his medical degree as well as a
degree in pharmacology from the University of Birmingham,
England. He also has a diploma in music from the Royal Schools
of Music in piano and violin. The Board believes that
Dr. Abeles is qualified to serve as a director due to his
extensive expertise in the medical field, in the development and
commercialization of drugs and medical devices and his
membership on public and private companies boards of
directors.
Marvin E. Lesser, 68, was first elected to the Board on
June 9, 2009. He is a member of our Audit and Compensation
Committees. Mr. Lesser has been Managing Partner of Sigma
Partners, L.P., a private investment partnership, since 1993.
Also, since 2000 he has been the President of Alpina Management,
LLC, the investment adviser to St. Moritz 2000 Fund, Ltd., a
private investment fund. Since 1992 he has periodically provided
consulting services in finance, compensation and organizational
matters. He is a director of USG Corporation, Golfsmith
International Holdings, Inc. and St. Moritz 2000 Fund, Ltd, and
from 2002 to 2007 was a director of Pioneer Companies, Inc. He
has experience serving on audit, compensation, finance,
governance and CEO search committees, and has been the chair of
audit committees and a CEO search committee.
Mr. Lessers background and experience include both
public accounting and law, but he is currently not practicing in
either profession. Mr. Lesser holds a Bachelor of Science
in Economics degree from the Wharton School at the University of
Pennsylvania, a Bachelor of Laws degree from the University of
Pennsylvania and Master of Laws degree from New York University.
The Board believes that Mr. Lesser is qualified to serve as
a director due to his prior and current experience on public
company boards, his knowledge of public company accounting and
financial matters and his investment managers perspective
on the analysis of corporate performance and the domestic and
global economic environments.
Richard C. Lufkin, 63, who serves as the Chairman of our
Audit Committee and is also a member of our Compensation, and
Nominating and Corporate Governance Committees, was first
elected to the Board on January 27, 1992. Since 2005 he has
served as a co-founder, director, and the Chief Financial
Officer of Anima Cell Metrology, Inc., a development-stage,
privately-held biotechnology firm focused on proteomics. From
1995 to 2004 Mr. Lufkin was co-founder and President of
Linguagen Corp. (now Redpoint Bio Corp.), a publicly-traded
biotechnology firm developing products deriving from its
expertise in the molecular biology of taste signaling. From 1992
to 2003 he was co-founder and Chief Operating Officer of
SynectiQ Corporation, a medical device contract research and
development firm. From 1986 until it was acquired by IVAX
Corporation in 1991, Mr. Lufkin was President and Chief
Operating Officer of Medical Market Specialties, Inc., a
specialty pharmaceutical firm concentrating on the latter stage
development, regulatory approval, and marketing of orphan drugs.
He is the principal of Enterprise Development Associates, a
proprietorship formed in 1985 which provides consulting and
venture support services, licensing, strategic planning, FDA
regulatory affairs and marketing management to early stage
technology-based companies, principally in the life sciences
sector. From 1980 to 1985, he held management positions with
Johnson & Johnson handling business development of
professional and consumer wound and oral care products,
orthopedics, athletic products, ostomy, and adult incontinence
6
products, as well as establishing business terms for numerous
product acquisition, distribution, license, option, and funded
research agreements. Prior to this time, he was Assistant Vice
President of the American Research and Development, Division of
Textron, Inc. managing venture capital investments including
seed capital, second and third round financings and leveraged
buy-outs for portfolio companies, on many of which he served as
a board member. Early in his career he worked at Corning, Inc.
following his service as a Naval officer. Mr. Lufkins
other current activities include serving as a director for the
New Jersey Chapter, National Association of Corporate Directors,
member of the Technology Advisory Board of the New Jersey
Economic Development Authority, and President of the MIT Club of
Northern New Jersey. Mr. Lufkin earned his Bachelor of
Science from the Massachusetts Institute of Technology and his
Master in Business Administration from the Wharton School,
University of Pennsylvania. The Board of Directors believes that
Mr. Lufkin is qualified to serve as a director due to his
strong entrepreneurial experience in developing and
commercializing new products for the pharmaceutical and medical
device markets.
DIRECTOR
COMPENSATION
Directors who are members of management receive no cash
compensation for service as a director or as member of any
committee. Non-employee directors receive $25,000 per year, as
annual compensation, regardless of the number of Board or
Committee meetings they attend. The Chairman of the Board
receives an additional $10,000 per year, and the Vice-Chairman
of the Board receives $1,000 per meeting in which he acts in the
absence of the Chairman of the Board. Directors serving on the
Audit Committee receive an additional $5,000 per year. The
Chairman of the Audit Committee receives an additional $5,000
per year. Directors are also reimbursed for their
out-of-pocket
expenses related to their attendance at meetings of the Board
and Committees. Under the Companys 2006 Equity
Compensation Plan, as amended, all non-employee directors are
awarded options to purchase up to 15,000 shares of Common
Stock on June 30th of their first year of service or as of the
close of business thirty (30) days following their
election, whichever shall first occur, and options to purchase
up to 10,000 shares of Common Stock on June 30th of each
year following their re-election. All options granted to
non-employee directors vest immediately. As further discussed
under Compensation Discussion & Analysis
below, in 2009 Messrs. Abeles, Bartash, Lufkin and Moliteus
received a special, one-time grant of 7,500 restricted shares
for their extraordinary service during the year. Mr. Haft
received a special, one-time grant of 15,000 restricted shares
for his extraordinary service during the year. These awards of
restricted shares vest at a rate of 25% per year over four years.
The following table sets forth the annual compensation to
non-employee directors for 2009:
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Change in
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Pension
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Value and
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Nonqualified
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Fees
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Non-Equity
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Deferred
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Earned or
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Incentive Plan
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Compensation
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All Other
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Paid in Cash
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Stock
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Option Awards
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Compensation
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Earnings
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Compensation
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Name
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($)
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Awards ($)
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($)(1)(2)
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($)
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($)
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($)
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Total ($)
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John H. Abeles, MD
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$
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30,000
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$
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9,150
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$
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7,734
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$
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46,884
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David M. Bartash
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$
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31,000
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$
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9,150
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$
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7,734
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$
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47,884
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Alexander W. Casdin
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$
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30,000
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$
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20,267
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$
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50,267
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Jay M. Haft, Esq.
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$
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40,000
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$
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18,300
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$
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7,734
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$
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66,034
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Richard C. Lufkin
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$
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35,000
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$
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9,150
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$
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7,734
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$
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51,884
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Marvin E. Lesser
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$
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16,808
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$
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11,601
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$
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28,409
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Magnus Moliteus
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$
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30,000
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$
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9,150
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$
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7,734
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$
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46,884
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(1)
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Option awards represent the
grant-date fair value of the awards. The grant date fair value
of each directors 2009 stock option grant was $0.77 per
share, except for Mr. Casdin whose weighted average grant
date fair value was $0.81 per share. Grant date fair value is
based on the Black-Scholes option pricing model on the date of
grant. For additional discussion on the valuation assumptions
used in determining the compensation expense, see Note 8 to the
audited consolidated financial statements in our Annual Report
on
Form 10-K
for the year ended December 31, 2009.
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(2)
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The aggregate numbers of shares
subject to option awards outstanding as of December 31,
2009 were as follows: 85,000 for Dr. Abeles, 95,000 for
Mr. Bartash, 25,000 for Mr. Casdin, 105,000 for
Mr. Haft, 15,000 for Mr. Lesser, 105,000 for
Mr. Lufkin and 60,000 for Mr. Moliteus.
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Independence
of Directors
The Board has determined that all of the non-employee directors
are independent, as independence is defined under the rules of
The NASDAQ Stock Market.
7
CORPORATE
GOVERNANCE
Meetings
and Committees of the Board of Directors
During the year ended December 31, 2009, there were
fourteen (14) meetings of the Board of Directors. Each
incumbent director attended at least 75% of the aggregate of the
meetings of the Board of Directors and of all of the committees
on which he serves. The Board of Directors has established an
Audit Committee, Nominating and Corporate Governance Committee,
Compensation Committee and Acquisition and Business Development
Committee. Mr. Haft, the Chairman of the Board, normally
presides at Board meetings, and, in his absence,
Mr. Bartash, the Vice-Chairman of the Board, presides.
All of the non-employee directors are members of the Audit
Committee. Mr. Lufkin serves as its Chairman. All of the
members are independent directors in accordance with the rules
of The NASDAQ Stock Market and applicable federal securities
laws and regulations. In addition, the Board of Directors has
determined that Mr. Lufkin and Mr. Haft both qualify
as audit committee financial experts and has designated
Mr. Lufkin to fill that role. The Audit Committee provides
oversight of the Companys accounting functions and acts as
liaison between the Board of Directors and the Companys
independent registered public accounting firm. The Committee
reviews with the independent auditors the Companys
unaudited quarterly financial statements, the planning and scope
of the audits of the Companys financial statements, the
results of those audits and the adequacy of internal accounting
controls, and monitors other corporate and financial policies.
In performing these functions, the Audit Committee meets
periodically with the independent auditors (including in private
sessions) and with management. In addition, the Audit Committee
selects the independent registered public accounting firm. The
Audit Committee operates under a written charter adopted and
approved by the Board of Directors, a copy of which is attached
to this proxy statement as Exhibit A and is also available
on the Companys website at www.dusapharma.com. The
Committee met five (5) times during 2009.
The members of the Nominating and Corporate Governance Committee
currently are Dr. Abeles, who serves as its Chairman, and
Messrs. Haft and Lufkin. All of the members of our
Nominating and Corporate Governance Committee are independent
directors in accordance with the rules of The NASDAQ Stock
Market. The Nominating and Corporate Governance Committees
purpose is to identify and evaluate the qualifications of
individuals to become members of the Board of Directors, to
select the director nominees, to develop and recommend corporate
governance principles to the Board of Directors and to provide
oversight and guidance to the Board of Directors to assure
compliance with its corporate governance policies and
principles. There were six (6) meetings of this Committee
in 2009. Shareholders who wish to suggest qualified candidates
to the Nominating and Corporate Governance Committee for
director should write to: Administrator, Nominating and
Corporate Governance Committee, DUSA Pharmaceuticals, Inc., 25
Upton Drive, Wilmington, Massachusetts 01887 stating, in detail,
the suggested nominees biography and qualifications of
such person for consideration by the Nominating and Corporate
Governance Committee. You should also enclose a written
statement from each proposed nominee consenting to be named as a
nominee and, if nominated and elected, to serve as a director. A
copy of the Nominating and Corporate Governance Committee
Charter is located on the Companys website at
www.dusapharma.com.
Among the central purposes of the Nominating and Corporate
Governance Committee are identifying individuals qualified to
become members of the Board of Directors, reviewing the
qualifications of candidates and selecting the director nominees
to be voted on at each annual meeting of shareholders. When the
need to recruit a director arises, the Nominating and Corporate
Governance Committee will consult the other directors and the
Chief Executive Officer and may retain fee-paid third party
recruiting firms to identify potential candidates.
Mr. Wurzers nomination was proposed by Steven Becker,
who, through investment funds controlled by him, owns 6.56% of
DUSAs common stock and may be deemed to be the beneficial
owner of approximately 7.33% of DUSAs common stock.
Mr. Altomari was recommended by a shareholder and
Mr. Hondros was recommended by Mr. Doman. The
candidate evaluation process may include inquiries as to the
candidates reputation and background, examination of the
candidates experiences and skills in relation to the Board
of Directors requirements at the time, consideration of
the candidates independence as measured by the Board of
Directors independence standards, and other considerations
as the Nominating and Corporate Governance Committee deems
appropriate at the time. In addition, the Committee considers
the diversity of professional experience, education, skill sets
and viewpoints of the Board of Directors, as a whole, when
considering the individual qualities of a potential nominee,
with the goal of promoting a balance of perspectives. Prior to
formal consideration by the Nominating and Corporate Governance
Committee, any candidate who passes such screening would be
interviewed by the Nominating and Corporate Governance Committee
or its Chairman and the Chief Executive Officer. In effectuating
those purposes, the Nominating and Corporate Governance
Committee is charged with ensuring that the nominees for
membership on the Board of Directors are of the highest possible
caliber and are able to provide insightful, intelligent and
effective guidance to the management of the Company. The
following criteria have been identified by the
8
Nominating and Corporate Governance Committee, and adopted by
the Board of Directors, to guide the Nominating and Corporate
Governance Committee in selecting nominees:
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1.
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Directors should be of the highest ethical character and share
the values of DUSA;
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2.
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Directors should have personal and professional reputations that
compliment and enhance the image and standing of DUSA;
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3.
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Directors should be leaders in their fields of endeavor, with
exemplary qualifications;
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4.
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The Committee should generally seek current
and/or
former officers
and/or
directors of companies and organizations, including scientific,
government, educational and other
non-profit
institutions;
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5.
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The Committee should seek directors so the Board is comprised of
directors who collectively are knowledgeable in the fields of
pharmaceuticals and device development, particularly those areas
of research, development and commercialization undertaken by the
Company;
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6.
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Directors should have varied educational and professional
experiences and backgrounds who, collectively, provide
meaningful counsel to management;
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7.
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Directors should generally not serve on more than six
(6) boards;
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8.
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At least two-thirds (2/3rds) of the directors on the Board
should be independent as defined by The NASDAQ Stock
Market and should not have any real or apparent conflicts of
interest in serving as a director; and
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9.
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Each director should have the ability to exercise sound,
independent business judgment.
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The Committee applies the same criteria to all nominees for the
Board irrespective of the source of such nominee.
Absent extenuating circumstances, each member of the Board of
Directors is expected to attend the 2010 Annual Meeting of
Shareholders. All of the directors, who were directors at such
time, attended the 2009 Annual Meeting of Shareholders.
All of the non-employee members of the Board of Directors are
members of the Compensation Committee. Mr. Haft serves as
its Chairman. The Compensation Committee considers matters
related to the compensation of the Companys key officers
and directors. The Committee also considers employee benefits
which may be appropriate as the Company grows and develops
policies and procedures. The Compensation Committee is
responsible for setting and administering the policies which
govern annual executive salaries and cash bonus awards, and
under the 2006 Equity Compensation Plan approves the amounts of
stock option or other equity awards awarded to all grantees. The
Compensation Committee evaluates, on a yearly basis, the
performance, and determines the compensation of, the executive
officers of DUSA, including the named executive officers.
DUSAs President and Chief Executive Officer, Robert F.
Doman, is not a member of the Compensation Committee, however,
the Compensation Committee seeks input from him regarding the
performance and proposed compensation of DUSAs other
executive officers. Mr. Doman and Richard C. Christopher,
DUSAs Vice President of Finance and Chief Financial
Officer, are present, at the invitation of the Compensation
Committee, at its meetings, other than during consideration of
their own compensation. The Compensation Committee has the
authority to retain, at the Companys expense, independent
counsel or other advisers as it deems necessary in connection
with its responsibilities. In 2009, the Compensation Committee
engaged WNB Consulting LLC to review and analyze DUSAs
executive compensation program, including benefit plans, to
prepare a benchmarking analysis and to recommend appropriate
levels of cash and equity compensation for DUSAs executive
officers, including the Chairman of the Board and Chief
Executive Officer, and to recommend ways to enhance long-term
incentives for the Companys management team. The
Compensation Committee is solely responsible for the engagement
of WNB Consulting, and all work performed by WNB Consulting on
behalf of DUSA is initiated and supervised by the Compensation
Committee, except to the extent delegated by the Compensation
Committee to management. The Compensation Committee met six
(6) times in 2009. It also met two (2) times in 2010
to discuss cash and equity compensation for 2010 and to consider
cash bonuses for 2009. The Compensation Committee operates under
a written charter adopted and approved by the Board of
Directors, a copy of which is available on the Companys
website at www.dusapharma.com.
Code of
Ethics Applicable to Senior Officers
We have adopted a written Code of Ethics Applicable to Senior
Officers that applies to our senior officers, including our
principal executive officer, principal financial officer,
principal accounting officer, or persons performing similar
functions. We have posted the Code of Ethics on our website,
which is located at www.dusapharma.com. In addition, we intend
to disclose on our website any amendments to, or waivers
9
from, any provision of the Code of Ethics that applies to our
principal executive officer, principal financial officer,
principal accounting officer, or persons performing similar
functions.
Compensation
Committee Interlocks and Insider Participation
None of the directors on the Compensation Committee is or was
formerly an officer or employee of the Company or had any
relationship or related person transaction requiring disclosure
under the rules of the Securities and Exchange Commission. None
of our executive officers serves as a member of the board of
directors or compensation committee of any entity that has one
or more of its executive officers serving as a member of our
Compensation Committee. In addition, none of our executive
officers serves as a member for the compensation committee of
any entity that has one or more of its executive officers
serving as a member of our Board of Directors.
The members of the Acquisition and Business Development
Committee are Dr. Abeles, Mr. Bartash,
Mr. Moliteus and Mr. Casdin. Mr. Bartash serves
as its Chairman. The Acquisition and Business Development
Committee reviews potential business acquisition candidates,
potential business combinations and potential therapies that
DUSA is considering or should consider for in-licensing. The
Acquisition and Business Development Committee has no charter
and meets on an ad hoc basis. The Acquisition and Business
Development Committee did not meet during 2009.
Structure
and Risk Oversight Function of the Board of Directors
The leadership structure of the Board currently consists of an
independent Chairman of the Board who oversees the Board
meetings and works with our Chief Executive Officer to establish
meeting agendas and a Vice-Chairman of the Board and Lead
Director. Our Chairman, Mr. Haft, does not serve as our
principal executive officer as we believe this structure
enhances the independence of our Board. As noted above, our
Chief Executive Officer, Mr. Doman, is the only member of
our Board who has not been deemed to be independent by the
Board. Further, our Corporate Governance Guidelines provide that
if the positions of Chairman of the Board and Chief Executive
Officer are held by the same person, the Board shall designate a
Lead Director who will organize and lead meetings of the
Boards independent directors. Our Audit and Compensation
Committees are comprised of all of the independent directors.
All Board committees are chaired by independent directors who
report to the full Board whenever necessary. We believe this
leadership structure helps facilitate efficient decision-making
and communication among our directors and fosters efficient
Board functioning at regularly scheduled meetings.
Our management is primarily responsible for managing the risks
we face in the ordinary course of operating our business. The
Board oversees potential risks and our risk management
activities by receiving operational and strategic presentations
from management which include discussions of key risks to our
business. The Board also periodically discusses with management
important compliance and quality issues. In addition, the Board
has delegated risk oversight to each of its key committees
within their areas of responsibility. For example, the Audit
Committee assists the Board in its risk oversight function
reviewing and discussing with management certain financial
risks, such as our system of disclosure controls and risks
associated with our cash investment policies. The Compensation
Committee assists the Board in its risk oversight function by
overseeing strategies with respect to our incentive compensation
programs and key employee retention issues. We believe our Board
leadership structure facilitates the division of risk management
oversight responsibilities among the Board committees and
enhances the Boards efficiency in fulfilling its oversight
function with respect to different areas of our business risks
and our risk mitigation practices.
Equity
Compensation Plan Information
The Company had the following securities authorized for issuance
under equity compensation plans as of December 31, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
(b)
|
|
(c)
|
|
|
|
|
|
|
Number of Securities
|
|
|
Number of Securities
|
|
|
|
Remaining Available for
|
|
|
to be Issued Upon
|
|
Weighted-Average
|
|
Future Issuance Under
|
|
|
Exercise of
|
|
Exercise Price of
|
|
Equity Compensation Plans
|
|
|
Outstanding Options,
|
|
Outstanding Options,
|
|
(Excluding Securities
|
Plan Category
|
|
Warrants and
Rights (#)
|
|
Warrants and
Rights ($)
|
|
Reflected in Column
(a)) (#)
|
|
Equity compensation plans approved by security holders
|
|
|
2,664,000
|
|
|
$
|
6.71
|
|
|
|
1,373,593
|
|
Equity compensation plans not approved by security holders
|
|
|
250,000
|
|
|
$
|
6.00
|
|
|
|
|
|
Total
|
|
|
2,914,000
|
|
|
$
|
6.65
|
|
|
|
1,373,593
|
|
10
PROPOSAL NO. 2 -
RATIFICATION OF THE SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors selected
Deloitte & Touche LLP as the independent registered
public accounting firm for the Company for the 2010 fiscal year.
Shareholder ratification of the appointment is not required
under the laws of the State of New Jersey, but the Audit
Committee has decided to ascertain the position of the
shareholders on the appointment. The Board of Directors will
reconsider the appointment if it is not ratified. A majority of
the votes cast, in person or by proxy, at the Annual Meeting of
Shareholders is required for ratification. Abstentions will have
no effect on this proposal. The ratification of
Deloitte & Touche LLP is a matter on which a broker or
nominee has discretionary voting authority, so broker non-votes
will not result from this proposal. A representative of
Deloitte & Touche LLP will be present at the meeting
to answer questions from shareholders and will have the
opportunity to make a statement on behalf of the firm, if he or
she so desires.
THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THIS PROPOSAL.
Audit
Fees
The aggregate fees billed by Deloitte & Touche LLP for
professional services rendered for the audit of the
Companys annual financial statements for the fiscal years
ended December 31, 2009 and 2008 and for the reviews of the
financial statements included in the Companys Quarterly
Reports on
Form 10-Q
for fiscal years 2009 and 2008 were $478,500 and $600,200,
respectively.
Audit
Related Fees
The aggregate fees billed by Deloitte & Touche LLP
during fiscal year 2009 for the review of documents filed with
the Securities and Exchange Commission related to the
Companys filing of a Post-effective Amendment to a
Registration Statement on
Form S-8
were $14,000. The aggregate fees billed by Deloitte &
Touche LLP during fiscal year 2008 for the review of documents
filed with the Securities and Exchange Commission related to the
Companys filing of Registration Statements on
Forms S-3
and S-8 were
$37,200.
Fees for
Tax Services
The aggregate fees billed by Deloitte Tax LLP for tax services
rendered in support of an Internal Revenue Code Section 382
analysis were $170,000. No fees for tax services were incurred
for the fiscal year ended December 31, 2008.
All Other
Fees
There were no other fees billed by Deloitte & Touche
LLP for professional services rendered to the Company for the
fiscal years ended December 31, 2009 and 2008.
Policy on
Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Registered Public Accounting
Firm
In considering the nature of the services provided by the
independent registered public accounting firm, all of which were
pre-approved in accordance with procedures required by the Audit
Committee Charter, the Audit Committee determined that such
services are compatible with the provision of independent audit
services. The Audit Committee discussed these services with the
independent auditors and Company management to determine that
Deloitte & Touche LLP is permitted under the rules and
regulations concerning auditor independence promulgated by the
Securities and Exchange Commission to implement the
Sarbanes-Oxley Act of 2002, as well as by the American Institute
of Certified Public Accountants.
11
BOARD
AUDIT COMMITTEE
REPORT1
The Audit Committee of the Board of Directors (the Audit
Committee) assists the Board of Directors by providing
oversight of the Companys financial reporting process and
its independent registered public accounting firm. Management is
responsible for preparing the Companys financial
statements and the Companys independent registered public
accounting firm is responsible for auditing those financial
statements. The Audit Committee is responsible for overseeing
the conduct of these activities by the Companys management
and selecting the independent registered public accounting firm.
The Audit Committee operates under a written charter adopted and
approved by the Board of Directors. A brief description of the
responsibilities of the Audit Committee is set forth above under
the caption Meetings and Committees of the Board.
The Audit Committee reviewed and discussed the audited
consolidated financial statements for the fiscal year ended
December 31, 2009 with management. The Audit Committee also
discussed with Deloitte & Touche LLP, the independent
registered public accounting firm, the matters required to be
discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees. In
addition, the Audit Committee received from Deloitte &
Touche LLP the written disclosures and the letter required by
the applicable requirements of the Public Company Accounting
Oversight Board regarding the independent registered public
accounting firms communications with the Audit Committee
concerning independence, and the Audit Committee discussed with
the independent registered public accounting firm their
independence from the Company and its management. Additionally,
the Audit Committee considered whether their provision of
services to the Company beyond those rendered in connection with
their audit and review of the Companys consolidated
financial statements was compatible with maintaining their
independence and the fees and costs billed and to be billed for
those services as shown on page 11 of this proxy statement.
The Audit Committee concluded that Deloitte & Touche
LLPs provision of such services is compatible with
Deloitte & Touche LLPs independence.
Based on its review and the discussions with the Companys
management and its independent auditors, the Audit Committee
recommended to the Board of Directors that the Companys
audited consolidated financial statements for the fiscal year
ended December 31, 2009 be included in the Companys
Annual Report on
Form 10-K.
John H. Abeles, MD
David M. Bartash
Alexander W. Casdin
Jay M. Haft, Esq.
Marvin E. Lesser
Richard C. Lufkin (Chairman)
Magnus Moliteus
|
|
|
(1) |
|
The materials in the Audit Committee Report are not
soliciting material, are not deemed filed with the
SEC and are not to be incorporated by reference in any filing of
the Company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, whether made before
or after the date of this report and irrespective of any general
incorporation language therein. |
12
COMPENSATION
DISCUSSION & ANALYSIS
Philosophy and Objectives - All of our
compensation programs and policies are designed to attract,
retain, and reward key employees to align compensation with
DUSAs performance and to motivate executive officers to
achieve the Companys business objectives. Our programs are
geared to rewarding both short and longer-term performance with
the ultimate objective of increasing shareholder value over time.
The Compensation Committee of the Board of Directors (the
Compensation Committee or the Committee)
believes that compensation should reflect the success of our
executives as a management team, so we consider both individual
and corporate strategic and financial goals in determining
compensation. We believe that executive compensation should not
be based on the short-term performance of our stock, but that
the price of our stock will, in the long-term, reflect our
operating performance and management of the Company by our
executives. We seek to have the long-term performance of our
stock reflected in executive compensation through our stock
option and restricted stock award programs.
Throughout this proxy statement, the individuals who served as
our as our Chief Executive Officer and our Chief Financial
Officer during fiscal year 2009, as well as other individuals
included in the Summary Compensation Table on page 18, are
referred to as named executive officers.
Overview of Compensation and Process - The
Compensation Committee is composed of all of the independent
non-employee directors. The Compensation Committee is
responsible for setting and administering the policies which
govern annual executive salaries and cash bonus awards, and
under the 2006 Equity Compensation Plan, the Committee approves
the amounts of stock option or other equity awards to all
grantees. The Compensation Committee evaluates, on a yearly
basis, the performance, and determines the compensation of, the
executive officers of DUSA, including the named executive
officers. DUSAs President and Chief Executive Officer,
Robert Doman, is not a member of the Compensation Committee,
however, the Compensation Committee seeks input from him
regarding the performance of DUSAs other executive
officers. Mr. Doman and Richard C. Christopher, DUSAs
Vice President of Finance and Chief Financial Officer, are
present, at the invitation of the Compensation Committee, at its
meetings, other than during consideration of their own
compensation or other executive sessions.
In 2007, the Compensation Committee retained an independent
compensation consultant, WNB Consulting LLC to review and
analyze DUSAs executive compensation programs, to prepare
a benchmarking analysis, and to recommend appropriate levels of
cash and equity compensation for DUSAs executive officers,
including its President and Chief Executive Officer. WNB
Consulting was retained in both 2008 and 2009 for similar
purposes, which included updating the information that the firm
had provided to the Committee in 2007. The Compensation
Committee is solely responsible for the engagement of WNB
Consulting, and all work performed by WNB Consulting is
initiated and supervised by the Compensation Committee, except
to the extent delegated by the Compensation Committee to
management. The Committee discussed the recommendations of WNB
Consulting with the consultant when setting 2008, 2009 and 2010
salaries, and when making decisions about bonus levels and
equity compensation awards. While input from the consultant is
carefully considered, ultimate decision making authority rests
with the Compensation Committee which retains discretion over
salary, cash bonus, and equity compensation determinations based
upon its subjective view of an executives performance.
DUSAs executive compensation programs consist of base
salary, discretionary cash bonus incentives based on annual
individual and corporate goals, grants under the Companys
equity plan, a 401(k) plan, a deferred compensation plan, and
certain other perquisites and benefits generally available on
the same basis as benefits provided to its other employees.
Typically, during the first quarter of each year, our
Compensation Committee meets to consider and, if deemed
appropriate, approve cash bonuses for our executives based on
the prior fiscal years performance and base salaries for
the new fiscal year, and to consider and, if deemed appropriate,
grant equity awards, in the form of stock options and restricted
stock awards, to all of the executive officers. On occasion, as
occurred during 2007, compensation adjustments are made during
the year to reflect a change in roles or responsibilities of our
executives.
DUSA does not currently provide any pension benefits to its
named executive officers or employees.
Section 162(m) of the Internal Revenue Code of 1986, as
amended, generally disallows a tax deduction to public companies
for compensation in excess of $1 million paid to the
corporations chief executive officer and four other most
highly paid executive officers. We periodically review the
potential consequences of Section 162(m) and may structure
performance-based compensation to comply with certain
exemptions. However, we have not done so to date.
Base Salary - With regard to base salary, the
Compensation Committee believes that DUSAs officers should
be compensated at levels comparable to the base salary of
executive officers at similar public biotechnology or
pharmaceutical companies. Base salaries are paid at competitive
levels to attract and retain talented management personnel.
During 2008 and 2009, the Compensation Committee used survey
data
13
reporting the salaries and bonuses for executives of companies
in these groups which was prepared by WNB Consulting LLC.
In addition, the Committee has referred to survey data or
analyses of survey data from the Radford Biotechnology Survey,
Mercer Executive Compensation Survey, Watson Wyatts
Executive Compensation Survey, TSG Management Survey, SIRS
Executive Survey ORCs Executive Compensation Survey and
TSG Biotechnology Survey. The Committee uses this information to
assist it in setting executive compensation but does not have a
pre-established policy or target for the allocation between
either cash and non-cash or short-term and long-term incentive
compensation.
The Committee also takes note of the cost of living increase in
determining base salary increases, as well as the general
performance of the Company. In June 2007, the Committee
increased Mr. Domans salary in connection with his
promotion to the position of Chief Executive Officer. In early
2007, the Committee approved base salary increases in the range
of 2.5% to 10.8% for the other named executive officers.
Following the analysis by WNB Consulting which indicated that
several of the named executive officers base salaries were
below the low end range of competitiveness, the Committee, in
April 2008, approved a base salary increases in the range of
3.5% to 14.6%, including 10% for Mr. Doman and 14.6% for
Mr. Christopher. For 2009, all base salaries company-wide
remained at 2008 levels in order to preserve cash resources
during uncertain economic times. However, for 2010, the
Committee approved base salary increases for the named executive
officers, other than Mr. Doman, in the range of 2.0% to
6.4% which includes certain market adjustments for two of the
named executive officers based on recommendations from WNB
Consulting. The Committee granted an increase of 4% to
Mr. Doman in light of his very strong performance and
guidance of the Company to achieve both positive cash flow and
profitability during the fourth quarter of 2009
Bonuses - Under the terms of its employment
agreements with its officers, DUSAs Vice Presidents are
eligible to receive a range of up to 35% to 40% of their base
salary as a discretionary cash bonus award to be set by the
Board of Directors. These percentage opportunities reflect
increases of 5%-10% which the Committee made in April 2008 upon
the recommendation and analysis of WNB Consulting. In June 2007,
in connection with his promotion to President and Chief
Executive Officer, the Committee determined that Mr. Doman
should be eligible to receive up to 50% of his base salary as a
cash bonus. In some cases, the agreements provide that the Board
may award a cash bonus in excess of the stated percentage for
outstanding performance. DUSA believes that the cash bonus is an
important incentive to its officers and assists DUSA in reaching
its corporate goals.
Financial and strategic business goals are typically set by
management, and approved by the Board of Directors, usually
during the fourth quarter of the previous year. The primary
financial goals relate to achievement of net revenue and income
statement improvement milestones. Management recommends these
goals to incentivize its named executive officers to perform at
consistent high levels, however, these goals are not set at
levels which management believes are likely to be unattainable.
For 2007, attainment of corporate goals represented 70% of the
bonus opportunity for the executives and attainment of
individual goals represented 30% of the bonus opportunity,
except that corporate financial goals had to be achieved in
order for any bonus payment to be granted. In prior years, the
Committee used various combinations of attainment of corporate
goals, individual goals and stock performance as a basis for
determining bonuses. No bonuses were paid for 2007 performance
because management did not achieve its corporate goals primarily
due to the consequences of a litigation matter that was settled
in October 2007. For 2008 and 2009, the Committee used a more
flexible, subjective approach in its consideration of cash bonus
incentives. While management made recommendations to the
Committee in light of certain corporate performance, including
increases in total revenues and reduction in operating loss, no
formal metrics were adopted by the Committee. The Committee also
considered other factors, such as regulatory action in 2008
against certain of the Companys products and the manner in
which management successfully responded, and the attainment of
positive cash flow and profitability in the fourth quarter of
2009, despite a difficult economic environment. In February
2010, the Committee using its discretion, based on the
experience of its members and in light of performance during
2009, determined that bonuses should be paid in amounts ranging
from approximately 10% to approximately 30% of base salary. The
Committee believes that in light of the Companys stage of
development, a flexible approach is fairer and provides a
greater incentive for the Companys executives to achieve
both short and long term objectives.
The Compensation Committee discusses and adjusts the written
recommendations of the President and Chief Executive Officer of
DUSA in awarding discretionary cash bonuses, as well as base
salary increases for the other executives. For 2008, the then
current Chairman of the Board discussed a recommendation with
the Committee for the compensation of the then current President
and Chief Executive Officer which was considered by the
Committee. The Compensation Committee exercises subjective
judgment and discretion in the granting of the amount of bonuses
and in setting base salaries.
In February 2010, the Committee met with Mr. Doman and
Mr. Christopher who reviewed the contributions of each of
the named executive officers, and Mr. Doman provided his
recommendations for base salaries for 2010 and proposed a cash
bonus opportunity that should be paid to each of the named
executive officers other than himself. In making its decision,
the Committee discussed and evaluated the
14
recommendations of Mr. Doman regarding 2010 salaries and
cash bonus opportunities, as well as the base salary and bonus
for Mr. Doman, in conjunction with WNB Consulting.
Equity Awards - DUSA has awarded stock options to
its executive officers on initial hire, sometimes at the time of
a promotion, and generally, on an annual basis at a meeting of
the Compensation Committee during the first quarter of the year.
During 2008 and 2009, in conjunction with the recommendation of
WNB Consulting, the Committee also provided its executives with
restricted stock awards. The Compensation Committee believes
that a strong stock ownership program, aligns executive officers
with shareholders interests and is essential to the long-term
growth of the Company by providing executives with incentives to
increase shareholder value over time. The Compensation Committee
uses survey data and recommendations of consultants to monitor
and evaluate the amount of long-term incentive compensation
levels of its officers. There is no formula for the number of
grants which are issued. Also recently, the amount of the grants
has been limited due to the number of grants that are available
under the 2006 Equity Compensation Plan, since the Board of
Directors believes that no more than 20% of the shares of common
stock outstanding should be subject to equity awards. In
addition, the Board has decided to grant equity awards every
year in order to take into account the volatility of DUSAs
stock price from year to year. WNB Consulting has recommended to
the Compensation Committee that going forward, DUSA should
increase the level of equity compensation DUSA pays to its
executive officers to better align executive officers interest
with shareholders and maintain the effectiveness of DUSAs
goal of retaining and motivating its executive officers through
the use of equity compensation since historical equity
compensation has been significantly below that of similarly
situated companies. WNB Consulting has advised that DUSAs
current equity compensation does not meet desired levels of
competitive long-term compensation based on its analysis.
WNB Consulting also provided survey data indicating that the
members of DUSAs Board of Directors receive less
compensation than their peers, particularly with respect to
equity compensation and committee activities. Although the
Committee decided that annual compensation should remain at
current levels, in light of the extraordinary time and effort
required of the members of the Committee during 2008, the Board
awarded a special grant of restricted shares to Committee
members. Messrs. Abeles, Bartash, Lufkin and Moliteus each
received an award of 7,500 restricted shares and Mr. Haft
received 15,000 restricted shares.
Stock options have typically been granted as of the close of
business on the date of grant. In December 2006, the Board of
Directors determined that all grants should be made two days
following the release of quarterly earnings by DUSA.
DUSA also maintains a 401(k) plan for all employees which
provides a match of $0.50 for each dollar contributed up to 2.5%
of base salary. In 2006, DUSA adopted a deferred compensation
plan which was available to operating director-level employees
and above, however since only one executive officer is currently
enrolled, the plan has been suspended for the time being. DUSA
adopted these plans in order to provide competitive benefits to
its upper level employees.
In some cases, the Committee has altered a proposed amount of a
cash bonus or option grant to provide a particular award for
excellent performance. This is an example of the discretion
which is contemplated in the employment agreements between the
Company and the named executive officers.
Currently, DUSA does not have any stated policy regarding an
adjustment or recovery of awards or payments if a performance
measure upon which such award or payment may have been based
were to be restated.
Perquisites - As provided in his employment
agreement, DUSA provides its President and Chief Executive
Officer with local housing, including utilities, since his
permanent residence is in a state different from the location of
DUSAs principal offices in Massachusetts. In addition,
DUSA covers the amount of tax that the officer pays on the
amount of the rent which constitutes compensation to him. This
form of compensation did affect the level of base salary that
the officer was offered and agreed upon when he joined DUSA in
2005.
Other Compensation -
Generally Available Benefits
We provide the following benefits to our named executive
officers generally on the same basis as the benefits provided to
all employees:
|
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|
|
Health and dental insurance;
|
|
|
|
Life insurance;
|
|
|
|
Short- and long-term disability;
|
|
|
|
Educational assistance; and
|
|
|
|
401(k) plan.
|
15
We believe that these benefits are consistent with those offered
by other similarly situated companies.
Severance Benefits
All of the named executive officers have a provision in their
employment agreements providing for a severance benefit equal to
twelve (12) months of the officers then current
salary. DUSA has received information from its employment
consultant that the provision of twelve (12) months
severance for termination without cause is relatively common,
and DUSA believes that the provision assists it in attracting
key management to the Company.
Change of Control
DUSA provides a change of control provision in its named
executive officers employment agreements. The provision
provides for the payment of three (3) times an
officers then current salary under certain change of
control circumstances. DUSA believes that the change of control
provisions would serve to retain DUSAs senior management
talent and to focus managements attention on DUSAs
operations during a change of control transaction. DUSA also
provided a change of control provision in a consulting agreement
with its former Chairman of the Board. The provision provides
for the payment of three (3) times the consultants
annual consulting fee under certain change of control
circumstances subject to certain terms and conditions.
Sections 280G and 4999 of the Internal Revenue Code impose
certain adverse tax consequences on compensation treated as
excess parachute payments. An executive is treated as having
received excess parachute payments if he receives compensatory
payments or benefits that are contingent on a change in control,
and the aggregate amount of such payments and benefits equal or
exceeds three times the executives base amount. The
portion of the payments and benefits in excess of one times base
amount are treated as excess parachute payments and are subject
to a 20% excise tax, in addition to any applicable federal
income and employment taxes. Also, our compensation deduction in
respect of the executives excess parachute payments is
disallowed. If we were to be subject to a change of control,
certain amounts received by our executives could be excess
parachute payments under Section 380G and 4999 of the
Internal Revenue Code.
Deferred Compensation
On the recommendation of the Compensation Committee, DUSA
adopted the DUSA Pharmaceuticals, Inc. Non-Qualified Deferred
Compensation Plan (the Plan) effective
October 18, 2006. The Plan is intended to be a
non-qualified, supplemental retirement plan. It is intended
primarily for the purpose of allowing a select group of
management, including the named executive officers and members
of the Board of Directors (the Participants) the
option of having a portion of their compensation deferred,
pursuant to Sections 201(2), 301(a)(3), and 401(a)(1) of
the Employee Retirement Income Security Act of 1974, as amended
(ERISA) and, as such, to be exempt from the
provisions of Parts II, III, and IV of Title I of
ERISA. Participants may defer up to 80% of their compensation. A
Participant will be 100% vested in all of the amounts he or she
defers as well as in the earnings attributable to a
Participants deferred account. A Participant may elect to
receive distributions from the deferred account at various
times, either in a lump sum or in up to ten annual installments.
DUSAs obligation to pay the Participant an amount from his
or her deferred account is an unsecured promise and benefits
will be paid out of the general assets of the Company. While
DUSA has established a Rabbi Trust to segregate the
Participants deferred amounts, the Participants will be
general creditors of DUSA. The Compensation Committee acts as
the administrator of the Plan. The trustee of the
Participants deferred accounts is Bankers
Trust Company. Although, as noted above, this plan has been
suspended for lack of enrollees, we believe that this plan is
beneficial in assisting DUSA to retain and attract key
individuals for the long-term benefit of the Company.
Section 409A of the Internal Revenue Code requires that
nonqualified deferred compensation be deferred and
paid under plans or arrangements that satisfy the requirements
of the statute with respect to the timing of deferral elections,
timing of payments and certain other matters. Failure to satisfy
these requirements can expose employees and other service
providers to accelerated income tax liabilities and penalty
taxes and interest on their vested compensation under such
plans. It is our intention to design and administer our
compensation and benefits plans and arrangements for all of our
employees and other service providers, including the named
executive officers, so that they are either exempt from, or
satisfy the requirements of, Section 409A. With respect to
our compensation and benefit plans that are subject to
Section 409A, in accordance with Section 409A and
regulatory guidance issued by the IRS, we are currently
operating such plans in compliance with Section 409A based
upon our good faith, reasonable interpretation of the statute
and the IRSs regulatory guidance.
16
REPORT OF
THE COMPENSATION COMMITTEE
2
The Compensation Committee has reviewed and discussed the
contents of the Compensation Discussion and Analysis as required
by Item 402(b) of
Regulation S-K
with the Companys management. Based on this review and
discussions, the Compensation Committee recommended to the
Companys Board of Directors that the Compensation
Discussion and Analysis be included in this proxy statement and
incorporated by reference into the Companys Annual Report
on
Form 10-K
for the year ended December 31, 2009.
By the Compensation Committee of the Board of Directors
John H. Abeles, MD
David M. Bartash
Alexander W. Casdin
Jay M. Haft, Esq. (Chairman)
Marvin E. Lesser
Richard C. Lufkin
Magnus Moliteus
|
|
|
(2) |
|
The material in the Compensation Committee Report is not
soliciting material, is not deemed filed with the
SEC and is not to be incorporated by reference in any filing of
the Company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, whether made before
or after the date of this report and irrespective of any general
incorporation language therein. |
EXECUTIVE
OFFICERS WHO ARE NOT DIRECTORS
The name, age, current position and date first elected as an
executive officer of the Company of each executive officer who
is not a director of the Company is listed below, followed by
summaries of their backgrounds and principal occupations.
Executive officers are elected annually, and serve at the
discretion of the Board of Directors.
|
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|
Date First
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|
|
|
|
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|
Elected as
|
Name
|
|
Age
|
|
Current Title
|
|
Officer
|
|
Mark C. Carota
|
|
|
54
|
|
|
Vice President, Operations
|
|
2/18/2000
|
Richard C. Christopher
|
|
|
40
|
|
|
Vice President, Finance and Chief Financial Officer
|
|
1/01/2004
|
Scott L. Lundahl
|
|
|
51
|
|
|
Vice President, Intellectual Property and Regulatory Affairs
|
|
6/23/1999
|
Stuart L. Marcus, MD, PhD
|
|
|
63
|
|
|
Vice President, Scientific Affairs and Chief Medical Officer
|
|
10/11/1993
|
William F. ODell
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|
|
63
|
|
|
Executive Vice President, Sales and Marketing
|
|
4/17/2006
|
Michael J. Todisco, CPA
|
|
|
45
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|
|
Vice President, Controller
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|
9/18/2006
|
Mark C. Carota has been employed by the Company since
October 1999 and has served as our Vice President, Operations
since February 2000. Prior to joining the Company,
Mr. Carota was Director of Operations from November 1998 to
October 1999 for Lavelle, Inc., a privately held manufacturer of
orthopedic instrumentation. From July 1998 to November 1998,
Mr. Carota was employed as Director of Quality Assurance by
CGI Inc. Prior to joining CGI Inc., Mr. Carota was employed
by Allergan Inc. from February 1997 to July 1998 where he had
responsibility for quality assurance, engineering and facilities.
Richard C. Christopher has been employed by the Company
since December 2000 and has served as our Vice President,
Finance and CFO since January 2005. Prior to his promotion to
his current position in January 2005, he held the positions of
Vice President, Financial Planning and Analysis from January
2004 to January 2005 and Director, Financial Analysis from
December 2000 to January 2004. Prior to joining the Company, he
was the North American Cost Accounting Manager for Grace
Construction Products, a unit of W.R. Grace & Co.,
from April 1999 to December 2000. Prior to joining Grace
Construction Products, Mr. Christopher was employed by the
Boston Edison Company from March 1996 to April 1999.
17
Scott L. Lundahl has been employed by the Company since
May 1998 and has served as our Vice President, Intellectual
Property and Regulatory Affairs since January 2004. In addition
to his current position, he has held the positions of Vice
President, Technology and Director of Technology Development. In
1994, Mr. Lundahl co-founded and became Vice President of
Lumenetics, Inc., a privately-owned medical device development
company, which, prior to May 1998, provided the Company with
consulting services in the light device technology area.
Stuart L. Marcus, MD, Ph.D has been employed by the
Company as our Vice President, Scientific Affairs and Chief
Medical Officer since October 1993. Prior to joining the
Company, he was Director of the Hematology/Oncology Department
of Daiichi Pharmaceuticals Inc., and prior thereto he held
positions in the Medical Research Division of the American
Cyanamid Company, directing photodynamic therapy clinical
development, among other assignments.
William F. ODell has been employed by the Company
as our Executive Vice President, Sales and Marketing since April
2006. Prior to joining the Company, Mr. ODell was
Vice President of Marketing and Strategic Business Development
at West Pharmaceuticals, Inc. from October 2005 to April 2006.
Mr. ODell also served at West Pharmaceuticals as Vice
President of Sales and Marketing for the Americas Region from
January 2002 to October 2005 and as Vice President of Global
Marketing from December 1999 to December 2001.
Michael J. Todisco, CPA, has been employed by the Company
since May 2005 and has served as our Vice President, Controller
since September 2006. Prior to his promotion to his current
position, he held the position of Controller. Prior to joining
the Company, he was the Director of Finance at Art Technology
Group, Inc. from March 2003 through May 2005. Prior to joining
Art Technology Group, Mr. Todisco was the Director of
Treasury Services at American Tower Corporation from March 2001
through March 2003.
EXECUTIVE
COMPENSATION
The following table shows, for the fiscal years ended
December 31, 2007, 2008 and 2009, certain information
regarding the annual and long-term compensation paid by DUSA to
those persons who were, at any time during the year (i) our
principal executive officer, (ii) our principal financial
officer, and (iii) the three most highly compensated
executive officers other than the principal executive officer
and principal financial officer who were serving DUSA at the end
of the year. All amounts are stated in United States dollars
unless otherwise indicated. For more information about the
elements of each named executive officers compensation,
see Compensation Discussion and Analysis above.
Summary
Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Non-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Deferred
|
|
|
|
|
Name and Principal
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive
|
|
Compensation
|
|
All Other
|
|
|
Position (NEO)
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Earnings
|
|
Compensation
|
|
Total
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)(2)
|
|
(f)(4)
|
|
(g)
|
|
(h)
|
|
(i)(5)
|
|
(j)
|
|
Robert F. Doman
|
|
|
2009
|
|
|
$
|
417,000
|
|
|
$
|
126,000
|
|
|
$
|
114,192
|
|
|
$
|
153,462
|
|
|
|
|
|
|
|
|
|
|
$
|
61,115
|
|
|
$
|
871,769
|
|
|
|
|
2008
|
|
|
|
417,000
|
|
|
|
141,000
|
(1)
|
|
|
41,800
|
|
|
|
41,134
|
|
|
|
|
|
|
$
|
328
|
|
|
|
60,137
|
|
|
|
701,399
|
|
|
|
|
2007
|
|
|
|
353,340
|
|
|
|
|
|
|
|
|
|
|
|
122,730
|
|
|
|
|
|
|
|
1,236
|
|
|
|
61,141
|
|
|
|
538,447
|
|
Richard C. Christopher
|
|
|
2009
|
|
|
$
|
235,000
|
|
|
$
|
52,000
|
|
|
$
|
45,872
|
|
|
$
|
61,499
|
|
|
|
|
|
|
|
|
|
|
$
|
10,888
|
|
|
$
|
405,259
|
|
|
|
|
2008
|
|
|
|
235,000
|
|
|
|
62,000
|
|
|
|
28,600
|
|
|
|
28,144
|
|
|
|
|
|
|
|
|
|
|
|
10,868
|
|
|
|
364,612
|
|
|
|
|
2007
|
|
|
|
205,000
|
|
|
|
|
|
|
|
|
|
|
|
40,910
|
|
|
|
|
|
|
|
|
|
|
|
10,390
|
|
|
|
256,300
|
|
William F. ODell
|
|
|
2009
|
|
|
$
|
266,100
|
|
|
$
|
54,000
|
|
|
$
|
45,872
|
|
|
$
|
61,499
|
|
|
|
|
|
|
|
|
|
|
$
|
15,869
|
|
|
$
|
443,340
|
|
|
|
|
2008
|
|
|
|
266,100
|
|
|
|
67,000
|
|
|
|
28,600
|
|
|
|
28,144
|
|
|
|
|
|
|
|
|
|
|
|
15,047
|
|
|
|
404,891
|
|
|
|
|
2007
|
|
|
|
255,833
|
|
|
|
|
|
|
|
|
|
|
|
51,137
|
|
|
|
|
|
|
|
|
|
|
|
13,827
|
|
|
|
320,797
|
|
Stuart L. Marcus, MD, PhD
|
|
|
2009
|
|
|
$
|
285,500
|
|
|
$
|
29,000
|
|
|
$
|
33,916
|
|
|
$
|
45,531
|
|
|
|
|
|
|
|
|
|
|
$
|
8,199
|
|
|
$
|
402,146
|
|
|
|
|
2008
|
|
|
|
285,500
|
|
|
|
69,000
|
|
|
|
28,600
|
|
|
|
28,144
|
|
|
|
|
|
|
|
|
|
|
|
8,220
|
|
|
|
419,464
|
|
|
|
|
2007
|
|
|
|
275,828
|
|
|
|
|
|
|
|
|
|
|
|
40,910
|
|
|
|
|
|
|
|
|
|
|
|
7,932
|
|
|
|
324,670
|
|
Mark C. Carota(3)
|
|
|
2009
|
|
|
$
|
210,000
|
|
|
$
|
40,000
|
|
|
$
|
27,800
|
|
|
$
|
45,531
|
|
|
|
|
|
|
|
|
|
|
$
|
9,045
|
|
|
$
|
332,376
|
|
|
|
|
(1)
|
|
Bonus includes amounts earned but
deferred, as applicable, under our deferred compensation plan.
|
|
(2)
|
|
The grant date fair value of these
stock awards was $2.20 per share in 2008, and $1.22 per share in
2009.
|
|
(3)
|
|
Mr. Carota was not one of our
named executive officers or one of our three most highly
compensated executive officers, other than the principal
executive officer and principal financial officer in 2007 or
2008.
|
|
(4)
|
|
Option awards represent the grant
date fair value of awards. Grant date fair value is based on the
Black-Scholes option pricing model on the date of grant. For
additional discussion on the valuation assumptions used in
determining the compensation expense, see Note 8 to the
audited consolidated financial statements in our Annual Report
on
Form 10-K
for the year ended December 31, 2009.
|
18
|
|
|
(5)
|
|
All other compensation includes a
car allowance, Company contributions under our 401(k) plan,
group term life insurance, housing arrangements, and other
perquisites as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group
|
|
|
|
|
|
|
|
|
|
|
Car
|
|
401(k)
|
|
Term Life
|
|
Housing/
|
|
Other
|
|
Total Other
|
Name
|
|
Year
|
|
Allowance
|
|
Match
|
|
Insurance
|
|
Insurance
|
|
(a)
|
|
Compensation
|
|
Robert F. Doman
|
|
|
2009
|
|
|
$
|
9,600
|
|
|
$
|
4,600
|
|
|
$
|
1,959
|
|
|
$
|
27,529
|
|
|
$
|
17,427
|
|
|
$
|
61,115
|
|
|
|
|
2008
|
|
|
|
9,600
|
|
|
|
4,208
|
|
|
|
1,932
|
|
|
|
27,148
|
|
|
|
17,249
|
|
|
|
60,137
|
|
|
|
|
2007
|
|
|
|
9,600
|
|
|
|
4,235
|
|
|
|
1,932
|
|
|
|
27,689
|
|
|
|
17,685
|
|
|
|
61,141
|
|
Richard C. Christopher
|
|
|
2009
|
|
|
$
|
6,001
|
|
|
$
|
2,937
|
|
|
$
|
1,950
|
|
|
|
|
|
|
|
|
|
|
$
|
10,888
|
|
|
|
|
2008
|
|
|
|
6,000
|
|
|
|
2,936
|
|
|
|
1,932
|
|
|
|
|
|
|
|
|
|
|
|
10,868
|
|
|
|
|
2007
|
|
|
|
6,000
|
|
|
|
2,563
|
|
|
|
1,827
|
|
|
|
|
|
|
|
|
|
|
|
10,390
|
|
William F. ODell
|
|
|
2009
|
|
|
$
|
8,400
|
|
|
$
|
3,326
|
|
|
$
|
2,199
|
|
|
$
|
1,327
|
|
|
$
|
617
|
|
|
$
|
15,869
|
|
|
|
|
2008
|
|
|
|
8,400
|
|
|
|
2,814
|
|
|
|
960
|
|
|
|
1,961
|
|
|
|
912
|
|
|
|
15,047
|
|
|
|
|
2007
|
|
|
|
8,400
|
|
|
|
2,829
|
|
|
|
960
|
|
|
|
1,118
|
|
|
|
520
|
|
|
|
13,827
|
|
Stuart L. Marcus, MD, PhD
|
|
|
2009
|
|
|
$
|
6,000
|
|
|
|
|
|
|
$
|
2,199
|
|
|
|
|
|
|
|
|
|
|
$
|
8,199
|
|
|
|
|
2008
|
|
|
|
6,000
|
|
|
|
|
|
|
|
2,220
|
|
|
|
|
|
|
|
|
|
|
|
8,220
|
|
|
|
|
2007
|
|
|
|
6,000
|
|
|
|
|
|
|
|
1,932
|
|
|
|
|
|
|
|
|
|
|
|
7,932
|
|
Mark C. Carota
|
|
|
2009
|
|
|
$
|
6,000
|
|
|
$
|
1,111
|
|
|
$
|
1,934
|
|
|
|
|
|
|
|
|
|
|
$
|
9,045
|
|
|
|
|
(a)
|
|
These amounts represent
gross-ups of
the perquisites for housing and relocation reimbursements,
respectively, for our named executive officers who received
these benefits during 2007, 2008 and 2009, to compensate them
for the taxes due on such amounts.
|
DUSAs named executive officers each have employment
agreements with DUSA. The material terms of these agreements are
discussed under Compensation Discussion and Analysis
and Potential Payments Upon Termination or
Change-In-Control.
Grants of
Plan-Based Awards
The following table provides information about equity and
non-equity awards granted to the named executive officers for
2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
Awards:
|
|
Exercise or
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
Estimated Future Payouts
|
|
Number
|
|
Base
|
|
Grant
|
|
Number of
|
|
Base
|
|
Grant
|
|
|
|
|
Under Non-Equity
|
|
Under Equity Incentive
|
|
of Shares
|
|
Price of
|
|
Date Fair
|
|
Securities
|
|
Price of
|
|
Date Fair
|
|
|
|
|
Incentive Plan Awards
|
|
Plan Awards
|
|
of Stock
|
|
Stock
|
|
Value of
|
|
Underlying
|
|
Option
|
|
Value of
|
Name and Principal
|
|
Grant
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
or Units
|
|
Award
|
|
Awards
|
|
Options
|
|
Awards
|
|
Options
|
Position (NEO)
|
|
Date
|
|
($)
|
|
($)
|
|
($)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
($/SH)
|
|
($)
|
|
(#)
|
|
($/SH)
|
|
($)(1)
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
|
|
|
|
(j)
|
|
(k)
|
|
(l)
|
|
Robert F. Doman
|
|
|
3/13/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93,600
|
|
|
$
|
1.22
|
|
|
$
|
114,192
|
|
|
|
187,400
|
|
|
$
|
1.22
|
|
|
$
|
153,462
|
|
Richard C. Christopher
|
|
|
3/13/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,600
|
|
|
$
|
1.22
|
|
|
$
|
45,872
|
|
|
|
75,100
|
|
|
$
|
1.22
|
|
|
$
|
61,499
|
|
William F. ODell
|
|
|
3/13/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,600
|
|
|
$
|
1.22
|
|
|
$
|
45,872
|
|
|
|
75,100
|
|
|
$
|
1.22
|
|
|
$
|
61,499
|
|
Stuart L. Marcus, MD, PhD
|
|
|
3/13/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,800
|
|
|
$
|
1.22
|
|
|
$
|
33,916
|
|
|
|
55,600
|
|
|
$
|
1.22
|
|
|
$
|
45,531
|
|
Mark C. Carota
|
|
|
3/13/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,800
|
|
|
$
|
1.22
|
|
|
$
|
33,916
|
|
|
|
55,600
|
|
|
$
|
1.22
|
|
|
$
|
45,531
|
|
|
|
|
(1)
|
|
Grant date fair value is based on
the Black-Scholes option pricing model on the date of grant. The
weighted average per share fair value of all named executive
officer stock option grants was $0.82. For additional discussion
on the valuation assumptions used in determining the
compensation expense, see Note 8 to the audited
consolidated financial statements in our Annual Report on
Form 10-K
for the year ended December 31, 2009.
|
19
Outstanding
Equity Awards at Fiscal Year-End
The following table sets forth the outstanding equity awards for
our named executive officers at December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
or Payout
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
of
|
|
Value of
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
Number of
|
|
|
|
Unearned
|
|
Unearned
|
|
|
|
|
|
|
Plan
|
|
|
|
|
|
Shares
|
|
|
|
Shares,
|
|
Shares,
|
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
or Units
|
|
|
|
Units or
|
|
Units or
|
|
|
Number of
|
|
Number of
|
|
Number of
|
|
|
|
|
|
of Stock
|
|
Market Value
|
|
Other
|
|
Other
|
|
|
Securities
|
|
Securities
|
|
Securities
|
|
|
|
|
|
That
|
|
of Shares or
|
|
Rights
|
|
Rights
|
|
|
Underlying
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
Have
|
|
Units of
|
|
That
|
|
That
|
|
|
Unexercised
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
Option
|
|
Not
|
|
Stock That
|
|
Have Not
|
|
Have Not
|
Name and Principal
|
|
Options (#)
|
|
Options (#)
|
|
Unearned
|
|
Exercise
|
|
Expiration
|
|
Vested
|
|
Have Not
|
|
Vested
|
|
Vested
|
Position (NEO)
|
|
Exercisable
|
|
Unexercisable
|
|
Options (#)
|
|
Price ($)
|
|
Date
|
|
(#)
|
|
Vested ($)
|
|
(#)
|
|
($)
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
Robert F. Doman
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
$
|
14.26
|
|
|
|
01/03/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert F. Doman
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
$
|
15.90
|
|
|
|
01/03/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert F. Doman
|
|
|
37,500
|
|
|
|
12,500
|
(1)
|
|
|
|
|
|
$
|
6.75
|
|
|
|
03/27/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert F. Doman
|
|
|
30,000
|
|
|
|
30,000
|
(2)
|
|
|
|
|
|
$
|
3.37
|
|
|
|
03/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert F. Doman
|
|
|
7,125
|
|
|
|
21,375
|
(3)
|
|
|
|
|
|
$
|
2.20
|
|
|
|
05/09/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert F. Doman
|
|
|
|
|
|
|
187,400
|
(4)
|
|
|
|
|
|
$
|
1.22
|
|
|
|
03/13/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert F. Doman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,250
|
(5)
|
|
$
|
22,088
|
|
|
|
|
|
|
|
|
|
Robert F. Doman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
93,600
|
(6)
|
|
$
|
145,080
|
|
|
|
|
|
|
|
|
|
Richard C. Christopher
|
|
|
12,000
|
|
|
|
|
|
|
|
|
|
|
$
|
16.94
|
|
|
|
12/17/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard C. Christopher
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
$
|
3.87
|
|
|
|
04/26/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard C. Christopher
|
|
|
7,500
|
|
|
|
|
|
|
|
|
|
|
$
|
1.60
|
|
|
|
03/13/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard C. Christopher
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
$
|
9.92
|
|
|
|
03/18/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard C. Christopher
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
$
|
10.00
|
|
|
|
03/17/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard C. Christopher
|
|
|
15,000
|
|
|
|
5,000
|
(7)
|
|
|
|
|
|
$
|
6.75
|
|
|
|
03/27/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard C. Christopher
|
|
|
10,000
|
|
|
|
10,000
|
(8)
|
|
|
|
|
|
$
|
3.37
|
|
|
|
03/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard C. Christopher
|
|
|
4,875
|
|
|
|
14,625
|
(9)
|
|
|
|
|
|
$
|
2.20
|
|
|
|
05/09/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard C. Christopher
|
|
|
|
|
|
|
75,100
|
(10)
|
|
|
|
|
|
$
|
1.22
|
|
|
|
03/13/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard C. Christopher
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,750
|
(11)
|
|
$
|
15,113
|
|
|
|
|
|
|
|
|
|
Richard C. Christopher
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,600
|
(12)
|
|
$
|
58,280
|
|
|
|
|
|
|
|
|
|
William F. ODell
|
|
|
37,500
|
|
|
|
12,500
|
(13)
|
|
|
|
|
|
$
|
6.90
|
|
|
|
04/17/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William F. ODell
|
|
|
12,500
|
|
|
|
12,500
|
(14)
|
|
|
|
|
|
$
|
3.37
|
|
|
|
03/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William F. ODell
|
|
|
4,875
|
|
|
|
14,625
|
(15)
|
|
|
|
|
|
$
|
2.20
|
|
|
|
05/09/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William F. ODell
|
|
|
|
|
|
|
75,100
|
(16)
|
|
|
|
|
|
$
|
1.22
|
|
|
|
03/13/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William F. ODell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,750
|
(17)
|
|
$
|
15,113
|
|
|
|
|
|
|
|
|
|
William F. ODell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,600
|
(18)
|
|
$
|
58,280
|
|
|
|
|
|
|
|
|
|
Stuart L. Marcus, MD, PhD
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
$
|
31.00
|
|
|
|
03/07/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stuart L. Marcus, MD, PhD
|
|
|
7,500
|
|
|
|
|
|
|
|
|
|
|
$
|
12.44
|
|
|
|
03/19/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stuart L. Marcus, MD, PhD
|
|
|
6,250
|
|
|
|
|
|
|
|
|
|
|
$
|
3.87
|
|
|
|
04/26/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stuart L. Marcus, MD, PhD
|
|
|
13,125
|
|
|
|
|
|
|
|
|
|
|
$
|
1.60
|
|
|
|
03/13/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stuart L. Marcus, MD, PhD
|
|
|
22,500
|
|
|
|
|
|
|
|
|
|
|
$
|
9.92
|
|
|
|
03/18/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stuart L. Marcus, MD, PhD
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
$
|
10.00
|
|
|
|
03/17/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stuart L. Marcus, MD, PhD
|
|
|
13,125
|
|
|
|
4,375
|
(19)
|
|
|
|
|
|
$
|
6.75
|
|
|
|
03/27/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stuart L. Marcus, MD, PhD
|
|
|
10,000
|
|
|
|
10,000
|
(20)
|
|
|
|
|
|
$
|
3.37
|
|
|
|
03/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stuart L. Marcus, MD, PhD
|
|
|
4,875
|
|
|
|
14,625
|
(21)
|
|
|
|
|
|
$
|
2.20
|
|
|
|
05/09/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stuart L. Marcus, MD, PhD
|
|
|
|
|
|
|
55,600
|
(22)
|
|
|
|
|
|
$
|
1.22
|
|
|
|
03/13/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stuart L. Marcus, MD, PhD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,750
|
(23)
|
|
$
|
15,113
|
|
|
|
|
|
|
|
|
|
Stuart L. Marcus, MD, PhD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,800
|
(24)
|
|
$
|
43,090
|
|
|
|
|
|
|
|
|
|
Mark C. Carota
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
$
|
31.00
|
|
|
|
03/07/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark C. Carota
|
|
|
7,500
|
|
|
|
|
|
|
|
|
|
|
$
|
12.44
|
|
|
|
03/19/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark C. Carota
|
|
|
8,750
|
|
|
|
|
|
|
|
|
|
|
$
|
3.87
|
|
|
|
04/26/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark C. Carota
|
|
|
13,125
|
|
|
|
|
|
|
|
|
|
|
$
|
1.60
|
|
|
|
03/13/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark C. Carota
|
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
$
|
9.92
|
|
|
|
03/18/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark C. Carota
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
$
|
10.00
|
|
|
|
03/17/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark C. Carota
|
|
|
11,250
|
|
|
|
3,750
|
(25)
|
|
|
|
|
|
$
|
6.75
|
|
|
|
03/27/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark C. Carota
|
|
|
10,000
|
|
|
|
10,000
|
(26)
|
|
|
|
|
|
$
|
3.37
|
|
|
|
03/20/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark C. Carota
|
|
|
4,125
|
|
|
|
12,375
|
(27)
|
|
|
|
|
|
$
|
2.20
|
|
|
|
05/09/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark C. Carota
|
|
|
|
|
|
|
55,600
|
(28)
|
|
|
|
|
|
$
|
1.22
|
|
|
|
03/13/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark C. Carota
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,250
|
(29)
|
|
$
|
12,788
|
|
|
|
|
|
|
|
|
|
Mark C. Carota
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,800
|
(30)
|
|
$
|
43,090
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The remaining unvested options vest
on 3/27/10.
|
|
(2)
|
|
Unvested options vest as to
15,000 shares on 3/20/10 and 15,000 shares on 3/20/11.
|
|
(3)
|
|
Unvested options vest as to
7,125 shares on 5/09/10, 7,125 shares on 5/09/11 and
7,125 shares on 5/09/12.
|
|
(4)
|
|
Unvested options vest as to
46,850 shares on 3/13/10, 46,850 shares on 3/13/11,
46,850 shares on 3/13/12 and 46,850 shares on 3/13/13.
|
20
|
|
|
(5)
|
|
Unvested restricted shares vest as
to 4,750 shares on 5/09/10, 4,750 shares on 5/09/11
and 4,750 shares on 5/09/12.
|
|
(6)
|
|
Unvested restricted shares vest as
to 23,400 shares on 3/13/10, 23,400 shares on 3/13/11,
23,400 shares on 3/13/12, and 23,400 shares
on 3/13/13.
|
|
(7)
|
|
The remaining unvested options vest
on 3/27/10.
|
|
(8)
|
|
Unvested options vest as to
5,000 shares on 3/20/10 and 5,000 shares on 3/20/11.
|
|
(9)
|
|
Unvested options vest as to
4,875 shares on 5/09/10, 4,875 shares on 5/09/11 and
4,875 shares on 5/09/12.
|
|
(10)
|
|
Unvested options vest as to
18,775 shares on 3/13/10, 18,775 shares on 3/13/11,
18,775 shares on 3/13/12 and 18,775 shares on 3/13/13.
|
|
(11)
|
|
Unvested restricted shares vest as
to 3,250 shares on 5/09/10, 3,250 shares on 5/09/11
and 3,250 shares on 5/09/12.
|
|
(12)
|
|
Unvested restricted shares vest as
to 9,400 shares on 3/13/10, 9,400 shares on 3/13/11,
9,400 shares on 3/13/12, and 9,400 shares
on 3/13/13.
|
|
(13)
|
|
The remaining unvested options vest
on 4/17/10.
|
|
(14)
|
|
Unvested options vest as to
6,250 shares on 3/20/10 and 6,250 shares on 3/20/11.
|
|
(15)
|
|
Unvested options vest as to
4,875 shares on 5/09/10, 4,875 shares on 5/09/11 and
4,875 shares on 5/09/12.
|
|
(16)
|
|
Unvested options vest as to
18,775 shares on 3/13/10, 18,775 shares on 3/13/11,
18,775 shares on 3/13/12 and 18,775 shares on 3/13/13.
|
|
(17)
|
|
Unvested restricted shares vest as
to 3,250 shares on 5/09/10, 3,250 shares on 5/09/11
and 3,250 shares on 5/09/12.
|
|
(18)
|
|
Unvested restricted shares vest as
to 9,400 shares on 3/13/10, 9,400 shares on 3/13/11,
9,400 shares on 3/13/12, and 9,400 shares
on 3/13/13.
|
|
(19)
|
|
The remaining unvested options vest
on 3/27/10.
|
|
(20)
|
|
Unvested options vest as to
5,000 shares on 3/20/10 and 5,000 shares on 3/20/11.
|
|
(21)
|
|
Unvested options vest as to
4,875 shares on 5/09/10, 4,875 shares on 5/09/11 and
4,875 shares on 5/09/12.
|
|
(22)
|
|
Unvested options vest as to
13,900 shares on 3/13/10, 13,900 shares on 3/13/11,
13,900 shares on 3/13/12 and 13,900 shares on 3/13/13.
|
|
(23)
|
|
Unvested restricted shares vest as
to 3,250 shares on 5/09/10, 3,250 shares on 5/09/11
and 3,250 shares on 5/09/12.
|
|
(24)
|
|
Unvested restricted shares vest as
to 6,950 shares on 3/13/10, 6,950 shares on 3/13/11,
6,950 shares on 3/13/12, and 6,950 shares
on 3/13/13.
|
|
(25)
|
|
The remaining unvested options vest
on 3/27/10.
|
|
(26)
|
|
Unvested options vest as to
5,000 shares on 3/20/10, 5,000 shares on 3/20/11.
|
|
(27)
|
|
Unvested options vest as to
4,125 shares on 5/09/10, 4,125 shares on 5/09/11 and
4,125 shares on 5/09/12.
|
|
(28)
|
|
Unvested options vest as to
13,900 shares on 3/13/10, 13,900 shares on 3/13/11,
13,900 shares on 3/13/12 and 13,900 shares on 3/13/13.
|
|
(29)
|
|
Unvested restricted shares vest as
to 2,750 shares on 5/09/10, 2,750 shares on 5/09/11
and 2,750 shares on 5/09/12.
|
|
(30)
|
|
Unvested restricted shares vest as
to 6,950 shares on 3/13/10, 6,950 shares on 3/13/11,
6,950 shares on 3/13/12, and 6,950 shares
on 3/13/13.
|
Option
Exercises and Stock Vested
The following table shows information with respect to each named
executive officer regarding the value of options exercised
during 2009. No shares were acquired on exercise of any options
for any of the named executive officers during 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of
|
|
|
|
Number of
|
|
|
|
|
Shares
|
|
Value
|
|
Shares
|
|
Value
|
Name and Principal
|
|
Acquired on
|
|
Realized on
|
|
Acquired on
|
|
Realized on
|
Position (NEO)
|
|
Exercise (#)
|
|
Exercise ($)
|
|
Vesting (#)
|
|
Vesting ($)
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
Robert F. Doman
|
|
|
-0-
|
|
|
$
|
0.00
|
|
|
|
4,750
|
|
|
$
|
6,365
|
|
Richard C. Christopher
|
|
|
-0-
|
|
|
$
|
0.00
|
|
|
|
3,250
|
|
|
$
|
4,355
|
|
William F. ODell
|
|
|
-0-
|
|
|
$
|
0.00
|
|
|
|
3,250
|
|
|
$
|
4,355
|
|
Stuart L. Marcus, MD, PhD
|
|
|
-0-
|
|
|
$
|
0.00
|
|
|
|
3,250
|
|
|
$
|
4,355
|
|
Mark C. Carota
|
|
|
-0-
|
|
|
$
|
0.00
|
|
|
|
2,750
|
|
|
$
|
3,685
|
|
21
Non-Qualified
Deferred Compensation
The following table shows that none of the named executive
officers are currently participating in the DUSA
Pharmaceuticals, Inc. Non-Qualified Deferred Compensation Plan,
an unfunded, unsecured deferred compensation plan:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
Registrant
|
|
Aggregated
|
|
Aggregated
|
|
Aggregated
|
Name and Principal
|
|
Contributions
|
|
Contributions
|
|
Earnings in Last
|
|
Withdrawal/
|
|
Balance at
|
Position (NEO)
|
|
in Last FY ($)
|
|
in Last FY ($)
|
|
FY ($)
|
|
Distributions ($)
|
|
Last FYE ($)
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
Robert F. Doman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard C. Christopher
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William F. ODell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stuart L. Marcus, MD, PhD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark C. Carota
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
POTENTIAL
PAYMENTS UPON TERMINATION OR
CHANGE-IN-CONTROL
The Company has employment agreements with each of its named
executive officers. According to the terms of these agreements,
the named executive officers are entitled to receive
compensation as determined by the Board of Directors and are
eligible to receive the benefits generally made available to
employees of the Company. The Company may terminate any of these
agreements at any time, with or without cause on sixty
(60) days prior written notice. If employment is terminated
without cause, the Company has agreed to pay a severance
allowance equivalent to twelve (12) months of the named
executive officers then-current base salary payable in
either: (i) a lump sum, within sixty (60) days
following the date of termination; or (ii) equal monthly
installments, depending on the terms of the named executive
officers employment agreement.
In the event a named executive officer should die while employed
by the Company, his heirs or beneficiaries will be entitled to
any Company paid death benefits in force at the time of such
death and will also be entitled to exercise any vested but
unexercised stock options which were held by him at the time of
his death, within a period of one (1) year from the date of
death.
These employment agreements also provide for certain severance
benefits following a change in control of the Company and
termination of employment. Upon any change of
control, as defined in the agreements, the Company shall
pay to the named executive officer a lump sum payment equal to
three (3) times his base salary for the last fiscal year
within five (5) days after such termination. In addition,
Mr. Domans agreement provides that he shall be
entitled to receive a change of control payment equal to three
(3) times his base salary less the amount of salary paid
from the date of the consummation of the change of control to
the effective date of a termination, if the termination is
effective within the three years of the change of control.
Under the Companys equity plans, upon a change of control,
unless the Company determines otherwise, all outstanding options
not fully vested automatically accelerate and become immediately
exercisable and the restrictions and conditions on all
outstanding stock awards immediately lapse. The date on which
such accelerated vesting, immediate exercisability and lapse of
restrictions and conditions would occur, is the date of the
occurrence of the change of control.
22
ESTIMATED
TERMINATION PAYMENT
The table below reflects amounts payable to the named executive
officers, assuming that their employment was terminated on
December 31, 2009, both prior to and following a change in
control of the Company, or assuming a change in control of the
Company occurred on December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Without Cause Prior to a Change in Control
|
|
|
|
|
(CIC) ($)
|
|
CIC ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accelerated
|
|
|
|
Without Cause
|
|
|
|
|
|
|
|
|
Accelerated
|
|
|
|
|
|
|
|
Vesting of
|
|
|
|
Within 36 Months
|
|
|
|
|
Continuation
|
|
Accelerated
|
|
Vesting of
|
|
|
|
|
|
Continuation
|
|
Options and
|
|
|
|
of a CIC or for
|
|
|
|
|
of
|
|
Vesting of
|
|
Restricted
|
|
|
|
CIC
|
|
of
|
|
Restricted
|
|
|
|
Good Reason Prior
|
Name
|
|
Severance
|
|
Benefits
|
|
Options
|
|
Stock
|
|
Total
|
|
Payment
|
|
Benefits
|
|
Stock
|
|
Total
|
|
to CIC ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert F. Doman
|
|
$
|
417,000
|
|
|
$
|
10,501
|
|
|
|
|
|
|
|
|
|
|
$
|
427,501
|
|
|
$
|
1,251,001
|
|
|
$
|
10,501
|
|
|
$
|
314,223
|
|
|
$
|
1,575,725
|
|
|
$1,251,000 less
salary following change
of control to date
of termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard C. Christopher
|
|
$
|
235,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
235,000
|
|
|
$
|
705,000
|
|
|
|
|
|
|
$
|
137,317
|
|
|
$
|
842,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William F. ODell
|
|
$
|
266,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
266,100
|
|
|
$
|
798,300
|
|
|
|
|
|
|
$
|
152,866
|
|
|
$
|
951,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stuart L. Marcus, MD, PhD
|
|
$
|
285,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
285,500
|
|
|
$
|
856,500
|
|
|
|
|
|
|
$
|
114,288
|
|
|
$
|
970,788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark C. Carota
|
|
$
|
210,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
210,000
|
|
|
$
|
630,000
|
|
|
|
|
|
|
$
|
108,444
|
|
|
$
|
738,444
|
|
|
|
401(k)
PROFIT SHARING PLAN
The Company adopted a tax-qualified employee savings and
retirement 401(k) Profit Sharing Plan (the 401(k)
Plan), effective January 1, 1996, covering all
qualified employees. Participants may elect a salary reduction
of at least 1% as a contribution to the 401(k) Plan, up to the
statutorily prescribed annual limit for tax-deferred
contributions ($16,500 in 2009, $22,000 if over age 50).
Modification of salary reductions can be made monthly (for
2009). Effective February 1, 2003, the Company began to
match a participants contribution up to 1.25% of a
participants salary (the Company Match),
subject to certain limitations of the 401(k) Plan. Participants
vest in the Company Match at a rate of 25% for each year of
service to the Company (based on the anniversary of their date
of hire). Employees who were already employed as of the
effective date of the Company Match received credit for their
past service to the Company.
23
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of
March 31, 2010, with respect to holdings of our common
stock by: (i) each of our directors; (ii) the director
nominees; (iii) each of our named executive officers;
(iv) all of our directors, director nominees and executive
officers as a group; and by all beneficial owners of greater
than 5% of our outstanding Common Stock, based upon currently
available Schedules 13D and 13G and other forms filed with the
Securities and Exchange Commission.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
Percentage of
|
|
|
Beneficially
|
|
Outstanding
|
Name(1)
|
|
Owned(2)
|
|
Shares(3)
|
|
John H. Abeles, MD
|
|
|
156,375
|
(4)
|
|
|
*
|
|
Alfred Altomari
|
|
|
|
|
|
|
|
|
David M. Bartash
|
|
|
112,375
|
(5)
|
|
|
*
|
|
Mark C. Carota
|
|
|
135,464
|
(6)
|
|
|
*
|
|
Alexander W. Casdin
|
|
|
225,000
|
(7)
|
|
|
*
|
|
Richard C. Christopher
|
|
|
149,678
|
(8)
|
|
|
*
|
|
Robert F. Doman
|
|
|
304,000
|
(9)
|
|
|
1.26
|
%
|
Jay M. Haft, Esq.
|
|
|
143,250
|
(10)
|
|
|
*
|
|
Paul J. Hondros
|
|
|
|
|
|
|
|
|
Marvin E. Lesser
|
|
|
15,000
|
(11)
|
|
|
*
|
|
Richard C. Lufkin
|
|
|
108,975
|
(12)
|
|
|
*
|
|
Stuart L. Marcus, MD, PhD
|
|
|
133,632
|
(13)
|
|
|
*
|
|
Magnus Moliteus
|
|
|
76,875
|
(14)
|
|
|
*
|
|
William F. ODell
|
|
|
108,126
|
(15)
|
|
|
*
|
|
David M. Wurzer, CPA
|
|
|
|
|
|
|
|
|
All directors, the director nominees and all executive officers
as a group (consisting of 17 persons)
|
|
|
1,916,892
|
(16)
|
|
|
7.93
|
%
|
James E. Flynn
Deerfield Capital, L.P.
Deerfield Special Situations Fund, L.P.
Deerfield Management Company, L.P.
Deerfield Special Situations Fund International Limited
|
|
|
3,610,418
|
(17)
|
|
|
14.94
|
%
|
Bradbury Dyer III
Paragon Associates and Paragon Associates II Joint Venture
|
|
|
2,117,860
|
(18)
|
|
|
8.76
|
%
|
Steven R. Becker
Matthew A. Drapkin
SRB Management, L.P.
SRB Greenway Opportunity Fund, (QP), L.P.
SRB Greenway Opportunity Fund, L.P.
BC Advisors, LLC
|
|
|
1,773,151
|
(19)
|
|
|
7.33
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%
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Edwin H. Morgens
Morgens, Waterfall, Vintiadis & Co., Inc.
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2,006,000
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(20)
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|
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8.30
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%
|
Notes:
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(1)
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Unless indicated otherwise, the
individuals listed herein have a business mailing address of
c/o DUSA
Pharmaceuticals, Inc., 25 Upton Drive, Wilmington, Massachusetts
01887.
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(2)
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Unless indicated otherwise:
(i) the individuals and entities listed herein have the
sole power to both vote and dispose of all securities that they
beneficially own; and (ii) beneficial ownership listed
includes all options and warrants which are exercisable as of
March 31, 2010.
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(3)
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The percentage of ownership as
calculated above includes in the number of shares outstanding
for each individual listed those shares that are beneficially,
yet not necessarily directly, owned. Applicable percentage of
ownership is based on 24,173,096 shares of Common Stock
outstanding on March 31, 2010 unless noted as otherwise.
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24
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(4)
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75,000 of the shares indicated
represent shares with respect to which Dr. Abeles has the
right to acquire through the exercise of options. Of the shares
indicated, Dr. Abeles shares investment and voting power
with regard to 69,500 shares.
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(5)
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95,000 of the shares indicated
represent shares with respect to which Mr. Bartash has the
right to acquire through the exercise of options.
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(6)
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126,525 of the shares indicated
represent shares with respect to which Mr. Carota has the
right to acquire through the exercise of options.
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(7)
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25,000 of the shares indicated
represent shares with respect to which Mr. Casdin has the
right to acquire through the exercise of options.
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(8)
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133,025 of the shares indicated
represent shares with respect to which Mr. Christopher has
the right to acquire through the exercise of options.
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(9)
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256,100 of the shares indicated
represent shares with respect to which Mr. Doman has the
right to acquire through the exercise of options. Of the shares
indicated, Mr. Doman shares investment and voting power
with respect to 4,750 shares.
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(10)
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95,000 of the shares indicated
represent shares with respect to which Mr. Haft has the
right to acquire through the exercise of options. Under
Rule 13d-3
of the Securities and Exchange Act of 1934, as amended,
Mr. Haft disclaims, but may be deemed to be the beneficial
owner of, 34,500 shares that are held by his spouse.
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(11)
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All of the shares indicated
represent shares with respect to which Mr. Lesser has the
right to acquire through the exercise of options.
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(12)
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95,000 of the shares indicated
represent shares with respect to which Mr. Lufkin has the
right to acquire through the exercise of options. Of the shares
indicated, Mr. Lufkin shares investment and voting power
with regard to 12,100 shares.
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(13)
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125,525 of the shares indicated
represent shares with respect to which Dr. Marcus has the
right to acquire through the exercise of options.
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(14)
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60,000 of the shares indicated
represent shares with respect to which Mr. Moliteus has the
right to acquire through the exercise of options.
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(15)
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97,275 of the shares indicated
represent shares with respect to which Mr. ODell has
the right to acquire through the exercise of options.
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(16)
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Includes all of the shares
indicated in footnotes (4) through (15), including an
additional 248,142 shares underlying stock options
beneficially owned by our unnamed executive officers.
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(17)
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The number of shares beneficially
owned is based on a Schedule 13G filed with the Securities
and Exchange Commission on February 12, 2010 by James E.
Flynn, Deerfield Capital, L.P., Deerfield Special Situations
Fund, L.P., Deerfield Management Company, L.P., and Deerfield
Special Situations Fund International Limited. Such
Schedule 13G discloses that James E. Flynn has shared
dispositive power, and beneficially owns, 3,610,418 shares
of the Companys Common Stock. As set forth in the
Schedule 13G, 1,273,806 shares are beneficially owned
by Deerfield Special Situations Fund, L.P. and
2,336,612 shares are beneficially owned by Deerfield
Special Situations Fund International Limited. Deerfield
Capital, L.P. is the general partner of Deerfield Special
Situations Fund, L.P. Deerfield Management Company, L.P. is the
investment manager of Deerfield Special Situations
Fund International Limited. James E. Flynn is the managing
member of the general partners of Deerfield Capital, L.P. and
Deerfield Management Company, L.P. and as such may be deemed to
have beneficial ownership of the shares reported in the
Schedule 13G. The address of James E. Flynn is 780 Third
Avenue, 37th Floor, New York, New York 10017. The Company makes
no representation as to the accuracy or completeness of the
information reported.
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(18)
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The number of shares beneficially
owned is based on a Schedule 13D filed with the Securities
and Exchange Commission on June 29, 2009 by Paragon
Associates II Joint Venture (PAJV), formed by
Paragon Associates, Ltd., a Texas limited partnership
(Paragon) and Paragon Associates II, Ltd., a Texas
limited partnership (Paragon II), and Bradbury
Dyer, III. Such Schedule 13D discloses that the
reporting person has dispositive power, and beneficially owns,
2,117,860 shares of the Companys Common Stock. Such
shares were purchased by Mr. Dyer for the account of PAJV.
Mr. Dyer, as the authorized agent to PAJV, controls the
investment decisions of PAJV. Mr. Dyer does not have direct
beneficial ownership of the 2,117,860 shares of the shares;
however, Mr. Dyer, as sole general partner of Paragon and
Pargon II, and as agent for PAJV, may be deemed to have indirect
beneficial ownership of such shares. The address of PAJV is 500
Crescent Court, Suite 260, Dallas, Texas 75201. The Company
makes no representation as to the accuracy or completeness of
the information reported.
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(19)
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The number of shares beneficially
owned is based on a Schedule 13D filed with the Securities
and Exchange Commission on May 13, 2010 by Mr. Steven
R. Becker (Mr. Becker), Mr. Matthew A.
Drapkin (Mr. Drapkin), SRB Management, Greenway
QP, Greenway L.P. and BCA (as hereafter defined). Such
Schedule 13D discloses that the reporting persons have
dispositive power, and beneficially own, 1,773,151 shares
of the Companys Common Stock. Such shares were acquired by
Mr. Becker for the accounts of (1) SRB Management,
L.P., a Texas limited partnership (SRB Management),
(2) SRB Greenway Opportunity Fund, (QP), L.P., a Texas
limited partnership (Greenway QP), (3) SRB
Greenway Opportunity Fund, L.P., a Texas limited partnership
(Greenway, L.P.), (4) BC Advisors, LLC, a Texas
limited liability company (BCA)
(5) Mr. Becker, and (6) Mr. Drapkin.
Mr. Becker and Mr. Drapkin are
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25
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the sole members of BCA, and BCA
is the general partner of SRB Management. Mr. Becker and
Mr. Drapkin are also limited partners of SRB Management.
SRB Management is the general partner of, and investment manager
for Greenway Opportunity QP and Greenway Opportunity, L.P. As
the general partner of SRB Management, BCA may be deemed to be
the beneficial owner of the shares of Common Stock beneficially
owned by SRB Management, and as the sole members of BCA,
Mr. Becker and Mr. Drapkin may also be deemed to be
the beneficial owner of the shares of Common Stock beneficially
owned by SRB Management. The address of Mr. Becker,
Mr. Drapkin, SRB Management, Greenway QP, Greenway L.P. and
BCA is 300 Crescent Court, Suite 1111, Dallas, Texas 75201.
The Company makes no representation as to the accuracy or
completeness of the information reported.
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(20)
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The number of shares beneficially
owned is based on a Schedule 13G filed with the Securities
and Exchange Commission on July 2, 2009 by Morgens,
Waterfall, Vintiadis & Company, Inc. (Morgens
Waterfall) and Edwin H. Morgens (Morgens).
Such Schedule 13G discloses that the reporting persons have
shared dispositive power, and beneficially own,
2,006,000 shares of the Companys Common Stock. As set
forth in the Schedule 13G, 680,000 shares are
beneficially owned by Phaeton International (BVI) Ltd.,
1,170,700 shares are beneficially owned by Phoenix
Partners, L.P., 149,300 shares are beneficially owned by
Phoenix Partners II, L.P., 2,000,000 shares are
beneficially owned by Morgens Waterfall and
2,006,000 shares are beneficially owned by Morgens. Such
Schedule 13G also discloses that Morgens has sole
dispositive power and beneficially owns 6,000 shares of the
Companys Common Stock. Morgens Waterfall is an investment
adviser registered under Section 203 of the Investment
Advisers Act of 1940 as amended, in the business of rendering of
financial services and as such it provides discretionary
investment advisory services to (a) Phaeton International
(BVI) Ltd., (b) Phoenix Partners, L.P., and
(c) Phoenix Partners II, L.P. In such capacity, Morgens
Waterfall has the power to make decisions regarding the
dispositions of the proceeds from the sale of the foregoing
shares of Common Stock. The business address of the reporting
persons above is 600 Fifth Avenue, 27th Floor,
New York, NY 10020. The Company makes no representation as
to the accuracy or completeness of the information reported.
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CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE
We review all relationships and transactions in which we and our
directors and executive officers or their immediate family
members are participants to determine whether such persons have
a direct or indirect material interest. According to our written
Statement of Policy with respect to Related Person Transactions,
our Audit Committee, with the assistance of management and our
legal counsel, is primarily responsible for the implementation
of processes and controls to obtain information from the
directors and executive officers with respect to related person
transactions and for then determining, based on the facts and
circumstances, whether we or a related person has a direct or
indirect material interest in the transaction. In determining
whether a proposed transaction is a related person transaction,
we examine:
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(i)
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the related persons relationship to us;
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(ii)
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the related persons interest in the transaction;
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(iii)
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the material facts of the proposed transaction, including the
proposed aggregate value of such transaction or, in the case of
indebtedness, the amount of principal that would be
involved; and
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(iv)
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whether the proposed transaction is on terms that are comparable
to the terms available to an unrelated third party or to
employees generally.
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If our Audit Committee determines that the proposed transaction
is a related person transaction, the Audit Committee decides
whether to approve or disapprove the transaction. If it is
approved, any material related person transaction is submitted
to our Board of Directors. For the period beginning
January 1, 2009 and ending March 31, 2010, there were
no transactions in which the Company was or is to be a
participant and the amount involved exceeds $120,000, and in
which any related person had or will have a direct or indirect
material interest. In January 2007, DUSA hired Kevin Doman, the
son of Robert F. Doman, our President and Chief Executive
Officer, as a sales representative. Kevin Domans hiring
was reviewed and approved by the Audit Committee. Factors
considered by the Audit Committee included
(i) Kevin Domans experience in the industry,
(ii) the fact that his compensation package is the same as
that of our other sales representatives and was not reviewed or
influenced by Robert Doman, prior to hiring or on an annual
basis thereafter and (iii) the amount of compensation that
Kevin Doman could receive from DUSA in the future. Kevin Doman
received $93,000 in salary and commissions for 2009 and has the
potential to earn approximately $130,000 in salary and
commissions in 2010.
26
SHAREHOLDER
PROPOSALS AND COMMUNICATIONS WITH THE BOARD OF
DIRECTORS
We intend to hold our 2011 Annual Meeting of Shareholders on or
about June 16, 2011. In order to be considered for
inclusion in the Board of Directors proxy statement and
proxy card for the 2011 Annual Meeting of Shareholders, a
shareholder proposal must be received by the Company on or
before December 28, 2010. Proposals should be directed to
the attention of the Vice President of Finance and Chief
Financial Officer, Richard C. Christopher, at the Companys
offices at 25 Upton Drive, Wilmington, Massachusetts 01887, or
the Secretary, Nanette W. Mantell, Esq.,
c/o Reed
Smith LLP, Princeton Forrestal Village, 136 Main
Street Suite 250, Princeton, New Jersey 08543.
In addition, if a shareholder wishes to present a proposal at
the Companys 2011 Annual Meeting which is not intended to
be included in the Companys proxy statement for that
meeting, the Company must receive written notice of the
shareholder proposal by March 16, 2011. If DUSA does not
receive notice of such a shareholder proposal by this date, the
Company will retain its discretionary authority to vote proxies
on such proposals even if it is not specifically reflected on
the proxy card, and shareholders have not had an opportunity to
vote on the proposal by proxy.
The Board of Directors believes that the most efficient method
for shareholders and other interested parties to raise issues
and ask questions and to get a response is to direct such
communications to DUSA through its Shareholder Services
department at the address provided in the Contact
DUSA section of our website, www.dusapharma.com. If,
notwithstanding these methods, a shareholder or other interested
party wishes to direct a communication specifically to the Board
of Directors, then the following method is available. To ensure
that the communication is properly directed in a timely manner,
it should be clearly identified as intended for the Board of
Directors:
Board of Directors
Attention: Chairman of the Board
c/o DUSA
Pharmaceuticals, Inc.
25 Upton Drive
Wilmington, MA 01887
The address stated above is supervised by DUSA which will
promptly forward to the Board any communication intended for
them. The Board believes that DUSA should speak with one voice
and has empowered management to speak on the Companys
behalf subject to the Boards oversight and guidance on
specific issues. Therefore, in most circumstances the Board will
not respond directly to inquiries received in this manner but
may take into consideration ideas, concerns and positions that
are presented in a concise, clear, supported and constructive
manner.
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the
Companys directors, officers and any person holding more
than ten percent (10%) of our Common Stock are required to
report their ownership of securities and any changes in that
ownership to the Securities and Exchange Commission on
Forms 3, 4 and 5. Based on our review of the copies of such
forms we have received, we believe that all of our officers,
directors and shareholders holding ten percent (10%) or more of
our Common Stock complied with all filing requirements
applicable to them with respect to their reporting obligations.
In making these statements, we have relied on the written
representations of our directors and officers and copies of the
reports that they, and any person holding more than ten percent
(10%) of our Common Stock, have filed with the Securities and
Exchange Commission.
HOUSEHOLDING
OF PROXY MATERIALS
The Company is required to provide an Annual Report and proxy
statement to all shareholders. If you are a shareholder of
record and have more than one account in your name or at the
same address as other shareholders of record, you may authorize
the Company to discontinue mailings of multiple proxy
statements, Annual Reports and other information statements.
Each shareholder in the household will continue to receive a
separate proxy card. This process, known as
householding, reduces the volume of duplicate
information received at your household and helps reduce our
expenses. To do so, please mark the designated box on each proxy
card for which you wish to discontinue receiving
duplicate documents. Your consent to stop delivery of the Annual
Report, proxy statements and other information statements shall
be effective for five (5) years or until you revoke your
consent. You may revoke your consent at any time by contacting
Mr. Richard Christopher, our Vice President of Finance and
Chief Financial Officer, at
978-909-2211,
or by calling
1-800-607-2530.
Delivery of individual copies of the documents shall resume
within thirty (30) days of our receipt of your request.
27
OTHER
MATTERS
Management knows of no matters other than those described above
that are to be brought before the meeting. However, if any other
matter properly comes before the meeting, the persons named in
the enclosed proxy will vote the proxy in accordance with their
best judgment on the matter.
The cost of preparing and mailing the enclosed material will be
borne by the Company. The Company may use the services of its
officers and employees (who will receive no additional
compensation) to solicit proxies. The Company intends to request
that banks and brokers holding shares of DUSA Pharmaceuticals,
Inc. Common Stock forward copies of the proxy materials to those
persons for whom they hold shares and to request authority for
the execution of proxies. The Company will reimburse banks and
brokers for their
out-of-pocket
expenses. The Company has retained its transfer agent, American
Stock Transfer & Trust Company, to aid in the
solicitation, at an estimated cost of less than $10,000.
Certain information contained in this proxy statement relating
to the occupations and security holdings of our directors and
officers is based upon information received from the individual
directors and officers.
28
EXHIBIT A
Charter
of the Audit Committee
of the Board of Directors of
DUSA Pharmaceuticals, Inc.
Article I.
Purpose
The purpose of the Audit Committee of the Board of Directors
(the Committee) of DUSA Pharmaceuticals, Inc.
(DUSA or the Company) is to oversee the
accounting and financial reporting processes and audits of the
financial statements and to act as a liaison between the Board
of Directors (the Board) and the outside independent
registered public accounting firm.
Article II.
Responsibilities
The Committees function shall be one of oversight and
review. It is not expected to control DUSAs accounting
practices or to define the standards to be used in the
preparation of DUSAs financial statements. The Committee
shall be responsible for the following:
1. Selecting and replacing the independent registered
public accounting firm (subject, if applicable, to shareholder
ratification). The Committee shall be directly responsible for
the compensation and oversight of the work of the independent
registered public accounting firm (including resolution of
disagreements between management and the independent registered
public accounting firm regarding financial reporting) for the
purpose of preparing or issuing an audit report or related work.
The independent registered public accounting firm shall report
directly to the Committee, unless NASDAQ or the Securities and
Exchange Commission (the Commission) requirements
dictate otherwise. The Committee shall also be responsible for
selecting, replacing, compensating and overseeing the work of
any other registered public accounting firm engaged for the
purpose of preparing or issuing an audit, review or related work.
2. Reviewing with the outside auditors, the internal
auditors, if any, and management the unaudited quarterly
financial statements, the planning and scope of the audits of
the financial statements, and the results of those audits.
3. Reviewing with the outside auditors, the internal
auditors, if any, and management the adequacy of internal
accounting controls.
4. Reviewing and discussing quarterly reports from the
independent registered public accounting firm on:
(a) All critical accounting policies and practices to be
used;
(b) All alternative treatments of financial information
within generally accepted accounting principles that have been
discussed with management, ramifications of the use of such
alternative disclosures and treatments, and the treatment
preferred by the independent registered public accounting
firm; and
(c) Other material written communications between the
independent registered public accounting firm and management,
such as any management letter or schedule of unadjusted
differences.
5. Reviewing and discussing with management all financial
press releases.
6. Obtaining from the outside auditors a formal written
statement, consistent with Independence Standards Board Standard
1, delineating all relationships between DUSA and the auditors,
engaging in a dialogue with the outside auditors regarding any
disclosed relationships, and taking, or recommending that the
Board take, appropriate action to oversee the independence of
the outside auditors.
7. Reviewing and reassessing the adequacy of this Charter
on an annual basis and proposing appropriate amendments to the
Board for its consideration.
8. Monitoring other corporate and financial policies as
requested by the Board.
9. Investigating any matter brought to its attention, with
the power and authority to retain and compensate counsel
and/or other
experts for this purpose.
10. Preapproving all auditing services and permitted
non-audit services to be performed for the Company by its
independent registered public accounting firm, subject to the de
minimis exceptions for non-audit services described in
Section 10A(i)(1)(B) of the Securities Exchange Act of
1934, as amended (the Exchange Act) which are
approved by the Audit Committee prior to the completion of the
audit. The Audit Committee may form and delegate authority to
subcommittees consisting of one or more members when
appropriate, including the authority to grant preapprovals of
audit and
29
permitted non-audit services, provided that decisions of such
subcommittee to grant preapprovals shall be presented to the
full Audit Committee at its next scheduled meeting.
11. Discussing with the independent registered public
accounting firm the matters required to be discussed by
Statement on Auditing Standards No. 61 relating to the
conduct of the audit, including any difficulties encountered in
the course of the audit work, any restrictions on the scope of
activities or access to requested information, and any
significant disagreements with management.
12. Ensuring the rotation of the independent registered
public accounting firm personnel as required by law or
regulation.
13. Obtaining from the independent registered public
accounting firm assurance that Section 10A(b) of the
Exchange Act has not been implicated.
14. Establishing procedures, as required by the Commission
or the NASDAQ, for the receipt, retention and treatment of
complaints received by the Company regarding accounting,
internal accounting controls or auditing matters, and the
confidential, anonymous submission by employees of concerns
regarding questionable accounting or auditing matters.
15. Reviewing and approving all related party transactions
of the Company.
16. Reviewing disclosures made to the Committee, if any, by
the Companys Chief Executive Officer and Chief Financial
Officer during their certification process for the annual report
on
Form 10-K
and quarterly report on
Form 10-Q
about any significant deficiencies in the design or operation of
internal controls or material weaknesses therein and any fraud
involving management or other employees who have a significant
role in the Companys internal controls.
17. Reviewing and discussing any reports concerning
material violations submitted to the Committee by the
Companys counsel pursuant to the Commissions
attorney professional responsibility rules.
Article III.
Composition and Independence
The Committee shall be composed of at least three
(3) independent directors, recommended for membership by
the Nominating and Corporate Governance Committee, as defined by
the rules of NASDAQ. Each member of the Committee shall be able
to read and understand fundamental financial statements as
required by NASDAQ. At least one (1) member of the
Committee shall be an Audit Committee Financial Expert, or have
the financial expertise required by NASDAQ and the Commission.
If no such Audit Committee Financial Expert serves on the
Committee, DUSA shall disclose why no such Audit Committee
Financial Expert serves on the Committee, as specified by NASDAQ
or Commission requirements. The Committee members shall select a
Chairman from among the members who shall preside over meetings
of the Committee consistent with the provisions of DUSAs
By-laws. The Chairman shall maintain regular liaison with senior
management and the internal and outside auditors as he or she
determines is necessary or appropriate.
Article IV.
Meetings and Reports
The Committee shall meet on a regular basis, but no less than
quarterly, and may ask members of management or others to attend
such meetings to provide pertinent information, as necessary. A
quorum shall be declared when a majority of the appointed
members of the Committee are in attendance.
The Committee shall report to the full Board on a quarterly
basis with respect to its activities and its recommendations.
The Committee shall report to the shareholders, once each year,
in DUSAs proxy statement for its annual meeting. The
report to shareholders shall include the information required by
Regulation S-K,
Item 306 of the Exchange Act.
Article V.
Resources and Authority
The Committee shall have the authority, to the extent it deems
it necessary or appropriate, to retain, compensate and terminate
independent legal, accounting or other advisors without the
approval of Board or management of the Company.
Amended as of May 5, 2010
30
DUSA PHARMACEUTICALS, INC.
Proxy for 2010 Annual Meeting
This Proxy is Solicited on Behalf of
The Board of Directors
The undersigned hereby appoints Robert F. Doman and Richard C. Christopher or either of them,
each with power of substitution, proxies to vote all shares of common stock which the undersigned
would possess if personally present at the Annual Meeting of Shareholders (including all
adjournments thereof) of DUSA Pharmaceuticals, Inc. (the Company) to be held on Thursday, July
29, 2010, at 11:00 a.m., at the Companys offices located at 25 Upton Drive, Wilmington,
Massachusetts 01887.
SHAREHOLDERS ARE REQUESTED TO SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES OR CANADA.
The Board of Directors recommends a vote FOR each of the items listed below. Unless otherwise
specified, the vote represented by this proxy will be cast FOR Items 1 and 2.
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Nominees:
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o Alfred Altomari
o David M. Bartash
o Alexander W. Casdin
o Robert F. Doman
o Jay M. Haft
o Paul J. Hondros
o Magnus Moliteus
o David M. Wurzer |
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FOR ALL NOMINEES |
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o |
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WITHHOLD AUTHORITY FOR ALL NOMINEES |
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FOR ALL EXCEPT (See instructions below) |
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark
FOR ALL EXCEPT and fill in the circle next to each nominee you wish to withhold.
2. |
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Ratification of the selection of Deloitte & Touche LLP as the independent registered public
accounting firm for the Company for the fiscal year ending December 31, 2010. |
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o
FOR o
AGAINST o ABSTAIN |
3. |
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In their discretion, the proxies are authorized to vote upon such other business as may properly
come before the meeting. |
Electronic Distribution
If you would like to receive future DUSA Pharmaceuticals, Inc. proxy statements and annual
reports electronically, please visit http://www.amstock.com. Click on Shareholder Account Access
to enroll. Please enter your account number and tax identification number to log in, then select
Receive Company Mailings via E-Mail and provide your e-mail address.
To change the address on your account, please check the box and indicate your new address in
the address space above. Please note that changes to the registered name(s) on the account may not
be submitted via this method. o
Please sign exactly as your name or names appear on this Proxy. When shares are held jointly,
each holder should sign. When signing as executor, administrator, attorney, trustee or guardian,
please give full title as such. If the signer is a corporation, please sign full corporate name by
a duly authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by a duly authorized person.
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Signature of Shareholder
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Signature of Shareholder
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