THIS AGREEMENT, made this 1st day of February, 1999 by and between Derma
Sciences, Inc., a business corporation organized under the laws of the
Commonwealth of Pennsylvania ("Derma") and Stephen T. Wills, CPA, MST ("Wills").
1. Employment. Derma hereby employs Wills, and Wills agrees to be employed
by Derma, as Derma's Vice President and Chief Financial Officer upon the terms
and conditions hereinbelow set forth.
2. Time and Efforts. Wills shall devote such of his business time and
efforts as may reasonably be required to discharge his responsibilities
hereunder. Provided, however, Derma acknowledges that Wills currently serves,
and during the Term hereof will continue to serve, as Vice President and Chief
Financial Officer of Palatin Technologies, Inc. and Managing Principal of
Golomb, Wills and Company, PC. Derma further acknowledges that Wills' duties to
the foregoing organizations require that he devote a substantial portion of his
business time and efforts to the affairs thereof. Nothing contained herein shall
be deemed to restrict Wills' right to continue in the foregoing capacities.
3. Compensation. During the Term hereof Derma shall pay compensation to
Wills as follows:
(a) Salary at the rate of One Hundred Two Thousand Dollars ($102,000)
(b) Bonus as determined by Derma's board of directors upon
recommendation of the Chairman.
4. Options Grant. Wills shall receive "non-qualified" options to purchase
all, or any portion of, One Hundred Thousand (100,000) shares of Derma common
stock at a
price per share of $1.20. The subject options shall be exercisable during the
Term hereof until 12:00 midnight December 14, 2008 and shall vest as follows:
Number of Options Vesting Date
25,000 Upon execution hereof
25,000 December 15, 1999
25,000 December 15, 2000
25,000 December 15, 2001
Vesting of the foregoing options shall accelerate to 100% upon: (a) A change in
ownership of in excess of 75% of Derma; or (b) The sale by Derma of
substantially all of its assets.
5. Term and Severance. This Agreement shall be effective upon execution
hereof and shall continue indefinitely until terminated as provided herein.
Either party hereto may terminate this Agreement upon thirty (30) days written
notice of such termination to the other party. Upon termination of this
Agreement by Derma without cause:
(a) Derma shall pay to Wills a severance payment of one year's salary;
(b) The period to exercise the options granted hereunder shall be
extended to the earlier of five years from the date of termination or 12:00
midnight December 14, 2008.
6. Employee Benefits. During the term hereof, Wills shall be entitled to
the following employee benefits:
(a) Participation in Derma's medical insurance plans;
(b) Reimbursement of vehicle expenses at the rate of $0.31 per
(c) Participation in Derma's deferred compensation plans in accordance
with the terms thereof;
(d) Reimbursement of "ordinary and necessary" business expenses; and
(e) Paid vacation of two (2) weeks per year.
IN WITNESS WHEREOF, the parties hereto have hereunder set their hands and
seals as of the date first hereinabove written. DERMA SCIENCES, INC.
By: /s/ Edward J. Quilty
Edward J. Quilty, Chairman
/s/ Stephen T. Wills
Stephen T. Wills, CPA, MST