Exhibit 10.2
COLLAGENEX PHARMACEUTICALS, INC.
SEVERANCE AGREEMENT
This Severance Agreement (the "Agreement") is made and entered into effective as
of September 29, 2003 (the "Effective Date"), by and between Xxxx Xxxxxxxx (the
"Employee") and CollaGenex Pharmaceuticals, Inc., a Delaware corporation
("CollaGenex"). Certain capitalized terms used in this Agreement are defined in
Section 1 below.
In consideration of the mutual covenants contained in this Agreement and the
continued employment of Employee by CollaGenex, the parties agree as follows:
1. DEFINITION OF TERMS. The following terms referred to in this Agreement shall
have the following meanings:
(a) CAUSE. "Cause" shall mean (i) any act of dishonesty taken by the Employee in
connection with his or her responsibilities as an employee which is intended to
result in personal enrichment of the Employee, (ii) Employee's conviction of a
felony that the Board believes has had or will have a material detrimental
effect on CollaGenex' reputation or business, (iii) a willful act or willful
failure to act by the Employee that constitutes misconduct and is injurious to
CollaGenex, (iv) any material breach by Employee of any agreement with
CollaGenex, after there has been delivered to the Employee a written notice of
breach and Employee has been given a reasonable opportunity to cure such breach,
or (v) continued willful violations by the Employee of the Employee's
obligations to CollaGenex or responsibilities/duties as an employee after there
has been delivered to the Employee a written demand for performance from
CollaGenex which describes the basis for CollaGenex' belief that the Employee
has not substantially performed his or her duties, and Employee has been given a
reasonable opportunity to cure the violations.
(b) INVOLUNTARY TERMINATION. "Involuntary Termination" shall mean (i) without
the Employee's express written consent, a significant reduction of the
Employee's duties, position or responsibilities relative to the Employee's
duties, position or responsibilities in effect immediately prior to such
reduction, or the removal of the Employee from such position, duties
and responsibilities, unless the Employee is provided with comparable duties,
position and responsibilities; (ii) without the Employee's express written
consent, a significant reduction, without good business reasons, of the
facilities and perquisites (including office space and location) available to
the Employee immediately prior to such reduction; (iii) without the Employee's
express written consent, a reduction by CollaGenex of the Employee's base salary
as in effect immediately prior to such reduction; (iv) without the Employee's
express written consent, a material reduction by CollaGenex in the kind or level
of employee benefits to which the Employee is entitled immediately prior to such
reduction with the result that the Employee's overall benefits package is
significantly reduced; (v) without the Employee's express written consent, the
relocation of the Employee to a facility or a location more than fifty (50)
miles from his or her current location; (vi) any termination of the Employee by
CollaGenex that is not effected for Cause or for which the grounds relied upon
are not valid; or (vii) the failure of CollaGenex to obtain the assumption of
this Agreement by any successors contemplated in Section 7 below.
(c) TERMINATION DATE. "Termination Date" shall mean the effective date of any
notice of termination delivered by one party to the other under this Agreement.
2. TERM OF AGREEMENT. This Agreement shall terminate on the earlier of (a) the
date that all obligations of the parties under this Agreement have been
satisfied or (b) September 29, 2004.
3. AT-WILL EMPLOYMENT. CollaGenex and the Employee acknowledge that the
Employee's employment is and shall continue to be at-will, as defined under
applicable law. If, prior to the termination of this Agreement, the Employee
voluntarily leaves the employment of CollaGenex or Employee's employment is
terminated for Cause , this Agreement will terminated by Operation of Section 2
and the Employee shall not be entitled to any payments, benefits, damages,
awards or compensation other than as may otherwise be established under
CollaGenex' then existing employee benefit plans or policies at the Termination
Date, or as otherwise agreed by the parties at such time.
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4. SEVERANCE BENEFITS IN THE EVENT OF AN INVOLUNTARY TERMINATION.
(a) If the Employee's employment with CollaGenex terminates as a result of an
Involuntary Termination during the term of this Agreement, Employee shall be
entitled to the following severance benefits: (a) 1.0 times the Employee's base
salary as in effect as of the Termination Date, plus an amount equal to 1.0
times the average annual bonus paid to Employee prior to the Termination Date,
less applicable withholding, payable in a lump sum within thirty (30) days of
the Termination Date; provided, however, if Employee has not worked long enough
to have received a bonus for a full year of employment, an amount equal to 1.0
times the maximum bonus opportunity for the year in which employment is
terminated shall be substituted for the payment based on average bonus payments
referred to above in this subparagraph.
(b) TERMINATION APART FROM A CHANGE OF CONTROL. If the Employee's employment
with CollaGenex terminates other than as a result of an Involuntary Termination
during the term of this Agreement, then the Employee shall not be entitled to
receive severance or other benefits as described in this Section 4, but may be
eligible for those benefits (if any) as may then be established under
CollaGenex' then existing severance and benefits plans and policies at the time
of such termination.
(c) ACCRUED WAGES AND VACATION; EXPENSES. Without regard to the reason for, or
the timing of, Employee's termination of employment: (i) CollaGenex shall pay
the Employee any unpaid base salary due for periods prior to the Termination
Date; (ii) CollaGenex shall pay the Employee all of the Employee's accrued and
unused vacation through the Termination Date; and (iii) following submission of
proper expense reports by the Employee, CollaGenex shall reimburse the Employee
for all expenses reasonably and necessarily incurred by the Employee in
connection with the business of CollaGenex prior to the Termination Date. These
payments shall be made promptly upon termination and within the period of time
mandated by law.
5. LIMITATION ON PAYMENTS. In the event that the severance benefits provided for
in this Agreement or otherwise payable to the Employee (i) constitute "parachute
payments" within the meaning of Section 280G of the Code, and (ii) would be
subject to the excise tax imposed by Section 4999 of the Code (the "Excise
Tax"), then Employee's benefits under this Agreement shall be either
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(a) delivered in full, or
(b) delivered to such lesser extent which would result in no portion of such
benefits being subject to the Excise Tax, whichever of the foregoing amounts,
taking into account the applicable federal, state and local income taxes and the
Excise Tax, results in the receipt by Employee on an after-tax basis, of the
greatest amount of benefits, notwithstanding that all or some portion of such
benefits may be taxable under Section 4999 of the Code.
Unless CollaGenex and the Employee otherwise agree in writing, any determination
required under this Section shall be made in writing by CollaGenex' independent
public accountants (the "Accountants"), whose determination shall be conclusive
and binding upon the Employee and CollaGenex for all purposes. For purposes of
making the calculations required by this Section, the Accountants may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of
Section 280G and 4999 of the Code. CollaGenex and the Employee shall furnish to
the Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section. CollaGenex shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section.
6. SUCCESSORS.
(a) Company's Successors. Any successor to CollaGenex (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to all or substantially all of CollaGenex' business and/or assets
shall assume CollaGenex' obligations under this Agreement and agree expressly to
perform CollaGenex' obligations under this Agreement in the same manner and to
the same extent as CollaGenex would be required to perform such obligations in
the absence of a succession. For all purposes under this Agreement, the term
"Company" shall include any successor to CollaGenex' business and/or assets
which executes and delivers the assumption agreement described in this
subsection (a) or which becomes bound by the terms of this Agreement by
operation of law.
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(b) Employee's Successors. Without the written consent of CollaGenex, Employee
shall not assign or transfer this Agreement or any right or obligation under
this Agreement to any other person or entity. Notwithstanding the foregoing, the
terms of this Agreement and all rights of Employee hereunder shall inure to the
benefit of, and be enforceable by, Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.
7. NOTICES.
(a) General. Notices and all other communications contemplated by this Agreement
shall be in writing and shall be deemed to have been duly given when they are
personally delivered or when they are mailed by U.S. registered or certified
mail, return receipt requested and postage prepaid. In the case of the Employee,
mailed notices shall be addressed to the Employee at the home address which the
Employee most recently communicated to CollaGenex in writing. In the case of
CollaGenex, mailed notices shall be addressed to its corporate headquarters, and
all notices shall be directed to the attention of its Secretary.
(b) Notice of Termination. Any termination by CollaGenex for Cause or by the
Employee as a result of a voluntary resignation or an Involuntary Termination
shall be communicated by a notice of termination to the other party to this
Agreement given in accordance with this Section. Such notice shall (i) indicate
the specific termination provision in this Agreement relied upon, (ii) set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated, and (iii) specify the Termination
Date (which shall be not more than 30 days after the giving of such notice). If
the Employee fails to include in the notice any fact or circumstance which
contributes to a showing of Involuntary Termination, that failure shall not
waive any right of the Employee under this Agreement or preclude the Employee
from asserting such fact or circumstance in enforcing his or her rights under
this Agreement.
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8. MISCELLANEOUS PROVISIONS.
(a) NO DUTY TO MITIGATE. The Employee shall not be required to mitigate the
amount of any payment contemplated by this Agreement, nor shall any such payment
be reduced by any earnings that the Employee may receive from any other source.
(b) WAIVER. No provision of this Agreement may be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed
by the Employee and by an authorized officer of CollaGenex (other than the
Employee). No waiver by either party of any breach of, or of compliance with,
any condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision or of the same condition
or provision at another time.
(c) INTEGRATION. This Agreement and any outstanding stock option agreements and
restricted stock purchase agreements referenced in this Agreement represent the
entire agreement and understanding between the parties as to the subject matter
of this Agreement and supersede all prior or contemporaneous agreements, whether
written or oral, with respect to this Agreement and any stock option agreement
or restricted stock purchase agreement.
(d) CHOICE OF LAW. The validity, interpretation, construction and performance of
this Agreement shall be governed by the internal substantive laws, but not the
conflicts of law rules, of the Commonwealth of Pennsylvania.
(e) LITIGATION EXPENSE. In the event Employee commences litigation to enforce
rights under this Agreement, and a final unappealable outcome of the litigation
is an award in favor of Employee, in addition to the amount of the award,
CollaGenex will reimburse Employee for the costs and expenses of the litigation,
including reasonable attorney fees.
(f) SEVERABILITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
(g) EMPLOYMENT TAXES. All payments made pursuant to this Agreement shall be
subject to withholding of applicable income and employment taxes.
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(h) COUNTERPARTS. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together will constitute one and
the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of CollaGenex by its duly authorized officer, as of the day and year first
written above.
COMPANY: COLLAGENEX PHARMACEUTICALS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
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Title: Chairman, CEO & President
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/s/ Xxxx Xxxxxxxx
EMPLOYEE: --------------------------------
Signature
Xxxx Xxxxxxxx
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Printed Name
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