EXECUTIVE CHANGE IN CONTROL SEVERANCE AGREEMENT
Exhibit
10.25
THIS EXECUTIVE CHANGE IN CONTROL
SEVERANCE AGREEMENT dated as of ___________________ (as the same may be amended,
restated, supplemented or otherwise modified from time to time hereafter, this
“Agreement”), is entered into between Columbia Laboratories, Inc., a Delaware
corporation having its corporate offices at 000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx,
Xxx Xxxxxx (“Columbia” or the “Company”), and ________________
(“Executive”).
WITNESSETH:
WHEREAS, the Company desires to create
a greater incentive for Executive to remain in the employ of the Company,
particularly in the event of any possible change or threatened change in control
of the Company; and
NOW THEREFORE, in partial consideration
of Executive’s past and future services to the Company and the mutual covenants
contained herein, the parties hereby agree as follows:
1. Termination Following A
Change in Control
(a) Qualifying
Termination. Executive shall be entitled to the compensation
and benefits listed in Paragraph 1(b), in addition to compensation and benefits
to which Executive would otherwise be entitled as of the date of termination, if
Executive’s employment with the Company is terminated either (i) by the Company
for any reason other than for Cause within 90 days before a Change in Control or
within one year following the occurrence of any Change in Control or successive
Change in Control or (ii) by Executive for Good Reason within one year following
the occurrence of any Change in Control or successive Change in Control, and in
each case Executive properly executes, and does not revoke or attempt to revoke,
a valid and reasonable release of claims against the Company, its affiliates and
their employees and agents.
(b) Compensation and
Benefits. Within ten business days after a Change in Control
event (or the last day of any period during which any release may be revoked by
Executive), the Company shall make a lump sum cash payment to Executive, subject
to any mandatory tax withholding, equal to one times Executive’s Base Salary and
Bonus for the year prior to the Change in Control plus a lump sum payment equal
to the value of the Fringe Benefits provided to Executive for the year prior to
the Change in Control.
2. Definitions.
(a) Bonus. “Bonus”
shall mean the greater of (i) the bonus, if any, paid to Executive in the year
prior to the Qualifying Termination, (ii) the bonus, if any, paid to Executive
in the year prior to the Change in Control, or (iii) the Executive’s target
bonus at the time of the Change in Control.
(b) Base
Salary. “Base Salary” shall mean the greater of
(i) the annual rate of base salary in effect for Executive at the time of the
Qualifying Termination or (ii) the annual rate of base salary in effect for
Executive at the time of the Change in Control.
(c) Cause. “Cause”
shall mean termination based on (i) gross negligence, recklessness or
malfeasance in the performance of Executive’s duties; (ii) Executive
committing any criminal act; (iii) Executive committing any act of fraud or
other material misconduct resulting or intending to result directly or
indirectly in gain or personal enrichment at the expense of Company;
(iv) Executive willfully engaging in any conduct relating to the business
of Company that could reasonably be expected to have a materially detrimental
effect on the business or financial condition of the Company;
(v) misconduct which materially discredits or damages Company, or violates
Company’s policies or procedures, after Company has notified Executive of the
actions Company deems to constitute non-compliance; (vi) Executive
materially breaches Executive’s obligations relating to confidential
information, non-solicitation and non-competition.
(d) Change In
Control. “Change in Control” shall have occurred if
(a) there shall have consummated (i) any consolidation or merger of
Company in which Company is not the continuing or surviving entity or pursuant
to which shares of Company’s common stock would be converted to cash, securities
or other property, other than a merger of Company in which the holders of
Company’s common stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving entity immediately
after the merger, or (ii) any sale, lease, exchange or transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the company; or (b) the stockholders of the Company
approve a plan or proposal for the liquidation or dissolution of the Company; or
(c) any person (as that term is used in Sections 13(d) and 14(d)(z) of the
Securities and Exchange Act, as amended (the “Exchange Act”)) shall become a
beneficial owner (within the meaning of Rule 13d-2 under the Exchange Act) of
40% or more of Company’s outstanding common stock; or (d) during any period
of two consecutive years, individuals who at the beginning of such period
constitute the entire Board shall cease for any reason to constitute a majority
thereof unless the election, or the nomination for election by Company’s
stockholders, of each new director was approved by a vote of at least 50% of the
directors eligible to vote who were directors at the beginning of the
period.
(e) Good
Reason. For purposes of this Agreement, “Good Reason” shall
mean the termination by Executive of Executive’s employment with the Company and
all its affiliates and subsidiaries that are considered a single employer within
the meaning of Sections 414(b) and 414(c) of the Code which is due to (i) a
material diminution of Executive’s responsibilities, or working conditions, or
duties; (ii) a material diminution in the Executive’s base salary; (iii) a
material negative change in the terms or status of this Agreement; or (iv) a
relocation, without Executive’s consent, of the Executive’s office more than 100
miles from its location at the commencement of this Agreement; provided,
however, the Executive shall provide written notice to the Company of the
initial existence of the condition causing the change in terms or status no more
than ninety (90) days after the change in terms or status occurs and the Company
shall have thirty (30) days to resolve the issue causing the change in terms or
status. If the Company resolves such issue, then Executive’s
employment shall not be subject to the Good Reason provisions of this Agreement
as to such issue.
3. Applicable
Laws and Consent to Jurisdiction. The validity, construction,
interpretation, and enforceability of this Agreement shall be determined and
governed by the laws of the State of New Jersey without giving effect to the
principles of conflicts of law. For the purpose of litigating any dispute that
arises under this Agreement, the parties hereby consent to exclusive
jurisdiction of, and agree that such litigation shall be conducted in, any state
or federal court located in the State of New Jersey.
4. Severability.
The provisions of this Agreement are severable and if any one or more provisions
are determined to be illegal or otherwise unenforceable, in whole or in part,
the remaining provisions shall nevertheless be binding and
enforceable.
5. Miscellaneous;
Waiver. Executive further agrees that this Agreement sets
forth the entire Agreement between the Company and Executive with respect to the
subject matter herein, supersedes any and all prior agreements between the
Company and Executive with respect to the subject matter herein, and shall not
be amended or added to except in writing signed by the Company and
Executive. Executive understands that Executive may not assign
Executive’s duties and obligations under this Agreement to any other party and
that the Company may, at any time and without further action by or the consent
of Executive, assign this Agreement to any of its affiliated
companies.
6. Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall be deemed an
original and all of which taken together shall constitute one and the same
agreement.
7. Successors and
Assigns. This Agreement
shall be binding on the successors and heirs of Executive and shall inure to the
benefit of the successors and assigns of the Company.
8. Notices. Any
notice required or permitted hereunder shall be in writing and shall be
sufficiently given if personally delivered or if sent by registered or certified
mail, postage prepaid, with return receipt requested, addressed: (a)
in the case of the Company, to Columbia Laboratories, Inc., 000 Xxxxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx, attn.: General Counsel, and (b) in the case of
Executive, to Executive's last known address as reflected in the Company's
records, or to such other address as Executive shall designate by written notice
to the Company. Any notice given hereunder shall be deemed given at
the time of receipt thereof by the person to whom such notice is
given.
9. Code
Section 409A Compliance. Executive acknowledges and agrees
that he has been advised that, before entering into this Agreement, he should
consult with his financial, legal or tax adviser to determine the risk to him of
the imposition of tax under Internal Revenue Code Section
409A. Executive shall have no claim against the Company with respect
to Code Section 409A. This Agreement is intended to comply with the
requirements of Code Section 409A and the treasury regulations and other
guidance issued thereunder, as in effect from time to time. To the
extent a provision of this Agreement is contrary to or fails to address the
requirements of Code Section 409A and related treasury regulations, this
Agreement shall be construed and administered as necessary to comply with such
requirements to the extent allowed under applicable treasury
regulations.
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date first set forth above.
EXECUTIVE
COLUMBIA LABORATORIES, INC.
________________________ ________________________________
By: Xxxxx
X. Xxxx
Its: Senior
Vice President, and ChiefFinancial Officer
