Exhibit 10.2

ophtlogo2.jpg [ophtlogo2.jpg]
One Penn Plaza, Suite 19th Floor
New York, NY 10119
(212) 845-8200

February 2, 2017
 
Mr. Keith Westby
c/o Ophthotech Corporation
One Penn Plaza, Suite 19th Floor
New York, NY 10119
 
Dear Keith:
 
The board of directors (the “Board”) of Ophthotech Corporation (the “Company”)
has provided for the following severance benefits to be provided to you in the
event of your termination of employment with the Company, on the terms and
conditions set forth herein.
 
1.              Severance.
 
(a)       Subject to Section 1(b), if your employment is terminated (1) at any
time by the Company without Cause or by you for Good Reason (as such terms are
herein defined) or (2) within one year following a Change in Control Event (as
defined in the Company’s 2013 Stock Incentive Plan), by the Company, or its
successor, without Cause or by you for Good Reason, the Company or its successor
will (i) pay you in a lump sum on the Payment Date (as herein defined) (A) an
amount equal to nine (9) months of your then-current base salary, less standard
employment-related withholdings and deductions and (B) an amount equal to a
pro-rated portion of your then-current target bonus for the year in which your
employment terminates, provided, however, that if your employment is terminated
under the circumstances described in (2) of this Section 1(a), the Company or
its successor will instead pay you an amount equal to your then-current target
bonus for the year in which your employment terminates, in either case, without
regard to whether the performance goals with respect to such target bonus have
been established or met and less standard employment-related withholdings and
deductions, and (ii) provided you elect to continue your and your eligible
dependents’ participation in the Company’s medical and dental benefit plans
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986
(“COBRA”), reimburse you for the monthly premium to continue such coverage for
the lesser of the nine (9) full calendar months immediately following the month
in which the termination of your employment occurs and the end of the calendar
month in which you become eligible to receive group health plan coverage under
another employee benefit plan. Notwithstanding the foregoing, if the
reimbursement of monthly premiums would otherwise violate the nondiscrimination
rules or cause the reimbursement of claims to be taxable under the Patient
Protection and Affordable Care Act of 2010, together with the Health Care and
Education Reconciliation Act of 2010 (collectively, the “Healthcare Reform Act”)
or Section 105(h) of the Internal Revenue Code of 1986, as amended (the “Code”),
these payments shall be treated as taxable payments to you and you shall be
subject to imputed income tax treatment to the extent necessary to eliminate any
discriminatory treatment or taxation under the Act or Section 105(h).
 
(b)      Notwithstanding the foregoing, (i) the Company shall not be obligated
to pay you the severance payments provided for herein unless you have timely
executed (and not revoked) a separation

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Exhibit 10.2

agreement in a form to be provided by the Company. Such separation agreement
must be executed and become binding and enforceable within sixty (60) calendar
days after the effective date of your termination of employment (such 60th day,
the “Payment Date”); provided however, that if the 60th day following the date
of termination occurs in the next calendar year following the date of
termination, then the Payment Date shall be no earlier than January 1 of such
following calendar year and (ii) the severance payments provided for herein
shall be reduced by any payments to which you may be entitled as a result of any
applicable laws regarding plant closings or mass layoffs which require notice
prior to termination or pay or benefits following termination, such that the
amount of the payments made to you pursuant to such laws (whether such payments
are made to you during any notice period prior to termination (regardless of
whether the Company requires you to work during such notice period) or any
period following termination), will reduce the severance payments otherwise due
to you under Section 1(a).
 
(c)        For purposes hereof, “Cause” shall mean that: (i) you failed to
attempt in good faith, refused or willfully neglected to perform and discharge
your material duties and responsibilities; (ii) you have been convicted of, or
pled nolo contendere to, a felony or other crime involving fraud or moral
turpitude; (iii) you breached your fiduciary duty of loyalty to the Company, or
acted fraudulently or with material dishonesty in discharging your duties to the
Company; (iv) you undertook an intentional act or omission of misconduct that
materially harmed or was reasonably likely to materially harm the business,
interests, or reputation of the Company; (v) you materially breached any
material provision of this letter or any other agreement with the Company; or
(vi) you materially breached any material provision of any Company code of
conduct or ethics policy. Notwithstanding the foregoing, “Cause” shall not be
deemed to have occurred unless: (A) the Company provides you with written notice
that it intends to terminate your employment hereunder for one of the grounds
set forth in subsections (i), (v) or (vi) within sixty (60) days of such
reason(s) occurring, (B) if such ground is capable of being cured, you have
failed to cure such ground within a period of thirty (30) days from the date of
such written notice, and (C) the Company terminates your employment within six
(6) months from the date that Cause first occurs.
 
(d)      For purposes hereof, “Good Reason” shall mean, without your written
consent: (i) any change in your position or reporting relationship with the
Company that diminishes in any material respect your authority, duties or
responsibilities; (ii) any material reduction in your base compensation; (iii) a
material change in the primary geographic location at which services are to be
performed by you (unless the new location is closer to your primary residence
than the prior location); or (iv) a material breach of any provision hereof by
the Company or any successor or assign. Notwithstanding the foregoing, “Good
Reason” shall not be deemed to have occurred unless: (A) you provide the Company
with written notice that you intend to terminate your employment hereunder for
one of the grounds set forth in subsections (i), (ii), (iii) or (iv) of the
immediately preceding sentence within sixty (60) days of such
reason(s) occurring, (B) if such ground is capable of being cured, the Company
has failed to cure such ground within a period of thirty (30) days from the date
of such written notice, and (C) you terminate your employment within six
(6) months from the date that Good Reason first occurs. For purposes of
clarification, the above-listed conditions shall apply separately to each
occurrence of Good Reason and failure to adhere to such conditions in the event
of Good Reason shall not disqualify you from asserting Good Reason for any
subsequent occurrence of Good Reason.

2.              Equity Acceleration. If your employment with the Company, or its
successor, is terminated by the Company or such successor without Cause or by
you for Good Reason within the one (1) year period following a Change in Control
Event, then the then-unvested portion of any equity awards held by you that vest
solely based on the passage of time shall immediately vest in full and become
exercisable or free from forfeiture or repurchase, as applicable, as of the date
of such termination.
 

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Exhibit 10.2

3.              Modified Cutback.
 
(a)       Notwithstanding any other provision of this letter agreement, the
letter agreement evidencing your offer of employment with us, or any other
agreements between you and us, except as set forth in Section 3(b) hereof, in
the event that the Company undergoes a “Change in Ownership or Control” (as
defined below), the Company shall not be obligated to provide you a portion of
any “Contingent Compensation Payments” (as defined below) that you would
otherwise be entitled to receive to the extent necessary to eliminate any
“excess parachute payments” (as defined in Section 280G(b)(l) of the Code) for
you. For purposes of this Section 3(a), the Contingent Compensation Payments so
eliminated shall be referred to as the “Eliminated Payments” and the aggregate
amount (determined in accordance with Treasury Regulation Section 1.280G-1,
Q/A-30 or any successor provision) of the Contingent Compensation Payments so
eliminated shall be referred to as the “Eliminated Amount.”
 
(b)      Notwithstanding the provisions of Section 3(a), no such reduction in
Contingent Compensation Payments shall be made if (1) the Eliminated Amount
(computed without regard to this sentence) exceeds (2) 100% of the aggregate
present value (determined in accordance with Treasury Regulation
Section 1.280G-1, Q/A-31 and Q/A-32 or any successor provisions) of the amount
of any additional taxes that would be incurred by you if the Eliminated Payments
(determined without regard to this sentence) were paid to you (including, state
and federal income taxes on the Eliminated Payments, the excise tax imposed by
Section 4999 of the Code payable with respect to all of the Contingent
Compensation Payments in excess of your “base amount” (as defined in
Section 280G(b)(3) of the Code), and any withholding taxes). The override of
such reduction in Contingent Compensation Payments pursuant to this
Section 3(b) shall be referred to as a “Section 3(b) Override.” For purpose of
this paragraph, if any federal or state income taxes would be attributable to
the receipt of any Eliminated Payment, the amount of such taxes shall be
computed by multiplying the amount of the Eliminated Payment by the maximum
combined federal and state income tax rate provided by law.
 
(c)       For purposes of this Section 3 the following terms shall have the
following respective meanings:
 
(i)      “Change in Ownership or Control” shall mean a change in the ownership
or effective control of the Company or in the ownership of a substantial portion
of the assets of the Company determined in accordance with Section 280G(b)(2) of
the Code.
 
(ii)   “Contingent Compensation Payment” shall mean any payment (or benefit) in
the nature of compensation that is made or made available (under this Agreement
or otherwise) to a “disqualified individual” (as defined in Section 280G(c) of
the Code) and that is contingent (within the meaning of
Section 280G(b)(2)(A)(i) of the Code) on a Change in Ownership or Control of the
Company.
 
(d)      Any payments or other benefits otherwise due to you following a Change
in Ownership or Control that could reasonably be characterized (as determined by
the Company) as Contingent Compensation Payments (the “Potential Payments”)
shall not be made until the dates provided for in this Section 3(d). Within 30
days after each date on which you first become entitled to receive (whether or
not then due) a Contingent Compensation Payment relating to such Change in
Ownership or Control, the Company shall determine and notify you (with
reasonable detail regarding the basis for its determinations) (1) which
Potential Payments constitute Contingent Compensation Payments, (2) the
Eliminated Amount and (3) whether the Section 3(b) Override is applicable.
Within 30 days after delivery of such notice to you, you shall deliver a
response to the Company (the “Executive Response”) stating

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Exhibit 10.2

either (A) that you agree with the Company’s determination pursuant to the
preceding sentence or (B) that you disagree with such determination, in which
case you shall set forth (x) which Potential Payments should be characterized as
Contingent Compensation Payments, (y) the Eliminated Amount, and (z) whether the
Section 3(b) Override is applicable. In the event that you fail to deliver an
Executive Response on or before the required date, the Company’s initial
determination shall be final. If you state in the Executive Response that you
agree with the Company’s determination, the Company shall make the Potential
Payments to you within three business days following delivery to the Company of
the Executive Response (except for any Potential Payments which are not due to
be made until after such date, which Potential Payments shall be made on the
date on which they are due). If you state in the Executive Response that you
disagree with the Company’s determination, then, for a period of 60 days
following delivery of the Executive Response, you and the Company shall use good
faith efforts to resolve such dispute. If such dispute is not resolved within
such 60-day period, such dispute shall be settled exclusively by arbitration in
New York, New York, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator’s award in
any court having jurisdiction. The Company shall, within three business days
following delivery to the Company of the Executive Response, make to you those
Potential Payments as to which there is no dispute between the Company and you
regarding whether they should be made (except for any such Potential Payments
which are not due to be made until after such date, which Potential Payments
shall be made on the date on which they are due). The balance of the Potential
Payments shall be made within three business days following the resolution of
such dispute.
 
(e)       The Contingent Compensation Payments to be treated as Eliminated
Payments shall be determined by the Company by determining the “Contingent
Compensation Payment Ratio” (as defined below) for each Contingent Compensation
Payment and then reducing the Contingent Compensation Payments in order
beginning with the Contingent Compensation Payment with the highest Contingent
Compensation Payment Ratio. For Contingent Compensation Payments with the same
Contingent Compensation Payment Ratio, such Contingent Compensation Payment
shall be reduced based on the time of payment of such Contingent Compensation
Payments with amounts having later payment dates being reduced first. For
Contingent Compensation Payments with the same Contingent Compensation Payment
Ratio and the same time of payment, such Contingent Compensation Payments shall
be reduced on a pro rata basis (but not below zero) prior to reducing Contingent
Compensation Payment with a lower Contingent Compensation Payment Ratio. The
term “Contingent Compensation Payment Ratio” shall mean a fraction the numerator
of which is the value of the applicable Contingent Compensation Payment that
must be taken into account by you for purposes of Section 4999(a) of the Code,
and the denominator of which is the actual amount to be received by you in
respect of the applicable Contingent Compensation Payment. For example, in the
case of an equity grant that is treated as contingent on the Change in Ownership
or Control because the time at which the payment is made or the payment vests is
accelerated, the denominator shall be determined by reference to the fair market
value of the equity at the acceleration date, and not in accordance with the
methodology for determining the value of accelerated payments set forth in
Treasury Regulation Section 1.280G-1Q/A-24(b) or (c)).
 
(f)         The provisions of this Section 3 are intended to apply to any and
all payments or benefits available to you under this letter agreement or any
other agreement or plan of the Company under which you receive Contingent
Compensation Payments.
 
4.              Miscellaneous.
 
(a)       Code Section 409A. The intent of the parties is that payments and
benefits under this letter comply with, or be exempt from, Internal Revenue Code
Section 409A and the regulations and guidance

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Exhibit 10.2

promulgated thereunder (collectively “Code Section 409A”). Accordingly, if any
provision of this letter is ambiguous, such that one interpretation would
subject a payment or benefit to the excise tax imposed by Code Section 409A and
an alternative interpretation would not so subject the payment or benefit, the
parties intend the interpretation that would not so subject the payment or
benefit to apply. With regard to any provision herein that provides for
reimbursement of costs and expenses or in-kind benefits, except as permitted by
Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not
be subject to liquidation or exchange for another benefit, (ii) the amount of
expenses eligible for reimbursement, or in-kind benefits, provided during any
taxable year shall not affect the expenses eligible for reimbursement, or
in-kind benefits to be provided, in any other taxable year, provided that this
clause (ii) shall not be violated with regard to expenses reimbursed under any
arrangement covered by Section 105(a) of the Code solely because such expenses
are subject to a limit related to the period the arrangement is in effect, and
(iii) such payments shall be made on or before the last day of your taxable year
following the taxable year in which the expense occurred, provided that any tax
gross-ups may be reimbursed by the end of the calendar year following the
calendar year in which such taxes are remitted to the taxing authorities. For
purposes of Code Section 409A, each payment hereunder shall be treated as a
separate payment and your right to receive any installment payments pursuant to
this Agreement shall be treated as a right to receive a series of separate and
distinct payments. In no event may you, directly or indirectly, designate the
calendar year of any payment to be made under this letter that is considered
nonqualified deferred compensation. Termination of employment as used herein
shall mean separation from service within the meaning of Code Section 409A. In
the event at the time of any separation from service you are a “specified
employee” within the meaning of Code Section 409A, any deferred compensation
subject to Code Section 409A payable as a result of such termination shall not
be paid prior to the earlier of six (6) months after such termination and your
death and shall be paid immediately thereafter.

(b)      Governing Law. This letter shall be governed by and construed in
accordance with the laws of the State of New York (without reference to the
conflicts of laws provisions thereof). Any action, suit, or other legal
proceeding which is commenced to resolve any matter arising under or relating to
any provision of this letter shall be commenced only in a court of the State of
New York (or, if appropriate, a federal court located within New York), and the
Company and you each consents to the jurisdiction of such a court. The Company
and you each hereby irrevocably waive any right to a trial by jury in any
action, suit or other legal proceeding arising under or relating to any
provision hereof.
 
(c)       Conflict; Amendment: Counterparts. This letter agreement sets forth
the Company’s sole obligation, subject to the terms and conditions set forth
herein, to provide severance benefits to you. The severance benefits set forth
in this letter agreement are therefore in lieu of, and not in addition to, any
severance benefits that may be described in the letter agreement evidencing your
offer of employment with us, or any other agreement or arrangement between you
and us. Except as modified hereby, the terms of the letter agreement evidencing
your offer of employment with us remain in full force and effect. This agreement
may only be modified in a document signed by both the Company and you. This
agreement may be executed in counterparts, each of which will be deemed an
original, but all of which will be deemed one and the same instrument.
 
[Remainder of page intentionally left blank]
 

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Exhibit 10.2

If the provisions of this agreement are acceptable to you, please sign and date
this agreement below and return the signed and dated agreement to me on or
before February 10, 2017.
 

 
Sincerely,
 
 
 
OPHTHOTECH CORPORATION
 
 
 
By:
/s/ Amy R. Sheehan
 
Amy R. Sheehan
 
Vice President, Human Resources
 

 
ACCEPTED AND AGREED:
 
 
 
/s/ Keith Westby
 
Keith Westby
 
 
 
Date:
2/21/17
 
 
 
 
 

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