**Exhibit10.38**

**ExecutiveOfficer Compensation Summary**

CollaGenex Pharmaceuticals, Inc.’s (the “Company’s”)executive officers consist of: (i) Colin W. Stewart, President and ChiefExecutive Officer; (ii) Nancy C. Broadbent, Senior Vice President andChief Financial Officer; (iii) David F. Pfeiffer, Senior Vice President ofSales and Marketing; (iv) Klaus Theobald, Senior Vice President and ChiefMedical Officer; (v) Andrew Powell, Vice President, General Counsel andSecretary and (vi) Greg Ford, our Vice President, Business Development andStrategic Planning.

The compensation structure for executive officers ofthe Company consists of three components: base salary, discretionary cashbonuses (typically paid annually) and stock options. The Company does not haveemployment agreements with any of its executive officers, but has executedindemnification agreements with each of its executive officers.  Inaddition, the Company has entered into change of control agreements with eachof Mr. Stewart, Ms. Broadbent, Mr. Pfeiffer, Mr. Powell,Dr. Theobald and Mr. Ford.

The Compensation Committee of the Board of Directors(the “Committee”) seeks to establish base salaries for each position and levelof responsibility that are competitive with those of executive officers atother emerging pharmaceutical companies. Annual cash bonuses are awarded toexecutive officers based on their achievements against a stated list ofobjectives developed at the beginning of each year by senior management and theCommittee. All executive officers are awarded option grants upon joining theCompany that are competitive with those at comparable emerging pharmaceuticalcompanies. In addition, the Committee may award additional stock option grantsannually. When granting stock options, the Committee considers therecommendation of the Company’s Chief Executive Officer and the relativeperformance and contributions of each executive officer.

Compensation decisions affecting the Company’sexecutive officers are made on an annual basis by the Committee. On December 7,2006, the Committee approved the terms of compensation (exclusive of optiongrants) to be paid to the Company’s executive officers, including the basesalary for 2007, as follows:

·                                          *Mr. Stewart*. The Committee approved a10% increase in Mr. Stewart’s base salary for 2007, as well as a $258,246bonus. As a result of the increase, Mr. Stewart’s base salary is now$414,700.

·                                          *Ms. Broadbent*. The Committee approveda 4% increase in Ms. Broadbent’s base salary for 2007, as well as a$138,240 bonus. As a result of the increase, Ms. Broadbent’s base salaryis now $266,200.

·                                          *Mr. Pfeiffer*. The Committee approveda 4% increase in Mr. Pfeiffer’s base salary for 2007, as well as a$137,670 bonus. As a result of the increase, Mr. Pfeiffer’s base salary isnow $275,300.

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·                                          *Mr. Theobald*. The Committee approveda 7.7% increase in Mr. Theobald’s base salary for 2007, as well as a$139,932 bonus. As a result of the increase, Mr. Theobald’s base salary isnow $290,000.

·                                          *Mr. Powell*. The Committee approved a4% increase in Mr. Powell’s base salary for 2007, as well as a $123,786 bonus.As a result of the increase, Mr. Powell’s base salary is now $247,500.

·                                          *Mr. Ford*. The Committee approved a 4%increase in Mr. Ford’s base salary for 2007, as well as a $96,640 bonus. As aresult of the increase, Mr. Ford’s base salary is now $251,300.

 

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