EXHIBIT 10.24
[Questcor Pharmaceuticals, Inc. letterhead]
March 21, 2003
Questcor Pharmaceuticals, Inc.
0000 Xxxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Dear Xxx:
This letter amends the terms of the November 3, 2000 letter
agreement (the "Agreement") between Questcor Pharmaceuticals, Inc. ("Questcor")
and you, and is in consideration of your continued employment with Questcor.
The third and fourth paragraphs of the Agreement are hereby amended
to read in their entirety as follows:
Also, in the event that a Change in Control occurs, and
your employment with the Company is terminated as a result of Involuntary
Termination (as defined below) other than for Cause (as defined below), at
any time within the fifteen (15) month period commencing ninety (90) days
prior to such Change in Control, and you are a full-time employee of the
Company at any time within the thirty (30) days prior to the termination
of your employment with the Company, then you will be entitled to receive
from Questcor a severance benefit, payable in cash in a lump sum payment,
an amount equal to the sum of: (i) twelve (12) months of base salary, and
(ii) your prorated maximum bonus opportunity for the fiscal year of
Questcor in which the termination of your employment occurs (the
'Termination Fiscal Year'). Such payment will be paid not later than ten
(10) days following such termination of employment. For purposes of
determining your severance benefit, your monthly rate of base salary will
equal your greatest monthly rate of base salary in effect during the
thirty (30) days prior to the date of the termination of your employment
(or, if greater, your monthly rate of base salary in effect immediately
prior to the Change in Control), and your prorated maximum bonus
opportunity for the Termination Fiscal Year will equal your maximum bonus
opportunity under the Company's bonus and incentive compensation plans for
the Termination Fiscal Year, multiplied by a fraction, the numerator of
which is the number of days during the Termination Fiscal Year that have
elapsed on the date of the termination of your employment, and the
denominator of which is the number of days in the Termination Fiscal Year.
For purposes of this letter amendment, you will be treated as a full-time
employee of the Company if you are regularly scheduled to work for the
Company for not less than forty (40) hours per week. Furthermore, in the
event
you are entitled to receive a severance benefit under this paragraph as a
result of your termination of employment: (i) if the Board of Directors of
Questcor (the "Board") (or the Compensation Committee thereof) has
determined the amount of your bonus for the fiscal year of Questcor
immediately preceding the Termination Fiscal Year (the `Prior Fiscal
Year') prior to the Change in Control, and Questcor has not paid the bonus
for the Prior Fiscal Year (if any) to you prior to such termination of
employment, Questcor will pay your bonus (as so determined) for the Prior
Fiscal Year to you, or (ii) if the Board (or the Compensation Committee
thereof) has not determined the amount of your bonus for the Prior Fiscal
Year prior to the Change in Control, Questcor will pay to you a bonus for
the Prior Fiscal Year in an amount not less than your maximum bonus
opportunity for the Prior Fiscal Year. For purposes of this paragraph, any
reference to the fiscal year of the Company will include the fiscal year
of any successor thereto. Such payment will be paid in cash in a lump sum
payment not later than ten (10) days following such termination of
employment.
In the event you are entitled to a severance benefit
under this letter amendment, then in addition to such severance benefit,
you will receive such health, term life and disability insurance benefits
coverage ('Company-Provided Coverage') as is provided to you (and your
dependents, if applicable) immediately prior to the termination of your
employment with the Company, for twelve (12) months following the
termination of your employment, or until you become covered under another
employer's group insurance plan or plans providing health, term life and
disability insurance coverage, whichever occurs first. In addition, for
fifteen (15) months following the termination of the Company-Provided
Coverage, the Company will provide you (and your dependents, if
applicable) with such health, term life and disability insurance benefits
coverage as is provided to you (and your dependents, if applicable)
immediately prior to the termination of your employment with the Company,
at your election and expense. The benefits coverage provided under this
paragraph will be under such terms and conditions (including benefits,
premiums, deductibles and co-payments) as are at least as favorable as
those in effect immediately prior to the date of termination of your
employment (or, if more favorable, those in effect immediately prior to
the Change in Control); provided, however, that, following the termination
of the Company-Provided Coverage, your premiums for such benefits coverage
will be based on the full cost of such coverage.
The following paragraph is hereby added to the Agreement after the
fourth paragraph thereof:
In the event that you are entitled to a severance
benefit under this letter amendment, then in addition to such severance
benefit, you will have the right to require an extension of the exercise
period of each of your stock options under any plan of the Company (or any
options into which any such options have been converted) for a period of
two (2) years following the later of: (i) the termination of employment,
or (ii) the expiration of a lock-up agreement (if any) imposed on the
Company's optionees at the time of your termination of
employment; provided, however, that in no event will such extension of
such option extend beyond the expiration of the original term of the
option.
The following paragraphs are hereby added to the Agreement
immediately preceding the last paragraph thereof:
If any legal action or other proceeding is brought for
the enforcement of this letter amendment, or because of an alleged
dispute, breach or default in connection with any of the provisions of
this letter amendment, the successful or prevailing party will be entitled
to recover attorneys' fees and other expenses and costs incurred in that
action or proceeding, in addition to any other relief that may be granted.
Notwithstanding the immediately preceding paragraph, in
the case of any legal action or other proceeding by you to enforce a
benefit under this letter amendment, or an alleged dispute, breach or
default in connection with a benefit under this letter amendment,
regardless of whether you are successful or prevail: (i) the Company shall
bear its attorneys' fees and other expenses and costs, and (ii) the
Company shall reimburse you for your reasonable attorneys' fees and other
reasonable expenses and costs, to the extent incurred in connection with
such enforcement or attempted enforcement or alleged dispute, breach or
default as part of the Initial Adjudication (as defined below), in
addition to any other relief that may be granted. The Company shall not
reimburse you for any attorneys' fees and other expenses and costs
incurred in connection with such enforcement or attempted enforcement or
alleged dispute, breach or default incurred by you following the Initial
Adjudication. Such reimbursements of your attorneys' fees and other
expenses and costs shall be made monthly not later than 30 days after the
Company has received a copy of the written invoice evidencing such fees,
expenses or costs. In the event that a court of competent jurisdiction
determines that you have acted in connection with such enforcement or
attempted enforcement, or alleged dispute, breach or default, in bad
faith, or that your positions, claims or assertions were frivolous or
without substantial basis, you shall repay to the Company any attorneys'
fees and other expenses and costs paid by the Company to you pursuant to
this paragraph. For the purposes of this letter amendment, the 'Initial
Adjudication' shall mean the final order, decree or other adjudication of
your claims by a court of competent jurisdiction with regard to such
enforcement or attempted enforcement or such alleged dispute, breach or
default.
This Agreement shall be construed and enforced in
accordance with the laws of the State of California, without giving effect
to the principles of conflict of laws thereof.
Please indicate your acceptance of this letter amendment by
returning a signed copy of this letter amendment.
The amendments made by this letter shall be effective as of the date
hereof. The Agreement, as amended, shall remain in full force and effect.
Sincerely,
/s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
Chairman, President and CEO
Questcor Pharmaceuticals, Inc.
Date: March 21, 2003
Accepted by,
/s/ Xxxxxxx X. Xxxxxxxxxx
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Date: March 24, 2003
