February 13, 2007 Craig C. Chambliss 3260 Whipple Road Union City, California 94587 RE: Amendment to Change-in-Control Agreement Dear Mr. Chambliss:
Exhibit 10.5
February 13, 2007
Xxxxx X. Xxxxxxxxx
0000 Xxxxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
0000 Xxxxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
RE: Amendment to Change-in-Control Agreement
Dear Xx. Xxxxxxxxx:
This letter (this “Amendment”) amends that certain Change-in-Control Agreement (the “Original
Agreement”) entered into by and between you and Questcor Pharmaceuticals, Inc., a California
corporation (“Questcor”) in connection with your commencement of employment at Questcor. Unless
otherwise modified by this Amendment, the Original Agreement remains in full force and effect.
This Amendment, once fully executed and delivered by Questcor and you, entitles you to receive
the benefits set forth in this Amendment in the event of certain Changes in Control (as defined in
The Questcor Pharmaceuticals Incorporated 1992 Stock Option Plan (the “1992 Plan) or the 2006
Equity Incentive Award Plan (the “2006 Plan”). You shall receive no benefits under this Amendment
unless there has been a Change in Control.
1. Accelerated Vesting. Section 1 of the Original Agreement is amended and restated
its entirety to read as follows:
“Notwithstanding anything to the contrary in Section 11 of the Plan (other than Sections 11(a)
and 11(h) of the 1992 Plan and Section 12.2(a) and 12.2(e) of the 2006 Plan), in the event that a
Change in Control occurs, and your employment with the Company is terminated as a result of an
Involuntary Termination (as defined below) at any time within the twelve (12) month period
commencing on the date of such Change in Control, one-hundred percent (100%) of the then-unvested
shares of Questcor’s common stock subject to each of your outstanding stock options and one-hundred
percent (100%) of your restricted shares subject to vesting will become immediately vested and
exercisable on the date of your Involuntary Termination. The Company shall cause each option
agreement evidencing the grant of stock options to you (each, an “Option Agreement”) under the 1992
Plan or the 2006 Plan to reflect the accelerated vesting provisions set forth in this Amendment.”
2. Cash Severance. Cash Severance. In the event that a Change in Control occurs, and
your employment with the Company is terminated as a result of an Involuntary Termination (as
defined below) at any time within the twelve (12) month period commencing on the date of such
Change in Control, you will receive severance compensation equal to the sum of (i) an amount equal
to the product of your minimum annual base salary in effect as of the date of termination
multiplied by the number one (1), plus (ii) an amount equal to the product of your target bonus as
established by the Board of Directors or its Compensation Committee for the year during which the
termination takes place multiplied by the number one (1) (the “Severance Payment”). If payment is
due to you as a result of you terminating your employment for Good Reason, then the Severance
Payment shall be paid as follows: (1) if, on the date you terminate your employment for Good
Reason, the Company is
a reporting company under the Securities Exchange Act of 1934 (the “Exchange Act”), then you
will be entitled to receive such payment in a single lump sum on the first business day that occurs
at the end of the period commencing on the date of termination and ending six months after the last
day of the calendar month in which the date of termination occurs (e.g., if you terminate your
employment on March 15, 2007, the Company will pay the amount specified herein on the first
business day immediately following September 30, 2007); (2) however, if the Company is not a
reporting company under the Exchange Act at the time you terminate your employment for Good Reason,
you shall be entitled to receive such payment in a single lump sum on the fifth business day
following your termination of employment. If paid upon a Change in Control, the Severance Payment
shall be in lieu of, and not in addition to, the payment of any cash severance payments that you
may otherwise be entitled to under your Offer Letter.
3. At-Will Employment. Nothing contained in this Amendment shall (i) confer upon you
any right to continue in the employ of the Company, (ii) constitute any contract or agreement of
employment, or (iii) interfere in any way with the at-will nature of your employment with the
Company.
4. Entire Agreement. This Amendment, the Original Agreement, the Offer Letter, the
Plan and any Option Agreements or Restricted Stock Award Agreement set forth the entire agreement
of the parties hereto in respect of the accelerated vesting of stock options or restricted stock
held by you and supersede all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee or representative
of any party hereto, and any prior agreement of the parties hereto in respect of the accelerated
vesting of stock options held by you, is hereby terminated and cancelled.
5. Miscellaneous. No provision of this Amendment may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by you
and such officer as may be specifically designated by the Board. No waiver by either party hereto
at any time of any breach by the other party hereto of or compliance with, any condition or
provision of this Amendment to be performed by such other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with respect to the subject
matter hereof have been made by either party which are not expressly set forth in this Amendment.
The validity, interpretation, construction and performance of this Amendment shall be governed by
the laws of the State of California without regard to its conflicts of law principles. The section
headings contained in this Amendment are for convenience only, and shall not affect the
interpretation of this Amendment.
Please indicate your acceptance of this Amendment by returning a signed copy of this Amendment.
| Sincerely, |
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| /s/ Xxxxx X. Fares | ||||
| Xxxxx X. Fares | ||||
| Chief Executive Officer Questcor Pharmaceuticals, Inc. |
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Accepted by,
/s/ Xxxxx X. Xxxxxxxxx
|
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Xxxxx X. Xxxxxxxxx |
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Date: February 13, 2007 |
