EXHIBIT 10.20
AMENDMENT TO THE
EMPLOYMENT AGREEMENT
OF XXXXXXX X. XXXXXXXXX
This Amendment to the Employment Agreement (the "Agreement"), dated
as of April 4, 1999, by and between Questcor Pharmaceuticals, Inc., a California
corporation (formerly named "Cypros Pharmaceutical Corporation") (the
"Company"), and Xxxxxxx X. Xxxxxxxxx ("Executive") is made and entered into as
of March 21, 2003.
RECITALS
A. The Company, Cypros Acquisition Corporation and RiboGene, Inc.
entered into the Agreement and Plan of Reorganization dated as of August 4,
1999, which provided that Cypros Acquisition Corporation would be merged with
and into RiboGene, Inc., on the terms and subject to the conditions set forth
therein (the "Merger").
B. The Company and Executive entered into the Agreement, which
provided that Executive would become employed by the Company, effective as of
the Merger, on the terms and subject to the conditions set forth in the
Agreement.
C. The Company and Executive desire to amend the Agreement in
certain respects and continue Executive's employment in accordance with the
Agreement, as amended.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and with reference to the above recitals, the
parties hereby agree to amend the Agreement as follows:
1. Subsections 7.1(a), (b) and (c) of the Agreement are hereby
amended to read in their entirety as follows:
(a) Subject to Section 7.3 below, if Executive's employment
with the Company is terminated by the Company (other than for 'Cause' or
'Disability' or upon Executive's death) at any time within sixty (60) days
before, or within twelve (12) months after, a Change of Control, or is
terminated by Executive within six (6) months after a Change of Control,
Executive shall be entitled to receive a severance benefit, in an amount
equal to twenty-four (24) months of Base Salary at the annual rate in
effect immediately prior to the Change of Control (or, if greater, the
annual rate in effect on the date of termination of employment). In
addition, in the event of such termination of employment, the Company
shall pay to Executive a prorated bonus for the fiscal year of the Company
in which such termination of employment occurs (the 'Termination Fiscal
Year') in an amount equal to Executive's Bonus Opportunity for the
Termination Fiscal Year, multiplied by a fraction, the numerator of which
is the number of days during the Termination Fiscal Year ending prior to
such termination of employment, and the denominator of which is the number
of days
in the Termination Fiscal Year. Furthermore, in the event of such
termination of employment: (i) if the Board (or the Compensation Committee
thereof) has determined the amount of Executive's bonus for the fiscal
year of the Company immediately preceding the Termination Fiscal Year (the
'Prior Fiscal Year') prior to the Change of Control, and the Company has
not paid the bonus for the Prior Fiscal Year (if any) to Executive prior
to such termination of employment, the Company shall pay Executive's bonus
(as so determined) for the Prior Fiscal Year to Executive, or (ii) if the
Board (or the Compensation Committee thereof) has not determined the
amount of Executive's bonus for the Prior Fiscal Year prior to the Change
of Control, the Company shall pay to Executive a bonus for the Prior
Fiscal Year in an amount not less than Executive's Bonus Opportunity for
the Prior Fiscal Year. For purposes of this subsection, the Executive's
Bonus Opportunity for any fiscal year shall be not less than 50% of
Executive's annual rate of Base Salary determined as of the first day of
such fiscal year, and any reference to the fiscal year of the Company
shall include the fiscal year of any successor thereto. Such payments
shall be paid in cash in a lump sum payment not later than ten (10) days
following such termination of employment.
(b) In the event Executive is entitled to a severance benefit
pursuant to Section 7.1(a), then in addition to such severance benefit,
Executive shall receive 100% Company-paid health, term life and disability
insurance coverage and medical expense reimbursement benefits coverage as
is provided to such Executive (and his dependents, if applicable)
immediately prior to Executive's termination of employment (the
'Company-Paid Coverage'). Company-Paid Coverage shall continue for
twenty-four (24) months following termination of employment or until
Executive becomes covered under another employer's group insurance plan or
plans providing health, term life and disability insurance coverage,
whichever occurs first. In addition, for twenty-four (24) months following
the termination of Company-Paid Coverage, the Company shall provide
Executive (and his dependents, if applicable) with the health, term life
and disability insurance coverage provided immediately prior to
Executive's termination of employment, at Executive's election and
expense.
(c) In the event Executive is entitled to severance benefits
pursuant to Section 7.1(a), each of the Prior Stock Options (as assumed
and converted as provided in Section 3.4), the New Options and each other
stock option exercisable for shares of Company Common Stock (or any option
into which such Options or any such options have been converted) held by
Executive shall become immediately vested on the date of Executive's
termination of employment and shall be exercisable in full in accordance
with the provisions of the plan and option agreement pursuant to which
such Option or option was granted. Executive shall have the right to
require an extension of the exercise period of each such Option or option
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 Executive's termination
of employment; provided, however, that in no event will such extension of
such Option or option extend beyond the expiration of the
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original term of the Option or option. In addition, the Prior Restricted
Stock (as substituted as provided in Section 3.5) and each other share of
Company's Common Stock held by Executive that is subject to a forfeiture,
reacquisition or repurchase option held by the Company shall become fully
vested, nonforfeitable and no longer subject to reacquisition or
repurchase by the Company or other restrictions on the date of Executive's
termination of employment.
2. Section 10.11 of the Agreement is hereby amended to read in its
entirety as follows:
10.11 ATTORNEYS' FEES.
(a) If any legal action or other proceeding is brought for the
enforcement of the Agreement, or because of an alleged dispute, breach or
default in connection with any of the provisions of the Agreement, the
successful or prevailing party shall 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.
(b) Notwithstanding subsection (a), in the case of any legal
action or other proceeding by Executive to enforce Section 7.1 of the
Agreement, or an alleged dispute, breach or default in connection with
Section 7.1 of the Agreement, regardless of whether Executive is
successful or prevails: (i) the Company shall bear its attorneys' fees and
other expenses and costs, and (ii) the Company shall reimburse Executive
for Executive's 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 Executive 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 Executive following the Initial Adjudication. Such
reimbursements of Executive's 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 or arbitrator
determines that Executive has acted in connection with such enforcement or
attempted enforcement, or alleged dispute, breach or default, in bad
faith, or that Executive's positions, claims or assertions were frivolous
or without substantial basis, Executive shall repay to the Company any
attorneys' fees and other expenses and costs paid by the Company to
Executive pursuant to this subsection (b). For the purposes of this
Agreement, the "Initial Adjudication" shall mean the final order, decree
or other adjudication of Executive's claims by a court of competent
jurisdiction or arbitrator with regard to such enforcement or attempted
enforcement or such alleged dispute, breach or default.
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3. This Amendment shall be effective as of the date hereof. The
Agreement, as amended by this Amendment, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Agreement as of the date first written above.
"COMPANY"
QUESTCOR PHARMACEUTICALS, INC.,
a California corporation
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Title: Vice President, Finance &
Administration and
Chief Financial Officer
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Date: March 21, 2003
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"EXECUTIVE"
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Date: March 21, 2003
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