Exhibit 10.54
August 1, 2006
Eric Liebler
3260 Whipple Road
Union City, California 94587
RE: Severance Agreement
Dear Eric:
In addition to the terms and conditions of your employment with Questcor
Pharmaceuticals, Inc. (the “Company”) which are set forth in your Offer Letter
dated August 1, 2006, and Change-in-Control Agreement dated August 1, 2006,
which are incorporated herein, the Company agrees to provide you severance in
the event that the following conditions are met.
In the event (1) your employment is terminated by the Company other than (a) for
Cause (as defined below) or (b) as a result of your permanent and total
disability within the meaning of Section 422(c)(6) of the Internal Revenue
Service Code of 1986, as amended (the “Code”), or (c) you resign your employment
upon 30 days’ prior written notice to the Company for Good Reason (as defined
below), during your first three years of employment, you will receive severance
compensation totaling Six (6) months of base salary. In the event (2) your
employment is terminated by the Company other than (a) for Cause (as defined
below) or (b) as a result of your disability within the meaning of
Section 422(c)(6) of the Code, or (c) you resign your employment upon 30 days’
prior written notice to the Company for Good Reason (as defined below), after
your first three years of employment, you will receive severance compensation
totaling Twelve (12) months of base salary.
As a condition precedent to receiving severance compensation, you will be
required to execute a general release (in a form prepared by counsel for the
Company) of claims against the Company and its officers, directors, agents and
shareholders. Such general release will not include rights to vested options or
claims for any compensation earned (including, without limitation, accrued
vacation), or reimbursement of expenses incurred, through the date of
termination. Severance compensation will be paid in accordance with normal
payroll procedures. If you are reemployed at any time during the severance
period, all further severance compensation payments shall immediately cease.
“Cause” will mean termination of your employment for any one or more of the
following: (a) habitual or material neglect of your assigned duties (other than
by reason of disability) or intentional refusal to perform your assigned duties
(other than by reason of disability) which continues uncured for 30 days
following receipt of written notice of such

 

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deficiency or “Cause” event from the Board of Directors, specifying in detail
the scope and nature of the deficiency or the “Cause” event; (b) an act of
dishonesty intended to result in your gain or personal enrichment;
(c) personally engaging in illegal conduct which causes material harm to the
reputation of the Company or its affiliates; (d) committing a felony or gross
misdemeanor directly relating to, an act of dishonesty or fraud against, or a
misappropriation of property belonging to, the Company or its affiliates;
(e) personally engaging in any act of moral turpitude that causes material harm
to the reputation of the Company; (f) intentionally breaching in any material
respect the terms of any nondisclosure agreement with the Company; or
(g) commencement of employment with another Company while an employee of the
Company without the prior consent of the Board of Directors. Any determination
of “Cause” as used herein will be made only in good faith by the Board of
Directors.
“Good Reason” will mean the removal of your title of Vice President, Corporate
Planning and Communications without your written consent; provided, however,
that Good Reason shall not exist as a result of any reduction of your authority,
duties or responsibilities so long as you retain the title of Vice President,
Corporate Planning and Communications of the Company.
This letter, your Offer Letter, your Change-in-Control Agreement, your stock
option grant dated August 1, 2006, and any future stock option grants,
constitute the entire agreement between you and the Company regarding the terms
and conditions of your employment with the Company and supersede any other
agreement or promises made to you by anyone, whether oral or written, express or
implied.
This Agreement shall be interpreted, construed and administered in a manner that
satisfies the requirements of Sections 409A of the Code, and the Treasury
Regulations there under.
Please sign and date this letter, and return it to me a soon as possible
acknowledging your understanding and acceptance of the terms and conditions set
forth above.

         
Sincerely,
       
 
       
/s/ James L. Fares
                 
 
       
James L. Fares
       
President and CEO
  Date: August 1, 2006    
 
       
Agreed:
       
 
       
/s/ Eric Liebler
                 
 
       
Eric Liebler
        Vice President, Corporate Planning and Communications       Date:
August 8, 2006