EXHIBIT 10.43
[QUESTCOR LETTERHEAD]
May 4, 2005
Craig Chambliss
3260 Whipple Road
Union City, California 94587
RE: Severance Agreement
Dear Craig:
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 March 31, 2005, and Change-in-Control Agreement dated May 1, 2005, 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.

 

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“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 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, Sales and
Marketing 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, Sales and
Marketing of the Company.
This letter, your Offer Letter, your Change-in-Control Agreement, your stock
option grant dated May 1, 2005, 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:        May 4, 2005    
 
               
 
               
Agreed:
               
     /s/ CRAIG C. CHAMBLISS
               
 
               
Craig Chambliss
               
Vice President, Sales and Marketing
      Date:        May 4, 2005