exv10w43



 








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.



 









 





“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