Exhibit 10.35


 


FIRST HORIZON
PHARMACEUTICAL CORPORATION


 


 


ACCELERATED VESTING PLAN


 


(also functioning as a Summary Plan Description)


 


 


Effective:
January 24, 2006


 

















 


FIRST
HORIZON PHARMACEUTICAL CORPORATION


 


ACCELERATED
VESTING PLAN


 


Plan Document and
Summary Plan Description


 


The Board of Directors of First Horizon Pharmaceutical
Corporation (the “Company”)
has determined that it is in the best interest of the Company to adopt this Accelerated
Vesting Plan (the “Plan”) in
order to attract and to retain the qualified personnel needed to assist in the
Company’s business.


 


This document is the Plan’s plan document, and also
functions as its summary plan description. This Plan will control in case of
conflict with any other document except as provided in Section 2.4. Throughout
this Plan, the term “Sponsor” is
used when the Company is acting in its non-fiduciary capacity as Plan sponsor
and settlor. The term “Plan Administrator”
is used when the Company is acting in the limited capacity of interpreting the
Plan and determining eligibility for benefits (see Section 8 below for
detailed information).


 


The Plan became effective on January     ,
2006, when it received approval of the Company’s Board of Directors. Even if
the Plan expires or is terminated, the Sponsor will thereafter honor any vested
but unpaid benefits under the Plan (subject to Section 8 below). References
to Sponsor, the Company, and their affiliates also refer to any successor to
their interests.


 


1.             Plan
Eligibility. Participants in the Plan as of January     ,
2006 (the “Participant Date”) are listed
on Exhibit A (each a “Participant”)
and will be eligible for certain severance benefits described in Section 2.
Any employee hired after the Participant Date will only be a Participant if
approved by the Compensation Committee of the Company’s Board of Directors (the
“Compensation Committee”). The
Compensation Committee of the Company’s Board of Directors shall have the
absolute discretion and authority to determine the Participants.


 


2.             Severance
Benefits


 


2.1.         Amount
and Conditions


 


A Participant who experiences
a Triggering Event (defined below) and executes any agreement that the Sponsor
may, in its discretion, require pursuant to Section 2.3, will become
vested in the right to receive the following “Severance
Benefit”:


 


(a)  If the
Triggering Event is a Change in Control, such Participant shall become 100%
vested in any stock option, restricted stock, or other stock-based award
received from the Company or its affiliates.


 


(b)  If the
Triggering Event is other than a Change in Control, such Participant shall
receive credit for one year of additional vesting for purposes of determining
vested interest in any stock option, restricted stock, or other stock-based
award that the Participant has received from the Company or its affiliates,
except as Participant’s employment agreement with the Company, if any, may provide
for greater vesting benefits.


 


If a Participant’s employment
with the Company is terminated for any reason other than a Triggering Event,
Participant will not be eligible for any benefits under this Plan.


 


2.2.         Definitions


 


2.2.1.      “Triggering Event” means any of
the following:


 

















 


(a)           Participant’s
death;


 


(b)           the
Company’s termination of Participant’s employment with or service to the Company
without Cause;


 


(c)           the
occurrence of a Change in Control; and


 


(d)           the
Participant’s termination of Participant’s employment with or service to the
Company for Good Reason.


 


2.2.2.      “Cause” means that:  (a) Participant shall have
been convicted of, or shall have pleaded guilty or nolo contendere to, any
felony or a crime involving dishonesty, fraud or moral turpitude; (b) Participant
shall have repeatedly refused to follow the lawful direction of the Company’s
Board of Directors or supervising officers; (c) Participant shall have engaged
in acts of fraud, embezzlement, theft, misappropriation of funds, breach of
fiduciary duty or other act of dishonesty against the Company; (d) Participant
shall have been grossly negligent or shall have engaged in willful misconduct
in the discharge of Participant’s duties and/or responsibilities.


 


2.2.3.      “Change in Control” shall be deemed to have occurred
upon the following:


 


(a)           the
acquisition (other than by a direct purchase of shares from the Company or
pursuant to any action or transaction or series of related actions or
transactions approved in advance by the Board) by any “person,” including a “syndication”
or “group,” as those terms are used in Section 13(d)(3) or 14(d)(2) of
the Exchange Act, of securities representing 20% or more of the combined voting
power of the Company’s then outstanding voting securities, which is any
security that ordinarily possesses the power to vote in the election of the
board of directors of a corporation without the happening of any precondition
or contingency;


 


(b)           the
Company is merged or consolidated with another corporation and immediately
after giving effect to the merger or consolidation less than 80% of the
outstanding voting securities of the surviving or resulting entity are then
beneficially owned in the aggregate by (x) the shareholders of the Company
immediately prior to such merger or consolidation, or (y) if a record date has
been set to determine the shareholders of the Company entitled to vote on such
merger or consolidation, the shareholders of the Company as of such record
date;


 


(c)           if
at any time during a calendar year a majority of the directors of the Company
are not persons who were directors at the beginning of the calendar year; or


 


(d)           the
Company transfers substantially all of its assets to another corporation which
is less than 80% owned by the Company.


 


Notwithstanding the foregoing, a “Change in Control”
shall not mean any acquisition by any “person,” including a “syndication” or “group,”
as those terms are used in Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act, of securities representing 20% or more of the combined voting
power of the Company’s then outstanding voting securities with respect to any
person who owns such outstanding voting securities at the time of the
effectiveness of this Plan, provided such person does not thereafter acquire
any additional voting securities that in the aggregate exceed more than 2% of
the combined voting power of the Company’s then outstanding voting securities.


 


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2.2.4.      “Good
Reason” means the occurrence of any one or more of the following events
which continues uncured for a period not less than thirty (30) days following
written notice given by the Participant to the Company within fifteen (15) days
following the occurrence of such event:


 


(a)           any
material breach of Participant’s employment agreement, if any, with the
Company;


 


(b)           any
failure to continue the Participant as an executive officer of the Company provided
that Participant is or becomes an executive officer;


 


(c)           any
Company requirement that Participant performs his services to the Company
primarily at a location outside of metropolitan Atlanta, Georgia; or


 


(d)           the
reduction of Participant’s salary below the amount established in Participant’s
employment agreement, if any.


 


2.3.         Agreements
Precedent to Collecting Benefits. As a condition precedent to the vesting of
a Participant’s right to collect any benefits pursuant to this Plan, the
Participant must execute all of the following agreements (in a form satisfactory
to the Sponsor, subject to the Sponsor’s sole and absolute discretion to waive
the execution of any agreement):


 


2.3.1.      a
general release of any and all past, present, or future claims (whether or not
such claims relate to the Plan) that the Participant may have against the
Company, its subsidiaries and affiliates, and their officers, directors,
employees and agents, and a covenant not to bring any action in respect of any
claim so released;


 


2.3.2.      an
agreement not to make disparaging comments (whether orally or in writing)
regarding the Company or its subsidiaries and affiliates, its officers and
employees, its products and services, or any other aspect of the Company’s
business either during or following termination of your employment with the
Company; and


 


2.3.3.      an
agreement that the Participant will not, without the prior written consent of
the Company, disclose to any entity or person any information which is treated
as confidential by the Company (“Confidential Information”),
and is not generally known or available to the public, provided, that you may make
disclosures of such Confidential Information to the extent required by law or
legal process. The term “Confidential Information” includes:


 


(a)           information
regarding the business methods, business policies, procedures, techniques,
business or strategic plans, trade secrets, pricing policies, or other
processes of or developed by the Company;


 


(b)           any
names and addresses of customers or clients, and any data on or relating to
past, present or prospective customers or clients;


 


(c)           formulae,
inventions, research or development projects or results, or other knowledge
developed by the Company; and


 


(d)           any
other confidential information relating to or dealing with the business
operations or activities of the Company; made known to you or learned or
acquired by you while in the employ of the Company, which is not generally
known to others outside the Company, whether written or otherwise, regarding
earnings, plans, strategies, prospective and executed contracts and other
business arrangements.


 


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2.3.4.      Participant’s
agreement, upon termination of employment, to promptly return all property of the
Company, to reimburse the Company for any personal telephone calls, credit card
charges and other expenses, and Participant’s payment of all amounts due to the
Company.


 


Notwithstanding any other provision of the Plan, Participant
will not be treated as having satisfied the requirements of this Section 2.3
unless (a) Participant executes any one or more of the above agreements
that the Sponsor may for any reason require, (b) Participant delivers
such agreements to the person, and within the time period, prescribed in such
agreement, and (c) Participant does not make a legally valid revocation of
such agreement.


 


2.4.         Pre-existing
Plans


 


Notwithstanding anything in this Plan to the contrary,
Section 12 of the Company’s 2002 Stock Plan and Section 12 of the
Company’s 2003 Stock Plan, and not this Plan (including Section 2.1
hereof) shall govern the vesting of options and stock awards granted under the 2002
Stock Plan and 2003 Stock Plan, respectively, in the event of a Change in
Control.


 


3.             Taxes


 


Taxes will be withheld from each Participant’s Severance
Benefits to the extent the Plan Administrator determines that this is required
by law.


 


4.             Relation
to Other Plans and Agreements


 


Any Severance Benefits that a Participant receives
will be in addition to any other benefits to which a Participant is entitled by
Company policy or the law. No Severance Benefits will be taken into account for
purposes of determining benefits under other Company benefit plans, retirement or
pension plans, 401(k) plans, or similar retirement arrangements. All such plans
or similar arrangements, to the extent inconsistent with this Plan, are hereby
so amended.


 


5.             Claims
Procedures


 


5.1.         Formal
Claims Typically Not Required


 


Typically, you will not
need to present a formal claim to receive the Severance Benefits payable under
this Plan.


 


5.2.         Disputes


 


If any person believes
that Severance Benefits are being denied improperly, that the Plan is not being
operated properly, that fiduciaries of the Plan have breached their duties, or
that the Participant’s legal rights are being violated with respect to the
Plan, the Participant must file a formal claim with the Plan Administrator within the time period set forth
in Section 5.3. The Plan Administrator will handle all such claims in
accordance with the procedures set forth in Section 5.4. This
requirement applies to all claims that any person has with respect to the Plan,
including claims against fiduciaries and former fiduciaries, except to the
extent the Plan Administrator determines, in its sole discretion, that it does
not have the power to grant all relief reasonably being sought by the Participant.


 


5.3.         Time
for Filing Claims


 


A formal claim must be
filed within ninety (90) days after the date the Participant first knew or
should have known of the facts on which the claim is based (or, if earlier, the date that is one
hundred twenty (120) days after your employment terminates for any reason),
unless the Sponsor in writing consents otherwise. The Plan


 


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Administrator will
provide a Participant, on request, with a copy of the claims procedures
established under Section 5.4. If a Participant files an
untimely claim, no Severance Benefits of any kind shall be payable under the
Plan.


 


5.4.         Procedures


 


5.4.1.      If
the Plan Administrator does not offer a Participant the payment of Severance
Benefits under this Plan within ten (10) days after the occurrence of a Triggering
Event, the Participant must file a claim for benefits on a form prescribed
by the Plan Administrator and within the time frame set forth in Section 5.3
above. If the Participant’s claim for a benefit is wholly or partially denied,
the Plan Administrator will furnish the Participant with a written notice of
the denial. This written notice must be provided to the Participant within a
reasonable period of time after the receipt of the Participant’s claim by the
Plan Administrator (generally within thirty (30) days after the occurrence of a
Triggering Event). Written notice of denial of a claim must contain the
following information:


 


(a)           the
specific reason or reasons for the denial;


 


(b)           a
specific reference to those provisions of the Plan on which such denial is
based;


 


(c)           a
description of any additional information or material necessary to perfect the Participant’s
claim, and an explanation of why such material or information is necessary; and


 


(d)           a
copy of the appeals procedures under the Plan and the time limits applicable to
such procedures, including a statement of the Participant’s right to bring a
civil action under Section 502(a) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”)
following an adverse determination of the Participant’s claim.


 


5.4.2.      If
the Participant’s claim has been denied, and the Participant wishes to submit
his or her request for a review of his or her claim, the Participant must
follow the following Claims Review Procedure:


 


(a)           Upon
the denial of a claim for benefits, the Participant may file a request for
review of the claim, in writing, with the Plan Administrator;


 


(b)           The
Participant must file the claim for review not later than sixty (60) days after
the Participant has received written notification of the denial of the claim
for benefits;


 


(c)           The
Participant has the right to review and obtain copies of all  relevant
documents relating to the denial of the claim and to submit any issues and
comments, in writing, to the Plan Administrator;


 


(d)           If
the Participant’s claim is denied, the Plan Administrator must provide the Participant
with written notice of this denial within sixty (60) days after the Plan
Administrator’s receipt of the Participant’s written claim for review.


 


5.4.3.      The
Plan Administrator’s decision regarding the Participant’s claim for review will
be communicated to the Participant in writing, and if the Participant’s claim
for review is denied in whole or part, the decision will include:


 


(a)           the
specific reason or reasons for the denial;


 


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(b)           specific
references to the pertinent provisions of the Plan on which the decision was
based; and


 


(c)           a
statement that the Participant may receive, upon request and free of
charge, reasonable access to and copies of, all documents, records and other
information relevant to the Participant’s claim for benefits.


 


6.             Plan
Administration


 


6.1.         Discretion.
The Plan Administrator is responsible for the general administration and
management of the Plan and shall have all powers and duties necessary to
fulfill its responsibilities, including, but not limited to, the discretion to
interpret and apply the provisions of the Plan and to determine all questions
relating to eligibility for Plan benefits. The Plan Administrator and all Plan
fiduciaries shall have the discretion to interpret or construe ambiguous,
unclear, or implied (but omitted) terms in any fashion they deem to be
appropriate in their sole and absolute discretion, and to make any findings of
fact needed in the administration of the Plan. The validity of any such
interpretation, construction, decision, or finding of fact shall not be given
de novo review if challenged in court, by arbitration, or in any other forum,
and shall be upheld unless clearly arbitrary or capricious.


 


6.2.         Finality
of Determinations. Unless arbitrary and capricious, all actions taken and
all determinations by the Plan Administrator or by Plan fiduciaries will be
final and binding on all persons claiming any interest in or under the Plan. To
the extent the Plan Administrator or any Plan fiduciary has been granted
discretionary authority under the Plan, the Plan Administrator’s or Plan
fiduciary’s prior exercise of such authority will not obligate it to exercise
its authority in a like fashion thereafter.


 


6.3.         Drafting
Errors. If, due to errors in drafting, any Plan provision does not
accurately reflect its intended meaning, as demonstrated by consistent
interpretations or other evidence of intent (by the Sponsor or the Plan
Administrator, as the case may be), or as determined by the Plan
Administrator in its sole and absolute discretion, the provision shall be
considered ambiguous and shall be interpreted by the Plan Administrator and all
Plan fiduciaries in a fashion consistent with its intent, as determined in the
sole and absolute discretion of the Plan Administrator (but with regard to the
intent of the Sponsor as settlor).


 


6.4.         Scope.
This Section may not be invoked by any person to require the Plan
to be interpreted in a manner inconsistent with its interpretation by the Plan
Administrator or other Plan fiduciaries.


 


7.             Costs,
Indemnification, and Reimbursement for Litigation Expenses


 


7.1.         All
costs of administering the Plan and providing Plan benefits will be paid by the
Company.


 


7.2.         To
the extent permitted by applicable law and in addition to any other indemnities
or insurance provided by the Company, the Company will indemnify and hold
harmless its (and its affiliates’) current and former officers, directors,
employees, and agents against all expenses, liabilities, and claims (including
legal fees incurred to defend against such liabilities and claims) arising out
of their discharge in good faith of their administrative and fiduciary
responsibilities with respect to the Plan. Expenses and liabilities arising out
of willful misconduct will not be covered under this indemnity.


 


8.             Plan
Amendment and Termination; Limitation on Employee Rights; Conditions of Receipt
of Severance Benefits


 


8.1.         Sponsor
May Amend or Terminate the Plan. Subject to subsection 8.2, the
Sponsor, acting through its Board of Directors or its delegate, has the right
in its sole and absolute discretion to amend the Plan, to extend its term, or
to terminate the Plan, prospectively.


 


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8.2.         Application
of Amendment or Termination of the Plan. Notwithstanding the foregoing, any
amendment or termination of the Plan that occurs on or after the Participation
Date will only apply to those Participants:


 


8.2.1.      who
consent individually and in writing to the amendment or termination of the Plan;
or


 


8.2.2.      whose
vested Severance Benefit is not adversely affected by such amendment or
termination.


 


8.3.         No
Right to Continued Employment. This Plan shall not give any employee the
right to be retained in the service of the Company, and shall not interfere
with or restrict the right of the Company to discharge or retire the employee for
any lawful reason.


 


9.             Governing
Law. This Plan is not a welfare plan subject to ERISA. The laws of the
State of Georgia (excluding its choice of laws principles) shall govern this
Plan.


 


	
  FIRST HORIZON
  PHARMACEUTICAL CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Patrick
  Fourteau

  	
   

  
	
   

  	
  Patrick
  Fourteau, President

  
	
   

  	
  and Chief Executive Officer

  



 


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Exhibit A


 


Initial
Participants


 


Michael Mavrogordato


 


Leslie Zacks


 


Sam Gibbons