exv10w1



 





Exhibit 10.1




July 16, 2007




David Medeiros

3260 Whipple Road

Union City, California 94587




RE: Severance Agreement




Dear David:




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 May 6, 2003, and Change-in-Control
Agreement dated February 13, 2007, which are incorporated herein, the Company agrees to provide you
severance in the event that the following conditions are met. This Severance Agreement supersedes
the original severance agreement dated July 10, 2003 which agreement is hereby terminated and of no
further force or effect.



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), 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 Senior Vice President, Pharmaceutical
Operations 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 Senior Vice President, Pharmaceutical Operations of the Company.



This letter, your Offer Letter, your Change-in-Control Agreement, your existing stock option
grants, and any future stock option grants or stock awards, 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/ Don Matthew Bailey
	 	 
	 
	 	 
	Don Matthew Bailey
	 	 
	Interim President

	 	Date: July 16, 2007
	 
	 	 
	Agreed:
	 	 
	 
	 	 
	/s/ David J. Medeiros
	 	 
	 
	 	 
	David J. Medeiros
	 	 
	Senior Vice President, Pharmaceutical Operations

	 	Date: July 17, 2007