**Exhibit 10.35**

 

**FIRST HORIZONPHARMACEUTICAL CORPORATION**

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**ACCELERATED VESTING PLAN**

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**(also functioning as a Summary Plan Description)**

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Effective:January 24, 2006

 

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**FIRSTHORIZON PHARMACEUTICAL CORPORATION**

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**ACCELERATEDVESTING PLAN**

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Plan Document andSummary Plan Description

 

The Board of Directors of First Horizon PharmaceuticalCorporation (the “**Company**”)has determined that it is in the best interest of the Company to adopt this AcceleratedVesting Plan (the “**Plan**”) inorder to attract and to retain the qualified personnel needed to assist in theCompany’s business.

 

This document is the Plan’s plan document, and alsofunctions as its summary plan description. This Plan will control in case ofconflict with any other document except as provided in Section 2.4. Throughoutthis Plan, the term “**Sponsor**” isused when the Company is acting in its non-fiduciary capacity as Plan sponsorand settlor. The term “**Plan Administrator**”is used when the Company is acting in the limited capacity of interpreting thePlan and determining eligibility for benefits (see Section 8 below fordetailed information).

 

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

 

**1.****             PlanEligibility.**Participants in the Plan as of January     ,2006 (the “**Participant Date”)** are listedon 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 ifapproved by the Compensation Committee of the Company’s Board of Directors (the“**Compensation Committee”**). TheCompensation Committee of the Company’s Board of Directors shall have theabsolute discretion and authority to determine the Participants.

 

**2.****             SeveranceBenefits**

 

**2.1.****         Amountand Conditions**

 

A Participant who experiencesa Triggering Event (defined below) and executes any agreement that the Sponsormay, in its discretion, require pursuant to Section 2.3, will becomevested in the right to receive the following “**SeveranceBenefit**”:

 

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

 

(b)  If theTriggering Event is other than a Change in Control, such Participant shallreceive credit for one year of additional vesting for purposes of determiningvested interest in any stock option, restricted stock, or other stock-basedaward that the Participant has received from the Company or its affiliates,except as Participant’s employment agreement with the Company, if any, may providefor greater vesting benefits.

 

If a Participant’s employmentwith 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 ofthe following:

 

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**(a)****          **Participant’sdeath;

 

**(b)****          **theCompany’s termination of Participant’s employment with or service to the Companywithout Cause;

 

**(c)****          **theoccurrence of a Change in Control; and

 

**(d)****          **theParticipant’s termination of Participant’s employment with or service to theCompany for Good Reason.

 

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

 

**2.2.3.****     **“**Change in Control**” shall be deemed to have occurredupon the following:

 

**(a)****          **theacquisition (other than by a direct purchase of shares from the Company orpursuant to any action or transaction or series of related actions ortransactions 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) ofthe Exchange Act, of securities representing 20% or more of the combined votingpower of the Company’s then outstanding voting securities, which is anysecurity that ordinarily possesses the power to vote in the election of theboard of directors of a corporation without the happening of any preconditionor contingency;

 

**(b)****          **theCompany is merged or consolidated with another corporation and immediatelyafter giving effect to the merger or consolidation less than 80% of theoutstanding voting securities of the surviving or resulting entity are thenbeneficially owned in the aggregate by (x) the shareholders of the Companyimmediately prior to such merger or consolidation, or (y) if a record date hasbeen set to determine the shareholders of the Company entitled to vote on suchmerger or consolidation, the shareholders of the Company as of such recorddate;

 

**(c)****          **ifat any time during a calendar year a majority of the directors of the Companyare not persons who were directors at the beginning of the calendar year; or

 

**(d)****          **theCompany transfers substantially all of its assets to another corporation whichis 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) ofthe Exchange Act, of securities representing 20% or more of the combined votingpower of the Company’s then outstanding voting securities with respect to anyperson who owns such outstanding voting securities at the time of theeffectiveness of this Plan, provided such person does not thereafter acquireany additional voting securities that in the aggregate exceed more than 2% ofthe combined voting power of the Company’s then outstanding voting securities.

 

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**2.2.4.****      “GoodReason”** means the occurrence of any one or more of the following eventswhich continues uncured for a period not less than thirty (30) days followingwritten notice given by the Participant to the Company within fifteen (15) daysfollowing the occurrence of such event:

 

**(a)****          **anymaterial breach of Participant’s employment agreement, if any, with theCompany;

 

**(b)****          **anyfailure to continue the Participant as an executive officer of the Company providedthat Participant is or becomes an executive officer;

 

**(c)****          **anyCompany requirement that Participant performs his services to the Companyprimarily at a location outside of metropolitan Atlanta, Georgia; or

 

**(d)****          **thereduction of Participant’s salary below the amount established in Participant’semployment agreement, if any.

 

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

 

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

 

**2.3.2.****     **anagreement not to make disparaging comments (whether orally or in writing)regarding the Company or its subsidiaries and affiliates, its officers andemployees, its products and services, or any other aspect of the Company’sbusiness either during or following termination of your employment with theCompany; and

 

**2.3.3.****     **anagreement that the Participant will not, without the prior written consent ofthe Company, disclose to any entity or person any information which is treatedas confidential by the Company (“**Confidential Information**”),and is not generally known or available to the public, provided, that you may makedisclosures of such Confidential Information to the extent required by law orlegal process. The term “Confidential Information” includes:

 

**(a)****          **informationregarding the business methods, business policies, procedures, techniques,business or strategic plans, trade secrets, pricing policies, or otherprocesses of or developed by the Company;

 

**(b)****          **anynames and addresses of customers or clients, and any data on or relating topast, present or prospective customers or clients;

 

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

 

**(d)****          **anyother confidential information relating to or dealing with the businessoperations or activities of the Company; made known to you or learned oracquired by you while in the employ of the Company, which is not generallyknown to others outside the Company, whether written or otherwise, regardingearnings, plans, strategies, prospective and executed contracts and otherbusiness arrangements.

 

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

 

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

 

**2.4.****         Pre-existingPlans**

 

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

 

**3.****             Taxes**

 

Taxes will be withheld from each Participant’s SeveranceBenefits to the extent the Plan Administrator determines that this is requiredby law.

 

**4.****             Relationto Other Plans and Agreements**

 

Any Severance Benefits that a Participant receiveswill be in addition to any other benefits to which a Participant is entitled byCompany policy or the law. No Severance Benefits will be taken into account forpurposes of determining benefits under other Company benefit plans, retirement orpension plans, 401(k) plans, or similar retirement arrangements. All such plansor similar arrangements, to the extent inconsistent with this Plan, are herebyso amended.

 

**5.****             ClaimsProcedures**

 

**5.1.****         FormalClaims Typically Not Required**

 

Typically, you will notneed to present a formal claim to receive the Severance Benefits payable underthis Plan.

 

**5.2.****         Disputes**

 

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

 

**5.3.****         Timefor Filing Claims**

 

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

 

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Administrator willprovide a Participant, on request, with a copy of the claims proceduresestablished under Section 5.4. **If a Participant files anuntimely claim, no Severance Benefits of any kind shall be payable under thePlan**.

 

**5.4.****         Procedures**

 

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

 

**(a)****          **thespecific reason or reasons for the denial;

 

**(b)****          **aspecific reference to those provisions of the Plan on which such denial isbased;

 

**(c)****          **adescription of any additional information or material necessary to perfect the Participant’sclaim, and an explanation of why such material or information is necessary; and

 

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

 

**5.4.2.****     **Ifthe Participant’s claim has been denied, and the Participant wishes to submithis or her request for a review of his or her claim, the Participant mustfollow the following Claims Review Procedure:

 

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

 

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

 

**(c)****          **TheParticipant has the right to review and obtain copies of all  relevantdocuments relating to the denial of the claim and to submit any issues andcomments, in writing, to the Plan Administrator;

 

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

 

**5.4.3.****     **ThePlan Administrator’s decision regarding the Participant’s claim for review willbe communicated to the Participant in writing, and if the Participant’s claimfor review is denied in whole or part, the decision will include:

 

**(a)****          **thespecific reason or reasons for the denial;

 

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**(b)****          **specificreferences to the pertinent provisions of the Plan on which the decision wasbased; and

 

**(c)****          **astatement that the Participant may receive, upon request and free ofcharge, reasonable access to and copies of, all documents, records and otherinformation relevant to the Participant’s claim for benefits.

 

**6.****             PlanAdministration**

 

**6.1.****         Discretion.**The Plan Administrator is responsible for the general administration andmanagement of the Plan and shall have all powers and duties necessary tofulfill its responsibilities, including, but not limited to, the discretion tointerpret and apply the provisions of the Plan and to determine all questionsrelating to eligibility for Plan benefits. The Plan Administrator and all Planfiduciaries shall have the discretion to interpret or construe ambiguous,unclear, or implied (but omitted) terms in any fashion they deem to beappropriate in their sole and absolute discretion, and to make any findings offact needed in the administration of the Plan. The validity of any suchinterpretation, construction, decision, or finding of fact shall not be givende novo review if challenged in court, by arbitration, or in any other forum,and shall be upheld unless clearly arbitrary or capricious.

 

**6.2.****         Finalityof Determinations.**Unless arbitrary and capricious, all actions taken andall determinations by the Plan Administrator or by Plan fiduciaries will befinal and binding on all persons claiming any interest in or under the Plan. Tothe extent the Plan Administrator or any Plan fiduciary has been granteddiscretionary authority under the Plan, the Plan Administrator’s or Planfiduciary’s prior exercise of such authority will not obligate it to exerciseits authority in a like fashion thereafter.

 

**6.3.****         DraftingErrors.**If, due to errors in drafting, any Plan provision does notaccurately reflect its intended meaning, as demonstrated by consistentinterpretations or other evidence of intent (by the Sponsor or the PlanAdministrator, as the case may be), or as determined by the PlanAdministrator in its sole and absolute discretion, the provision shall beconsidered ambiguous and shall be interpreted by the Plan Administrator and allPlan fiduciaries in a fashion consistent with its intent, as determined in thesole and absolute discretion of the Plan Administrator (but with regard to theintent of the Sponsor as settlor).

 

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

 

**7.****             Costs,Indemnification, and Reimbursement for Litigation Expenses**

 

**7.1.****        **Allcosts of administering the Plan and providing Plan benefits will be paid by theCompany.

 

**7.2.****        **Tothe extent permitted by applicable law and in addition to any other indemnitiesor insurance provided by the Company, the Company will indemnify and holdharmless its (and its affiliates’) current and former officers, directors,employees, and agents against all expenses, liabilities, and claims (includinglegal fees incurred to defend against such liabilities and claims) arising outof their discharge in good faith of their administrative and fiduciaryresponsibilities with respect to the Plan. Expenses and liabilities arising outof willful misconduct will not be covered under this indemnity.

 

**8.****             PlanAmendment and Termination; Limitation on Employee Rights; Conditions of Receiptof Severance Benefits**

 

**8.1.****         SponsorMay Amend or Terminate the Plan.**Subject to subsection 8.2, theSponsor, acting through its Board of Directors or its delegate, has the rightin its sole and absolute discretion to amend the Plan, to extend its term, orto terminate the Plan, prospectively.

 

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**8.2.****         Applicationof Amendment or Termination of the Plan.**Notwithstanding the foregoing, anyamendment or termination of the Plan that occurs on or after the ParticipationDate will only apply to those Participants:

 

**8.2.1.****     **whoconsent individually and in writing to the amendment or termination of the Plan;or

 

**8.2.2.****     **whosevested Severance Benefit is not adversely affected by such amendment ortermination.

 

**8.3.****         NoRight to Continued Employment.**This Plan shall not give any employee theright to be retained in the service of the Company, and shall not interferewith or restrict the right of the Company to discharge or retire the employee forany lawful reason.

 

**9.****             GoverningLaw.**This Plan is not a welfare plan subject to ERISA. The laws of theState of Georgia (excluding its choice of laws principles) shall govern thisPlan.

 
| FIRST HORIZON  PHARMACEUTICAL CORPORATION |
|-------------------------------------------|
|                                      |
|                                      |
| By:                                       | /s/ Patrick  Fourteau |   |
|                                      | Patrick  Fourteau, President |
|                                      | and Chief Executive Officer |

 

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**Exhibit A**

 

**InitialParticipants**

 

Michael Mavrogordato

 

Leslie Zacks

 

Sam Gibbons

 

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