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Exhibit 10.3  

 
  SEPARATION AGREEMENT AND FULL RELEASE OF ALL CLAIMS    
    

        THIS SEPARATION AGREEMENT AND FULL RELEASE OF ALL CLAIMS (hereinafter the "Agreement") is entered into by and among FIRST HORIZON PHARMACEUTICAL CORPORATION (the
"Company") and JACK SPENCER ("Employee"). WITNESSETH 

        A.    The
Company and Employee are parties to that certain Employment Agreement (the "Employment Agreement") dated as of February 12, 2003, and that certain
Employee/Independent Contractor Confidentiality and Non-Solicitation Agreement (the "Confidentiality Agreement") dated February 7, 2003. 

        B.    Employee
has resigned as an officer of the Company and from related offices and positions with affiliates as set forth in the letter of resignation attached hereto as  Exhibit A for reference. 

        C.    Employee
and the Company are terminating their employment relationship effective May 22, 2003, and desire to settle fully and finally all differences between them
that may arise out of or relate to Employee's employment with the Company and all other claims Employee has or may have through the date of execution of this Agreement. 

        NOW,
THEREFORE, in consideration of the recitals, the mutual agreements contained herein and other good and valuable consideration, the receipt, adequacy and sufficiency of which is
hereby acknowledged, the parties to this Agreement hereby agree, promise and covenant as to each of the following: 

        1.     Capacity to Execute. 

        Each
of the parties represents and warrants that he or it is legally viable and competent to enter into this Agreement, is relying on independent judgment and the advice of legal counsel
and has not been influenced, pressured or coerced to any extent whatsoever in making this Agreement by any representations or statements made by the Company and/or any person or persons representing
the
Company, and that the individuals executing this Agreement on his or its behalf are authorized to do so. Each of the parties further represents and warrants that he or it has not sold, assigned,
transferred, conveyed or otherwise disposed of all or any part of the claims released hereunder, whether known or unknown. 

        2.     Specific Consideration Provided to Employee. 

        In
exchange for the covenants of Employee hereunder and other good and valuable consideration, Employee shall receive the following forms of compensation as severance from the Company: 

        (a)   Those
benefits set forth in Section 8(e) of the Employment Agreement which shall be payable to Employee even though Employee resigned. 

        (b)   The
benefits set forth in Section 8(e)(iii) of the Employment Agreement which provide for twelve months of COBRA coverage for Employee shall in addition
include such benefits for those of Employee's dependents who are currently included in such coverage subject to COBRA to the extent such benefits otherwise are in effect for Employee under the
Employment Agreement, understanding however that Employee is responsible for complying with all terms and conditions of any employee benefit plan. 

        (c)   To
the extent requested by the Employee, three months of outplacement services at a firm and in a program designated by the Company. 

        The
severance obligations set forth in paragraphs 2(a), 2(b), and 2(c) herein shall constitute the total payment and severance obligations under this Agreement, which represent payments
and obligations that Employee would not otherwise be entitled to receive from the Company. Accordingly, Employee understands and warrants that no amount other than as set forth in this
Section 2 (which includes amounts set forth in the Employment Agreement) is or shall be due or claimed to be due from the Company and/or from any other person or entity released in
paragraph 3 below with respect 

to
any claim or claims released in paragraph 3 below, including, but not limited to, any and all claims for attorneys' fees and the costs of litigation that he may have under any federal, state
or local law, common law or in equity. 

        3.     Release of Claims. 

        In
consideration of the payment provided for in paragraph 2 above and other good and valuable consideration, the receipt, adequacy, and sufficiency of which is hereby
acknowledged, Employee and his heirs, executors, administrators, agents, assigns, receivers, attorneys, servants, legal representatives, predecessors and successors in interest, regardless of form,
trustees in bankruptcy or otherwise, wards, and any other representative or entity acting on his or their behalf, pursuant to, or by virtue of the rights of any of them, do hereby now and forever
unconditionally release, discharge, acquit and hold harmless the Company and any parent, subsidiary or related companies, and any and all of their employees, agents, administrators, assigns,
receivers, attorneys, servants, legal representatives, affiliates, insurers, predecessors and successors in interest, regardless of form, trustees in bankruptcy or otherwise, insurance benefit plans,
and any other representative or entity acting on its or their behalf (collectively, the "Released Parties"), from any and all claims, rights, demands, actions, suits, damages, losses, expenses,
liabilities, indebtedness, and causes of action, of whatever kind or nature that existed from the beginning of time through the date of execution of this Agreement, regardless of whether known or
unknown, and regardless of whether asserted by Employee to date, including, but not limited to, all claims for or relating to assault, battery, negligence, negligent hiring, negligent retention,
negligent supervision, negligent training, negligent or intentional infliction of emotional distress, false imprisonment, defamation (whether libel or slander), personal injury, bodily injury, bad
faith, pain and suffering, medical expenses, wage and hour, lost income and earnings (including, but not limited to, back pay, front pay and any other form of present or future income, benefits and/or
earnings), equitable reinstatement, breach of any express or implied contract, breach of the covenant of good faith and fair dealing, workers' compensation, wrongful termination, wrongful demotion,
wrongful failure to promote, wrongful deprivation of a career opportunity, discrimination (including disparate treatment and disparate impact), hostile work environment, quid
pro quo sexual harassment, retaliation, any request to submit to a drug or polygraph test, and/or whistleblowing, whether said claim(s) are brought pursuant to Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of 1991, 42 U.S.C. § 1981, the Employee Retirement Income Security Act, the Equal Pay Act, the Pregnancy Discrimination Act, the Fair Labor
Standards Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act or any other constitutional, federal, regulatory, state or local law, or
under the common law or in equity. 

        Employee
further understands and warrants that this Agreement shall operate as a fully binding and complete resolution of all claims as to the parties to this Agreement and all parties
represented by or claiming through such parties, and that he shall not be able to seek any monies for any claim, whether known or unknown, against any of the persons or entities released hereunder
other than as provided in paragraphs 2 and 6 of this Agreement. 

        4.     Covenant Not-to-Sue. 

        Employee
covenants and agrees not to file or initiate a lawsuit against any of the Released Parties in regard to any claims, demands, causes of action, suits, damages, losses and
expenses, arising from acts or omissions of the Company occurring on or before the date of execution of this Agreement, and Employee will ask no other person or entity to initiate such a lawsuit on
his behalf. If Employee breaches this covenant and agreement, Employee must immediately repay and refund to the Company all payments he received pursuant to paragraphs 2(a) and 2(b) above, and
Employee shall also indemnify and hold harmless the Company, any of the Released Parties, and any of their officers, owners, directors, employees and agents from any and all costs incurred by any and
all of them, including their reasonable attorneys' fees, in defending against any such lawsuit. 

        5.     No Proceedings Initiated. 

        Employee
represents and warrants that neither he nor anyone acting on his behalf has filed or initiated any charge or claim against the Company in any administrative or judicial
proceeding. 

        6.     Covenants of Employee. 

        (a)   Employee
ratifies and confirms each and every covenant and agreement of Employee contained in the Employment Agreement (as modified hereby) and the Confidentiality
Agreement. Employee acknowledges that certain of such covenants and agreement survive the termination of employment of Employee with the Company and remain in full force and effect in accordance with
their terms (as modified hereby). 

        (b)   Employee
agrees that he shall not disparage the Company or otherwise seek to reduce the goodwill of the Company. The Company agrees not to disparage Employee or to act
in any way to diminish Employee's reputation. 

        (c)   For
the avoidance of doubt, the Company and the Employee acknowledge and agree that the following shall remain in full force and effect in accordance with their
respective terms: 

          (i)  Any
stock options issued by the Company to Employee; and 

         (ii)  The
Indemnification Agreement between Employee and the Company in the Company's standard form for its directors and executive officers. 

        7.     No Voluntary Assistance. 

        Employee
hereby covenants and agrees that he will not voluntarily assist, support, or cooperate with, directly or indirectly, any entity or person alleging or pursuing any claim,
administrative charge, or cause of action against the Company, including without limitation, by providing testimony or other information, audio or video recordings, or documents, except under
compulsion of law. If compelled to testify, nothing contained herein shall in any way inhibit or interfere with Employee providing completely truthful testimony. Nor shall anything herein prevent
Employee's full cooperation with any investigation or other proceeding by any federal, state or local governmental agency. 

        8.     No Admission of Liability. 

        The
parties agree and acknowledge that this Agreement is a full and complete compromise of the matters released herein between the parties hereto; that neither the releases nor the
negotiations for this Agreement and the settlement embodied herein, including all statements or communications made to date, shall be considered admissions by them. 

        9.     Confidentiality Agreement. 

        (a)   Subject
to the limited exceptions set forth in sub-paragraphs 9(b) and 9(c) below, the parties to this Agreement, individually and collectively, agree that
all of the terms, conditions, and provisions of this Agreement, including the amount of consideration paid by the Company are to remain strictly and absolutely confidential. The parties, individually
and collectively, therefore specifically agree not to disclose any such terms, conditions, provisions, allegations or information to any third party or entity for any purpose other than as provided in
sub-paragraphs 9(b) and 9(c) below. 

        (b)   If
a subpoena is served upon Employee requiring the disclosure of any such confidential information protected by paragraph 9(a), Employee agrees to notify the
Company immediately upon service of the subpoena and before responding to the subpoena. 

        (c)   The
parties, individually or collectively, may disclose information protected by paragraph 9(a) to the following persons and under the following circumstances.
Both parties may disclose information protected by paragraph 9(a) to their accountants, financial advisors, tax advisors and attorneys, and the Internal Revenue Service. The Employee may
disclose the information published in paragraph 9(a), to his spouse, sons and daughters. The Company also may disclose the information protected by paragraph 9(a) to its management
employees and members of its Board of Directors, to any 

governmental
regulatory agency or in any required filings with any regulatory agency, or as required under any state or federal law. In the event of any such disclosure to any accountant, financial
advisor, tax advisor, attorney, or to Employee's spouse, sons or daughter, the party who discloses such information shall make such persons aware of the confidentiality provisions of this Agreement. 

        10.   OWBPA Rights. 

        (a)   Employee
is advised to seek legal counsel regarding the terms of this Agreement. Employee acknowledges that he has either sought legal counsel or has consciously decided
not to seek legal counsel, contrary to the Company's advice, regarding the terms and effect of this Agreement. 

        (b)   Employee
acknowledges that this Agreement releases only those claims which exist as of the date of Employee's execution of this Agreement. 

        (c)   Employee
acknowledges that (i) he may take a period of forty-five (45) days from the date of receipt of this Agreement (May 22, 2003)
within which to consider and sign this Agreement, and (ii) he has received the disclosure set forth on Exhibit B attached hereto and
incorporated herein by reference. 

        (d)   Employee
acknowledges that he will have seven (7) days from the date of signing this Agreement to revoke the Agreement in writing in its entirety ("Revocation
Period"). Employee acknowledges that the Agreement will not become effective or enforceable until the Revocation Period has expired. In the event the Employee chooses to revoke this Agreement, within
the Revocation Period, he will: 

        1.     Revoke
the entire Agreement in a signed writing, delivered to the following person on or before the seventh (7th) day after he executed the Agreement: 

Mr. Darrell
Borne

First Horizon Pharmaceutical Corporation

6195 Shiloh Road

Alpharetta, Georgia 30005 

        2.     Forfeit
all severance and other consideration from the Company that are contemplated by this Agreement; and 

        3.     Return
the full amount of consideration received, if any, to the Company along with the signed writing. 

        (e)   The
Effective Date of this Agreement shall be the eighth (8th) day after the date Employee signs the Agreement, assuming the Employee has not revoked the
Agreement in writing within the Revocation Period. 

        (f)    Employee
expressly acknowledges that the payments and the other consideration that he is receiving under this Agreement constitute material consideration for his
execution of this Agreement, and represent valuable consideration to which he would not otherwise be entitled. 

        11.   Jurisdiction/Choice of Forum. 

        The
laws of the State of Georgia shall govern this Agreement, unless pre-empted by any applicable federal law controlling the review of this Agreement. The parties further
stipulate and agree that any litigation regarding this Agreement shall be brought in the state or federal courts for the Northern District of Georgia and neither party will object to personal
jurisdiction or venue in any of these courts. 

        12.   Advice of Attorneys. 

        The
parties acknowledge that they have fully read, understood and unconditionally accepted this Agreement after consulting with their attorneys or having the opportunity to consult with
an attorney, and acknowledge that this Agreement is mutual and binding upon all parties hereto regardless of the extent of damages allegedly suffered by any of the parties hereto. 

        13.   Counterparts. 

        This
Agreement may be signed in counterpart originals with the same force and effect as if signed in a single original document. 

        14.   Cooperation of the Parties. 

        The
parties to this Agreement agree to cooperate fully and to execute any and all supplementary documents and to take all additional actions that may be necessary or appropriate to give
full force and effect to the basic terms and intent of this Agreement and the settlement embodied herein. Employee further agrees to fully cooperate with the Company in any and all investigations,
inquiries or litigation whether in any judicial, administrative, or public, quasi-public or private forum, in which the Company is involved, whether or not Employee is a defendant in such
investigations, inquiries, proceedings or litigation. Employee shall provide truthful and accurate testimony, background information, and other support and cooperation as the Company may reasonably
request. The Company will compensate Employee for all travel expenses, attorney's fees, and preparation expenses and lost wages associated with pursuit of actions necessary to comply with
Section 14. 

        15.   Modification in Writing Only. 

        Neither
this Agreement nor any provision of this Agreement may be modified or waived in any way except by an agreement in writing signed by each of the parties hereto consenting to such
modification or waiver. 

        16.   Construction of this Agreement. 

        The
parties agree that they each have participated in the drafting of this Agreement, and that, as a result, this Agreement shall not be construed in favor of or against any party
hereto. 

        17.   No False Statements or Misrepresentation. 

        The
Company and Employee hereby warrants and represents that they have not made any false statements or misrepresentations in connection with this Agreement. 

        18.   Headings and Captions. 

        The
headings and captions used in the Agreement are for convenience of reference only, and shall in no way define, limit, expand, or otherwise affect the meaning or construction of any
provision of this Agreement. 

        19.   Entire Agreement. 

        This
Agreement contains the entire agreement of the parties concerning the subject matter hereof, and is intended and shall be construed as an integrated Agreement. Each party
understands, acknowledges and hereby represents and warrants that this Agreement supersedes any and all prior or contemporaneous understandings, agreements, representations and/or promises, whether
oral or written, which are not expressly set forth herein or expressly referred to in this Agreement, and no understanding, agreement, representation, warranty, promise or inducement has been made
concerning the subject matter of this Agreement other than as set forth in this Agreement, and that each party enters into this Agreement without any reliance whatsoever upon any understanding,
agreement, representation, warranty or promise not set forth herein. 

        This
Agreement shall be binding upon and inure to the benefit of the parties hereto, jointly and severally, and the past, present and future heirs, executors, administrators, agents,
employees, servants, attorneys, affiliated persons and entities, predecessors and successors in interest and assigns, regardless of form, trustees in bankruptcy or otherwise, and any other
representative or entity acting on behalf of, pursuant to, or by virtue of the rights of each. 

        IN
WITNESS WHEREOF, the undersigned have executed this Separation Agreement and Full Release of All Claims. 

	 	 	EMPLOYEE:
	

 	
 	

/s/  JACK E. SPENCER      
 Jack Spencer
	

 	
 	

Date:	
 	

May 22, 2003

	

 	
 	
FIRST HORIZON PHARMACEUTICAL CORPORATION:
	

 	
 	

By:	
 	

/s/  DARRELL BORNE      

	

 	
 	

Its:	
 	

CFO

	

 	
 	

Date:	
 	

May 22, 2003

Exhibit A  

May
22, 2003 

Board
of Directors

First Horizon Pharmaceutical Corporation

6195 Shiloh Road

Alpharetta, Georgia 30005 

Gentlemen: 

        I
am resigning effective immediately from all of my offices with First Horizon Pharmaceutical Corporation and any subsidiary of First Horizon Pharmaceutical Corporation and as trustee,
administrator or otherwise for any employee plan of First Horizon Pharmaceutical Corporation. 

	 	 	Sincerely,
	

 	
 	

/s/  JACK E. SPENCER      

Exhibit B  

        First Horizon Pharmaceutical Corporation ("the Company") is experiencing a change in management wherein certain individuals, as set forth below, have been offered
the opportunity to submit their voluntary resignations in exchange for good and valuable consideration to which they would not otherwise have been entitled. The only eligibility factor for this
voluntary resignation program is the job position held by each individual listed below. This voluntary resignation program will remain open for a period of 45 days from the presentation of the
Separation Agreement and Full Release of all Claims to each individual named below as being 40 years of age or older, unless extended by the Company in its sole and absolute discretion. 

        The
individuals eligible for this voluntary resignation program are as follows: 

	(1)
	Andrew
Shales, Vice President of Marketing, Age 42. No other person is employed in this job class so as to be eligible for this voluntary resignation program.

	(2)
	Jack
Spencer, Vice President of Sales, Age 53. No other person is employed in this job class so as to be eligible for this voluntary resignation program. 

        No
other person employed by the Company is in any way eligible for this voluntary resignation program at this time. 

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Exhibit 10.4  

As Adopted by the Board of Directors

on June 12, 2003  

  
 

    FIRST HORIZON PHARMACEUTICAL CORPORATION
  2003 NONQUALIFIED STOCK OPTION PLAN    
    

        1.    Purpose.    The purpose of the 2003 Nonqualified Stock Option Plan
(the"Plan") is to (a) incentize and retain persons eligible to participate in the Plan; (b) motivate participants, by means of appropriate
incentives, to achieve long-range goals; and (c) further identify participants' interests with those of the Company's shareholders through compensation that is based on the
Company's common stock to promote the long-term financial interest of the Company, including the growth in value of the Company's equity and the enhancement of shareholder return. The term
"Company" means First Horizon Pharmaceutical Corporation and its Subsidiaries. The term "Code" shall
mean the Internal Revenue Code of 1986, as amended, and any successor statute. The term "Subsidiary" shall have the meaning set forth in
Section 424(f) of the Code. 

        2.    Types of Grants.    The Plan Committee (as defined below) may, from time to time, grant
nonqualified stock options as provided in Section 8 hereof or grant stock awards as provided in Section 9 hereof. 

        3.    Eligibility.    Non-executive employees (and only non-executive
employees) of the Company shall be eligible to participate in the Plan at the discretion of the Plan Committee; provided, however, that if and to the extent any state or federal securities laws, rules
or regulations limit the eligible participants to employees of the Company or otherwise, then the eligible participants shall be so limited under this Plan. 

        4.    Administration.    The Plan shall be administered by a plan committee (the
"Plan Committee") established by the Board of Directors of First Horizon Pharmaceutical Corporation (the
"Board"), which shall appoint and remove members of the Plan Committee in its discretion subject only to the requirements set forth herein. The Plan
Committee shall consist of two or more members of the Board
who are nonemployee directors within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, if deemed appropriate are outside
directors within the meaning of Section 162(m) of the Code. The Plan Committee shall determine the meaning and application of the provisions of the Plan and all grant agreements executed
pursuant thereto, and its decisions shall be conclusive and binding upon all interested persons. Subject to the provisions of the Plan, the Plan Committee shall have the sole authority to determine:
(a) the persons to whom grants shall be made; (b) the amount and nature of the grants; (c) the price to be paid for the Stock upon the exercise of each option; (d) the
period within which each option may be exercised; and (e) the other terms and conditions of the grants. Except to the extent prohibited by applicable law or the applicable rules of a stock
exchange, the Plan Committee may allocate all or any portion of its responsibilities to any one or more of its members and may delegate all or any portion of its responsibilities and powers to any
person or persons selected by it. Any such allocation or delegation may be revoked or modified by the Plan Committee at any time. 

        5.    Number of Shares Reserved under Plan.    The Company has reserved for issuance under the
Plan 1,200,000 shares of Common Stock of First Horizon Pharmaceutical Corporation ("Stock") or the number of shares of Stock, which, in accordance with
the provisions of Section 6 below, shall be substituted therefor. If an option granted under the Plan shall expire or terminate for any reason without having been exercised in full or without
having been vested or a Stock award shall be forfeited, shares subject to the unexercised, unvested or forfeited portion thereof shall again be available for the purposes of the Plan. 

        6.    Adjustment to Number of Shares and Exercise Price.    In the event of changes in the
outstanding Stock by reason of stock dividends, split-ups, consolidations, recapitalizations, reorganizations or similar events (as determined by the Plan Committee), an appropriate
adjustment shall be made by the Plan 

Committee
in the number of shares reserved under the Plan, in the number of shares set forth in Section 5 above, and in the number of shares and the option price per share specified in any
stock option agreement with respect to any unpurchased shares. The determination of the Plan Committee as to what adjustments shall be made shall be conclusive. Adjustments for any options to purchase
fractional shares shall also be determined by the Plan Committee. The Plan Committee shall give prompt notice to all Optionees of any adjustment pursuant to this Section. 

        7.    No Incentive Stock Options.    Incentive stock options as defined in Section 422
of the Code may not be granted under this Plan. 

        8.    Nonqualified Stock Options.    Each nonqualified stock option granted under the Plan
shall be evidenced by a stock option agreement between the person to whom such option is granted and the Company. Such stock option agreement shall provide that the option is subject to the following
terms and
conditions and to such other terms and conditions not inconsistent therewith as the Plan Committee may deem appropriate and may be set forth in the grant agreement: 

        (a)    Nonqualified Stock Option Price.    The price to be paid for each share of Stock upon the exercise of a
nonqualified stock option shall be determined by the Plan Committee at the time the option is granted. To the extent that the Fair Market Value of Stock is relevant to the pricing of the option by the
Plan Committee, Fair Market Value of the Stock shall be determined as follows: 

	(i)
	If
the Stock is at the time listed or admitted to trading on any stock exchange (including the Nasdaq National Stock Market), then the "Fair Market Value" shall be the
mean between the lowest and highest reported sale prices of the Stock on the date in question on the principal exchange on which the Stock is then listed or admitted to trading. If no reported sale of
Stock takes place on the date in question on the principal exchange, then the reported closing price of the Stock on such date on the principal exchange shall be determinative of "Fair Market Value."

	(ii)
	If
the Stock is not at the time listed or admitted to trading on a stock exchange, the "Fair Market Value" shall be the mean between the closing reported sale price of
the Stock on the date in question in the over-the-counter market.

	(iii)
	In
the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Committee. 

Provided,
however, that the Plan Committee may establish the "Fair Market Value" in such other manner as may be reasonably determined in good faith by the Plan Committee based on the reported sale of
the Stock on such stock exchange. 

        (b)    Limitation on Duration of Nonqualified Stock Option.    The period within which a nonqualified stock option may
be exercised shall be determined by the Plan Committee at the time the option is granted, but in no event shall such period exceed 10 years from the date the option is granted. 

        (c)    Payment for Stock upon Exercise of Nonqualified Stock Option.    The option exercise price for each share of
Stock purchased under a nonqualified stock option shall be paid in full at the time of purchase and shall be subject to the following: 

	(i)
	The
full exercise price for shares of Stock purchased upon the exercise of any stock option shall be paid at the time of such exercise (except that, in the case of an
exercise arrangement approved by the Plan Committee and described in paragraph 8(e)(iii) below, payment may be made as soon as practicable after the exercise).

	(ii)
	The
exercise price shall be payable in cash or by tendering (either actually or, if and so long as the Common Stock is registered under Section 12(b) or 12(g) of
the Exchange Act, by attestation) or constructively surrendering Stock already owned by the Optionee of the stock option for at least six months (or any shorter or longer period necessary to avoid a
charge to the Company's earnings for financial reporting purposes) having a Fair 

Market
Value on the day prior to the stock option's exercise date equal to the aggregate exercise price. 

	(iii)
	The
Plan Committee may permit a participant to elect to pay the exercise price upon the exercise of a stock option by authorizing a third party to sell shares of stock
(or a sufficient portion of the shares) acquired upon exercise of the stock option and remit to the Company a sufficient portion of the sale proceeds to pay the entire exercise price and any tax
withholding resulting from such exercise, or the Company may choose to retain such shares in satisfaction of the exercise price and any tax withholding. 

        9.    Stock Awards.    The Plan Committee may award Stock under the Plan as stock bonuses or a
Stock award. Stock awarded shall be subject to the terms, conditions, and restrictions determined by the Plan Committee. The restrictions may include restrictions concerning transferability, voting,
repurchase by the Company and forfeiture of the shares of Stock awarded, together with such other restrictions as may be determined by the Plan Committee. If shares of Stock are subject to forfeiture,
all dividends or other distributions paid by the Company with respect to the shares of Stock shall be retained by the Company until the shares of Stock are no longer subject to forfeiture, at which
time all accumulated amounts shall be paid to the recipient. The Plan Committee may require the recipient to sign an agreement as a condition of the award, but may not require the recipient to pay any
monetary consideration other than amounts necessary to satisfy tax withholding requirements. The agreement may contain any terms, conditions, restrictions, representations and warranties required by
the Plan Committee. The certificates representing the shares awarded shall bear any legends required by the Plan Committee. Upon the issuance of a stock award, the number of shares of Stock reserved
for issuance under the Plan shall be reduced by the number of shares of Stock issued. 

        10.    Nontransferability.    The options granted pursuant to the Plan shall be
nontransferable except by will or the laws of descent and distribution of the state or county of the Optionee's domicile at the time of death, or, pursuant to a qualified domestic relations order
defined under the Code or Title I of the
Employee Retirement Income Security Act, and shall be exercisable during the Optionee's lifetime only by him (or in the case of a transfer pursuant to a qualified domestic relations order, by the
transferee under such qualified domestic relations order) and after Optionee's death, by Optionee's personal representative or by the person entitled thereto under Optionee's will or the laws of
intestate succession. 

        11.    Effect of Termination of Optionee's Employment or Other Relationship with
Company.    Upon termination of the Optionee's employment or other relationship with the Company, Optionee's rights to exercise vested options then held by Optionee
shall be as follows, except that to the extent such periods are more restrictive in the Optionee's agreement with the Company the shorter period specified in the agreement shall apply: 

        (a)    Death of Optionee.    Upon the death of a Optionee, any vested option may be exercised (to the extent
exercisable on the date of death) within 12 months following the date of death or within such shorter period as the Plan Committee as the Plan Committee shall prescribe in the option agreement,
by the Optionee's representative or by the person entitled thereto under Optionee's will or the laws of intestate succession. 

        (b)    Disability of Optionee.    Upon the disability (within the meaning of Section 22(e)(3) of the Code) of a
Optionee, any vested option may be exercised (to the extent exercisable as of the date of disability), within 12 months following disability, or within such shorter period as the Plan Committee
shall prescribe in the option agreement. 

        (c)    Other Termination.    In the event an employee ceases to serve as an employee of the Company for any reason
other than as set forth in (a) and (b), above, any option which Optionee holds shall terminate at either (i) 60 days after the date a Optionee-employee employment terminates or
(ii) such later date as determined by the Plan Committee and set forth in the grant agreement for any grants. The foregoing shall not extend any option beyond the term specified in 

the
grant agreement and such option shall be exercisable only to the extent exercisable at the date of termination of employment or cessation of services. 

        12.    Change of Control.    Upon the occurrence of a Change in Control (as hereinafter
defined): All outstanding options granted under this Plan shall become fully vested and exercisable and all Stock awarded or sold under this Plan shall become fully vested.
"Change of Control" means a change in the beneficial ownership of the Company's voting stock or a change in the composition of the Board which occurs as
follows: 

        (a)   The
acquisition (other than by a direct purchase of shares from First Horizon Pharmaceutical Corporation ("Horizon")) 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 of representing 20% or more of the combined voting power of Horizon'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)   Horizon
is merged or consolidated with another corporation and immediately after giving effect to the merger or consolidation either (i) less than 80% of the
outstanding voting securities of the surviving or resulting entity are then beneficially owned in the aggregate by (x) the stockholders of Horizon immediately prior to such merger or
consolidation, or (y) if a record date has been set to determine the stockholders of Horizon entitled to vote on such merger or consolidation, the stockholders of Horizon as of such record
date; 

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

        (d)   Horizon
transfers substantially all of its assets to another corporation which is a less than 80% owned subsidiary of Horizon. 

        13.    Securities Law Requirements.    The Company's obligation to issue shares of its Stock
upon exercise of an option upon the grant of Stock awards, or upon the sale of Stock is expressly conditioned upon the completion by the Company of any registration or other qualification of such
shares under any state or federal law or rulings and regulations of any government regulatory body or the making of such investment representations or other representations and undertakings by the
Optionee or the recipient, as the case may be (or Optionee's legal representative, heir or legatee, as the case may be), in order to comply with the requirements of any exemption from any such
registration or other qualification of such shares which the Company in its sole discretion shall deem necessary or advisable. The Company may refuse to permit the sale or other disposition of any
shares acquired pursuant to any such representation until it is satisfied that such sale or other disposition would not be in contravention of applicable state or federal securities law. 

        14.    Tax Matters.    As a condition to the exercise of an option, the vesting or award of a
Stock bonus or the vesting or sale of shares of Stock, the Company may require the Optionee to pay over to the Company all applicable federal, state and local taxes which the Company is required to
withhold. At the discretion of the Plan Committee and upon the request of an Optionee, the minimum statutory withholding tax requirements may be satisfied by the withholding of shares of Stock
otherwise issuable to the Optionee upon the exercise of an option. In the event Optionee makes an 83(b) election under Code with respect to any grant under the Plan, or disposes of an incentive stock
option in a transaction deemed to be a disqualifying disposition under Section 421 of the Code, then, within 30 days of such 83(b) election or disqualifying disposition, the Optionee
shall inform the Company of such actions. 

        15.    Amendments to Plan.    The Board of Directors may amend the Plan at any time, subject
to applicable law and the requirements of any rule or regulation (including listing regulations applicable to the Company). Except as otherwise provided in this Plan, in no event may action by the
Board or shareholders to amend this Plan alter or impair the rights of a then existing Optionee, without Optionee's consent, under any stock option, award or right previously granted to him hereunder. 

        16.    Effective Date of Plan; Duration of Plan.    This Plan shall become effective upon the
approval of the Board (the "Effective Date"). The Plan shall have a duration of ten years from the Effective Date; provided that in the event of Plan termination, the Plan shall remain in effect as
long as any unexercised or unvested grants under it are outstanding. No grant may be made under the Plan on a date that is more than ten years from the Effective Date. 

        17.    Grant Agreements.    Each option granted and each Stock award or sale of shares of
Stock under the Plan shall be evidenced by a written agreement ("Agreement") executed by the Company and accepted by the Optionee, which (i) shall contain each of the provisions and agreements
herein specifically required to be contained therein or a copy of this Plan attached as an exhibit to the Agreement, (ii) may contain the agreement of the Optionee to remain in the employ of,
or to render services to, the Company for a period of time to be determined by the Plan Committee (or such terms may be included in a separate agreement with the Company), and (iii) may contain
such other terms and conditions as the Plan Committee deems desirable that are consistent with the Plan. 

        18.    No Implied Right of Employment.    Nothing in this Plan or in any grant hereunder shall
confer upon any recipient any right to continue in the employ of the Company or to continue to perform services for the Company, or shall interfere with or restrict in any way the rights of the
Company to discharge or terminate any officer, director, employee, advisor, independent contractor or consultant at any time for any reason whatsoever, with or without good cause. 

[END
OF PLAN] 

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FIRST HORIZON PHARMACEUTICAL CORPORATION 2003 NONQUALIFIED STOCK OPTION PLAN

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