Document:

Exhibit 10.13

 

AMENDED AND
RESTATED

EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this
“Agreement”) is made and entered into as of the 24th day of January, 2006, by
and between FIRST HORIZON PHARMACEUTICAL CORPORATION, a Delaware corporation
(the “Company”) and DARRELL BORNE (“Executive”).

 

WITNESSETH:

 

WHEREAS, Executive is employed by the Company
pursuant to the terms and conditions of that certain Employment Agreement dated
June 12, 2003 between the Company and Executive as amended and restated on
September 17, 2003 (the “Original Agreement”); and

 

WHEREAS, the parties desire to amend and restate the
terms and conditions of the Original Agreement, effective as of the date
hereof:

 

NOW, THEREFORE, in consideration of Executive’s continued
employment, the covenants and mutual agreements set forth herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:

 

1.     Employment.   Throughout the Term (as defined
in Section 2 below), the Company shall employ Executive as provided
herein, and Executive hereby accepts such employment. In accepting such
employment, Executive states that, to the best of his knowledge, he is not now,
and by accepting such employment, will not be, under any restrictions in the
performance of the duties contemplated under this Agreement as a result of the
provisions of any prior employment agreement or non-compete or similar
agreement to which Executive is or was a party.

 

2.     Term of Employment.   The term of Executive’s
employment by the Company hereunder shall continue hereafter unless sooner
terminated as a result of Executive’s death or in accordance with the
provisions of Section 6 below (the “Term”).

 

3.     Duties.   Throughout the Term, and except
as otherwise expressly provided herein, Executive shall be employed by the
Company as the Chief Financial Officer of the Company. Executive shall devote
his full time to the performance of his duties as Chief Financial Officer of
the Company in accordance with the Company’s By-laws, this Agreement and the
directions of the Company’s Board of Directors and any executive officer of the
Company who is senior to Executive. Without limiting the generality of the
foregoing, throughout the Term Executive shall faithfully perform his
duties as Chief Financial Officer at all times so as to promote the best
interests of the Company.

 

4.     Compensation.

 

(a)           Salary.   For any and all services
performed by Executive under this Agreement during the Term, in whatever
capacity, the Company shall pay to Executive an annual salary of Two Hundred
Forty Thousand Dollars ($240,000.00) per year (the “Salary”) less any and all
applicable federal, state and local payroll and withholding taxes. The Salary
shall be paid in the same increments as the Company’s normal payroll, but no
less frequent than bi-monthly and prorated,

 

 

however, for any period of less than a full month.
The Salary will be reviewed annually by the Compensation Committee of the Board
and a determination shall be made at that time as to the appropriateness of an
increase, if any, thereto.

 

(b)           Bonus.   In addition to the Salary,
Executive shall be eligible to receive from the Company an incentive
compensation bonus (the “Bonus”) based on a percentage of his Salary. The
Bonus, if any, shall be determined based on such criteria as shall be
determined from time to time by the Compensation Committee of the Board of
Directors. The nature of the criteria and the determination as to whether the
criteria have been satisfied, shall be determined by the Compensation Committee
of the Board in its sole discretion. Accordingly, there is no assurance that a
Bonus will be paid to Executive with respect to all or any particular year
during the Term.

 

5.     Benefits and Other Rights.   In consideration for Executive’s
performance under this Agreement, the Company shall provide to Executive the
following benefits:

 

(a)           The Company will provide Executive with cash
advances for or reimbursement of all reasonable out-of-pocket business expenses
incurred by Executive in connection with his employment hereunder. Such
reimbursement, however, is conditioned upon Executive adhering to any and all
reasonable policies established by Company from time to time with respect to
such reimbursements or advances, including, but not limited to, a requirement
that Executive submit supporting evidence of any such expenses to the Company.

 

(b)           To the extent from time-to-time provided by
the Company to employees of the Company at the same level as Executive, either (i) a
car allowance or (ii) a company car, gasoline charge card and car
maintenance plan. Executive acknowledges that the Company may in its
discretion change its policies for these purposes including, without
limitation, ceasing to provide the benefits set forth in this paragraph.

 

(c)           The Company will provide Executive and his
family with the opportunity to receive group medical coverage under the terms
of the Company’s health insurance plan, but subject to completion of normal
waiting periods. During any such waiting period, the Company will pay, or
reimburse Executive for, the cost of COBRA coverage for Executive and his
family under his prior health plan.

 

(d)           During the Term the Executive shall be
entitled to fifteen (15) days paid vacation, it being understood and
agreed that unused vacation shall not be carried over from one year to the
next. In addition, Executive shall be entitled to eight (8) paid holidays
and four (4) paid personal days off.

 

6.     Termination of the Term.

 

(a)           The Company shall have the right to terminate
the Term under the following circumstances:

 

(i)            Executive shall die;

 

 

(ii)           With or without Cause, effective upon written
notice to Executive by the Company; or

 

(iii)          Upon or within one (1) year following a
Change of Control.

 

(b)           Executive shall have the right to terminate
the Term under the following circumstances:

 

(i)            At any time upon sixty (60) days prior
written notice to the Company; or

 

(ii)           For Good Reason upon or within one (1) year
following a Change of Control.

 

(c)           For purposes of this Agreement, “Cause” shall
mean:

 

(i)            Executive shall be convicted of the
commission of a felony or a crime involving dishonesty, fraud or moral
turpitude;

 

(ii)           Executive has engaged in acts of fraud, embezzlement,
theft or other dishonest acts against the Company;

 

(iii)          Executive commits an act which negatively
impacts the Company or its employees including, but not limited to, engaging in
competition with the Company, disclosing confidential information or engaging
in sexual harassment, discrimination or other human rights-type violations;

 

(iv)          Executive’s gross neglect or willful
misconduct in the discharge of his duties and responsibilities; or

 

(v)           Executive’s repeated refusal to follow the
lawful direction of the Board of Directors or supervising officers.

 

(d)           For purposes of this Agreement, “Change of
Control” shall mean the occurrence of any of the following:

 

(i)            The acquisition (other than by a direct
purchase of shares from the Company) by any “person”, including a “syndication”
or “group”, as those terms are used in Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (other than any such person
currently owning in excess of the following amount), 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;

 

(ii)           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 stockholders of the Company immediately prior to such merger or
consolidation, or (y) if a record date has been set to determine the

 

 

stockholders of the Company entitled to vote on such
merger or consolidation, the stockholders of the Company as of such record
date;

 

(iii)          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;

 

(iv)          The Company transfers substantially all of
its assets to another corporation which is a less than 80% owned subsidiary of
the Company; or

 

(v)           The Company approves a plan or proposal for
dissolution on liquidation of the Company.

 

(e)           For purposes of this Agreement, “Good Reason”
shall mean the occurrence of any one or more of the following events which
continues uncured for a period of not less thirty (30) days following
written notice given by Executive to the Company within fifteen (15) days
following the occurrence of such event, unless the Executive specifically
agrees in writing that such event shall not be Good Reason:

 

(i)            Any material breach of this Agreement by the
Company;

 

(ii)           Any failure to continue the Executive as an
executive officer of the Company;

 

(iii)          The requirement by the Company that Executive
perform his services hereunder primarily at a location outside of the
metropolitan Atlanta, Georgia area; or

 

(iv)          The reduction of the Employee’s salary below
the amount set forth in Section 4(a) above without the written
consent of Executive.

 

7.     Effect of Expiration or
Termination of the Term.   Promptly
following the termination of the Term, and except as otherwise expressly agreed
to by the Company in writing, Executive shall:

 

(a)           Immediately resign from any and all other
positions or committees which Executive holds or is a member of with the
Company or any subsidiary of the Company including, but not limited to, as an
officer and director of the Company or any subsidiary of the Company.

 

(b)           Provide the Company with all reasonable
assistance necessary to permit the Company to continue its business operations
without interruption and in a manner consistent with reasonable business
practices; provided, however, that such transition period shall not exceed thirty
(30) days after termination nor require more than twenty (20) hours
of Executive’s time per week and Executive shall be promptly reimbursed for all
out-of-pocket expenses.

 

(c)           Deliver to the Company possession or any and
all property owned or leased by the Company which may then be in Executive’s
possession or under his control,

 

 

including, without limitation, any and all such
keys, credit cards, automobiles, equipment, supplies, books, records, files,
computer equipment, computer software and other such tangible and intangible
property of any description whatsoever. If, following the expiration or
termination of the Term, Executive shall receive any mail addressed to the
Company, then Executive shall immediately deliver such mail, unopened and in
its original envelope or package, to the Company.

 

(d)           Other than as provided in this Section 7,
upon a termination of employment all other benefits and/or entitlements to
participate in programs or benefits, if any, will cease as of the effective
date except medical insurance coverage that may be continued at Executive’s
own expense as provided by applicable law or written Company policy.

 

(e)           Upon termination of Executive pursuant to
§6(a)(i) or §6(a)(ii) without Cause, the Company shall: (i) provide
Executive with Salary continuance, subject to § 7(h) for twelve
(12) months (a “Salary Continuance”) at the rate in effect immediately
prior to termination, plus (ii) a lump sum payment equal to One Hundred
Percent (100%) of the Bonus, if any, paid to Executive for the calendar year
immediately preceding termination, plus (iii) provide twelve
(12) months of COBRA coverage for Executive which shall be substantially
equivalent to that provided by the Company prior to termination, plus (iv) provide
twelve (12) months of car allowance at seven hundred fifty dollars
($750.00) per month, subject to return of existing company vehicle at time of
termination and provided the Company is providing benefits under § 5(b) of
this Agreement at the time of termination of employment, plus (v) all of
Executive’s then unvested options and stock awards previously issued pursuant
to the Company’s stock option and other equity incentive plans shall
immediately vest and be exercisable as herein provided.

 

(f)            Upon termination of Executive pursuant to § 6(a)(ii) with
Cause or § 6(b)(i), the Company shall pay Executive or Executive’s estate
all Salary accrued but unpaid as of the date of such termination.

 

(g)           Upon termination of Executive pursuant to § 6(a)(iii) or
§ 6(b)(ii), the Company shall: (i) provide Executive with Salary
continuance for twenty-four (24) months at the rate in effect immediately
prior to termination, plus (ii) a lump sum payment equal to Two Hundred
Percent (200%) of the Bonus, if any, paid to Executive for the calendar year
immediately preceding termination, plus (iii) provide COBRA coverage for
Executive which shall be substantially equivalent to that provided by the
Company prior to termination until the earlier of (A) twenty-four
(24) months after the date of termination, (B) the availability of
replacement coverage to Executive from a third party employer after Executive
has accepted another full-time position and (C) the expiration of COBRA
benefits by reason of lapse of the statutory or regulatory benefit period established
by governmental authority, plus (iv) provide twenty-four (24) months
of car allowance at seven hundred fifty dollars ($750.00) per month, subject to
return of existing company vehicle at time of termination and provided the
Company is providing benefits under § 5(b) of this Agreement at the
time of termination of employment. Further, upon a Change in Control,
regardless of whether the Executive is terminated, all of Executive’s then
unvested options and

 

 

stock awards previously issued pursuant to the
Company’s stock option and other equity incentive plans shall immediately vest
and be exercisable as herein provided.

 

(h)           In the event that Executive shall be entitled
to receive a Salary Continuance and COBRA benefit pursuant to § 7(e), such
Salary Continuance and COBRA benefit shall continue only until such time as
Executive shall have accepted another full time position. In addition, in the
event that Executive shall perform consulting or other services for which
he shall receive compensation, all compensation shall be reported to the
Company and shall be offset against any remaining Salary Continuance payments.
Failure of Executive to promptly report the receipt of any compensation from a
third party or the acceptance of a new position shall entitle the Company to
terminate all remaining Salary Continuance and COBRA benefits and to seek
restitution for any payments made to Executive subsequent to such job
acceptance or compensation receipt.

 

(i)            Any dollar amounts which are to be paid at
the time of termination under this Section 7, other than Salary
Continuance, payments under Section 7(g)(i), the car allowance and COBRA
payments, shall be paid within thirty (30) days after the date of
termination. Any Salary Continuance, payments under Section 7(g)(i) or
COBRA payments shall be made in accordance with the usual payroll practices
which were applicable prior to termination. Except as otherwise specifically
set forth herein, any and all payments made pursuant to this Agreement shall be
net of any and all applicable federal, state and local payroll and withholding
taxes.

 

(j)            If the Company or the Company’s accountants
determine that the payments called for under Section 7(g) of this
Agreement either alone or in conjunction with any other payments or benefits
made available to the Employee by the Company will result in the Employee being
subject to an excise tax (“Excise Tax”) under Section 4999 of the Internal
Revenue Code of 1986, as amended (the “Code”), or if an Excise Tax is assessed
against Executive as a result of such payments or other benefits, the Company
shall make a Gross-Up Payment (as defined below) to or on behalf of Executive
as and when such determination(s) and assessment(s), as appropriate, are made,
subject to the conditions of this subsection (i). A “Gross-Up Payment”
shall mean a payment to or on behalf of Executive that shall be sufficient to
pay (i) any Excise Tax in full, (ii) any federal, state and local
income tax and Social Security or other employment tax on the payment made to
pay such Excise Tax as well as any additional Excise Tax on the Gross-Up
Payment, and (iii) any interest or penalties assessed by the Internal
Revenue Service on Executive if such interest or penalties are attributable to
the Company’s failure to comply with its obligations under this subsection (i) or
applicable law. Any determination under this subsection (i) by the
Company or the Company’s accountants shall be made in accordance with Section 280G
of the Code, any applicable related regulations (whether proposed, temporary or
final), any related Internal Revenue Service rulings and any related case law,
and shall assume that Executive shall pay Federal income taxes at the highest
marginal rate in effect for the year in which the Gross-Up Payment is made and
state and local income taxes at the highest marginal rate in effect in the
state of Executive’s residence for such year. Executive shall take such action
(other than waiving Employee’s right to any payments or benefits) as the
Company reasonably requests under the circumstances to mitigate or challenge

 

 

such tax. If the Company reasonably requests that
Executive take action to mitigate or challenge, or to mitigate and challenge,
any such tax or assessment and Executive complies with such request, the Company
shall provide Executive with such information and such expert advice and
assistance from the Company’s accountants, lawyers and other advisors as
Executive may reasonably request and shall pay for all expenses incurred
in effecting such compliance and any related fines, penalties, interest and
other assessments. Subject to the provisions of this subsection (i), all
determinations required to be made under this subsection (i), including
whether and when a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such determination,
shall be made by the public accounting firm that is retained by the Company as
of the date immediately prior to the Change of Control (the “Accounting Firm”)
which shall provide detailed supporting calculations both to the Company and
Executive within thirty (30) business days of the receipt of notice from
the Company or Executive that there has been a payment that could trigger a
Gross-Up Payment, or such earlier time as is requested by the Company
(collectively, the “Determination”). In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group effecting
the Change of Control, Executive may appoint another nationally recognized
public accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder).
All fees and expenses of the Accounting Firm shall be borne solely by the
Company and the Company shall enter into any agreement requested by the
Accounting Firm in connection with the performance of the services hereunder.
The Gross-Up Payment under this subsection (i) with respect to any
payments shall be made no later than sixty (60) days following such
payments. If the Accounting Firm determines that no Excise Tax is payable by
Executive, it shall furnish Executive with a written opinion to such effect,
and to the effect that failure to report the Excise Tax, if any, on Executive’s
applicable federal income tax return will not result in the imposition of a
negligence or similar penalty. The Determination by the Accounting Firm shall
be binding upon the Company and Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the
Determination, it is possible that Gross-Up Payments which will not have been
made by the Company should have been made (“Underpayment”) or Gross-Up Payments
are made by the Company which should not have been made (“Overpayment”),
consistent with the calculations required to be made hereunder. In the event
that Executive thereafter is required to make payment of any additional Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid
by the Company to or for the benefit of Executive. In the event the amount of
the Gross-Up Payment exceeds the amount necessary to reimburse Executive for
his Excise Tax as herein set forth, the Accounting Firm shall determine the
amount of the Overpayment that has been made and any such Overpayment (together
with interest at the rate provided in Section 1274(b)(2) of the Code)
shall be promptly paid by Executive to or for the benefit of the Company.
Executive shall cooperate, to the extent Executive’s expenses are reimbursed by
the Company, with any reasonable requests by the Company in connection with any
contests or disputes with the Internal Revenue Service in connection with the
Excise Tax.

 

 

8.     Restrictive Covenants for
Executive.   Executive
hereby covenants and agrees with the Company that for so long as Executive is
employed by the Company and for a period (the “Restricted Period”) of twelve
months after the termination of such employment for any reason, Executive shall
not, without the prior written consent of the Company, which consent shall be
within the sole and exclusive discretion of the Company, either directly or
indirectly on his own account or on behalf of any other person or entity:

 

(a)           Perform services for a Competing
Business that are substantially similar in whole or in part to those that
he performed for the Company in his role as Chief Financial Officer, including
specifically, but not limited to, the sale or marketing of drug products or the
management of individuals involved in the sale or marketing of drug products.
For purposes of this covenant, the term “Competing Business” shall mean any
company engaged in the development, marketing or sale of prescription drug
products, including generic and nongeneric drug products, which are competitive
with: (1) those products being marketed by the Company at the time of
Executive’s termination; or (2) those products that Executive was aware
were under development by the Company and expected to be marketed within two
years of Executive’s termination. This covenant shall apply only within the “Territory”
which is defined as the fifty states of the Unites States. Executive recognizes
and agrees that in his capacity of Chief Financial Officer, his duties extend
throughout the entire service area of the Company which includes, at a minimum,
the fifty states of the Unites States and that, because of the executive nature
of Executive’s position with the Company, in order to afford the Company
protection from unfair competition by the Executive following his termination
of employment, this covenant must extend throughout the stated Territory.
Executive further acknowledges that this covenant does not prohibit him from
engaging in his entire trade or business but only a very limited segment of the
pharmaceuticals industry.

 

(b)           Solicit any current supplier, customer or
client of the Company with whom Executive dealt, or with whom anyone in
Executive’s direct chain of command dealt, on behalf of the Company within the
year preceding Executive’s termination of employment, for the purpose of
purchasing drug products (or ingredients of drug products) or selling or
marketing drug products, including generic and nongeneric drug products, which
are competitive with: (1) those products being marketed by the Company at
the time of Executive’s termination; or (2) those products that Executive
was aware were under development by the Company and expected to be marketed
within two years of Executive’s termination. Notwithstanding this subsection (b).
Executive may solicit suppliers that have excess capacity as reasonably
determined by the Company.

 

9.     Confidentiality.   Attached to this Agreement as Exhibit A
is the form of the Employee/Independent Contractor Confidentiality and
Non-Solicitation Agreement (the “Confidentiality Agreement”) which the Company
requires all employees, including, but not limited to, the Executive, to
execute and which is a part of each employee’s terms of employment. By
signing this Agreement, Executive acknowledges having received, read, executed
and delivered to the Company a copy of the Confidentiality Agreement and agrees
that the terms of the Confidentiality Agreement shall be incorporated by
reference into this Agreement and shall be considered as part of the terms
and conditions of Executive’s continued employment with the Company.

 

 

10.   Remedies.

 

(a)           The covenants of Executive set forth in Section 8
and Section 9 are separate and independent covenants for which valuable
consideration has been paid, the receipt, adequacy and sufficiency of which are
acknowledged by Executive, and have also been made by Executive to induce the
Company to enter into this Agreement and continue Executive’s employment with
the Company. Each of the aforesaid covenants may be availed of, or relied
upon, by the Company in any court of competent jurisdiction, and shall form the
basis of injunctive relief and damages including expenses of litigation
(including, but not limited to, reasonable attorney’s fees upon trial and
appeal) suffered by the Company arising out of any breach of the aforesaid
covenants by Executive. The covenants of Executive set forth in this Section 10
are cumulative to each other and to all other covenants of Executive in favor
of the Company contained in this Agreement and shall survive the termination of
this Agreement for the purposes intended.

 

(b)           Each of the covenants contained in Section 8
and Section 9 above shall be construed as agreements which are independent
of any other provision of this Agreement, and the existence of any claim or
cause of action by any party hereto against any other party hereto, of whatever
nature, shall not constitute a defense to the enforcement of such covenants. If
any of such covenants shall be deemed unenforceable by virtue of its scope in
terms of geographical area, length of time or otherwise, but may be made
enforceable by the imposition of limitations thereon, Executive agrees that the
same shall be enforceable to the fullest extent permissible under the laws and
public policies of the jurisdiction in which enforcement is sought. The parties
hereto hereby authorize any court of competent jurisdiction to modify or reduce
the scope of such covenants to the extent necessary to make such covenants
enforceable.

 

(c)           In the event that Executive believes that the
Company is in violation of a material obligation owed to Executive under this
Agreement, and the Executive has given notice of such violation to the Company
requesting that the Company cure such violation, and within twenty
(20) business days the Company has not undertaken steps to cure such
violation or to provide information to Executive demonstrating that the Company
is not in violation of the Agreement, and as a result of such failure to cure
or dispute such violation, the Executive terminates the Agreement in accordance
with Section 8(b). Executive shall not be barred from seeking employment
with a competitor notwithstanding the restriction of Section 8(a);
provided, however, that all other restrictions, contained in this Agreement,
including, but not limited to, the covenants in Section 8(b) and in Section 9,
shall remain in full force and effect.

 

11.   Enforcement Costs.   If any legal action or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any
provisions of this Agreement, the successful or prevailing party or parties
shall be entitled to recover reasonable attorney’s fees, court costs and all
expenses even if not taxable as court costs (including, without limitation, all
such fees, costs and expenses incident to appeal and other post judgment
proceedings), incurred in that action or proceeding, in addition to any other
relief to which such party or parties may be entitled. Attorneys fees
shall include, without limitation, paralegal fees,

 

 

investigative fees, administrative costs, sales and
use taxes and all other charges billed by the attorney to the prevailing party.

 

12.   Notices.   Any and all notices necessary
or desirable to be served hereunder shall be in writing and shall be:

 

(a)           Personally delivered, or

 

(b)           Sent by certified mail, postage prepaid,
return receipt requested, or guaranteed overnight delivery by a nationally
recognized express delivery company, in each case addressed to the intended
recipient at the address set forth below.

 

(c)           For notices sent to the Company:

 

First Horizon Pharmaceutical Corporation

6195 Shiloh Road

Alpharetta, Georgia 30005

Telephone No: (770) 442-9707

Facsimile No.: (770) 442-9594

 

(d)           For notices sent to Executive:

 

Mr. Darrell Borne

561 Gramercy Drive

Marietta, Georgia 30068

 

Either party hereto may amend the addresses for
notices to such party hereunder by delivery of a written notice thereof served
upon the other party hereto as provided herein. Any notice sent by certified
mail as provided above shall be deemed delivered on the third (3rd) business
day next following the postmark date which it bears.

 

13.   Entire Agreement.   This Agreement sets forth the
entire agreement of the parties hereto with respect to the subject matter
hereof, and specifically supercedes any other agreement or understanding among
the parties hereto related to the subject matter hereof, including, without
limitation, the Original Agreement. This Agreement may not be modified or
revised except pursuant to a written instrument signed by the party against
whom enforcement is sought.

 

14.   Severability.   The invalidity or
unenforceability of any provision hereof shall not affect the enforceability of
any other provision hereof, and except as otherwise provided in Section 10
above, any such invalid or unenforceable provision shall be severed from this
Agreement.

 

15.   Waiver.   Failure to insist upon strict
compliance with any of the terms or conditions hereof shall not be deemed a
waiver of such term or condition, and the waiver or relinquishment of any right
or remedy hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or remedy at any other time or times.

 

16.   Arbitration.   Any claims, disputes or
controversies arising out of or relating to this Agreement between the parties
(other than those arising under Section 10) shall be

 

 

submitted to arbitration by the parties. The
arbitration shall be conducted in Atlanta, Georgia in accordance with the rules of
the American Arbitration Association then in existence and the following
provisions: Either party may serve upon the other party by guaranteed
overnight delivery by a nationally recognized express delivery service, written
demand that the dispute, specifying in detail its nature, be submitted to
arbitration. Within seven business days after the service of such demand, each
of the parties shall appoint an arbitrator and serve written notice by
guaranteed overnight delivery by a nationally recognized express delivery
service, of such appointment upon the other party. The two arbitrators
appointed shall appoint a third arbitrator. The decision of two arbitrators in
writing under oath shall be final and binding upon the parties. The arbitrators
shall decide who is to pay the expenses of the arbitration. If the two
arbitrators appointed fail to agree upon a third arbitrator within ten days
after their appointment, then an application may be made by either party,
upon notice to the other party, to any court of competent jurisdiction for the
appointment of a third arbitrator, and any such appointment shall be binding
upon both parties.

 

17.   Governing Law.   This Agreement and the rights
and obligations of the parties hereto shall be governed by and construed in
accordance with the law of the State of Georgia, without regard to its
conflicts of laws provisions. Subject to Section 16, each party hereto
hereby (a) agrees that the state and federal courts of the Northern
District of Georgia shall have exclusive jurisdiction and venue of any
litigation which may be initiated with respect to this Agreement or to
enforce rights granted hereunder and (b) consents to the personal
jurisdiction and venue of such courts for such purposes.

 

18.   Benefit and Assignability.   This Agreement shall inure to
the benefit of and be binding upon the Company and its successors and assigns.
The rights and obligations of Executive hereunder are personal to him, and are
not subject to voluntary or involuntary alienation, transfer, delegation or
assignment.

 

IN WITNESS WHEREOF, the parties hereto have executed
this Employment Agreement as of the day and year first above written. 

 

	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  /s/ Darrell Borne

  
	
   

  	
  Name: Darrell Borne

  
	
   

  	
   

  
	
   

  	
  FIRST HORIZON PHARMACEUTICAL

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patrick Fourteau 

  
	
   

  	
  Name:

  	
  Patrick Fourteau, President and CEOExhibit 10.26

 

FIRST HORIZON PHARMACEUTICAL CORPORATION

 

EXECUTIVE OFFICERS’ COMPENSATION FOR 2005 AND 2006

 

SUMMARY SHEET

 

	
  Name

  	
   

  	
  Position (2)

  	
   

  	
  Year

  	
   

  	
  Base Salary

  	
   

  	
  Targeted Bonus

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Patrick P. Fourteau

  	
   

  	
  Chief Executive Officer and President

  	
   

  	
  2005

  	
   

  	
  $

  	
   285,000

  	
   

  	
  $

  	
   242,250

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  2006

  	
   

  	
  $

  	
   325,000

  	
   

  	
  $

  	
   325,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Darrell Borne

  	
   

  	
  Chief Financial Officer, Secretary and Treasurer

  	
   

  	
  2005

  	
   

  	
  $

  	
   200,000

  	
   

  	
  $

  	
   120,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  2006

  	
   

  	
  $

  	
   240,000

  	
   

  	
  $

  	
   144,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sam Gibbons

  	
   

  	
  Vice President of Sales

  	
   

  	
  2005

  	
   

  	
  $

  	
   180,000

  	
   

  	
  $

  	
   90,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  2006

  	
   

  	
  $

  	
   188,000

  	
   

  	
  $

  	
   94,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Michael Mavrogordato

  	
   

  	
  Vice President of Global Business Development

  	
   

  	
  2005

  	
   

  	
  $

  	
   150,000

  	
   

  	
  $

  	
   75,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  2006

  	
   

  	
  $

  	
   165,000

  	
   

  	
  $

  	
   82,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Leslie Zacks

  	
   

  	
  Vice President of Legal and Human Resources

  	
   

  	
  2005

  	
   

  	
  $

  	
   180,000

  	
   

  	
  $

  	
   90,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  2006

  	
   

  	
  $

  	
   205,000

  	
   

  	
  $

  	
   102,500

  	
   

  

 

(1)   The target bonus is discretionary and actual
amounts paid may be more or less. There is no stated maximum bonus. In
2005, Fourteau, Borne, Gibbons, Mavrogordato, and Zacks were paid bonuses of
$273,600, $135,600, 90,000, $75,000, $90,000, respectively.

 

(2)   All executives have been granted stock
options by the Company. The options vest under the Company’s annual vesting
policy of 25% per annum.Executive stock options will vest immediately if they
are terminated without cause or if the Company undergoes a change of control.
As of December 31, 2005, Fourteau, Borne, Gibbons, Mavrogordato, and Zacks
had outstanding options, vested and unvested, of 685,000, 147,500, 80,000,
55,000 and 50,000, respectively. In 2005, restricted shares were granted to Fourteau,
Borne, Gibbons, Mavrogordato and Zacks of 200,000, 150,000, 25,000, 40,000, and
25,000, respectively.

 

1

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