Document:

Exhibit 10.2

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (this “Agreement”)
is made and entered into as of the first day of September, 2008, by and between
Sciele Pharma, Inc., a
Delaware corporation (the “Company”),
and Edward Schutter (“Executive”),
and shall become effective as of the Effective Date (as defined below).

 

WITNESSETH:

 

WHEREAS, Executive is
currently serving as President and Chief Operating Officer of the Company
pursuant to that certain Amended and Restated Employment Agreement, dated as of
December 26, 2007, by and between the Company and Executive (the “Existing Employment Agreement”);

 

WHEREAS, contemporaneously
herewith, the Company has entered into an Agreement and Plan of Merger (the “Merger Agreement”) with
Shionogi & Co. Ltd. (“Parent”)
and Tall Bridge, Inc. (“Merger
Sub”), contemplating the
acquisition by Parent and Merger Sub of the Company, including the merger of
the Company with and into Merger Sub, with the Company as the surviving
corporation;

 

WHEREAS, the parties desire
to amend and restate the terms and conditions of employment between the Company
and Executive, to be effective upon, and subject to, the consummation of the
merger of the Company and Merger Sub, as contemplated by the Merger Agreement
(the “Merger”); and

 

WHEREAS, effective as of the
Effective Date (provided that
Executive is employed with the Company as of the Effective Date), this
Agreement shall supersede the Existing Employment Agreement.

 

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 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 commence upon consummation of the Merger (the “Effective Date”) and shall continue until
December 31, 2012, unless sooner terminated as a result of Executive’s
death or in accordance with the provisions of Section 6 below (the “Initial

 

1

 

Term”).  At
the conclusion of the Initial Term, this Agreement shall automatically renew
for successive one-year periods (each, a “Renewal
Term”, and collectively with the
Initial Term, the “Term”) unless
notice is provided by either party of its or his intent not to renew this
Agreement at least ninety (90) days prior to the conclusion of the Initial Term
or any Renewal Term.  Any election by the
Company not to renew this Agreement at the conclusion of the Initial Term or
any Renewal Term shall be deemed a termination without Cause (as defined in
Section 6(c) below) by the Company pursuant to
Section 6(a)(iii) below for all purposes of this Agreement, and any
election by Executive not to renew this Agreement at the conclusion of the
Initial Term or any Renewal Term shall be deemed a termination without Good
Reason (as defined in Section 6(d) below) by Executive pursuant to
Section 6(b)(i) below for all purposes of this Agreement.  In the event that Executive’s employment with
the Company terminates for any reason prior to the Effective Date or the Merger
does not occur for any reason, this Agreement shall be void ab initio without further action on the
part of either party.

 

3.          Duties.
Throughout the Term, and except as otherwise expressly provided herein,
Executive shall be employed by the Company as the President and Chief Operating
Officer of the Company.  Executive shall
devote his full time to the performance of his duties as President and Chief
Operating Officer of the Company in accordance with the Company’s bylaws, this
Agreement and the directions of the Company’s Board of Directors (the “Board”) and, if applicable, 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 President and Chief Operating 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 base salary (the “Salary”). 
The Salary shall be paid in the same increments as the Company’s normal
payroll, but no less frequently than bi-monthly and prorated, however, for any
period of less than a full month.  The
Salary for the remainder of calendar year 2008 will remain $325,000 per annum,
the Salary for calendar year 2009 will be $437,500 per annum, and the Salary
for calendar year 2010 will be $550,000 per annum.  Thereafter, the Salary will be reviewed
annually by the Board, commencing with calendar year 2011, and a determination
shall be made by the Board at that time as to the amount of the increase
thereto for the following calendar year; provided
that Executive’s Salary with respect to any calendar year during the Initial
Term commencing with 2011 shall be not less than four percent (4%) more than Executive’s
prior year’s Salary.  Except as described
in Section 6(d) below, the Salary shall not be decreased during the
Term without the consent of Executive.

 

2

 

(b)         Annual Bonus.

 

(i)         Executive’s annual incentive
compensation bonus with respect to calendar year 2008 shall be paid in
accordance with the terms and conditions of the annual incentive compensation
plan in which he participates as of the date hereof, other than with respect to
the amount payable under such plan, which shall be guaranteed to be paid at
target.

 

(ii)        With respect to each
calendar year during the Term commencing with 2009, Executive shall be eligible
to receive from the Company an annual incentive compensation bonus (the “Annual Bonus”) in a target amount equal to
a percentage of the Salary for such year (the “Target
Annual Bonus”).  With respect
to calendar year 2009, (A) the Target Annual Bonus shall be an amount
equal to one hundred five percent (105%) of the Salary for calendar year 2009;
and (B) the performance criteria shall be mutually agreed upon following
the date hereof and prior to the Effective Date.  With respect to calendar year 2010 and
thereafter during the Term, the Target Annual Bonus and performance criteria
shall be determined by the Board in its sole discretion; provided that Executive’s Target Annual
Bonus shall be not less than Executive’s prior year’s Target Annual Bonus.

 

(iii)       Except as described in
Section 6(d) below, the Target Annual Bonus shall not be decreased
during the Term without the consent of Executive.

 

(iv)       Satisfaction of
performance criteria, which determination shall be made by the Board in its
sole discretion, (A) below eighty percent (80%) shall result in no payout
of the Annual Bonus; (B) at eighty percent (80%) shall result in a payout
of the Annual Bonus at sixty-five percent (65%) of the Target Annual Bonus;
(C) above eighty percent (80%) and at or below one hundred percent (100%)
shall result in a payout of the Annual Bonus in an amount equal to the Target
Annual Bonus multiplied by the Annual Bonus Medium Multiplication Factor, where
the “Annual Bonus Medium Multiplication
Factor” equals the sum of sixty-five percent (65%) plus the product
of one-and-three-quarters percent (1.75%) multiplied by the number of
percentage points above eighty percent (80%) by which the performance criteria
are satisfied; provided that the
Annual Bonus Medium Multiplication Factor shall not exceed one hundred percent
(100%); and (D) above one hundred percent (100%) shall result in a payout
of the Annual Bonus in an amount equal to the Target Annual Bonus multiplied by
the Annual Bonus High Multiplication Factor, where the “Annual Bonus High Multiplication Factor”
equals the sum of one hundred percent (100%) plus the product of five percent
(5%) multiplied by the number of percentage points above one hundred percent
(100%) by which the performance criteria are satisfied; provided that the Annual Bonus High
Multiplication Factor

 

3

 

shall
not exceed two hundred percent (200%) (for example, if the performance criteria
were satisfied at a 92.3% level, then the Annual Bonus would be paid out at
86.525 of the Target Annual Bonus and, if the performance criteria were
satisfied at a 105.4% level, then the applicable portion of the Annual Bonus
would be paid out at 127% of the Target Annual Bonus).

 

(v)        Subject to
Section 7 below, the Annual Bonus, if any, shall be paid to Executive not
later than March 15 of the year following the calendar year with respect
to which the Annual Bonus was earned; provided
that Executive (x) is employed with the Company on December 31 of
such calendar year and (y) has not given or received a notice of
termination of employment without Good Reason or for Cause on or prior to such
December 31.

 

(c)          Long-Term Incentive Compensation. On
January 1 of each calendar year during the Term commencing with 2009,
Executive shall be eligible to receive from the Company an award under the
Company’s long-term incentive compensation plan (such plan, the “LTIP” and any such award, a “LTI Award”) in a target amount equal to a
fixed amount (the “Target LTI”).

 

(i)         With respect to
calendar year 2009, (A) the Target LTI shall be $1,603,125; and
(B) the performance criteria shall be mutually agreed upon following the
date hereof and prior to the Effective Date. 
With respect to calendar year 2010 and thereafter during the Term, the
Target LTI and performance criteria (which shall be based on earnings before
interest, taxes, depreciation and amortization (EBITDA)) shall be determined by
the Board in its sole discretion.

 

(ii)        Except as described in
Section 6(d) below, from the end of the Initial Term, the Target LTI
shall not be decreased during the Term without the consent of Executive.

 

(iii)       Satisfaction of
performance criteria, which determination shall be made by the Board in its
sole discretion, (A) below eighty percent (80%) shall result in no payout
of the applicable portion of the LTI Award; (B) at eighty percent (80%)
shall result in a payout of the applicable portion of the LTI Award at seventy
percent (70%) of the Target LTI; and (C) above eighty percent (80%) shall
result in a payout of the applicable portion of the LTI Award in an amount
equal to the Target LTI multiplied by the LTI Multiplication Factor, where the
“LTI  Multiplication Factor” equals the sum of seventy percent
(70%) plus the product of one-and-one-half percent (1.5%) multiplied by the
number of percentage points above eighty percent (80%) by which the performance
criteria are satisfied; provided
that the LTI Multiplication Factor shall not exceed one hundred percent (100%)
(for example, if the performance criteria were satisfied at a 92.3% level, then
the applicable portion of the

 

4

 

LTI
Award would be paid out at 88.45% of the Target LTI and, if the performance
criteria were satisfied at a 105.4% level, then the applicable portion of the
LTI Award would be paid out at 100% of the Target LTI).

 

(iv)       Each LTI Award shall
vest as follows: (A) twenty-five percent (25%) shall vest on
December 31 of the calendar year in which the grant date occurs and shall
be paid out on the basis of the satisfaction of performance criteria during
such calendar year; (B) twenty-five percent (25%) shall vest on
December 31 of the first calendar year following the year in which the
grant date occurs and shall be paid out on the basis of the satisfaction of
performance criteria during such first calendar year; (C) twenty-five percent
(25%) shall vest on December 31 of the second calendar year following the
year in which the grant date occurs and shall be paid out on the basis of the
satisfaction of performance criteria during such second calendar year; and
(D) twenty-five percent (25%) shall vest on December 31 of the second
calendar year following the year in which the grant date occurs and shall be
paid out on the basis of the cumulative satisfaction of performance criteria
during the three calendar years commencing with the year in which the grant
date occurs.

 

(v)        Subject to
Section 7 below, the applicable portion of the LTI Award, if any, shall be
paid to Executive as soon as reasonably practicable following the applicable
vesting date and, in any event, not later than March 15 of the year
following the calendar year during which the LTI Award vested; provided that Executive (x) is
employed with the Company on the applicable vesting date and (y) has not
given or received a notice of termination of employment without Good Reason or
for Cause on or prior to such vesting date.

 

(d)         Total Direct Compensation Opportunity.  The sum of Executive’s Salary, Target Annual
Bonus and Target LTI shall be referred to as his “Total Direct Compensation Opportunity”; it being understood that Total Direct
Compensation Opportunity shall not include any other compensation, including,
but not limited to, the Retention Bonus (as defined in
Section 4(e) below), and benefits. 
Executive’s Total Direct Compensation Opportunity with respect to any
calendar year during the Initial Term commencing with 2010 shall be not less
than four percent (4%) more than Executive’s prior year’s Total Direct
Compensation Opportunity.

 

(e)          Retention Bonus.  On the Effective Date, Executive shall be
entitled to receive from the Company a retention bonus (the “Retention Bonus”) in an aggregate amount
equal to $2,500,000.  Subject to
Section 7 below, the Retention Bonus shall vest and be paid out in eight
(8) equal semi-annual installments commencing with the six (6) month anniversary
of the Effective Date; provided
that Executive (x) is employed with the Company on the applicable vesting
date and (y) has not given or received a notice of termination of
employment without Good Reason or for Cause on or prior to such vesting date.

 

5

 

(f)          Taxes. 
Any and all amounts payable pursuant to this Agreement shall be less any
and all applicable federal, state and local payroll and withholding taxes.

 

(g)         Board. 
If Executive is a member of the Board, he shall recuse himself from any
discussions and decision-making relating to his compensation, benefits and
performance; provided that he
shall be permitted to participate in such discussions (but not any
decision-making) at the invitation of the Board.

 

(h)         Post-December 31, 2008 Effective Date.  The parties acknowledge their expectation
that the Effective Date shall occur on or before December 31, 2008.  However, if the Effective Date occurs after
December 31, 2008, then the parties shall, in good faith, make appropriate
changes to this Agreement to reflect such delay.

 

5.          Benefits
and Other Rights.

 

(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, which in all cases will be made no later than sixty (60) days
after Executive incurs the expense, 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)         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.  In addition, Executive and his eligible
dependents shall be eligible to participate in all other employee benefit
programs applicable to the Company’s senior executives generally (including,
but not limited to, those set forth on Exhibit A attached hereto,
during the period of eighteen (18) months following the Effective Time, to the
extent that Executive is eligible to participate in the programs described
therein as of the date hereof).

 

(c)          During the Term,
Executive shall be entitled to an aggregate of thirty-five (35) days of paid
time off (i.e., paid vacation and
paid personal days) and eight (8) days of federal holidays.  Unused paid time off shall not be carried
over from one year to the next.

 

6.          Termination
of the Agreement.

 

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

 

(i)         Executive shall die;

 

6

 

(ii)        With Cause, effective
at any time upon written notice to Executive by the Company; or

 

(iii)       Without Cause,
effective at any time upon written notice to Executive by the Company.

 

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

 

(i)         Without Good Reason,
at any time upon not less than sixty (60) days’ prior written notice to the
Company; or

 

(ii)        For Good Reason,
effective at any time upon written notice to the Company by Executive.

 

(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 dishonest acts against the Company;

 

(iii)       Executive commits an
act which negatively and not insignificantly 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 or, if applicable,
supervising officers.

 

(d)         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 ninety (90) days after the later of
(x) the occurrence of such event or (y) when Executive should have
reasonably become aware of such occurrence, unless 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 Executive as an executive-level officer of the Company;

 

7

 

(iii)       A material diminution
in Executive’s duties; or assignment to him of duties that are materially
inconsistent with his duties or materially impair his ability to function as
President and Chief Operating Officer; it
being understood that, effective as of the Effective Time,
(A) a change in or assignment of duties attributable to the Company not
being a public company, (B) Executive not being a member of the Board and
(C) Executive reporting to Parent or an affiliate of Parent shall not
constitute Good Reason;

 

(iv)       The requirement by the Company
that Executive relocate his primary location of the performance of his services
under this Agreement outside of the metropolitan Atlanta, Georgia area; it being understood that overnight or
short-term business travel in connection with the performance of Executive’s
services under this Agreement shall not constitute Good Reason; or

 

(v)        The reduction in
Executive’s Total Direct Compensation Opportunity below the amounts
contemplated by Section 4 above; it
being understood that (A) such a reduction as part of a
broad-based and significant reduction of compensation generally of employees
and senior executives of Parent’s U.S. operations, as discussed and agreed upon
in good faith with Executive, and (B) a change to the terms and conditions
of the LTIP following December 31, 2012 (provided
that the overall value of the LTIP remains substantially the same) shall not
constitute Good Reason.

 

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

 

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

 

(b)           Executive shall
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
paid for such time (at an hourly rate commensurate with a pro rata portion of
his Salary) as if his employment were not terminated and shall be reimbursed
for all out-of-pocket expenses.

 

(c)           Executive shall
deliver to the Company possession of any and all property owned or leased by
the Company which may then be in Executive’s

 

8

 

possession
or under his control, including, but not limited to, 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, the Company shall cease all other benefits
and/or entitlements to participate in programs or benefits, if any, as of the
effective date of termination, 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’s employment on account of Executive’s death pursuant to
Section 6(a)(i) above, the Company shall pay to Executive’s estate a lump
sum amount (the “Death Payment”)
equal to the sum of (i) one year’s Salary as then in effect; (ii) the
Annual Bonus with respect to the calendar year during which such death occurs,
at target, prorated to reflect the number of days during such calendar year
during which Executive was employed; (iii) the portion of any outstanding
LTI Award that would have otherwise vested during the performance period in
which such death occurs, at target, prorated to reflect the number of days
during such calendar year during which Executive was employed (for the
avoidance of doubt, in the case of an annual performance period, one
(1) year, and, in the case of a three (3) cumulative performance
period, three (3) years); (iv) any outstanding Retention Bonus that
would have otherwise vested during the semi-annual period in which such death
occurs, prorated to reflect the number of days during such period during which
Executive was employed; (v) any accrued but unpaid Salary through the date
of such death; (vi) any accrued but unused paid time off through the date
of such death; and (vii) any unpaid Annual Bonus, LTI Award or Retention
Bonus, in each case that was earned or vested prior to the date of such
death.  The Death Payment shall be paid
to Executive not later than thirty (30) days after such death occurs.

 

(f)            Upon termination of
Executive’s employment pursuant to Section 6(a)(ii) above with Cause,
Section 6(b)(i) above without Good Reason or Section 2 above on
account of Executive’s non-renewal of this Agreement, the Company shall pay
Executive any accrued but unpaid Salary through the date of such termination
and any accrued but unused paid time off through the date of such termination.

 

(g)           Upon termination of
Executive’s employment pursuant to Section 6(a)(iii) above without
Cause or Section 6(b)(ii) above for Good Reason or Section 2
above on account of the Company’s non-renewal of this Agreement, the Company
shall provide Executive with the following payments and benefits (the “Severance”):

 

9

 

(i)         payments made in equal
consecutive installments in accordance with the Company’s regular payroll
practices during the twelve (12) months following such termination in an
aggregate amount equal to the sum of (A) two (2) times the Salary at
the highest annual rate in effect during the Term; (B) two (2) times
(x) the Annual Bonus, if any, earned by Executive for the calendar year
immediately preceding such termination or (y) if Executive was not
eligible to earn an Annual Bonus with respect to such year, the Target Annual
Bonus; plus (C) the balance of all outstanding unvested LTI Awards, at
target, and any outstanding unvested Retention Bonus;

 

(ii)        payment of any unpaid
Annual Bonus, LTI Award or Retention Bonus, in each case that was earned or
vested prior to the date of such termination; and

 

(iii)       Company-paid COBRA
coverage for Executive and his eligible dependents which shall be substantially
equivalent to that provided by the Company prior to termination of Executive’s
employment, until the earlier of (A) twenty-four (24) months after the
date of such termination or (B) Executive’s acceptance of replacement
coverage from a third-party employer.

 

The Company’s obligation to
provide the Severance is subject to Executive’s execution and non-revocation of
a release of claims against the Company and its affiliates in substantially the
form on Exhibit B attached hereto. 
In addition, upon Executive’s breach of any of the covenants set forth
in Sections 8, 9 or 10 below, the Company’s obligation to provide the Severance
shall immediately cease.

 

In addition, the Company
shall pay Executive any accrued but unpaid Salary through the date of such
termination and any accrued but unused paid time off through the date of such
termination.  These accrued payments, together
with the payment described in Section 6(g)(ii) above, shall be paid
to Executive not later than thirty (30) days after the date of such
termination.

 

(h)         For the avoidance of
doubt, Executive acknowledges that, upon the effectiveness of this Agreement,
he shall not have any right to terminate his employment for Good Reason (for
this Section 7(h) only, as defined in the Existing Employment
Agreement) and receive any payments and benefits in connection therewith.

 

(i)           If the Company or
the Company’s accountants determine that any payment called for under this
Agreement either alone or in conjunction with any other payments or benefits
made available to Executive by the Company will result in Executive 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 payment or other payments and benefits,
the Company shall make a Gross-Up Payment (as defined 

 

10

 

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 (x) any Excise
Tax in full, (y) 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 (z) any
interest or penalties assessed by the Internal Revenue Service or any other
applicable taxing authority 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 (including 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
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 an independent public accounting firm retained by the Company (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, with a copy to the other party, 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”),
which shall be binding upon the Company and Executive.  All fees and expenses of the Accounting Firm
shall be borne solely by the Company and the Company shall enter into any
agreement reasonably requested by the Accounting Firm in connection with the
performance of the services hereunder. 
The Gross-Up Payment under this subsection (i) shall be made no
later than sixty (60) days following such payments; provided that the Gross-Up Payment shall in all events be
paid no later than the end of Executive’s taxable year next following the
Executive’s taxable year in which the Excise Tax (and any income or other
related taxes or interest or penalties thereon) on a payment are remitted to
the Internal Revenue Service or any other applicable taxing authority.  As a result of any uncertainty in the
application of Section 4999 of the 

 

11

 

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, 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, 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.  The
Company’s obligation to provide the Gross-Up Payment is subject to Executive’s
execution and non-revocation of a release of claims against the Company and its
affiliates in substantially the form on Exhibit B attached hereto.

 

(j)            Notwithstanding any
other provision of this Agreement, if at the time of termination of Executive’s
employment he is a “specified employee” (as defined in Section 409A of the
Code) and any payment upon such termination under this Section 7 will
result in additional tax or interest to Executive under Section 409A of
the Code (including any applicable related regulations (whether proposed,
temporary or final), any related Internal Revenue Service rulings and any
related case law), he will not be entitled to such payments until the earlier
of (i) the date that is six (6) months after such termination of
employment or (ii) any earlier date that does not result in any additional
tax or interest to Executive under Section 409A of the Code.  In addition, if any provision of this
Agreement would subject Executive to any additional tax or interest under
Section 409A of the Code, then the Company shall reform such provision; provided that the Company shall
(x) maintain, to the maximum extent practicable, the original intent of
the applicable provision without subjecting Executive to such additional tax or
interest and without substantively reducing the amount payable under such
provision and (y) not incur any additional compensation expense as a
result of such reformation.

 

8.          Confidentiality.
Executive hereby agrees that, other than in the ordinary course of performing
his duties for the Company, he shall not, directly or indirectly, at any time
(whether during or after termination of Executive’s employment with the Company
for any reason), intentionally or negligently divulge to any person or entity
other than the Company or any affiliate, without the Company’s express written
authorization, any information known to him to constitute trade secrets or
proprietary information belonging to the Company or any of its affiliates, or
other confidential financial information, operating budgets, strategic plans,
or research methods, projects or plans of the Company or any of its affiliates,
received or created by him in the course of his employment by the Company or in
connection with his duties with the Company 

 

12

 

(“Confidential Information”). 
Anything herein to the contrary notwithstanding, the provisions of this
Section 8 shall not apply (i) when disclosure is required by law or
by any court, arbitrator, mediator or administrative or legislative body
(including any committee thereof) with apparent jurisdiction to order Executive
to disclose or make accessible any information, (ii) with respect to any
other litigation, arbitration or mediation involving this Agreement, including,
but not limited to, the enforcement of this Agreement, or (iii) as to
Confidential Information that becomes generally known to the public or within
the relevant trade or industry other than due to Executive’s violation of this
Section 8.

 

9.          Nonsolicitation.  During Executive’s employment with the
Company and for a period specified below following the termination of
Executive’s employment for any reason (the “Relevant
Period”), Executive shall not, directly or indirectly:

 

(a)           induce or attempt to
induce any employee of the Company or any of its affiliates to be employed or
to perform services elsewhere;

 

(b)           hire any employee of
the Company or of any of its affiliates to be employed or to perform services
elsewhere; provided that
Executive may hire such employees if their employment is terminated by the
Company; or

 

(c)           solicit or attempt
to solicit the trade of any individual or entity which, at the time of such
solicitation, is a customer of the Company or any of its subsidiaries, or which
the Company or any of its subsidiaries is undertaking reasonable steps to
procure as a customer at the time of or immediately preceding termination of
employment; provided, however,
that this limitation (i) shall not apply to any wholesalers and
(ii) shall only apply to any product or service which is in competition
with a product or service of the Company or any of its subsidiaries.

 

The Relevant Period shall be
twenty-four (24) months in the case of Sections 9(a) and 9(b) above
and twelve (12) months in the case of Section 9(c) above.

 

10.        Nondisparagement.  Executive will not at any time (whether
during or after termination of Executive’s employment with the Company for any
reason) knowingly make any statement, written or oral, or take any other action
that disparages or otherwise harms the Company, its business or reputation or
the reputation of any of its affiliates or the officers and directors of any of
them.

 

11.        Remedies.  The covenants of Sections 8, 9 and 10 below
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.

 

12.        Indemnification.

 

(a)           The Company shall
indemnify Executive and hold Executive harmless from and against any and all
liabilities, suits, claims, actions, causes of 

 

13

 

action,
judgments, settlements, debts and expenses (including actually and reasonably
incurred legal fees and costs) of any kind whatsoever arising from and in
connection with Executive’s employment with the Company and its affiliates,
other than any arising from Executive’s willful or criminal misconduct or gross
negligence (separately and collectively, the “Indemnifiable
Claims”) to the fullest extent permitted by law.  The Company shall control Executive’s defense
against any such Indemnifiable Claims, and Executive agrees to cooperate with
the Company to mitigate costs, expenses and other damages associated with such
Indemnifiable Claims and to cooperate fully in such defense.  The Company agrees that, for purposes of this
Section 12(a), it shall interpret and/or apply any provision of applicable
law (and, as applicable, the bylaws and/or other organizational documents of
the Company and its applicable affiliates) with respect to Executive in a
manner not less favorable than how such provision is interpreted and applied by
the Company to then active directors and officers of the Company.

 

(b)           The Company shall,
as of the Effective Time, cause Executive to be covered under a prepaid
directors’ and officers’ liability insurance policy on terms and conditions no
less advantageous to such individuals than the Company’s directors’ and
officers’ liability insurance policy existing as of the date hereof (the “D&O Insurance”), during the Term and
for a period of not less than six (6) years after the termination of this
Agreement, but only to the extent related to actions or omissions of such
officers and directors in their capacities as such; provided, that in no event shall the Surviving Corporation
be required, in order to maintain or procure insurance coverage pursuant
hereto, to (i) expend more than $20,000 for the “tail” portion of such
insurance or (ii) pay annual premiums for the non-”tail” portion of such
insurance that are materially greater than for comparable coverage obtained by
comparable companies on the date hereof, subject to reasonable increase from
time to time  (collectively, the “Maximum Amount”); provided, further, that if the amount of
the annual premiums necessary to maintain or procure such insurance coverage
exceeds the Maximum Amount, the Surviving Corporation shall procure and
maintain during the Term and for such six (6) year period as much coverage
as is available for the Maximum Amount. 
The Company shall have the right to cause coverage to be extended under
the D&O Insurance by obtaining a “tail” policy on terms and conditions no
less advantageous to such former directors or officers than the D&O
Insurance, and such “tail” policy shall satisfy the provisions of this
Section 12(b).

 

(c)           Nothing in this
Agreement shall operate to limit or extinguish any right to indemnification,
advancement of expenses, or contribution that Executive would otherwise have,
including, but not limited to, by agreement or under applicable law.

 

13.        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 shall be entitled to recover
reasonable attorney’s fees, court costs and all 

 

14

 

expenses, even if not
taxable as court costs (including, but not limited to, 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
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.

 

14.        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.

 

For notices sent to the
Company:

 

Sciele Pharma, Inc.

Five Concourse Parkway,
Suite 1800

Atlanta, Georgia 30328

Attn: General Counsel

Facsimile: (678) 992-1043

 

For notices sent to
Executive:

 

Ed Schutter

1803 Newstead Trace

Marietta, GA 30062

 

Either party may amend the
addresses for notices to such party hereunder by delivery of a written notice
thereof served upon the other party 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.

 

15.        Entire
Agreement. This Agreement sets forth the entire agreement of the
parties hereto with respect to the subject matter hereof, and specifically
supersedes any other agreement or understanding among the parties hereto
related to the subject matter hereof, including, but not limited to, as of the
Effective Date, the Existing Employment Agreement and any other agreement
covering the subject matter hereof (including, but not limited to,
indemnification and directors’ and officer’s insurance).  This Agreement may not be modified or revised
except pursuant to a written instrument signed by the party against whom
enforcement is sought.

 

16.        Severability.
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining 

 

15

 

provisions or portions of
this Agreement shall be unaffected thereby and shall remain in full force and
effect to the fullest extent permitted by law.

 

17.        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.

 

18.        Arbitration.
Any claims, disputes or controversies arising out of or relating to this
Agreement between the parties 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 (7) 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
(10) 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.

 

19.        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 18 above, 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.

 

20.        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.

 

[Signatures
on Next Page]

 

16

 

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

 

 

	
   

  	
    EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/ Edward J.
  Schutter

  
	
   

  	
    Name: Edward
  J. Schutter

  
	
   

  	
   

  
	
   

  	
    COMPANY:

  
	
   

  	
   

  
	
   

  	
    SCIELE PHARMA,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    By:

  	
    /s/ Patrick P.
  Fourteau

  
	
   

  	
   

  	
    Name: Patrick
  P. Fourteau

  

 

17

 

Exhibit A

Benefits

 

	
  Executive Supplemental
  Life Insurance

  	
   

  	
  $500,000 policy; builds
  projected cash value to cover premiums on a $250,000 policy at age 55 or in
  four (4) years if over 55.

  
	
   

  	
   

  	
   

  
	
  Executive Supplemental
  Disability Coverage

  	
   

  	
  Individual, portable
  disability policy targeted to provide approximately 66 2/3% of pay combined
  with Group LTD policy. Policy amounts are reviewed every two (2) years.

  
	
   

  	
   

  	
   

  
	
  Annual Executive Physical

  	
   

  	
  Provided through Emory
  University’s Executive Healthcare System.

  
	
   

  	
   

  	
   

  
	
  Financial Planning

  	
   

  	
  Financial planning and tax
  preparation assistance provided through a local Atlanta firm.

  
	
   

  	
   

  	
   

  
	
  Company Executive Deferred
  Compensation Plan

  	
   

  	
  Allows deferral of up to
  75% of salary and up to 100% of annual and long-term incentive awards.

  

 

A-1

 

Exhibit B

 

WAIVER AND RELEASE AGREEMENT

 

This Waiver and Release
Agreement (this “Agreement”) is
made and entered into as of the
         day of
                    ,
20    , by and between Sciele Pharma, Inc., a Delaware
corporation (the “Company”), and                         
(“Executive”).

 

1.                                      Release: 
Executive, for himself/herself, his/her heirs, agents, executors and
administrators, hereby releases and discharges the Company and its current and
former subsidiaries, parents, affiliates, joint ventures, officers, directors,
employees, partners, owners, attorneys and agents (collectively, the “Company Releasees”) from all debts,
obligations, promises, covenants, collective bargaining obligations,
agreements, contracts, endorsements, bonds, controversies, suits or causes of
actions known or unknown, suspected or unsuspected, of every kind and nature
whatsoever, which may heretofore have existed or which may now exist,
including, but not limited, to those arising under the Age Discrimination in
Employment Act, as modified by the Older Workers Benefit Protection Act,
Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C.
Section 2000e et seq., the
Worker Adjustment Retraining and Notification Act, 29 U.S.C. Section 2101,
et seq., the Employee Retirement
Income Security Act of 1974, as amended, 29 U.S.C. Section 1001 et seq., the Americans with Disabilities
Act, as amended, 42 U.S.C. Section 12101 et seq., the Reconstruction Era Civil Rights Act, as
amended, 42 U.S.C. Section 1981 et
seq., the Rehabilitation Act of 1973, as amended, 29 U.S.C.
Section 701 et seq., the
Family and Medical Leave Act of 1992, 29 U.S.C. Section 2601 et seq., and any and all state or local
laws regarding employment discrimination and/or federal, state or local laws of
any type or description regarding employment, as well as any claim for breach
of contract, wrongful discharge, breach of any express or implied promise,
misrepresentation, fraud, retaliation, violation of public policy, infliction
of emotional distress, defamation, promissory estoppel, invasion of privacy or
any other theory or claim, whether legal or equitable, including, but not
limited to, any claims arising from or derivative of Executive’s employment
with the Company and Executive’s termination of employment with the Company or
otherwise.  This release is for any and
all relief, without regard to its form or characterization.  Executive acknowledges that he/she has not been
discriminated against on the basis of age, sex, handicap, race, ethnicity,
religion or any other protected class status.

 

THIS MEANS THAT BY SIGNING
THIS AGREEMENT, EXECUTIVE WILL HAVE WAIVED ANY RIGHT HE/SHE MAY HAVE TO
BRING A LAWSUIT OR MAKE ANY CLAIM OF ANY KIND WHATSOEVER AGAINST ANY OF THE
COMPANY RELEASEES BASED ON ANY ACTIONS OR OMISSIONS 

 

B-1

 

OF ANY OF THE COMPANY
RELEASEES ON OR PRIOR TO THE DATE OF SIGNING THIS AGREEMENT.

 

2.                                       Covenant Not to Sue:  Executive understands and agrees that, to the
fullest extent permitted by law, Executive is precluded from filing or pursuing
any legal claim of any kind against any of the Company Releasees at any time in
the future, in any federal, state or municipal court, administrative agency or
other tribunal, arising out of any of the claims that Executive has released
and waived by virtue of executing this Agreement.  Executive agrees not to file or pursue any
such legal claims.  Excluded from this
release and covenant not to sue is any right or claim that cannot be waived by
law, including, but not limited to, (a) any rights or claims of the
Executive that arise after this Agreement becomes effective; (b) any
vested rights under any tax-qualified and/or retirement plan(s) maintained
by the Company or its affiliates; (c) any rights under any indemnification
agreement(s) between the Executive and the Company, any rights to and
claims for indemnification or as an insured under any directors’ and officers’
liability insurance policy in connection with the Executive’s service as a
director, officer, employee or agent of the Company or any of its subsidiaries
or affiliates, under their respective certificates of incorporation and bylaws,
or otherwise as provided by law; (d) Executive’s right to participate in
an investigation conducted by any government agency; (e) the independent
right and responsibility of the Equal Employment Opportunity Commission (the “EEOC”) to enforce the law;
(f) Executive’s right to seek a determination of the validity of whether
his/her waiver of his/her rights under the ADEA was voluntary and knowing;
(g) Executive’s right to enforce this Agreement and (h) Executive’s
right to receive payments and benefits under Sections 7(g), 7(i), 12 and 13 of
his/her Amended and Restated Employment Agreement dated as of
August     , 2008. 
Executive understands, however, that, while this Agreement does not
affect his/her right to file a charge or participate in an investigation or
proceeding conducted by the EEOC or any other federal, state or local court or
agency, it does bar any claim he/she might have to receive monetary damages
should any agency pursue any claims on Executive’s behalf.

 

3.                                       Knowledge and Understanding:   Executive acknowledges that:

 

(a)                    he/she has been advised in writing (by this
Agreement) to consult with an attorney prior to executing this Agreement;

 

(b)                   he/she has been given a period of twenty-one
(21) days to consider this Agreement and, if he/she elects to sign it before
that time, acknowledges that he/she has done so voluntarily; and

 

(d)                   he/she is fully aware of his/her rights and
has carefully read and has fully come to understand all provisions of this
Agreement before signing.

 

B-2

 

4.             Effective Date: 
Executive will have seven (7) days after signing this Agreement to
revoke it.  Any revocation will be in
writing and addressed to [Name and Address].  This Agreement will not become effective
until the earliest date after (a) both parties have executed this
Agreement and (b) Executive’s seven (7) day revocation period has
passed without revocation.

 

5.             Reasonable Cooperation: 
Executive agrees to make himself/herself reasonably available and to
cooperate with the Company and its affiliates and their respective counsel in
connection with any investigation, administrative proceeding or litigation
relating to any matter in which he/she was involved or of which he/she has
knowledge as a result of his/her employment with the Company.  The Company shall reimburse the Executive for
reasonable expenses (including, but not limited to, lost wages, transportation
costs, and postage or telephone charges) that the Executive incurs in assisting
the Company or any affiliate pursuant to this Section 5 within fifteen
(15) days after the Company receives Executive’s request for reimbursement,
along with satisfactory written substantiation of the claimed expenses.

 

6.             Successors:  This
Agreement will apply to Executive, as well as his/her heirs, agents, executors
and administrators.  The Agreement also
will apply to, and inure to the benefit of, the predecessors, successors and
assigns of the Company and its respective current and former subsidiaries,
parents, affiliates, joint ventures, officers, directors, employees, partners,
owners, attorneys and agents.

 

7.             Severability:  The
parties explicitly acknowledge and agree that the provisions of this Agreement
are both reasonable and enforceable. 
However, the provisions of this Agreement are severable, and the
invalidity of any one or more provisions will not affect or limit the
enforceability of the remaining provisions. 
If any provision of this Agreement is held unenforceable for any reason,
then such provision will be enforced to the maximum extent permitted by law.

 

8.             No Admission: 
Executive acknowledges that neither the Company’s execution of this
Agreement nor the Company’s performance of its terms shall constitute an
admission by the Company of any wrongdoing by it or any of the other Company
Releasees with respect to Executive in connection with any matter.

 

9.             Applicable Law: 
This Agreement will be interpreted, enforced and governed under the laws
of the State of Georgia.

 

10.           Jurisdiction:  Any
action brought by or on behalf of Executive, his/her agents, heirs,
administrators, or executors against any of the Company Releasees relating to
or arising from this Agreement or Executive’s employment with or separation
from the Company will be maintained in a court in Atlanta, Georgia.

 

B-3

 

11.           Complete Agreement: 
Executive represents and acknowledges that in executing this Agreement
he/she does not rely upon and has not relied upon any representations or
statements not set forth herein made by the Company or any of the other Company
Releasees with regard to the subject matter, basis or effect of this Agreement
or otherwise.  It is mutually understood
and agreed that this Agreement constitutes the entire understanding between the
Company and Executive relating to the subject matter hereof.

 

The parties have each
executed this Agreement on the dates indicated below.

 

PLEASE READ
CAREFULLY.  THIS AGREEMENT IS A LEGAL
DOCUMENT AND INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING, BUT
NOT LIMITED, TO ALL CLAIMS AS REFERENCED ABOVE, TO THE FULLEST EXTENT PERMITTED
BY LAW.

 

BY SIGNING
THIS AGREEMENT, EXECUTIVE ACKNOWLEDGES AND AFFIRMS THAT HE/SHE IS COMPETENT,
THAT HE/SHE HAS BEEN AFFORDED TWENTY-ONE (21) DAYS TO REVIEW AND CONSIDER THIS
AGREEMENT WITH AN ATTORNEY OF HIS/HER CHOICE AND HAS SEVEN (7) DAYS TO
REVOKE HIS/HER SIGNATURE, THAT HE/SHE HAS READ AND UNDERSTANDS AND ACCEPTS THIS
DOCUMENT AS FULLY AND FINALLY WAIVING AND RELEASING ANY AND ALL CLAIMS,
DEMANDS, DISPUTES AND ANY DIFFERENCES OF ANY KIND WHATSOEVER WHICH HE/SHE
MAY HAVE HAD, NOW HAS OR IN THE FUTURE MAY HAVE AGAINST THE COMPANY
OR ANY OF THE OTHER COMPANY RELEASEES ARISING OUT OF OR RELATING TO HIS/HER
EMPLOYMENT WITH THE COMPANY, HIS/HER COMPENSATION AND BENEFITS WITH THE COMPANY
AND/OR HIS/HER TERMINATION OF EMPLOYMENT WITH THE COMPANY UP TO AND INCLUDING
THE DATE OF THIS AGREEMENT, EXCLUDING CLAIMS THAT THE LAW DOES NOT PERMIT
EXECUTIVE TO WAIVE BY SIGNING THIS AGREEMENT, AND HE/SHE  FURTHER ACKNOWLEDGES AND AFFIRMS THAT NO
REPRESENTATIONS, PROMISES OR INDUCEMENTS HAVE BEEN MADE TO HIM/HER EXCEPT AS
SET FORTH IN THIS AGREEMENT, THAT HE/SHE 
HAS SIGNED THIS AGREEMENT FREELY AND VOLUNTARILY INTENDING TO BE LEGALLY
BOUND 

 

B-4

 

BY ITS
TERMS, AND THAT HE/SHE HAS DONE SO WITH FULL UNDERSTANDING OF ITS BINDING LEGAL
CONSEQUENCES.

 

B-5

 

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

 

 

	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  

 

B-6

 

WAIVER OF TWENTY-ONE (21) DAY REVIEW PERIOD

 

I acknowledge that in
connection with the foregoing Waiver and Release Agreement (the “Agreement”) between Sciele
Pharma, Inc. (“Company”) and
me, [Name of Executive], the Company has advised me that pursuant to the Older
Workers Benefit Protection Act, I have twenty-one (21) days to review the
Agreement before I execute it and return it to the Company.

 

I hereby waive my right to
this twenty-one (21) day review period and wish to execute the Agreement prior
to the conclusion of this twenty-one (21) day period.  However, I understand that I have seven
(7) days to revoke this waiver should I change my mind.  I further understand that the Agreement shall
not be binding on the Company or me until seven (7) days after I sign the
Agreement.

 

 

	
  BY:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
  [Name
  of Executive]

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACKNOWLEDGED THIS
         DAY OF
                                     ,
  20       .

  
	
   

  	
   

  
	
   

  	
   

  
	
  SCIELE PHARMA, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  	
   

  
									

 

B-7Exhibit
10.3

 

AMENDED
AND RESTATED

EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of
the first day of September, 2008, by and between Sciele Pharma, Inc., a Delaware corporation (the “Company”), and Darrell Borne (“Executive”), and shall become effective as
of the Effective Date (as defined below).

 

WITNESSETH:

 

WHEREAS, Executive is currently serving as Executive
Vice President and Chief Financial Officer of the Company pursuant to that certain
Amended and Restated Employment Agreement, dated as of December 26, 2007,
by and between the Company and Executive (the “Existing
Employment Agreement”);

 

WHEREAS, contemporaneously herewith, the Company has
entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Shionogi & Co. Ltd. (“Parent”) and Tall Bridge, Inc. (“Merger  Sub”),
contemplating the acquisition by Parent and Merger Sub of the Company,
including the merger of the Company with and into Merger Sub, with the Company
as the surviving corporation;

 

WHEREAS, the parties desire to amend and restate the
terms and conditions of employment between the Company and Executive, to be
effective upon, and subject to, the consummation of the merger of the Company
and Merger Sub, as contemplated by the Merger Agreement (the “Merger”); and

 

WHEREAS, effective as of the Effective Date (provided that Executive is employed with
the Company as of the Effective Date), this Agreement shall supersede the
Existing Employment Agreement.

 

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 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 commence upon
consummation of the Merger (the “Effective
Date”) and shall continue until December 31, 2012, unless
sooner terminated as a result of Executive’s death or in accordance with the
provisions of Section 6 below (the “Initial

 

1

 

Term”).  At the
conclusion of the Initial Term, this Agreement shall automatically renew for
successive one-year periods (each, a “Renewal
Term”, and collectively with the
Initial Term, the “Term”) unless
notice is provided by either party of its or his intent not to renew this
Agreement at least ninety (90) days prior to the conclusion of the Initial Term
or any Renewal Term.  Any election by the
Company not to renew this Agreement at the conclusion of the Initial Term or
any Renewal Term shall be deemed a termination without Cause (as defined in
Section 6(c) below) by the Company pursuant to
Section 6(a)(iii) below for all purposes of this Agreement, and any
election by Executive not to renew this Agreement at the conclusion of the
Initial Term or any Renewal Term shall be deemed a termination without Good
Reason (as defined in Section 6(d) below) by Executive pursuant to Section 6(b)(i) below
for all purposes of this Agreement.  In
the event that Executive’s employment with the Company terminates for any
reason prior to the Effective Date or the Merger does not occur for any reason,
this Agreement shall be void ab initio
without further action on the part of either party.

 

3.          Duties.
Throughout the Term, and except as otherwise expressly provided herein,
Executive shall be employed by the Company as the Executive Vice President and
Chief Financial Officer of the Company. 
Executive shall devote his full time to the performance of his duties as
Executive Vice President and Chief Financial Officer of the Company in
accordance with the Company’s bylaws, this Agreement and the directions of the
Company’s Board of Directors (the “Board”)
and, if applicable, 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 Executive Vice President and 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 base
salary (the “Salary”).  The Salary shall be paid in the same
increments as the Company’s normal payroll, but no less frequently than
bi-monthly and prorated, however, for any period of less than a full month.  The Salary for the remainder of calendar year
2008 will remain $297,000 per annum, the Salary for calendar year 2009 will be
$361,000 per annum, and the Salary for calendar year 2010 will be $425,000 per
annum.  Thereafter, the Salary will be
reviewed annually by the Board, commencing with calendar year 2011, and a
determination shall be made by the Board at that time as to the amount of the
increase thereto for the following calendar year; provided that Executive’s Salary with respect to any
calendar year during the Initial Term commencing with 2011 shall be not less
than four percent (4%) more than Executive’s prior year’s Salary.  Except as described in
Section 6(d) below, the Salary shall not be decreased during the Term
without the consent of Executive.

 

2

 

(b)         Annual
Bonus.

 

(i)                            Executive’s annual incentive compensation
bonus with respect to calendar year 2008 shall be paid in accordance with the
terms and conditions of the annual incentive compensation plan in which he participates
as of the date hereof, other than with respect to the amount payable under such
plan, which shall be guaranteed to be paid at target.

 

(ii)                         With respect to each calendar year during
the Term commencing with 2009, Executive shall be eligible to receive from the
Company an annual incentive compensation bonus (the “Annual Bonus”) in a target amount equal to a percentage of
the Salary for such year (the “Target Annual
Bonus”).  With respect to
calendar year 2009, (A) the Target Annual Bonus shall be an amount equal
to ninety percent (90%) of the Salary for calendar year 2009; and (B) the
performance criteria shall be mutually agreed upon following the date hereof
and prior to the Effective Date.  With
respect to calendar year 2010 and thereafter during the Term, the Target Annual
Bonus and performance criteria shall be determined by the Board in its sole
discretion; provided that
Executive’s Target Annual Bonus shall be not less than Executive’s prior year’s
Target Annual Bonus.

 

(iii)                      Except as described in
Section 6(d) below, the Target Annual Bonus shall not be decreased
during the Term without the consent of Executive.

 

(iv)                     Satisfaction of performance criteria,
which determination shall be made by the Board in its sole discretion,
(A) below eighty percent (80%) shall result in no payout of the Annual
Bonus; (B) at eighty percent (80%) shall result in a payout of the Annual
Bonus at sixty-five percent (65%) of the Target Annual Bonus; (C) above
eighty percent (80%) and at or below one hundred percent (100%) shall result in
a payout of the Annual Bonus in an amount equal to the Target Annual Bonus
multiplied by the Annual Bonus Medium Multiplication Factor, where the “Annual Bonus Medium Multiplication Factor”
equals the sum of sixty-five percent (65%) plus the product of one-and-three-quarters
percent (1.75%) multiplied by the number of percentage points above eighty
percent (80%) by which the performance criteria are satisfied; provided that the Annual Bonus Medium
Multiplication Factor shall not exceed one hundred percent (100%); and
(D) above one hundred percent (100%) shall result in a payout of the
Annual Bonus in an amount equal to the Target Annual Bonus multiplied by the
Annual Bonus High Multiplication Factor, where the “Annual Bonus High Multiplication Factor” equals the sum of
one hundred percent (100%) plus the product of five percent (5%) multiplied by
the number of percentage points above one hundred percent (100%) by which the
performance criteria are satisfied; provided
that the Annual Bonus High Multiplication Factor 

 

3

 

shall not exceed two
hundred percent (200%) (for example, if the performance criteria were satisfied
at a 92.3% level, then the Annual Bonus would be paid out at 86.525 of the
Target Annual Bonus and, if the performance criteria were satisfied at a 105.4%
level, then the applicable portion of the Annual Bonus would be paid out at
127% of the Target Annual Bonus).

 

(v)                        Subject to Section 7 below, the
Annual Bonus, if any, shall be paid to Executive not later than March 15
of the year following the calendar year with respect to which the Annual Bonus
was earned; provided that
Executive (x) is employed with the Company on December 31 of such
calendar year and (y) has not given or received a notice of termination of
employment without Good Reason or for Cause on or prior to such
December 31.

 

(c)          Long-Term
Incentive Compensation. On January 1 of each calendar year
during the Term commencing with 2009, Executive shall be eligible to receive
from the Company an award under the Company’s long-term incentive compensation
plan (such plan, the “LTIP” and
any such award, a “LTI Award”) in
a target amount equal to a fixed amount (the “Target
LTI”).

 

(i)                           With respect to calendar year 2009,
(A) the Target LTI shall be $914,100; and (B) the performance
criteria shall be mutually agreed upon following the date hereof and prior to
the Effective Date.  With respect to
calendar year 2010 and thereafter during the Term, the Target LTI and
performance criteria (which shall be based on earnings before interest, taxes,
depreciation and amortization (EBITDA)) shall be determined by the Board in its
sole discretion.

 

(ii)                        Except as described in
Section 6(d) below, from the end of the Initial Term, the Target LTI
shall not be decreased during the Term without the consent of Executive.

 

(iii)                     Satisfaction of performance criteria,
which determination shall be made by the Board in its sole discretion,
(A) below eighty percent (80%) shall result in no payout of the applicable
portion of the LTI Award; (B) at eighty percent (80%) shall result in a
payout of the applicable portion of the LTI Award at seventy percent (70%) of
the Target LTI; and (C) above eighty percent (80%) shall result in a
payout of the applicable portion of the LTI Award in an amount equal to the
Target LTI multiplied by the LTI Multiplication Factor, where the “LTI  Multiplication
Factor” equals the sum of seventy percent (70%) plus the product of
one-and-one-half percent (1.5%) multiplied by the number of percentage points
above eighty percent (80%) by which the performance criteria are satisfied; provided that the LTI Multiplication
Factor shall not exceed one hundred percent (100%) (for example, if the
performance criteria were satisfied at a 92.3% level, then the applicable
portion of the 

 

4

 

LTI Award would be paid
out at 88.45% of the Target LTI and, if the performance criteria were satisfied
at a 105.4% level, then the applicable portion of the LTI Award would be paid
out at 100% of the Target LTI).

 

(iv)       Each LTI Award shall vest as follows:
(A) twenty-five percent (25%) shall vest on December 31 of the
calendar year in which the grant date occurs and shall be paid out on the basis
of the satisfaction of performance criteria during such calendar year;
(B) twenty-five percent (25%) shall vest on December 31 of the first
calendar year following the year in which the grant date occurs and shall be
paid out on the basis of the satisfaction of performance criteria during such
first calendar year; (C) twenty-five percent (25%) shall vest on
December 31 of the second calendar year following the year in which the
grant date occurs and shall be paid out on the basis of the satisfaction of
performance criteria during such second calendar year; and (D) twenty-five
percent (25%) shall vest on December 31 of the second calendar year
following the year in which the grant date occurs and shall be paid out on the
basis of the cumulative satisfaction of performance criteria during the three
calendar years commencing with the year in which the grant date occurs.

 

(v)        Subject to Section 7 below, the
applicable portion of the LTI Award, if any, shall be paid to Executive as soon
as reasonably practicable following the applicable vesting date and, in any
event, not later than March 15 of the year following the calendar year
during which the LTI Award vested; provided
that Executive (x) is employed with the Company on the applicable vesting
date and (y) has not given or received a notice of termination of
employment without Good Reason or for Cause on or prior to such vesting date.

 

(d)         Total
Direct Compensation Opportunity. 
The sum of Executive’s Salary, Target Annual Bonus and Target LTI shall
be referred to as his “Total Direct Compensation
Opportunity”; it being understood
that Total Direct Compensation Opportunity shall not include any other
compensation, including, but not limited to, the Retention Bonus (as defined in
Section 4(e) below), and benefits. 
Executive’s Total Direct Compensation Opportunity with respect to any
calendar year during the Initial Term commencing with 2010 shall be not less
than four percent (4%) more than Executive’s prior year’s Total Direct
Compensation Opportunity.

 

(e)          Retention
Bonus.  On the Effective Date,
Executive shall be entitled to receive from the Company a retention bonus (the
“Retention Bonus”) in an
aggregate amount equal to $1,600,000. 
Subject to Section 7 below, the Retention Bonus shall vest and be
paid out in eight (8) equal semi-annual installments commencing with the
six (6) month anniversary of the Effective Date; provided that Executive (x) is
employed with the Company on the applicable vesting date and (y) has not
given or received a notice of termination of employment without Good Reason or
for Cause on or prior to such vesting date.

 

5

 

(f)          Taxes.  Any and all amounts payable pursuant to this
Agreement shall be less any and all applicable federal, state and local payroll
and withholding taxes.

 

(g)         Board.  If Executive is a member of the Board, he
shall recuse himself from any discussions and decision-making relating to his
compensation, benefits and performance; provided
that he shall be permitted to participate in such discussions (but not any
decision-making) at the invitation of the Board.

 

(h)         Post-December 31,
2008 Effective Date.  The
parties acknowledge their expectation that the Effective Date shall occur on or
before December 31, 2008.  However,
if the Effective Date occurs after December 31, 2008, then the parties
shall, in good faith, make appropriate changes to this Agreement to reflect
such delay.

 

5.     Benefits and Other Rights.

 

(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, which in
all cases will be made no later than sixty (60) days after Executive incurs the
expense, 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)         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. 
In addition, Executive and his eligible dependents shall be eligible to
participate in all other employee benefit programs applicable to the Company’s
senior executives generally (including, but not limited to, those set forth on Exhibit A
attached hereto, during the period of eighteen (18) months following the
Effective Time, to the extent that Executive is eligible to participate in the
programs described therein as of the date hereof).

 

(c)          During the Term, Executive shall be
entitled to an aggregate of thirty-five (35) days of paid time off (i.e., paid vacation and paid personal
days) and eight (8) days of federal holidays.  Unused paid time off shall not be carried
over from one year to the next.

 

6.     Termination of the
Agreement.

 

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

 

(i)         Executive shall die;

 

6

 

(ii)        With Cause, effective at any time upon
written notice to Executive by the Company; or

 

(iii)       Without Cause, effective at any time upon
written notice to Executive by the Company.

 

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

 

(i)         Without Good Reason, at any time upon
not less than sixty (60) days’ prior written notice to the Company; or

 

(ii)        For Good Reason, effective at any time
upon written notice to the Company by Executive.

 

(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 dishonest acts against the Company;

 

(iii)       Executive commits an act which negatively
and not insignificantly 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 or, if applicable, supervising officers.

 

(d)         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 ninety (90) days after the later of (x) the occurrence of
such event or (y) when Executive should have reasonably become aware of
such occurrence, unless 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 Executive as an
executive-level officer of the Company;

 

7

 

(iii)       A material diminution in Executive’s
duties; or assignment to him of duties that are materially inconsistent with
his duties or materially impair his ability to function as Executive Vice
President and Chief Financial Officer; it
being understood that, effective as of the Effective Time,
(A) a change in or assignment of duties attributable to the Company not
being a public company, (B) Executive not being a member of the Board and
(C) Executive reporting to Parent or an affiliate of Parent shall not
constitute Good Reason;

 

(iv)       The requirement by the Company that
Executive relocate his primary location of the performance of his services
under this Agreement outside of the metropolitan Atlanta, Georgia area; it being understood that overnight or
short-term business travel in connection with the performance of Executive’s
services under this Agreement shall not constitute Good Reason; or

 

(v)        The reduction in Executive’s Total
Direct Compensation Opportunity below the amounts contemplated by Section 4
above; it being understood that
(A) such a reduction as part of a broad-based and significant reduction of
compensation generally of employees and senior executives of Parent’s U.S.
operations, as discussed and agreed upon in good faith with Executive, and
(B) a change to the terms and conditions of the LTIP following
December 31, 2012 (provided
that the overall value of the LTIP remains substantially the same) shall not
constitute Good Reason.

 

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

 

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

 

(b)         Executive shall 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 paid for such time (at an hourly
rate commensurate with a pro rata portion of his Salary) as if his employment
were not terminated and shall be reimbursed for all out-of-pocket expenses.

 

(c)          Executive shall deliver to the Company
possession of any and all property owned or leased by the Company which may
then be in Executive’s 

 

8

 

possession or under his
control, including, but not limited to, 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, the Company shall cease all other benefits and/or entitlements
to participate in programs or benefits, if any, as of the effective date of
termination, 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’s
employment on account of Executive’s death pursuant to Section 6(a)(i) above,
the Company shall pay to Executive’s estate a lump sum amount (the “Death Payment”) equal to the sum of
(i) one year’s Salary as then in effect; (ii) the Annual Bonus with
respect to the calendar year during which such death occurs, at target,
prorated to reflect the number of days during such calendar year during which
Executive was employed; (iii) the portion of any outstanding LTI Award
that would have otherwise vested during the performance period in which such
death occurs, at target, prorated to reflect the number of days during such
calendar year during which Executive was employed (for the avoidance of doubt,
in the case of an annual performance period, one (1) year, and, in the
case of a three (3) cumulative performance period, three (3) years);
(iv) any outstanding Retention Bonus that would have otherwise vested
during the semi-annual period in which such death occurs, prorated to reflect
the number of days during such period during which Executive was employed;
(v) any accrued but unpaid Salary through the date of such death;
(vi) any accrued but unused paid time off through the date of such death;
and (vii) any unpaid Annual Bonus, LTI Award or Retention Bonus, in each
case that was earned or vested prior to the date of such death.  The Death Payment shall be paid to Executive
not later than thirty (30) days after such death occurs.

 

(f)          Upon termination of Executive’s
employment pursuant to Section 6(a)(ii) above with Cause,
Section 6(b)(i) above without Good Reason or Section 2 above on
account of Executive’s non-renewal of this Agreement, the Company shall pay
Executive any accrued but unpaid Salary through the date of such termination
and any accrued but unused paid time off through the date of such termination.

 

(g)         Upon termination of Executive’s
employment pursuant to Section 6(a)(iii) above without Cause or
Section 6(b)(ii) above for Good Reason or Section 2 above on account
of the Company’s non-renewal of this Agreement, the Company shall provide
Executive with the following payments and benefits (the “Severance”):

 

9

 

(i)         payments
made in equal consecutive installments in accordance with
the Company’s regular payroll practices during the twelve (12) months following such
termination in an aggregate amount equal to the sum of (A) two (2) times
the Salary at the highest annual rate in effect during the Term; (B) two (2) times
(x) the Annual Bonus, if any, earned by Executive for the calendar year
immediately preceding such termination or (y) if Executive was not
eligible to earn an Annual Bonus with respect to such year, the Target Annual
Bonus; plus (C) the balance of all outstanding unvested LTI Awards, at
target, and any outstanding unvested Retention Bonus;

 

(ii)        payment
of any unpaid Annual Bonus, LTI Award or
Retention Bonus, in each case that was earned or vested prior to the date of
such termination; and

 

(iii)       Company-paid COBRA coverage for Executive and his eligible
dependents which shall be substantially equivalent to that provided by the
Company prior to termination of Executive’s employment, until the earlier of
(A) twenty-four (24) months after the date of such termination or (B) Executive’s
acceptance
of replacement coverage from a third-party employer.

 

The Company’s obligation to provide the
Severance is subject to Executive’s execution and non-revocation of a release
of claims against the Company and its affiliates in substantially
the form on Exhibit B attached hereto.  In addition, upon Executive’s breach of any
of the covenants set forth in Sections 8, 9 or 10 below, the Company’s obligation to
provide the Severance shall immediately cease.

 

In
addition, the Company shall pay Executive any accrued
but unpaid Salary through the date of such termination and any accrued but
unused paid time off through the date of such termination.  These accrued payments, together with the
payment described in Section 6(g)(ii) above, shall be paid to
Executive not later than thirty (30) days after the date of such termination.

 

(h)           For the avoidance of doubt, Executive
acknowledges
that, upon the effectiveness of this Agreement, he shall not have any right to
terminate his employment for Good Reason (for this Section 7(h) only,
as defined in the Existing Employment Agreement) and receive any payments and
benefits in connection therewith.

 

(i)            If the Company or the Company’s accountants determine
that any payment called for under this Agreement either alone or in conjunction
with any other payments or benefits made available to Executive by the Company
will result in Executive 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 payment or other payments and benefits, the Company shall make
a Gross-Up Payment (as defined

 

10

 

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 (x) any Excise Tax in full, (y) 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 (z) any interest or penalties assessed by the Internal Revenue
Service or any other applicable taxing authority 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 (including 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
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 an independent public accounting firm retained by the Company (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, with a copy to the
other party, 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”), which shall be binding upon the
Company and Executive.  All fees
and expenses of the Accounting Firm shall be borne solely by the Company and
the Company shall enter into any agreement reasonably requested by the
Accounting Firm in connection with the performance of the services hereunder.  The Gross-Up Payment under this
subsection (i) shall be made no later than sixty (60) days following such
payments; provided that the Gross-Up Payment shall
in all events be paid no later than the end of Executive’s taxable year next
following the Executive’s taxable year in which the Excise Tax (and any income
or other related taxes or interest or penalties thereon) on a payment
are remitted to the Internal Revenue Service or any other applicable taxing
authority.  As a result of any
uncertainty in the application of Section 4999 of the

 

11

 

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, 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, 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.  The Company’s obligation to provide
the Gross-Up Payment is subject to Executive’s execution and non-revocation of
a release of claims against the Company and its affiliates in substantially
the form on Exhibit B attached hereto.

 

(j)            Notwithstanding any other provision of this Agreement, if
at the time of termination of Executive’s employment he is a “specified
employee” (as defined in Section 409A of the Code) and any payment upon
such termination under this Section 7 will result in additional tax or
interest to Executive under Section 409A of the Code (including any
applicable related regulations (whether proposed, temporary or final), any
related Internal Revenue Service rulings and any related case law), he will not
be entitled to such payments until the earlier of (i) the date that is six
(6) months after such termination of employment or (ii) any earlier
date that does not result in any additional tax or interest to Executive under Section 409A
of the Code.  In addition, if any
provision of this Agreement would subject Executive to any additional tax or
interest under Section 409A of the Code, then the Company shall reform
such provision; provided that the Company shall (x) maintain,
to the maximum extent practicable, the original intent of the applicable
provision without subjecting Executive to such additional tax or interest and without
substantively reducing the amount payable under such provision and (y) not
incur any additional compensation expense as a result of such reformation.

 

8.          Confidentiality. Executive
hereby agrees that, other than in the ordinary course of performing his duties
for the Company, he shall not, directly or indirectly, at any time (whether
during or after termination of Executive’s employment with the Company for any
reason), intentionally or negligently divulge to any
person or entity other than the Company or any affiliate, without the Company’s
express written authorization, any information known to him to constitute trade
secrets or proprietary information belonging to the Company or any of its
affiliates, or other confidential financial information, operating budgets,
strategic plans, or research methods, projects or plans of the Company or any
of its affiliates, received or created by him in the course of his employment
by the Company or in connection with his duties with the Company

 

12

 

(“Confidential Information”). 
Anything herein to the contrary notwithstanding, the provisions of this Section 8
shall not apply (i) when disclosure is required by law or by any court,
arbitrator, mediator or administrative or legislative body (including any
committee thereof) with apparent jurisdiction to order Executive to disclose or
make accessible any information, (ii) with respect to any other
litigation, arbitration or mediation involving this Agreement, including, but
not limited to, the enforcement of this Agreement, or (iii) as to
Confidential Information that becomes generally known to the public or within
the relevant trade or industry other than due to Executive’s violation of this Section 8.

 

9.          Nonsolicitation.  During Executive’s employment with the
Company and for a period specified below following the
termination of Executive’s employment for any reason (the “Relevant Period”),
Executive shall not, directly or indirectly:

 

(a)           induce or attempt to induce any employee of the Company or
any of its affiliates to be employed or to perform services elsewhere;

 

(b)           hire any employee of the Company or of any of its
affiliates to be employed or to perform services elsewhere; provided that Executive may hire such employees if their
employment is terminated by the Company; or

 

(c)           solicit
or attempt to solicit the trade of any individual or entity which, at the time
of such solicitation, is a customer of the Company or any of its subsidiaries,
or which the Company or any of its subsidiaries is undertaking reasonable steps
to procure as a customer at the time of or immediately preceding termination of
employment; provided, however, that this limitation (i) shall
not
apply to any wholesalers and (ii) shall only apply to any product
or service which is in competition with a product or service of the Company or
any of its subsidiaries.

 

The Relevant Period shall be twenty-four (24)
months in the case of Sections 9(a) and 9(b) above and twelve (12)
months in the case of Section 9(c) above.

 

10.        Nondisparagement.  Executive will not at any time (whether
during or after termination of Executive’s employment with the Company for any
reason) knowingly make any statement, written or oral, or take any other action
that disparages or otherwise harms the Company, its business or reputation or
the reputation of any of its affiliates or the officers and directors of any of
them.

 

11.        Remedies.  The covenants of Sections 8, 9 and 10 below 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.

 

12.        Indemnification.

 

(a)           The Company shall indemnify Executive
and hold Executive harmless from and against any and all liabilities, suits,
claims, actions, causes of

 

13

 

action, judgments, settlements, debts and
expenses (including actually and reasonably incurred legal fees and costs) of
any kind whatsoever arising from and in connection with Executive’s
employment with the Company and its affiliates, other than any arising from Executive’s
willful or criminal misconduct or gross negligence (separately and
collectively, the “Indemnifiable Claims”) to the
fullest extent permitted by law.  The
Company shall control Executive’s defense against any such Indemnifiable
Claims, and Executive agrees to cooperate with the Company to mitigate
costs, expenses and other damages associated with such Indemnifiable Claims and to
cooperate fully in such defense.  The
Company agrees that, for purposes of this Section 12(a), it shall interpret
and/or apply any provision of applicable law (and, as applicable, the bylaws and/or
other organizational documents of the Company and its applicable affiliates)
with respect to Executive in a manner not less favorable than how such provision is
interpreted and applied by the Company to then active directors and officers of
the Company.

 

(b)           The Company shall, as of the
Effective Time, cause Executive to be covered under a prepaid
directors’ and officers’ liability insurance policy on terms and conditions no
less advantageous to such individuals than the Company’s directors’ and
officers’ liability insurance policy existing as of the date hereof (the “D&O Insurance”), during the Term and for a period of
not less than six (6) years after the termination of this Agreement, but
only to the extent related to actions or omissions of such officers and
directors in their capacities as such; provided, that
in no event shall the Surviving Corporation be required, in order to maintain or procure
insurance coverage pursuant hereto, to (i) expend more than $20,000
for the
“tail” portion of such insurance or (ii) pay annual premiums for the
non-”tail” portion of such insurance that are materially greater than for
comparable coverage obtained by comparable companies on the date hereof,
subject to reasonable increase from time to time  (collectively, the “Maximum Amount”); provided, further,
that if the amount of the annual premiums necessary to maintain or procure such
insurance coverage exceeds the Maximum Amount, the Surviving Corporation shall
procure and maintain during the Term and for such six (6) year
period as much coverage as is available for the Maximum Amount.  The Company shall have the right to
cause coverage to be extended under the D&O Insurance by obtaining
a “tail” policy on terms and conditions no less advantageous to such former
directors or officers than the D&O Insurance, and such “tail” policy shall
satisfy the provisions of this Section 12(b).

 

(c)           Nothing in this Agreement shall operate to limit or
extinguish any right to indemnification, advancement of expenses, or
contribution that Executive would otherwise have, including, but not limited
to, by agreement or under applicable law.

 

13.        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 shall be entitled to recover reasonable attorney’s
fees, court costs and all

 

14

 

expenses, even
if not taxable as court costs (including, but not limited to, 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 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.

 

14.        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.

 

For notices sent to the Company:

 

Sciele Pharma, Inc.

Five Concourse Parkway, Suite 1800

Atlanta, Georgia 30328

Attn: General Counsel

Facsimile: (678) 992-1043

 

For notices sent to Executive:

 

Darrell Borne

561 Gramercy Drive

Marietta, GA 30068

 

Either party may amend the addresses for
notices to such party hereunder by delivery of a written notice thereof
served upon the other party 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.

 

15.        Entire Agreement.
This Agreement sets forth the entire agreement of the parties hereto with
respect to the subject matter hereof, and specifically supersedes any other
agreement or understanding among the parties hereto related to the subject
matter hereof, including, but not limited to, as of the Effective Date, the
Existing Employment Agreement and any other agreement covering the subject
matter hereof (including, but not limited to, indemnification and directors’ and officer’s
insurance).  This Agreement may not be
modified or revised except pursuant to a written instrument signed by the party
against whom enforcement is sought.

 

16.        Severability.
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining

 

15

 

provisions or
portions of this Agreement shall be unaffected thereby and shall remain in full
force and effect to the fullest extent permitted by law.

 

17.        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.

 

18.        Arbitration.
Any claims, disputes or controversies arising out of or relating to this
Agreement between the parties 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 (7) 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 (10) 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.

 

19.        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 18 above,
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.

 

20.        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.

 

[Signatures on Next Page]

 

16

 

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

 

 

	
   

  	
    EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/ Darrell
  Borne

  
	
   

  	
    Name: Darrell
  Borne

  
	
   

  	
   

  
	
   

  	
    COMPANY:

  
	
   

  	
   

  
	
   

  	
    SCIELE PHARMA,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    By:

  	
    /s/ Patrick P.
  Fourteau

  
	
   

  	
    Name: Patrick
  P. Fourteau

  

 

17

 

Exhibit A

Benefits

 

	
  Executive Supplemental Life Insurance

  	
   

  	
  $500,000 policy; builds projected cash value to cover premiums on a
  $250,000 policy at age 55 or in four (4) years if over 55.

  
	
   

  	
   

  	
   

  
	
  Executive Supplemental Disability Coverage

  	
   

  	
  Individual, portable disability policy targeted to provide
  approximately 66 2/3% of pay combined with Group LTD policy. Policy amounts
  are reviewed every two (2) years.

  
	
   

  	
   

  	
   

  
	
  Annual Executive Physical

  	
   

  	
  Provided through Emory University’s Executive Healthcare System.

  
	
   

  	
   

  	
   

  
	
  Financial Planning

  	
   

  	
  Financial planning and tax preparation assistance provided through a
  local Atlanta firm.

  
	
   

  	
   

  	
   

  
	
  Company
  Executive Deferred Compensation Plan

  	
   

  	
  Allows deferral of up to 75% of salary and up to 100% of annual
  and long-term incentive awards.

  

 

A-1

 

Exhibit B

 

WAIVER AND RELEASE AGREEMENT

 

This Waiver
and Release Agreement (this “Agreement”) is
made and entered into as of the
         day of
                    ,
20    , by and between Sciele Pharma, Inc., a Delaware
corporation (the “Company”), and                         
(“Executive”).

 

1.                                      Release:  Executive, for himself/herself, his/her
heirs, agents, executors and administrators, hereby releases and discharges the
Company and its current and former subsidiaries, parents, affiliates, joint
ventures, officers, directors, employees, partners, owners, attorneys and
agents (collectively, the “Company Releasees”)
from all debts, obligations, promises, covenants, collective bargaining
obligations, agreements, contracts, endorsements, bonds, controversies, suits
or causes of actions known or unknown, suspected or unsuspected, of every kind
and nature whatsoever, which may heretofore have existed or which may now
exist, including, but not limited, to those arising under the Age
Discrimination in Employment Act, as modified by the Older Workers Benefit
Protection Act, Title VII of the Civil Rights Act of 1964, as amended,
42 U.S.C. Section 2000e et seq., the
Worker Adjustment Retraining and Notification Act, 29 U.S.C. Section 2101,
et seq., the Employee Retirement Income
Security Act of 1974, as amended, 29 U.S.C. Section 1001 et seq., the Americans with Disabilities Act, as amended,
42 U.S.C. Section 12101 et seq., the
Reconstruction Era Civil Rights Act, as amended, 42 U.S.C. Section 1981
et seq., the Rehabilitation Act of 1973,
as amended, 29 U.S.C. Section 701 et seq., the
Family and Medical Leave Act of 1992, 29 U.S.C. Section 2601 et seq., and any and all state or local laws regarding
employment discrimination and/or federal, state or local laws of any type or
description regarding employment, as well as any claim for breach of contract,
wrongful discharge, breach of any express or implied promise,
misrepresentation, fraud, retaliation, violation of public policy, infliction
of emotional distress, defamation, promissory estoppel, invasion of privacy or
any other theory or claim, whether legal or equitable, including, but not
limited to, any claims arising from or derivative of Executive’s employment
with the Company and Executive’s termination of employment with the Company or
otherwise.  This release is for any and
all relief, without regard to its form or characterization.  Executive acknowledges that he/she has not
been discriminated against on the basis of age, sex, handicap, race, ethnicity,
religion or any other protected class status.

 

THIS MEANS THAT BY SIGNING THIS AGREEMENT,
EXECUTIVE WILL HAVE WAIVED ANY RIGHT HE/SHE MAY HAVE TO BRING A LAWSUIT OR MAKE
ANY CLAIM OF ANY KIND WHATSOEVER AGAINST ANY OF THE COMPANY RELEASEES BASED ON
ANY ACTIONS OR OMISSIONS

 

B-1

 

OF ANY OF THE COMPANY RELEASEES ON OR PRIOR
TO THE DATE OF SIGNING THIS AGREEMENT.

 

2.                                       Covenant Not to Sue:  Executive understands and agrees that, to the
fullest extent permitted by law, Executive is precluded from filing or pursuing
any legal claim of any kind against any of the Company Releasees at any time in
the future, in any federal, state or municipal court, administrative agency or
other tribunal, arising out of any of the claims that Executive has released
and waived by virtue of executing this Agreement.  Executive agrees not to file or pursue any
such legal claims.  Excluded from this
release and covenant not to sue is any right or claim that cannot be waived by
law, including, but
not limited to, (a) any
rights or claims of the Executive that arise after this Agreement becomes
effective; (b) any vested rights under any tax-qualified and/or retirement
plan(s) maintained by the Company or its affiliates; (c) any rights
under any indemnification agreement(s) between the Executive and the
Company, any rights to and claims for indemnification or as an insured under
any directors’ and officers’ liability insurance policy in connection with the
Executive’s service as a director, officer, employee or agent of the Company or
any of its subsidiaries or affiliates, under their respective certificates of
incorporation and bylaws, or otherwise as provided by law; (d) Executive’s
right to participate in an investigation conducted by any government agency; (e) the
independent right and responsibility of the Equal Employment Opportunity
Commission (the “EEOC”) to enforce the law; (f) Executive’s
right to seek a determination of the validity of whether his/her waiver of
his/her rights under the ADEA was voluntary and knowing; (g) Executive’s
right to enforce this Agreement and (h) Executive’s right to receive
payments and benefits under Sections 7(g), 7(i), 12 and 13 of his/her Amended
and Restated Employment Agreement dated as of August     ,
2008.  Executive understands, however, that, while
this Agreement does not affect his/her right to file a charge or participate in
an investigation or proceeding conducted by the EEOC or any other federal,
state or local court or agency, it does bar any claim he/she might have to
receive monetary damages should any agency pursue any claims on Executive’s
behalf.

 

3.                                       Knowledge
and Understanding:   Executive acknowledges that:

 

(a)                    he/she has been advised in writing
(by this Agreement) to consult with an attorney prior to executing this
Agreement;

 

(b)                   he/she has been given a period of
twenty-one (21) days to consider this Agreement and, if he/she elects to sign
it before that time, acknowledges that he/she has done so voluntarily; and

 

(d)                   he/she is fully aware of his/her
rights and has carefully read and has fully come to understand all provisions
of this Agreement before signing.

 

B-2

 

4.             Effective Date:  Executive will have seven (7) days after
signing this Agreement to revoke it.  Any
revocation will be in writing and addressed to [Name and
Address].  This Agreement will
not become effective until the earliest date after (a) both parties have
executed this Agreement and (b) Executive’s seven (7) day revocation
period has passed without revocation.

 

5.             Reasonable Cooperation:  Executive agrees to make himself/herself
reasonably available and to cooperate with the Company and its affiliates and
their respective counsel in connection with any investigation, administrative
proceeding or litigation relating to any matter in which he/she was involved or
of which he/she has knowledge as a result of his/her employment with the
Company.  The Company shall reimburse the
Executive for reasonable expenses (including, but not limited to, lost wages,
transportation costs, and postage or telephone charges) that the Executive
incurs in assisting the Company or any affiliate pursuant to this Section 5
within fifteen (15) days after the Company receives Executive’s request for
reimbursement, along with satisfactory written substantiation of the claimed
expenses.

 

6.             Successors:  This Agreement will apply to Executive, as
well as his/her heirs, agents, executors and administrators.  The Agreement also will apply to, and inure
to the benefit of, the predecessors, successors and assigns of the Company and
its respective current and former subsidiaries, parents, affiliates, joint ventures,
officers, directors, employees, partners, owners, attorneys and agents.

 

7.             Severability:  The parties explicitly acknowledge and agree
that the provisions of this Agreement are both reasonable and enforceable.  However, the provisions of this Agreement are
severable, and the invalidity of any one or more provisions will not affect or
limit the enforceability of the remaining provisions.  If any provision of this Agreement is held
unenforceable for any reason, then such provision will be enforced to the
maximum extent permitted by law.

 

8.             No
Admission:  Executive
acknowledges that neither the Company’s execution of this Agreement nor the
Company’s performance of its terms shall constitute an admission by the Company
of any wrongdoing by it or any of the other Company Releasees with respect to
Executive in connection with any matter.

 

9.             Applicable Law:  This Agreement will be interpreted, enforced
and governed under the laws of the State of Georgia.

 

10.           Jurisdiction:  Any action brought by or on behalf of
Executive, his/her agents, heirs, administrators, or executors against any of
the Company Releasees relating to or arising from this Agreement or Executive’s
employment with or separation from the Company will be maintained in a court in
Atlanta, Georgia.

 

B-3

 

11.           Complete Agreement:  Executive represents and acknowledges that in
executing this Agreement he/she does not rely upon and has not relied upon any
representations or statements not set forth herein made by the Company or any
of the other Company Releasees with regard to the subject matter, basis or
effect of this Agreement or otherwise. 
It is mutually understood and agreed that this Agreement constitutes the
entire understanding between the Company and Executive relating to the subject
matter hereof.

 

The parties have each executed this Agreement
on the dates indicated below.

 

PLEASE READ CAREFULLY.  THIS AGREEMENT IS A LEGAL DOCUMENT AND
INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING, BUT NOT LIMITED,
TO ALL CLAIMS AS REFERENCED ABOVE, TO THE FULLEST EXTENT PERMITTED BY LAW.

 

 

BY SIGNING THIS AGREEMENT, EXECUTIVE
ACKNOWLEDGES AND AFFIRMS THAT HE/SHE IS COMPETENT, THAT HE/SHE HAS BEEN
AFFORDED TWENTY-ONE (21) DAYS TO REVIEW AND CONSIDER THIS AGREEMENT WITH AN
ATTORNEY OF HIS/HER CHOICE AND HAS SEVEN (7) DAYS TO REVOKE HIS/HER
SIGNATURE, THAT HE/SHE HAS READ AND UNDERSTANDS AND ACCEPTS THIS DOCUMENT AS
FULLY AND FINALLY WAIVING AND RELEASING ANY AND ALL CLAIMS, DEMANDS, DISPUTES
AND ANY DIFFERENCES OF ANY KIND WHATSOEVER WHICH HE/SHE MAY HAVE HAD, NOW
HAS OR IN THE FUTURE MAY HAVE AGAINST THE COMPANY OR ANY OF THE OTHER
COMPANY RELEASEES ARISING OUT OF OR RELATING TO HIS/HER EMPLOYMENT WITH THE
COMPANY, HIS/HER COMPENSATION AND BENEFITS WITH THE COMPANY AND/OR HIS/HER
TERMINATION OF EMPLOYMENT WITH THE COMPANY UP TO AND INCLUDING THE DATE OF THIS
AGREEMENT, EXCLUDING CLAIMS THAT THE LAW DOES NOT PERMIT EXECUTIVE TO WAIVE BY
SIGNING THIS AGREEMENT, AND HE/SHE 
FURTHER ACKNOWLEDGES AND AFFIRMS THAT NO REPRESENTATIONS, PROMISES OR
INDUCEMENTS HAVE BEEN MADE TO HIM/HER EXCEPT AS SET FORTH IN THIS AGREEMENT,
THAT HE/SHE  HAS SIGNED THIS AGREEMENT
FREELY AND VOLUNTARILY INTENDING TO BE LEGALLY BOUND

 

B-4

 

BY ITS TERMS, AND THAT HE/SHE HAS DONE SO
WITH FULL UNDERSTANDING OF ITS BINDING LEGAL CONSEQUENCES.

 

B-5

 

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

 

 

	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  

 

B-6

 

WAIVER OF TWENTY-ONE
(21) DAY REVIEW PERIOD

 

I acknowledge that in connection with the foregoing Waiver and Release
Agreement (the “Agreement”) between Sciele Pharma, Inc.
(“Company”) and me, [Name of Executive],
the Company has advised me that pursuant to the Older Workers Benefit
Protection Act, I have twenty-one (21) days to review the
Agreement before I execute it and return it to the Company.

 

I hereby waive my right to this twenty-one
(21) day review period and wish to execute the Agreement prior to the
conclusion of this twenty-one (21) day period. 
However, I understand that I have seven (7) days to revoke this
waiver should I change my mind.  I
further understand that the Agreement shall not be binding on the Company or me
until seven (7) days after I sign the Agreement.

 

 

	
  BY:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
  [Name
  of Executive]

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACKNOWLEDGED THIS
         DAY OF
                                              ,
  20       .

  
	
   

  	
   

  
	
   

  	
   

  
	
  SCIELE PHARMA, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  	
   

  
								

 

B-7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]