Document:

Exhibit
10.1

 

EMPLOYMENT
AGREEMENT

 

This EMPLOYMENT AGREEMENT
(the “Agreement”) is made and entered into as of the 26th
day of April 2006, by and between FIRST
HORIZON PHARMACEUTICAL CORPORATION, a Delaware corporation (the “Company”), and
LARRY M. DILLAHA (“Executive”).

 

WITNESSETH:

 

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

 

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

 

2.               Term of Employment.    The
term of Executive’s employment by the Company hereunder shall continue
thereafter unless sooner terminated as a result of Executive’s death or in
accordance with the provisions of Section 7 below (the “Term”).

 

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 Medical Officer of the Company. Executive shall
devote his full time to the performance of his duties as Executive Vice
President and Chief Medical Officer of the Company in accordance with the
Company’s By-laws, this Agreement and the directions of the Company’s Board of
Directors and any executive officer of the Company who is senior to Executive.
Without limiting the generality of the foregoing, throughout the Term Executive
shall faithfully perform his duties as Executive Vice President and Chief Medical
Officer at all times so as to promote the best interests of the Company.

 

4.               Compensation.

 

(a)                                                          Salary.    For any and
all services performed by Executive under this Agreement during the Term, in
whatever capacity, the Company shall pay to Executive an annual salary of Two
Hundred Thousand Dollars ($200,000.00) per year (the “Salary”) less any and all
applicable federal, state and local payroll and withholding taxes. The Salary
shall be paid in the same increments as the Company’s normal payroll, but no
less frequent than bi-monthly and prorated, however, for any period of less
than a full month. The Salary will be reviewed annually by the Compensation
Committee of the Board of Directors and a determination shall be made at that
time as to the appropriateness of an increase, if any, thereto.

 

(b)                                                         Bonus.    In
addition to the Salary, Executive shall be eligible to receive from the Company
an incentive compensation bonus (the “Bonus”) of up

 

 

to
fifty percent (50%) of Executive’s Base Salary. The Bonus, if any, shall be determined
based on such criteria as shall be determined from time to time by the
Compensation Committee of the Board of Directors. The nature of the criteria
and the determination as to whether the criteria have been satisfied shall be
determined by the Compensation Committee of the Board of Directors in its sole
discretion. Accordingly, there is no assurance that a Bonus will be paid to
Executive with respect to all or any particular year during the Term.

 

5.               Restricted Stock Award. Subject to
approval by the Board of Directors (or an appropriate Committee appointed by
the Board of Directors) and your execution of a formal restricted stock award
agreement, First Horizon Pharmaceutical will grant you 4,000 shares of
restricted Company stock on the commencement date of your employment. Stock
price shall be the average stock trading price on the date Executive’s
employment commences. Such restricted stock award shall vest ratably over a
four (4) year period commencing from the date of the restricted stock award. The
first vesting period shall occur one (1) year from the date of the restricted
stock award. Both stock price and vesting schedule shall be specifically set
forth in the restricted stock option agreement to be executed by Executive and
the Company.

 

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

 

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

 

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

 

(c)                                                          During
the Term the Executive shall be entitled to twenty (20) days paid
vacation, it being understood and agreed that unused vacation shall not be
carried over from one year to the next. In addition, Executive shall be
entitled to eight (8) paid holidays and four (4) paid personal days
off.

 

7.              Termination of the Term.

 

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

 

(i)                                     Executive
shall die;

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)                                     The
acquisition (other than by a direct purchase of shares from the Company) by any
“person,” including a “syndication” or “group”, as those terms are used in
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (other than any such person currently owning in excess of the following
amount), of securities representing 20% or more of the combined voting power of
the Company’s then outstanding voting securities, which is any security that
ordinarily possesses the power to vote in the election of the Board of
Directors of a corporation without the happening of any precondition or
contingency;

 

(ii)                                  The
Company is merged or consolidated with another corporation and immediately
after giving effect to the merger or consolidation less than 80% of the
outstanding voting securities of the surviving or resulting entity are then
beneficially owned in the aggregate by (x) the stockholders of the Company
immediately prior to such merger or consolidation, or (y) if a record date
has been set to determine the stockholders of the Company entitled to vote on
such merger or consolidation, the stockholders of the Company as of such record
date;

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)                                                          Deliver
to the Company possession of any and all property owned or leased by the
Company which may then be in Executive’s possession or under his control,
including, without limitation, any and all such keys, credit cards,
automobiles, equipment, supplies, books, records, files, computer equipment,
computer software and other such tangible and intangible property of any
description whatsoever. If, following the expiration or termination of the
Term, Executive shall receive any mail addressed to the Company, then Executive shall immediately deliver

 

 

such
mail, unopened and in its original envelope or package, to the Company.

 

(d)                                                         Other
than as provided in this Section 8, upon a termination of employment all
other benefits and/or entitlements to participate in programs or benefits, if
any, will cease as of the effective date except medical insurance coverage that
may be continued at Executive’s own expense as provided by applicable law or
written Company policy.

 

(e)                                                          Upon
termination of Executive pursuant to § 7(a)(i) or § 7(a)(ii) without
Cause following the six (6) month anniversary of the Effective Date, the
Company shall: (i) provide Executive with Salary continuance, subject to §
8(h) for six (6) months (a “Salary Continuance”) at the rate in effect
immediately prior to termination, plus (ii) a lump sum payment equal to Fifty
Percent (50%) of the Bonus, if any, paid to Executive for the calendar year
immediately preceding termination, plus (iii) provide six (6) months
of COBRA coverage for Executive which shall be substantially equivalent to that
provided by the Company prior to termination, plus (iv) the Executive’s
then unvested options and stock awards previously issued pursuant to the
Company’s stock option and other equity incentive plans shall immediately vest
and be exercisable as provided for in the First Horizon Pharmaceutical
Corporation Accelerated Vesting Plan, dated January 24, 2006. In the event of
termination of Executive’s employment prior to the six (6) month
anniversary of the Effective Date, Executive shall not be entitled to any
severance from the Company.

 

(f)                                                            Upon
termination of Executive pursuant to § 7(a)(ii) with
Cause or § 7(b)(i), the Company shall pay Executive or Executive’s estate all
Salary accrued but unpaid as of the date of such termination.

 

(g)                                                         Upon
termination of Executive pursuant to § 7(a)(iii) or § 7(b)(ii), the
Company shall: (i) provide Executive with Salary continuance for twelve
(12) months at the rate in effect immediately prior to termination, plus
(ii) a lump sum payment equal to One Hundred Percent (100%) of the Bonus,
if any, paid to Executive for the calendar year immediately preceding
termination, plus (iii) provide COBRA coverage for Executive which shall
be substantially equivalent to that provided by the Company prior to
termination until the earlier of (A) twelve (12) months after the
date of termination, (B) the availability of replacement coverage to
Executive from a third party employer after Executive has accepted another
full-time position and (C) the expiration of COBRA benefits by reason or
lapse of the statutory or regulatory benefit period established by governmental
authority. Further, upon a Change in Control, regardless of whether the
Executive is terminated, all of Executive’s then unvested options and stock
awards previously issued pursuant to the Company’s stock option and other
equity incentive plans shall immediately vest and be exercisable as herein
provided.

 

(h)                                                         In
the event that Executive shall be entitled to receive a Salary Continuance and
COBRA benefit pursuant to § 8(e), such Salary Continuance and COBRA benefit
shall continue only until such time as Executive shall have accepted another
full time position. In addition, in the event that Executive shall perform consulting
or other services for which he shall receive compensation, all compensation
shall be reported to the Company and shall be offset against any remaining
Salary 

 

 

Continuance
payments. Failure of Executive to promptly report the
receipt of any compensation from a third party or the acceptance of a new
position shall entitle the Company to terminate all remaining Salary Continuance
and COBRA benefits and to seek restitution for any payments made to Executive
subsequent to such job acceptance or compensation receipt.

 

(i)                                                             Any
dollar amounts which are to be paid at the time of termination under this
Section 8, other than Salary Continuance, payments under Section 8(g)(i) and COBRA payments, shall be paid within thirty
(30) days after the date of termination. Any Salary Continuance, payments
under Section 8(g)(i) or COBRA payments
shall be made in accordance with the usual payroll practices which were
applicable prior to termination. Except as otherwise specifically set forth
herein, any and all payments made pursuant to this Agreement shall be net of
any and all applicable federal, state and local payroll and withholding taxes.

 

(j)                                                             If
the Company or the Company’s accountants determine that the payments called for
under Section 8(g) of this Agreement either alone or in conjunction with
any other payments or benefits made available to the Employee by the Company
will result in the Employee being subject to an excise tax (“Excise Tax”) under
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”),
or if an Excise Tax is assessed against Executive as a result of such payments
or other benefits, the Company shall make a Gross-Up Payment (as defined below)
to or on behalf of Executive as and when such determination(s) and
assessments(s), as appropriate, are made, subject to the conditions of this
subsection (i). A “Gross-Up Payment” shall mean a payment to or on behalf of
Executive that shall be sufficient to pay (i) any Excise Tax in full, (ii) any
federal, state and local income tax and Social Security or other employment tax
on the payment made to pay such Excise Tax as well as any additional Excise Tax
on the Gross-Up Payment, and (iii) any interest or penalties assessed by
the Internal Revenue Service on Executive if such interest or penalties are
attributable to the Company’s failure to comply with its obligations under this
subsection (i) or applicable law. Any determination under this subsection
(i) by the Company or the Company’s accountants shall be made in
accordance with Section 280G of the Code, any applicable related
regulations (whether proposed, temporary or final), any related Internal
Revenue Service rulings and any related case law, and shall assume that
Executive shall pay Federal income taxes at the highest marginal rate in effect
for the year in which the Gross-Up Payment is made and state and local income
taxes at the highest marginal rate in effect in the state of Executive’s
residence for such year. Executive shall take such action (other than waiving
Employee’s right to any payments or benefits) as the Company reasonably
requests under the circumstances to mitigate or challenge such tax. If the
Company reasonably requests that Executive take action to mitigate or
challenge, or to mitigate and challenge, any such tax or assessment and
Executive complies with such request, the Company shall provide Executive with
such information and such expert advice and assistance from the Company’s
accountants, lawyers and other advisors as Executive may reasonably request and
shall pay for all expenses incurred in effecting such compliance and any
related fines, penalties, interest and other assessments. Subject to the
provisions of this subsection (i), all determinations required to be made under
this subsection (i), including whether and when a Gross-Up Payment is

 

 

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

 

9.              Restrictive Covenants for Executive.   
 Executive hereby covenants and agrees with the Company that for so long
as Executive is employed by the Company and for a period (the “Restricted Period”)
of twelve (12) months after termination of such employment for any reason,
Executive shall not, without the prior written consent of the Company, which
consent shall be within the sole and exclusive discretion of the Company,
either directly or indirectly on his own account or on behalf of any other
person or entity:

 

 

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

 

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

 

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

 

11.       Remedies.

 

(a)                                                          The
covenants of Executive set forth in Section 9 and Section 10 are
separate and independent covenants for which valuable consideration has been
paid, the receipt, adequacy and sufficiency of which are acknowledged by
Executive, and have also been made by Executive to induce the Company to enter
into this Agreement and continue

 

 

Executive’s employment
with the Company. Each of the aforesaid covenants may be availed of, or relied
upon, by the Company in any court of competent jurisdiction, and shall form the
basis of injunctive relief and damages including expenses of litigation
(including, but not limited to, reasonable attorney’s fees upon trial and
appeal) suffered by the Company arising out of any breach of the aforesaid
covenants by Executive. The covenants of Executive set forth in this Section 9
are cumulative to each other and to all other covenants of Executive in favor
of the Company contained in this Agreement and shall survive the termination of
this Agreement for the purposes intended.

 

(b)                                                         Each
of the covenants contained in Section 9 and Section 10 above shall be
construed as agreements which are independent of any other provision of this
Agreement, and the existence of any claim or cause of action by any party
hereto against any other party hereto, of whatever nature, shall not constitute
a defense to the enforcement of such covenants. If any of such covenants shall
be deemed unenforceable by virtue of its scope in terms of geographical area,
length of time or otherwise, but may be made enforceable by the imposition of
limitations thereon, Executive agrees that the same shall be enforceable to the
fullest extent permissible under the laws and public policies of the
jurisdiction in which enforcement is sought. The parties hereto hereby
authorize any court of competent jurisdiction to modify or reduce the scope of
such covenants to the extent necessary to make such covenants enforceable.

 

(c)                                                          In
the event that Executive believes that the Company is in violation of a
material obligation owed to Executive under this Agreement, and the Executive
has given notice of such violation to the Company requesting that the Company
cure such violation, and within twenty (20) business days the Company has
not undertaken steps to cure such violation or to provide information to
Executive demonstrating that the Company is not in violation of the Agreement,
and as a result of such failure to cure or dispute such violation, the
Executive terminates the Agreement in accordance with Section 7(b),
Executive shall not be barred from seeking employment with a competitor
notwithstanding the restriction of Section 9(a); provided, however, that
all other restrictions contained in this Agreement, including, but not limited
to the covenants in Section 9(b) and in Section 10, shall remain in
full force and effect.

 

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

 

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

 

(a)                                                          Personally
delivered, or

 

 

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

 

(c)                                                          For
notices sent to the Company:

 

First Horizon
Pharmaceutical Corporation

6195 Shiloh Road

Alpharetta, Georgia 30005

Telephone No.: (770) 442-9707

Facsimile No.: (770) 442-9594

 

(d)                                                         For
notices sent to Executive:

 

Mr. Larry M. Dillaha

403 N. Cameron Court

Nashville, TN 37076

 

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

 

14.       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, without limitation, the Original Agreement. This Agreement may not
be modified or revised except pursuant to a written instrument signed by the
party against whom enforcement is sought.

 

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

 

16.       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.

 

17.       Arbitration.    Any
claims, disputes or controversies arising out of or relating to this Agreement
between the parties (other than those arising under Section 10) shall be
submitted to arbitration by the parties. The arbitration shall be conducted in Atlanta,
Georgia in accordance with the rules of the American Arbitration Association
then in existence and the following provisions: Either party may serve upon the
other party by guaranteed overnight delivery by a nationally recognized express
delivery service, written demand that the dispute, specifying in detail its
nature, be submitted to arbitration. Within seven (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 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.

 

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

 

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

 

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

 

	
   

  	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ LARRY M. DILLAHA

  	
   

  
	
   

  	
   

  	
  Name: Larry M. Dillaha

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FIRST HORIZON PHARMACEUTICAL

  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ PATRICK FOURTEAU

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Patrick Fourteau, Chief
  Executive Officer

  
						

 

 

EXHIBIT A

 

First
Horizon Pharmaceutical Corporation

 

Employee
/ Independent Contractor

Confidentiality,
Non-Solicitation and Non-Competition Agreement

 

Employee or Independent Contractor Name:

 

The
growth and success of First Horizon Pharmaceutical Corporation (“FHPC”) are
largely dependent on two key assets, our proprietary information and our highly
competent employees and independent contractors. Our employees are obtained by
recruiting the best people available and giving them
opportunities to advance and share in the success of FHPC.

 

Our
proprietary information (confidential items and information not generally known
outside of FHPC) is obtained by research and product development, business
development conducted by FHPC, product improvements, marketing and sales
methods, and service to customers. Many FHPC employees make major
contributions, and independent contractors may do so as well. These result in a
pool of information and expertise, which enables FHPC to conduct its business
with unusual success, and thus with unusual potential for its employees and
independent contractors. However, this potential exists only as long as this
information and expertise are retained within FHPC. Once generally known, this
information gives no advantages to FHPC, its employees, its independent
contractors, or its stockholders.

 

In effect, all FHPC
employees and independent contractors have a common interest and responsibility
in seeing that no one employee or independent contractor accidentally or
intentionally discloses or distributes this pool of information and expertise
in an unauthorized manner. To help protect you, other employees or independent
contractors, and FHPC against such disclosure, this Agreement has been prepared
so that we have a common understanding concerning your responsibilities in this
connection. Please read this Agreement carefully so that you may understand its
importance.

 

IN CONSIDERATION OF the
premises above and my employment or continued employment as an employee or
independent contractor of FHPC, I hereby agree with FHPC as follows:

 

1.                                       Defined
Terms: The following definitions will have the meanings indicated when used
in this document:

 

(a)                                  Confidential
Information means any proprietary information, materials, or trade secrets
or know-how, (whether or not patentable), or any similar items owned by or in
the possession of FHPC. Confidential Information includes records, files, memoranda,
notes, computer software, computer files, computer programs, computer
databases, reports, price lists, customer lists, drawings, plans, reprints
experimental data, reports, sources of materials or supply, patent strategies,
consultations and plans or strategies concerning business not limited to sales,
business development marketing and clinical development, and employment and
compensation policies, including any negative developments, which are
communicated to, acquired by or learned of by FHPC, financial data that is not
public information, business development projects including information
concerning the existence, scope or activities of any FHPC development project. All
copies and reproductions of FHPC confidential items, whether on paper, in a computer
readable medium, or in any other form, are also Confidential Items.

 

 

(b)                                 Invention
means any invention, original work of authorship, development, concept, trade
secret, discovery, innovation or improvement (whether or not patentable, or
registratable under copyright or similar laws) made, initiated, conceived, or
first actually or constructively reduced to practice by me, closely or jointly
with others:

 

(i)                                     which
results from any work for FHPC, any use of FHPC’s premises or property, or any
use of FHPC’s Confidential Information, confidential items or other resources;

 

(ii)                                  which
relates to any method, process, laboratory practice or know-how useful to or
being developed by FHPC in connection with any existing or planned business of
FHPC or any actual or anticipated research or development of FHPC; or

 

(iii)                               which relates to any product, article or manufacture, or
composition of matter being developed, made, sold, or used in connection with
FHPC’s business or FHPC’s development.

 

However, where and to the
extent required by applicable state statute, this Agreement shall not require
assignment to FHPC of the rights in an invention if no equipment, supplies,
facilities, trade secrets, confidential information or confidential items of
FHPC were used, and the invention was developed entirely on my own time unless:

 

(i)                                     the invention relates directly to FHPC business or to FHPC’s
actual or demonstrably anticipated research or development; or

 

(ii)                                  the invention results from any work performed by me for FHPC.

 

This
definition of invention includes each and every invention and/or improvement
that I may make or conceive, either solely or jointly with others, within one
year after termination of employment for any reason with FHPC if and to the
extent the invention and/or improvement results from any work for FHPC, any use
of FHPC’s premises or property or any use of FHPC’s confidential items or
confidential information.

 

(c)                                  “Employment”
means the period during which (i) I am employed by FHPC as an employee, whether
on a full-time or part-time basis and whether to fill a permanent or temporary
position, or (ii) I am engaged by FHPC as an independent contractor, whether on
a project or continuing basis.

 

2.                                       Protection
of Confidential Information

 

(a)                                  During
my employment and for three (3) years after the termination of my employment
for any reason, I will hold in strictest confidence and will not disclose,
communicate or divulge to, or use for my own benefit or the benefit of another,
any Confidential Information or Inventions. Notwithstanding the previous
sentence, for such Confidential Information constituting trade secrets under
the Georgia Trade Secrets Act of 1990, as may be amended from time to time (the
“Act”), I will maintain the confidentiality of such Confidential Information
for as long as is permitted under the Act.

 

(b)                                 Section
2 will not apply to any information which:

 

(i)                                     is or becomes publicly known under circumstances involving
no breach by me of the terms of this Section 2, however, Confidential
Information

 

 

shall
not be publicly known by reason of such information’s or item’s being available
in isolated segments in two or more readily available public documents,

 

(ii)                                  is generally disclosed to third parties by FHPC without
restriction on such third parties, or

 

(iii)                               is approved for release by written authorization of the
Board of Directors of the Company:

 

except
that a breach by me of my obligations under this Section 2 shall not be
absolved by the subsequent occurrence of any of the exceptions above.

 

(c)                                  All
Confidential Information remains the property of FHPC at all times, before,
during and after my employment. I will, upon termination of my employment at
FHPC or at any other time upon request by FHPC, promptly deliver to FHPC all
Confidential Information I may have in my possession, including but not limited
to all Confidential Information relating to the business of FHPC. I understand
that I must obtain FHPC’s express, written permission with regard to any
Confidential Information, if I wish to keep any copies of any Confidential
Information after the termination of my employment. I agree to, upon FHPC’s
request, certify to FHPC under oath that I have complied with the provisions of
this section 2(c).

 

(d)                                 I
acknowledge that my agreement to protect Confidential Information among other
things prohibits me from communicating Confidential Information to former
employees of FHPC, both while I am employed by FHPC and after termination of my
employment for the duration of my agreement which is set forth in Section 2(a).

 

(e)                                  I
shall submit to FHPC any proposed publication which contains any discussion
relating to FHPC, any Confidential Information, or Invention of FHPC, or any
work performed by me during the course of my employment with FHPC. Unless I am
notified by FHPC that such publication contains Confidential Information within
ninety (90) days of FHPC’s written acknowledgement of receipt of such
publication, I may proceed with such publication. This provision extends to
publications that are written and/or published after the termination of my
employment.

 

(f)                                    My
employment with FHPC and performance of my duties and responsibilities as an
employee do not and will not breach any agreement, which obligated me to keep
in confidence any trade secrets or confidential information of any other party
or to refrain from competing, directly or indirectly, with the business of any
other party, and I shall not disclose to FHPC any trade secrets, Confidential
Information of any other party.

 

(g)                                 I
acknowledge and agree that although I may disclose and discuss Confidential
Information with other current employees of FHPC, I will do so only on a
need-to-know basis and for the sole purpose of advancing the best interests and
the business objectives of FHPC.

 

3.                                       Inventions
and Patents

 

(a)                                  I
have attached hereto as Exhibit A is a list describing all inventions, original
works of authorship, developments, improvements and trade secrets which were
made by me prior to my employment with FHPC (collectively, “Prior Inventions”),
which belong to me, which relate to FHPC’s proposed business, products or

 

 

research
and development, and which are not assigned to FHPC hereunder, or, if no such
list is attached, I represent that there are no such Prior Inventions. If in the
course of my Employment Term I incorporate into a FHPC product, process or
machine a Prior Invention owned by me or in which I have an interest, FHPC is
hereby granted and shall have a nonexclusive, royalty-free, irrevocable,
perpetual, worldwide license to make, have made, modify, use and sell such
Prior Invention as part of or in connection with such product, process or
machine.

 

(b)                                 Inventions
shall be the property of FHPC. I hereby assign to FHPC or its designee all
right, title and interest in and to any and all Inventions and any and all
related patents, copyrights, trademarks, and trade names, and applications therefore,
in the United States and elsewhere.

 

(c)                                  I
will disclose to FHPC promptly all Inventions.

 

(d)                                 If
I am employed in a technical capacity, I will maintain a laboratory notebook or
equivalent record that is kept in accordance with standard scientific practices.
This notebook will contain daily records of all business protocols, procedures,
studies, experiments, data, etc. and will document the conception and/or
reduction to practice of any Invention. I will follow any guidelines and
policies that FHPC presently has or implements in the future regarding the
content, protection, counter-signing or notarizing of notebooks. I understand
that all notebooks and copies thereof are FHPC’s property and I may not have a
copy of any notebook upon the termination of my employment without the express
written permission of FHPC, regardless of the circumstances of termination.

 

(e)                                  I
shall, at FHPC’s expense, execute declarations, further assignments, documents
and other instruments as necessary or desirable to fully and completely assign
all Inventions to FHPC or its designee and to assist FHPC or its designee in
applying for, prosecuting and enforcing patents, copyrights or other
intellectual property rights in the United States and in any foreign country
with respect to any Invention. I understand that this obligation shall continue
to exist after the termination of my employment, regardless of the reasons for
and circumstances of termination. If FHPC is unable because of my mental or
physical incapacity or for any other reason to secure my signature to apply for
or to pursue any application for any United States or foreign patents or
copyright registrations covering Inventions assigned to FHPC as above, then I
hereby irrevocably designate and appoint FHPC and its duly authorized officers
and agents as my agent and attorney-in-fact, to act for and in my behalf and
stead to execute and file any such applications and to do all other lawfully
permitted acts to further the prosecution and issuance of letters patent or
copyright registrations thereon with the same legal force and effect as if
executed by me.

 

4.                                       Copyrightable
Material

 

Without
limiting the above, I specifically agree that all copyrightable materials
generated or developed by me in connection with my duties and responsibilities
with FHPC and under this Agreement, including but not limited to advertising
materials, product name and identities, product instructions, laboratory
notebooks, protocols, scientific publications, artistic and product designs,
sketches, technical bulletins, computer programs, computer files, computer
software, and computer databases, shall be considered works made for hire under
the copyright laws of the United States and that they shall, upon creation, be
owned exclusively by FHPC. To the extent that any such materials, under
applicable law, may not be considered works made for hire, I hereby assign to
FHPC the ownership of all copyrights in such materials, without the necessity
of

 

 

any further
consideration, and FHPC shall be entitled to register and hold in its own name
all copyrights in respect of such materials.

 

5.                                       Non-Solicitation.

 

I
agree that during my employment by FHPC and for three (3) years from the
termination of such employment for any reason, I will not, either directly or
indirectly, on my own behalf or in the service of or on behalf of others,
solicit, divert or recruit, or attempt to solicit, divert or recruit, any
employee of FHPC, with whom I had contact during my employment with FHPC, to
leave such employment, whether or not such employment is pursuant to a written
contract with the Company or at will.

 

6.                                       No
Competition

 

While
employed at FHPC, I will not provide services to any other pharmaceutical or
related company (excluding Northhampton Medical, Inc.) which is the same or
similar to the services I have provided to First Horizon. I understand that the
preceding sentence does not apply to me to the extent I am an independent
contractor of FHPC.

 

7.                                       Expenses

 

I
agree to repay any advances that FHPC may make to me for business expenses,
charges by me on any company credit card, and loans from FHPC to me unless such
expenses, charges or loans are reimbursable business expenses in accordance
with FHPC policies as established from time-to-time. Subject to applicable law,
I hereby expressly authorize FHPC to offset any amounts that I owe to FHPC from
compensation payable to me.

 

8.                                       No Assurance
or Obligation of Employment

 

I
agree and understand that nothing in this Agreement shall confer any right with
respect to continuation of employment by the Company, nor shall it interfere in
any way with my right or the Company’s right to terminate my employment at any
time, with or without cause or notice.

 

9.                                       Costs

 

Should
FHPC successfully enforce its rights against me under this Agreement, FHPC
shall be entitled to its costs of such enforcement, including reasonable
attorneys’ fees. Should I prevail in said action, FHPC shall pay my reasonable
costs associated with such enforcement, including my reasonable attorneys’
fees.

 

10.                                 Miscellaneous

 

(a)                                                          The terms of
this agreement shall survive termination of my employment.

 

(b)                                                         If any
provision of the Agreement shall, for any reason be held to be invalid or
unenforceable in any respect, such invalidity or unenforceability shall not
affect any other provision hereof, and this Agreement shall be construed as if
such invalid or unenforceable provision had not been included herein.

 

(c)                                                          The
validity, construction, enforcement and interpretation of this Agreement shall
be governed by the internal laws (and not the laws of conflicts) of the State
of Georgia. I agree that the state and federal courts of the Northern District
of Georgia shall have exclusive jurisdiction and venue of any litigation
arising out of or relating to this Agreement and my employment or the
termination of my employment with FHPC and I hereby expressly consent to the
personal

 

 

jurisdiction and venue
of the state and federal courts of the Northern District of Georgia for any
such litigation.

 

(d)                                                         This
Agreement shall be binding upon and inure to the benefit of me and FHPC and our
respective heirs, executors, administrators, legal representatives, successors
and assigns.

 

(e)                                                          This
Agreement embodies the entire agreement between FHPC and me in regard to the
matters discussed herein and hereby supersede any previous Agreements between
FHPC and me in regard to the matters discussed herein. No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
will be effective unless in writing and signed by both parties.

 

 

Employee
or Independent Contractor:

 

 

	
   

  	
   

  	
   

  	
   

  
	
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  Agreed
  to and Accepted:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  First
  Horizon Pharmaceutical Corporation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
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  TitleExhibit 10.2

 

CRA
INTERNATIONAL, INC. RESTRICTED STOCK AGREEMENT

 

Notification
and Acceptance of Restricted Stock Award

Non-Employee Director Award Pursuant to Section 6.9 of the Plan

 

Pursuant to the CRA International, Inc.
2006 Equity Incentive Plan (the “Plan”), the Director named below (hereinafter
the “Holder”) has been granted             
shares (the “Restricted Shares “) of the Company’s Common Stock, without par
value (“Common Stock”), subject to the restrictions stated below and in the
Plan, on the condition that the Holder execute and deliver this Agreement.

 

In accordance with the Plan, the Company is
therefore pleased to offer you the following Restricted Stock Award:

 

	
  Grant Date:

  	
   

  	
  [                          ]

  
	
   

  	
   

  	
   

  
	
  Director Name, Residential Address and
  Social Security Number:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Number of shares of Common Stock granted in
  this Restricted Stock Award:

  	
   

  	
  shares of the Company’s Common Stock

  
	
   

  	
   

  	
   

  
	
  Vesting Period:

  	
   

  	
  Four years, with Twenty-five Percent (25%)
  of the Restricted Stock Award vesting on each anniversary of the Grant Date.

  
	
   

  	
   

  	
   

  
	
  Vesting Schedule

  	
   

  	
   

  
	
   

  	
   

  	
  Date

  	
   

  	
  % Vested

  
	
   

  	
   

  	
  [                              ]

  	
   

  	
  25%

  
	
   

  	
   

  	
  [                              ]

  	
   

  	
  50%

  
	
   

  	
   

  	
  [                              ]

  	
   

  	
  75%

  
	
   

  	
   

  	
  [                              ]

  	
   

  	
  100%

  

 

This Restricted Stock Award is subject to the terms and conditions of
the Restricted Stock Agreement set forth below (the “Agreement”). By
signing below you both accept this Restricted Stock Award and acknowledge that
you have read, understand, agree to and accept the terms and conditions of the Agreement
set forth below.

 

Signed as a Massachusetts agreement under
seal as of the Grant Date:

 

	
  CRA INTERNATIONAL, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  James C. Burrows

  	
  {Insert Holder name}

  
	
  President and CEO

  	
   

  
				

 

 

Restricted Stock Agreement

 

The terms of
this Agreement shall govern the attached Notification and Acceptance of
Restricted Stock Award (the “Award”). Capitalized terms used, but not defined, herein
shall have the meanings ascribed to them in the Award. The Company agrees to
issue to the Holder in consideration of the premises and for valuable
consideration, the receipt whereof is hereby acknowledged, subject to the terms
and conditions of the Plan and this Agreement as follows:

 

1.                                       Vesting Schedule. The interest of the Holder in the Restricted Shares shall vest as to
one-fourth of the Restricted Shares on the first anniversary of the Grant Date,
and as to an additional one-fourth on each succeeding anniversary, so as to be
100% vested on the fourth anniversary thereof, conditioned upon the Holder’s
continued service as a Director of the Company as of each vesting date. Notwithstanding
the foregoing, the interest of the Holder in the Restricted Shares shall vest
as to 100% of the then unvested Restricted Shares upon the Holder’s termination
of service to the Company due to death or Disability. As used herein, the term “Disability”
shall mean any condition, arising by reason of ill health or otherwise, on
account of which the Holder shall become unable to perform services as a
Director of the Company for a period of six (6) consecutive months.

 

2.                                       Forfeiture of Restricted Shares.

 

(a)                                  The
Restricted Shares may not be sold, pledged or otherwise transferred until
the Restricted Shares become vested in accordance with Section 1. The
period of time between the Grant Date and the date Restricted Shares become
vested is referred to herein as the “Restriction Period” for each of such
shares.

 

(b)                                 If
service for the Company as a Director is terminated by the Company for any
reason (other than death or Disability), the balance of the Restricted Shares
which has not vested at the time of the Holder’s termination of service shall
be forfeited by the Holder and shall automatically be returned to the Company.

 

3.                                       Escrow of Certificates.

 

(a)                                  Simultaneously
with the execution of this Agreement, the Holder shall deposit with the Company
the certificate or certificates representing all of the Restricted Shares and
shall promptly upon acquisition of any additional shares of stock, property or
securities described in Paragraphs 5 and 6 hereof, deposit with the Company the
certificate or certificates for such additional shares. Any such additional
shares shall for all purposes be deemed Restricted Shares under this Agreement.
To all certificates deposited by the Holder with the Company, there shall be
attached a stock power or stock powers, duly executed by the Holder in blank,
constituting and appointing the Company his attorney to transfer such stock on
the books of the Company. The Company shall hold such certificates and stock
powers for the purposes of this Agreement. Notwithstanding anything to the
contrary herein, the Company may elect to have the Restricted Shares,
including, without limitation, any additional shares of stock, property or
securities described in Paragraphs 5 and 6 hereof, issued in book-entry in the
Company’s stock record books, and shall not be required to issue a physical
certificate to the Holder until such Restricted Shares are no longer subject to
forfeiture. The Holder shall continue to be the

 

2

 

owner of the Restricted Shares,
despite such deposit and stock powers or book-entry issuance, and shall be
entitled to exercise all rights of ownership in such Restricted Shares,
subject, however, to the provisions of this Agreement.

 

(b)                                 In
performing its duties under this Agreement, the Company shall be entitled to
rely upon any statement, notice, or other writing which it shall in good faith
believe to be genuine and to be signed or presented by a proper party or
parties or on other evidence or information deemed by him to be reliable. In no
event shall the Company be liable for any action taken or omitted in good faith.
The Company may consult with its counsel or counsel of any of the other
parties hereto and, without limiting the generality of the preceding sentence,
shall not be held liable for any action taken or omitted in good faith on
advice of such counsel.

 

It is further agreed that if any controversy
arises, between the parties hereto or with any third person, with respect to
the Restricted Shares or any part of the subject matter of this Agreement,
its terms or conditions, the Company shall not be required to take any actions
in the premises, but may await the settlement of any such controversy by
final appropriate legal proceedings or otherwise as it may require,
notwithstanding anything in this Agreement to the contrary, and in such event
the Company shall not be liable for interest or damages.

 

In the event
that a dispute should arise with respect to the delivery, right to possession,
and/or ownership of the certificates held by the Company representing the Restricted
Shares, the Company is authorized to retain such certificates and evidences in
its possession, or any portion thereof, without liability to anyone, until such
dispute shall have been settled either by mutual written agreement of the
parties concerned or by final order, decree or judgment of a court of competent
jurisdiction after the time for appeal has expired and no appeal has been
perfected, but the Company shall be under no duty whatsoever hereunder to
institute or defend any such proceedings.

 

The provisions
of this Section 3(b) shall survive the expiration or earlier
termination of this Agreement.

 

4.                                       Restriction on Transfer. Other than as set forth in the preceding
Paragraphs of this Agreement with respect to transfers to the Company, the
Holder shall not sell, assign, transfer, pledge, hypothecate, mortgage,
encumber or otherwise dispose of, voluntarily or involuntarily, by operation of
law or otherwise (collectively, “transfer”), any of the Restricted
Shares or any interest therein, unless and until such Restricted Shares are no
longer subject to forfeiture under Paragraph 2 and, accordingly, the
Restriction Period with respect to such shares has terminated.

 

5.                                       Stock Dividends and Certain Other Issuances and
Payments. If the Company shall
pay a stock dividend on, or have a merger, consolidation, capital
reorganization or recapitalization in which while existing Common Stock remains
outstanding, new stock is issued with respect to any of the Common Stock, the
shares of stock of the Company issued in payment of such dividend on, or issued
in connection with such merger, consolidation, capital reorganization or recapitalization
shall be added to, and deemed part of, the Restricted Shares for all
purposes of this Agreement. If the Company shall make a distribution of
property other than cash on any of the Common Stock, or shall distribute to its
stockholders shares of stock of

 

3

 

another
corporation, the property or shares of stock of such other corporation
distributed with respect to the Restricted Shares shall be added to and deemed part of
the Restricted Shares for all purposes of this Agreement. References in
Paragraph 3 to additional shares of stock and certificates for such shares as
described in Paragraphs 5 and 6 and stock powers therefor shall be deemed to
include, without limitation, reference to such property and instruments
evidencing substituted securities described in Paragraph 6 and to appropriate
instruments of transfer therefor, respectively. In the event of any such
dividend, merger, consolidation, capital reorganization or recapitalization in
which while existing Common Stock remains outstanding, new stock is issued, or
in the event of any such distribution of property or shares of another
corporation, unvested Restricted Shares shall remain subject to forfeiture as
set forth above, but the provisions hereof shall be appropriately adjusted by
the Company so that they will continue to apply with similar effect to such new
Restricted Shares.

 

6.                                       Stock Splits, Recapitalizations and Other Events. If the outstanding shares of the Common Stock
shall be subdivided into a greater number of shares or combined into a smaller
number of shares, or in the event of a reclassification of the outstanding
shares of Common Stock, or if the Company shall be a party to any merger,
consolidation, recapitalization or capital reorganization in which securities
are issued in exchange for the Restricted Shares, there shall be substituted
for the Restricted Shares hereunder such amount and kind of securities as are
issued in such subdivision, combination, reclassification, merger, consolidation,
recapitalization or capital reorganization with respect to the Restricted
Shares outstanding immediately prior thereto, and thereafter such securities
shall for all purposes be deemed the Restricted Shares hereunder. In any such
event, the unvested Restricted Shares shall remain subject to forfeiture as set
forth above, but the provisions hereof shall be appropriately adjusted by the
Company so that they will continue to apply with similar effect to such new Restricted
Shares.

 

7.                                       No Transfer in Violation of Agreement. The Company shall not be required to transfer
any of the Restricted Shares on its books which shall purportedly have been
sold, assigned or otherwise transferred in violation of this Agreement, or to
treat as owner of such shares, or to accord the right to vote as such owner or
to pay dividends to, any person or entity to which any such shares shall
purportedly have been sold, assigned or otherwise transferred in violation of
this Agreement. It is expressly understood and agreed that the restrictions on
transfer imposed by this Agreement shall apply not only to voluntary transfers
but also to involuntary transfers, by operation of law or otherwise. The Holder
shall pay all legal fees and expenses of the Company arising out of or relating
to any purported sale, assignment or transfer of any Restricted Shares in
violation of this Agreement.

 

8.                                       Legend. The certificates representing any shares of the Restricted Shares to be
issued to the Holder that are subject to forfeiture shall have endorsed
thereon, in addition to any other legends thereon, legends substantially in the
following form:

 

The securities represented by this
certificate are subject to restrictions on transfer and forfeiture to the
Corporation, as set forth in a restricted stock agreement between the
Corporation and the registered holder hereof, a copy of which will be provided
to the holder hereof by the Corporation upon written request and without
charge.

 

4

 

9.                                       Severability. If any provision of this Agreement shall be determined to be invalid,
illegal or otherwise unenforceable by any court of competent jurisdiction, the
validity, legality and enforceability of the other provisions of this Agreement
shall not be affected thereby. Any invalid, illegal or unenforceable provision
of this Agreement shall be severable, and after any such severance, all other
provisions hereof shall remain in full force and effect.

 

10.                                 Equitable Relief. The Holder acknowledges that money damages alone will not adequately
compensate the Company for breach of any of the Holder’s covenants and
agreements herein and, therefore, agrees that in the event of the breach or
threatened breach of any such covenant or agreement, in addition to all other
remedies available to the Company, at law, in equity or otherwise, the Company
shall be entitled to injunctive relief compelling specific performance of, or
other compliance with, the terms hereof.

 

11.                                 Tax Matters. The Holder will be liable for any and all taxes, including, without
limitation, withholding taxes, arising out of the grant or the vesting of the Restricted
Shares hereunder, and shall be solely responsible for obtaining such tax
treatment of the Restricted Shares and of Holder’s receipt thereof as the Holder
may desire, including, without limitation, any timely filing of an
election under Section 83(b) of the Internal Revenue Code of 1986, as
amended.

 

(a)                                  The
Holder will provide the Company with all information that the Company shall
request in connection with the Holder’s receipt of the Restricted Shares, and
any subsequent sale(s) or other disposition(s) thereof in order for the Company
to satisfy tax, accounting and securities laws reporting and other regulatory
requirements. Information with respect to sale(s) or disposition(s) of Restricted
Shares by the Holder should be delivered to the Company before the end of the
month within which they occurred. Information should be provided to the
attention of the Company’s General Counsel or, in his absence, to its Chief
Financial Officer.

 

(b)                                 Any
other provision of this Agreement to the contrary notwithstanding, the Holder
shall defend, indemnify and hold the Company harmless from and against any and
all damages, costs, expenses, fines, penalties, reasonable attorney’s fees and
claims of every kind or nature arising from the Holder’s failure to provide any
information required hereunder or to pay any tax amounts promptly and when due.

 

(c)                                  Section 83(b) Tax Election. Holder
acknowledges that the Company has advised the Holder of the possibility of
making an election under Section 83(b) of the Code with respect to
the Restricted Shares. The Holder should consult with his or her tax advisor to
determine the tax consequences of acquiring the Restricted Shares and the
potential advantages and potential disadvantages of filing the Section 83(b) election
in light of the Holder’s individual circumstances. The Holder acknowledges that
it is his or her sole responsibility, and not that of the Company or any of its
subsidiaries, to file a timely election under Section 83(b) and that
the right to make such an election will be lost if notice of such election is
not timely filed.

 

(d)                                 Holder
shall, no later than the date as of which the value of any Restricted Shares
first becomes includable in the gross income of the Holder for Federal income
tax

 

5

 

purposes, pay to the Company,
or make arrangements satisfactory to the Company regarding payment of any
Federal, state, local and/or payroll taxes of any kind required by law to be
withheld as a result thereof. The Company and its affiliates shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Holder.

 

12.                                 Notices. Any notice required or permitted under this Agreement shall be given in
writing and shall be deemed effectively given (a) upon personal delivery, (b) on
the first business day after being sent by express mail or a nationally
recognized overnight courier service, (c) upon transmission by facsimile
with receipt confirmed, or (d) on the third business day after being sent
by registered or certified mail, return receipt requested, postage prepaid. To
be effective, any such notice shall be addressed, if to the Company, at its
principal office, and if to the Holder at the last address of record on the
books of the Company or at such other address as such party may designate
by ten (10) days prior written notice to the other party hereto.

 

13.                                 Benefit of the Agreement. The rights and obligations of the Holder
hereunder are personal to the Holder, and except as otherwise expressly
provided herein, such rights and obligations may not be assigned or
delegated by the Holder without the prior written consent of the Company. Any
assignment or delegation of such rights and obligations of the Holder absent
such consent shall be void and of no force or effect. This Agreement shall
inure to the benefit of, and be binding upon, the legal representatives,
successors and assigns of the Company and the heirs, legal representatives,
successors and permitted assigns of the Holder. The rights and remedies of the
Company hereunder shall be cumulative and in addition to all other rights and
remedies the Company may have, at law, in equity, by contract or otherwise.
No modification, renewal, extension, waiver or termination of this Agreement or
any of the provisions herein contained shall be binding upon the Company unless
made in writing and signed by a duly authorized officer of the Company.

 

14.                                 Choice of Law and Forum. This Agreement shall be governed by, and
construed and enforced in accordance with, the substantive laws of The
Commonwealth of Massachusetts without regard to its principles of conflicts of
laws. All litigation arising from or relating to this Agreement shall be filed
and prosecuted before any court of competent subject matter jurisdiction
located in Boston, Massachusetts. The Holder consents to the jurisdiction of
such courts over him, stipulates to the convenience, efficiency and fairness of
proceeding in such courts, and covenants not to allege or assert the
inconvenience, inefficiency or unfairness of proceeding in such courts.

 

15.                                 Construction. The genders and numbers used in this Agreement are used as reference
terms only and shall apply with the same effect whether the parties are of the
masculine, neuter or feminine gender, corporate or other form, and the singular
shall likewise include the plural.

 

*                                         *                                         *

 

6

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