Exhibit 10.4

SAGENT PHARMACEUTICALS, INC.

CHANGE OF CONTROL SEVERANCE PLAN

INTRODUCTION

The purpose of the Plan is to enable the Employer to offer certain protections
to individuals who are employees of the Employer immediately prior to a Change
of Control if their employment with the Employer is terminated by the Employer
without Cause (excluding death or Disability) or by the Participant for Good
Reason, in each case, occurring at any time during the period commencing on the
date of the Change of Control and ending on the twelve (12) month anniversary
thereof. Accordingly, to accomplish this purpose, the Board has adopted the
Plan, to be effective as of the Effective Date.

Unless otherwise expressly provided in Section 2.3 hereof or unless otherwise
agreed to in writing between the Company and a Participant on or following the
Change of Control, Participants covered by the Plan shall not be eligible to
participate in any other severance or termination plan, policy or practice of
the Employer that would otherwise apply under the circumstances described herein
during the twelve (12) month period following a Change of Control. The Plan is
intended to fall within the definition of an “employee welfare benefit plan”
under Section 3(1) of ERISA. Important administrative provisions of (and
information about) the Plan and important information about a Participant’s
rights under the Plan and applicable law are contained in Article VIII hereof.
This document shall constitute both the Plan document and summary plan
description and shall be distributed to Participants in this form. Capitalized
terms and phrases used herein shall have the meanings ascribed thereto in
Article I hereof.

ARTICLE I

DEFINITIONS

For purposes of the Plan, capitalized terms and phrases used herein shall have
the meanings ascribed in this Article I.

1.1 “Accrued Obligations” shall have the meaning set forth in Section 2.2(a)
hereof.

1.2 “Affiliate” shall mean (i) any subsidiary corporation of the Company (or its
successors) within the meaning of Section 424(f) of the Code, (ii) any
corporation, trade or business (including, without limitation, a partnership or
limited liability company) which is directly or indirectly controlled 50% or
more (whether by ownership of stock, assets or an equivalent ownership interest
or voting interest) by the Company (or its successors), (iii) any entity in
control of or under common control with the Company or (iv) any other entity
(including its successors) which is designated as an Affiliate by the Board.

1.3 “Base Salary” shall mean a Participant’s annual base compensation rate for
services paid by the Employer to the Participant at the time immediately prior
to the Participant’s termination of employment, as reflected in the Employer’s
payroll records or, if higher, the Participant’s annual base compensation rate
immediately prior to the Change of Control. Base Salary shall not include
commissions, bonuses, overtime pay, incentive compensation, benefits

 

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paid under any qualified plan, any group medical, dental or other welfare
benefit plan, non-cash compensation, or any other additional compensation, but
shall include amounts reduced pursuant to a Participant’s salary reduction
agreement under Section 125, 132(f)(4) or 401(k) of the Code, if any, or a
nonqualified elective deferred compensation arrangement, if any, to the extent
that in each such case the reduction is to base salary.

1.4 “Board” shall mean the Board of Directors of the Company.

1.5 “Cause” shall mean the occurrence of any of the following as determined by
the Board: (i) the Participant’s conviction of, or plea of nolo contendere to, a
felony (other than in connection with a traffic violation) under any state or
federal law; (ii) the Participant’s willful and continued failure to
substantially perform his essential job functions hereunder after receipt of
written notice from the Company that specifically identifies the manner in which
the Participant has substantially failed to perform his essential job functions
and specifying the manner in which the Participant may substantially perform his
essential job functions in the future; (iii) a material act of fraud or willful
and material misconduct with respect, in each case, to the Company, by the
Participant; (iv) a willful and material breach of any restrictive covenants to
which the Participant is subject to; or (v) a willful and material violation of
a material policy of the Company. For purposes of this provision, no act or
failure to act, on the part of the Participant, shall be considered “willful”
unless it is done, or omitted to be done, by the Participant in bad faith or
without reasonable belief that the Participant’s action or omission was in the
best interests of the Company. Anything herein to the contrary notwithstanding,
the Participant shall not be terminated for “Cause” hereunder unless (A) written
notice stating the basis for the termination is provided to the Participant,
(B) as to clauses (ii), (iii), (iv) or (v) of this paragraph, the Participant is
given 30 days to cure the neglect or conduct that is the basis of such claim (it
being understood that any errors in expense reimbursement may be cured by
repayment), (C) if the Participant fails to cure such neglect or conduct, the
Participant has an opportunity to be heard with counsel before the full Board
prior to any vote regarding the existence of Cause and (D) there is a vote of a
majority of the members of the Board to terminate the Participant for Cause.

1.6 “Change of Control” means the consummation of the first transaction
following the Effective Date, whether in a single transaction or in a series of
related transactions, pursuant to which (a) any “person” (as such terms is used
in Sections 3(a)(9) and 13(d) of the Securities Exchange Act of 1934 as amended
(the “Act”)) or “group” (as such term is used in Section 14(d)(d) of the Act) is
or becomes a “beneficial owner” (as such term is used in Rule 13d-3 promulgated
under the Act) of more than 30% of the Voting Stock of the Company (excluding
acquisitions pursuant to a Business Combination (as defined below) that is not
considered to be a Change of Control under clause (e) below; (b) the majority of
the Board consists of individuals other than Incumbent Directors, which term
means the members of the Board on the Effective Date; provided that any person
becoming a director subsequent to such date whose election or nomination for
election was supported by two-thirds of the directors who then comprised the
Incumbent Directors shall be considered to be an Incumbent Director (excluding
any person who received such support in connection with the settlement of a
proxy contest); (c) the Company adopts any plan of liquidation providing for the
distribution of all or substantially all of its assets; (d) the Company
transfers all or substantially all of its assets or business (unless the
shareholders of the Company immediately prior to such transaction beneficially
own, directly or indirectly, in

 

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substantially the same proportion as they owned the Voting Stock of the Company,
all of the Voting Stock or other ownership interests of the entity or entities,
if any, that succeed to the business of the Company); or (e) any merger,
reorganization, consolidation or similar transaction (a “Business Combination”)
unless, immediately after consummation of such Business Combination, (A) the
shareholders of the Company immediately prior to the Business Combination hold,
directly or indirectly, more than 50% of the Voting Stock of the Company or the
Company’s ultimate parent company if the Company is a subsidiary of another
corporation, and (B) no person or group beneficially owns more than 30% of the
Voting Stock of the Company or the ultimate parent company of the Company if the
Company is a subsidiary of partner corporation. For purposes of this Change of
Control definition, the “Company” shall include any entity that succeeds to all
or substantially all of the business of the Company and “Voting Stock” shall
mean securities of any class or classes having general voting power under
ordinary circumstances, in the absence of contingencies, to elect the directors
of a corporation. Solely to the extent necessary to avoid a violation of Code
Section 409A, “Change of Control” shall be limited to a “change in control
event” as defined under Code Section 409A.

1.7 “COBRA” shall mean Part 6 of Subtitle I of ERISA, Section 4980B of the Code,
and any similar state law.

1.8 “Code” shall mean the United States Internal Revenue Code of 1986, as
amended, and the treasury regulations and other official guidance promulgated
thereunder.

1.9 “Code Section 409A” shall mean Section 409A of the Code together with the
treasury regulations and other official guidance promulgated thereunder.

1.10 “Company” shall mean Sagent Pharmaceuticals, Inc., a Delaware corporation,
and any of its successors as provided in Article VI hereof.

1.11 “Company Confidential Information” shall have the meaning set forth in the
closing paragraph of Section 2.6 hereof.

1.12 “Disability” shall mean a Participant’s disability that would qualify as
such under the Employer’s long-term disability plan without regard to any
waiting periods set forth in such plan.

1.13 “Effective Date” shall mean the date of the Plan’s adoption by the Board
(which occurred on February 18, 2015).

1.14 “Employer” shall mean the Company and its Affiliates.

1.15 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

1.16 “Good Reason” shall mean unless otherwise agreed to in writing by the
Participant, (i) any reduction in the Participant’s Base Salary or target bonus
or (ii) a relocation by the Company of the Participant’s primary place of
employment to a location more than 50 miles further from the Participant’s
primary residence than the current location of the Participant’s primary place
of employment. In order to invoke a termination for Good Reason, the Participant
must terminate his employment, if at all, within 60 days of the occurrence of
any event of “Good Reason.”

 

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1.17 “Non-Solicitation Period” shall have the meaning set forth in the closing
paragraph of Section 2.6 hereof.

1.18 “Participant” shall mean an individual as specified on Exhibit A who was an
employee of the Employer immediately prior to the Change of Control and who
becomes an employee of the successor entity as of the Change of Control other
than (i) an employee covered by a collective bargaining agreement, (ii) a leased
employee, (iii) a temporary or seasonal employee, (iv) an independent contractor
or consultant, (v) an individual employed for a period of forty-five
(45) calendar days or less, or (vi) an individual employed for less than twenty
(20) hours per week.

1.19 “Plan” shall mean this Sagent Pharmaceuticals, Inc. Change of Control
Severance Plan, as amended from time to time in accordance with the terms and
conditions hereof.

1.20 “Release” shall have the meaning set forth in Section 2.5 hereof.

1.21 “Severance Benefits” shall have the meaning set forth in the introductory
paragraph of Section 2.2 hereof.

ARTICLE II

SEVERANCE BENEFITS

2.1 Eligibility for Severance Benefits.

(a) Qualifying Event. Upon a Participant’s termination of employment by the
Employer without Cause (excluding death or Disability) or by the Participant for
Good Reason, in each case, occurring at any time during the period commencing on
the date of the Change of Control and ending on the twelve (12) month
anniversary thereof, then, subject to the provisions of Section 2.3 hereof and
Sections 2.5 through 2.7 hereof, the Employer shall pay or provide the
Participant with the Severance Benefits.

(b) Non-Qualifying Events. Unless otherwise provided by the Board at the time of
termination, a Participant shall not be entitled to the Severance Benefits if
the Participant’s employment is terminated (i) by the Employer for Cause,
(ii) by the Participant without Good Reason, (iii) on account of the
Participant’s death or Disability, or (iv) for any reason other than as
expressly specified in Section 2.1(a) hereof.

 

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2.2 Amount of Severance Benefits. Subject to the provisions of Sections 2.3
through 2.7 hereof, and unless otherwise determined by the Board at the time of
termination, in the event that a Participant becomes entitled to benefits
pursuant to Section 2.1(a) hereof, the Employer shall pay or provide the
Participant with the following benefits (collectively, the benefits described in
Sections 2.2(b) through 2.2(d) hereof shall be referred to herein as the
“Severance Benefits”):

(a) Accrued Obligations. The Employer shall pay to the Participant in a lump sum
in cash within 30 days after the date of termination of employment the sum of
(1) the Participant’s Base Salary through the date of termination to the extent
not theretofore paid and (2) any other compensation or benefits to which the
Participant is entitled (the sum of the amounts described in subclauses (1) and
(2) herein shall be called the “Accrued Obligations”), which Accrued Obligations
shall be in paid in accordance with the terms of the relevant arrangements and
plans governing the Company’s compensation and benefits programs. For the sake
of clarity, in the event of termination for Cause or due to a Participant’s
death or Disability, the Employer shall pay to the Participant all Accrued
Obligations, without any further obligations to the Participant.

(b) Salary. The Employer shall pay to the Participant in a lump sum in cash
within 30 days after the date of termination of employment in an amount equal to
the product of one (1) and the Participant’s Base Salary; provided, however,
that such amount shall be paid in lieu of, and the Participant hereby waives the
right to receive, any other amount of severance relating to salary or bonus
continuation to be received by the Participant upon termination of employment of
the Participant under any severance plan, policy or arrangement of the Company;
provided further that, to the extent that the payment of any amount constitutes
“nonqualified deferred compensation” for purposes of Code Section 409A, any such
payment scheduled to occur during the first sixty (60) days following such
termination shall not be paid until the sixtieth (60th) day following such
termination and shall include payment of any amount that was otherwise scheduled
to be paid prior thereto. Such payment of Base Salary shall be in lieu of any
payments under any other severance or termination plan, policy or practice of
the Employer, except as provided in Section 2.3 hereof, and shall be reduced
(offset) by any statutory entitlements of the Participant (including notice of
termination, termination pay and/or severance pay, but excluding statutory
unemployment benefits), and any payments related to an actual or potential
liability under the Worker Adjustment and Retraining Notification Act of 1988 or
similar state, local or foreign law.

(c) Equity. If, as of the date of a Change of Control which occurs during the
employment period, the Participant is employed by the Company or one of its
Affiliates, then as of such date, all outstanding equity-related awards held by
the Participant shall immediately vest and all options, stock appreciation
rights or similar awards shall remain exercisable for the balance of the
original term of the award.

(d) Continued Health Coverage. Provided the Participant elects continued welfare
coverage pursuant to COBRA, the Company shall pay during the period the
Participant actually continues such coverage, but in any event not to exceed 12
months, the same percentage of the monthly premium costs for COBRA continuation
coverage as it pays of the monthly premium costs for medical coverage for senior
executives generally; provided that the Company may pay this amount by paying
the Participant a monthly amount equal on an after-tax basis to such amount,
subject to any amendment, substitution or termination of the applicable plans or
programs of the Employer from time to time as applies to employees generally
during the coverage period; provided that the Participant’s continued
participation is possible under the general terms and provisions of the
applicable plans or programs of the Employer.

 

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2.3 Effect of Prior Agreements. If the Participant has an approved, executed
agreement with the Employer that provides for specific severance in connection
with a termination of employment which such agreement has not expired or been
replaced prior to the termination of the Participant’s employment, such
Participant shall not be entitled to receive any Severance Benefit under the
Plan.

2.4 No Duty to Mitigate/Set-off. Except as provided in Section 2.2(d) hereof, no
Participant entitled to receive Severance Benefits hereunder shall be required
to seek other employment or to attempt in any way to reduce any amount payable
to the Participant by the Employer pursuant to the Plan and there shall be no
offset against any amounts due to the Participant under the Plan on account of
any remuneration attributable to any subsequent employment that the Participant
may obtain or otherwise. The amounts payable hereunder shall not be subject to
setoff, counterclaim, recoupment, defense or other right which the Employer may
have against the Participant. In the event of the Participant’s breach of any
provision hereunder, including, without limitation, Sections 2.5 (other than as
it applies to a release of claims under the Age Discrimination in Employment
Act, as amended), 2.6 and 2.7 hereof, the Company shall be entitled to recover
any payments previously made to the Participant hereunder.

2.5 Release Required. The Participant agrees that, except for such other
payments and benefits to which the Participant may be entitled as expressly
provided by the terms of this Plan or any other applicable benefit plan, such
liquidated damages shall be in lieu of all other claims that the Participant may
make by reason of any such termination of his employment and that, as a
condition to receiving any of the severance benefits under Section 2.2
(excepting the Accrued Obligations), the Participant must execute a release of
claims substantially in the form attached hereto as Exhibit B (the “Release”),
which shall be delivered to the Participant for execution within 5 business days
of the date of termination. To be eligible for severance benefits, the
Participant must execute and deliver the Release, and such Release must become
irrevocable, within 60 days of the date of termination.

2.6 Restrictive Covenants. The Company and the Participant acknowledge and agree
that during the Participant’s employment with the Company, the Participant will
have access to and may assist in developing Company Confidential Information and
will occupy a position of trust and confidence with respect to the Company’s
affairs and business and the affairs and business of the Company Affiliates. The
Participant agrees that the following obligations are necessary to preserve the
confidential and proprietary nature of Company Confidential Information and to
protect the Company and the Company Affiliates against harmful solicitation of
employees and customers, harmful competition and other actions by the
Participant that would result in serious adverse consequences for the Company
and the Company Affiliates:

(a) Non-Disclosure. During and after the Participant’s employment with the
Company, the Participant will not knowingly use, disclose or transfer any
Company Confidential Information other than as authorized in writing by the
Company or within the scope of the Participant’s duties with the Company as
determined reasonably and in good faith by the

 

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Participant. Anything herein to the contrary notwithstanding, the provisions of
this Section 2.6(a) 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 actual or apparent jurisdiction to order the
Participant to disclose or make accessible any information; (ii) with respect to
any other litigation, arbitration or mediation involving this Plan, including,
but not limited to, the enforcement of this Plan; (iii) as to information that
becomes generally known to the public or within the relevant trade or industry
other than due to the Participant’s violation of this Section 2.6(a); (iv) as to
information that is or becomes available to the Participant on a
non-confidential basis from a source which is entitled to disclose it to the
Participant; or (v) as to information that the Participant possessed prior to
the commencement of employment with the Company.

(b) Materials. The Participant will not remove any Company Confidential
Information or any other property of the Company or any Company Affiliate from
the Company’s premises or make copies of such materials except for normal and
customary use in the Company’s business as determined reasonably and in good
faith by the Participant. The Company acknowledges that the Participant, in the
ordinary course of the Participant’s duties, routinely uses and stores Company
Confidential Information at home and other locations. The Participant will
return to the Company all Company Confidential Information and copies thereof
and all other property of the Company or any Company Affiliate at any time upon
the request of the Company and in any event promptly after termination of
Participant’s employment. The Participant agrees to attempt in good faith to
identify and return to the Company any copies of any Company Confidential
Information after the Participant ceases to be employed by the Company. Anything
to the contrary notwithstanding, nothing in this Section 2.6 shall prevent the
Participant from retaining a home computer, papers and other materials of a
personal nature, including diaries, calendars and Rolodexes, information
relating to his compensation or relating to reimbursement of expenses,
information that he reasonably believes may be needed for tax purposes, and
copies of plans, programs and agreements relating to his employment.

(c) No Solicitation or Hiring of Employees. During the Non-Solicitation Period,
the Participant shall not solicit, entice, persuade or induce any individual who
is employed by the Company or the Company Affiliates (or who was so employed
within 180 days prior to the Participant’s action) to terminate or refrain from
continuing such employment or to become employed by or enter into contractual
relations with any other individual or entity other than the Company or the
Company Affiliates, and the Participant shall not hire, directly or indirectly,
as an employee, consultant or otherwise, any such person. Anything to the
contrary notwithstanding, the Company agrees that (i) the Participant’s
responding to an unsolicited request from any former employee of the Company for
advice on employment matters; and (ii) the Participant’s responding to an
unsolicited request for an employment reference regarding any former employee of
the Company from such former employee, or from a third party, by providing a
reference setting forth his personal views about such former employee, shall not
be deemed a violation of this Section 2.6(c)). Notwithstanding the foregoing,
this Section 2.6(c) shall not preclude the Participant from soliciting for
employment or hiring any person who has been discharged by the Company or any
Company Affiliate without cause.

 

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(d) Non-Solicitation.

(i) During the Non-Solicitation Period, the Participant shall not, directly or
indirectly, (A) solicit or encourage any client or customer of the Company or a
Company Affiliate, or any person or entity who was such a client or customer
within 180 days prior to Participant’s action to terminate, reduce or alter in a
manner adverse to the Company or the Company Affiliate, any existing business
arrangements with the Company or a Company Affiliate or to transfer existing
business from the Company or a Company Affiliate to any other person or entity,
or (B) own an interest in any entity that competes with the Company or any
direct or indirect subsidiary of the Company; provided, however, that
Participant may own, as a passive investor, securities of any such entity that
has outstanding publicly traded securities so long as the Participant’s direct
holdings in any such entity shall not in the aggregate constitute more than 5%
of the voting power of such entity. The Participant agrees that, before
providing services, whether as an employee or consultant, to any entity during
the Non-Solicitation Period, the Participant will provide a copy of this Plan to
such entity, and such entity shall acknowledge to the Company in writing that it
has read this Plan. The Participant acknowledges that this covenant has a
unique, very substantial and immeasurable value to the Company, that the
Participant has sufficient assets and skills to provide a livelihood for the
Participant while such covenant remains in force and that, as a result of the
foregoing, in the event that the Participant breaches such covenant, monetary
damages would be an insufficient remedy for the Company and equitable
enforcement of the covenant would be proper.

(ii) If the restrictions contained in Section 2.6(d)(i) shall be determined by
any court of competent jurisdiction to be unenforceable by reason of their
extending for too great a period of time or over too great a geographical area
or by reason of their being too extensive in any other respect,
Section 2.6(d)(i)) shall be modified to be effective for the maximum period of
time for which it may be enforceable and over the maximum geographical area as
to which it may be enforceable and to the maximum extent in all other respects
as to which it may be enforceable.

(e) Publicity. During the Employment Period, the Participant hereby grants to
the Company the right to use, in a reasonable and appropriate manner, the
Participant’s name and likeness, without additional consideration, on, in and in
connection with technical, marketing or disclosure materials, or any combination
thereof, published by or for the Company or any Company Affiliate.

(f) Enforcement. The Participant acknowledges that in the event of any breach of
this Section 2.6, the business interests of the Company and the Company
Affiliates will be irreparably injured, the full extent of the damages to the
Company and the Company Affiliates will be impossible to ascertain, monetary
damages will not be an adequate remedy for the Company and the Company
Affiliates, and the Company will be entitled to enforce this Plan by a
temporary, preliminary and/or permanent injunction or other equitable relief,
without the necessity of posting bond or security, which the Participant
expressly waives. The Participant understands that the Company may waive some of
the requirements expressed in this Plan, but that such a waiver to be effective
must be made in writing and should not in any way be deemed a waiver of the
Company’s right to enforce any other requirements or provisions of this Plan.
The Participant agrees that each of the Participant’s obligations specified in
this Plan is a

 

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separate and independent covenant and that the unenforceability of any of them
shall not preclude the enforcement of any other covenants in this Plan. The
Participant further agrees that any breach of this Plan by the Company prior to
the date of termination shall not release the Participant from compliance with
the Participant’s obligations under this Section 2.6, so along as the Company
fully complies with Sections 2.2 and 4.7. The Company further agrees that any
breach of this Plan by the Participant that does not result in the Participant’s
being terminated for Cause, other than a willful (as defined in the definition
of “Cause”) and material breach of Section 2.6(d)(i)) after the date of
termination, shall not release the Company from compliance with its obligations
under this Plan. Notwithstanding the foregoing two sentences, neither party
shall be precluded from pursuing judicial remedies as a result of any such
breaches.

For the purposes of this section, “Company Confidential Information” means
information known to the Participant to constitute trade secrets or proprietary
information belonging to the Company or other confidential financial
information, operating budgets, strategic plans or research methods, personnel
data, projects or plans, or non-public information regarding the terms of any
existing or pending lending transaction between the Company and an existing or
pending client or customer (as the phrase “client or customer” is defined in
Section 2.6(d)(i) hereof), in each case, received by the Participant in the
course of his employment by the Company or in connection with his duties with
the Company. Notwithstanding anything to the contrary contained herein, the
general skills, knowledge and experience gained during the Participant’s
employment with the Company, information publicly available or generally known
within the industry or trade in which the Company competes and information or
knowledge possessed by the Participant prior to his employment by the Company,
shall not be considered Company Confidential Information; and “Non-Solicitation
Period” means the period commencing on the Effective Date and ending
twelve months after the earlier of the expiration of the Employment Period or
the Participant’s date of termination.

2.7 Cooperation. By accepting the Severance Benefits hereunder, subject to the
Participant’s other commitments, the Participant agrees to be reasonably
available to cooperate with the Employer and provide information as to matters
which the Participant was personally involved, or has information on, during the
Participant’s employment with the Employer and which are or become the subject
of litigation or other dispute.

ARTICLE III

UNFUNDED PLAN

The Plan shall be “unfunded” for the purposes of ERISA and the Code and the
Severance Benefits shall be paid out of the general assets of the Employer as
and when the Severance Benefits are payable under the Plan. All Participants
shall be solely unsecured general creditors of the Employer. If the Employer
decides in its sole discretion to establish any advance accrued reserve on its
books against the future expense of the Severance Benefits payable hereunder, or
if the Employer decides in its sole discretion to fund a trust from which Plan
benefits may be paid from time to time, such reserve or trust shall not under
any circumstances be deemed to be an asset of the Plan.

 

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ARTICLE IV

ADMINISTRATION OF THE PLAN

4.1 Plan Administrator. The general administration of the Plan on behalf of the
Employer (as plan administrator under Section 3(16)(A) of ERISA) shall be placed
with the Board.

4.2 Reimbursement of Expenses. The Employer may, in its sole discretion, pay or
reimburse the members of the Board for all reasonable expenses incurred in
connection with their duties hereunder, including, without limitation, expenses
of outside legal counsel.

4.3 Action by the Board. Decisions of the Board shall be made by a majority of
its members attending a meeting at which a quorum is present (which meeting may
be held telephonically), or by written action in accordance with applicable law.
Subject to the terms of the Plan and provided that the Board acts in good faith,
the Board shall have complete authority to determine a Participant’s
participation and the Severance Benefits under the Plan, to interpret and
construe the provisions of the Plan, and to make decisions in all disputes
involving the rights of any person interested in the Plan.

4.4 Delegation of Authority. Subject to the limitations of applicable law, the
Board may delegate any and all of its powers and responsibilities hereunder to
other persons by formal resolution filed with and accepted by the Board. Any
such delegation shall not be effective until it is accepted by the Board and the
persons designated and may be rescinded at any time by written notice from the
Board to the person to whom the delegation is made.

4.5 Retention of Professional Assistance. The Board may employ such legal
counsel, accountants and other persons as may be required in carrying out its
duties in connection with the Plan.

4.6 Accounts and Records. The Board shall maintain such accounts and records
regarding the fiscal and other transactions of the Plan and such other data as
may be required to carry out its functions under the Plan and to comply with all
applicable laws.

4.7 Indemnification. The Board, its members and any person designated pursuant
to Section 4.4 hereof shall not be liable for any action or determination made
in good faith with respect to the Plan. The Employer shall, to the fullest
extent permitted by law, indemnify and hold harmless each member of the Board
and each director, officer and employee of the Employer for liabilities or
expenses that they and each of them incur in carrying out their respective
duties under the Plan, other than for any liabilities or expenses arising out of
such individual’s willful misconduct or fraud. In addition, during the
employment period and thereafter, the Company agrees to indemnify and hold the
Participant and the Participant’s heirs and representatives harmless, to the
maximum extent permitted by law, against any and all damages, costs,
liabilities, losses and expenses (including reasonable attorneys’ fees) as a
result of any claim or proceeding (whether civil, criminal, administrative or
investigative), or any threatened claim or proceeding (whether civil, criminal,
administrative or investigative), against the Participant that arises out of or
relates to the Participant’s service as an officer, director or

 

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employee, as the case may be, of the Company, or the Participant’s service in
any such capacity or similar capacity with an affiliate of the Company or other
entity at the request of the Company, both prior to and after the Effective
Date, and to promptly advance to the Participant or the Participant’s heirs or
representatives such expenses upon written request with appropriate
documentation of such expense upon receipt of an undertaking by the Participant
or on the Participant’s behalf to repay such amount if it shall ultimately be
determined that the Participant is not entitled to be indemnified by the
Company. During the employment period and thereafter, the Company also shall
provide the Participant with coverage under its current directors’ and officers’
liability policy to the same extent that it provides such coverage to its other
executive officers. If the Participant has any knowledge of any actual or
threatened action, suit or proceeding, whether civil, criminal, administrative
or investigative, as to which the Participant may request indemnity under this
provision, the Participant will give the Company prompt written notice thereof;
provided that the failure to give such notice shall not affect the Participant’s
right to indemnification. The Company shall be entitled to assume the defense of
any such proceeding and the Participant will use reasonable efforts to cooperate
with such defense. To the extent that the Participant in good faith determines
that there is an actual or potential conflict of interest between the Company
and the Participant in connection with the defense of a proceeding, the
Participant shall so notify the Company and shall be entitled to separate
representation at the Company’s expense by counsel selected by the Participant
(provided that the Company may reasonably object to the selection of counsel
within ten (10) business days after notification thereof) which counsel shall
cooperate, and coordinate the defense, with the Company’s counsel and minimize
the expense of such separate representation to the extent consistent with the
Participant’s separate defense. This Section 4.7 shall continue in effect after
the termination of the Participant’s employment or the termination of this Plan.

ARTICLE V

AMENDMENT AND TERMINATION

Prior to a Change of Control, the Company reserves the right to amend or
terminate, in whole or in part, any or all of the provisions of the Plan by
action of the Board (or a duly authorized committee thereof) at any time,
provided that in no event shall any amendment or termination in the twelve
(12) period following a Change of Control adversely affect the rights of
Participants hereunder without the prior written consent of the affected
Participants. Notwithstanding the foregoing, the Plan shall terminate on the
first day following the twelve (12) month anniversary of the Change of Control,
provided that all obligations accrued by Participants prior to such termination
of the Plan must be satisfied in full in accordance with the terms hereof.

ARTICLE VI

SUCCESSORS

For purposes of the Plan, the Company shall include any and all successors or
assignees, whether direct or indirect, by purchase, merger, consolidation or
otherwise, to all or substantially all of the business or assets of the Company
and such successors and assignees shall perform the

 

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Company’s obligations under the Plan, in the same manner and to the same extent
that the Company would be required to perform if no such succession or
assignment had taken place. In the event that the surviving corporation in any
transaction to which the Company is a party is a subsidiary of another
corporation, the ultimate parent corporation of such surviving corporation shall
cause the surviving corporation to perform the obligations of the Company under
the Plan in the same manner and to the same extent that the Company would be
required to perform such obligations if no such succession or assignment had
taken place. In such event, the term “Company,” as used in the Plan, shall mean
the Company, as hereinbefore defined, and any successor or assignee (including
the ultimate parent corporation) to the business or assets thereof which by
reason hereof becomes bound by the terms and provisions of the Plan.

ARTICLE VII

MISCELLANEOUS

7.1 Minors and Incompetents. If the Board shall find that any person to whom any
Severance Benefit is payable under the Plan is unable to care for his or her
affairs because of illness or accident, or is a minor, any Severance Benefit due
(unless a prior claim therefore shall have been made by a duly appointed
guardian, committee or other legal representative) may be paid to the spouse, a
child, parent, or brother or sister, or to any person deemed by the Board to
have incurred expense for such person otherwise entitled to Severance Benefits,
in such manner and proportions as the Board may determine in its sole
discretion. Any such payment of Severance Benefits shall be a complete discharge
of the liabilities of the Employer and the Board under the Plan.

7.2 Limitation of Rights. Nothing contained herein shall be construed as
conferring upon a Participant the right to continue in the employ of the
Employer as an employee in any other capacity or to interfere with the
Employer’s right to discharge such Participant at any time for any reason
whatsoever.

7.3 Payment Not Salary. Any Severance Benefit payable under the Plan shall not
be deemed salary or other compensation to the Participant for the purposes of
computing benefits to which the Participant may be entitled under any pension
plan or other arrangement of the Employer maintained for the benefit of its
employees, unless such plan or arrangement provides otherwise.

7.4 Severability. In case any provision of the Plan shall be illegal or invalid
for any reason, said illegality or invalidity shall not affect the remaining
parts hereof, but the Plan shall be construed and enforced as if such illegal
and invalid provision never existed.

7.5 Withholding. The Employer shall have the right to make such provisions as it
deems necessary or appropriate to satisfy any obligation it may have to withhold
federal, state or local income or other taxes incurred by reason of payments
pursuant to the Plan. In lieu thereof, the Company and/or the Employer shall
have the right to withhold the amounts of such taxes from any other sums due or
to become due from the Company and/or the Employer to the Participant upon such
terms and conditions as the Board may prescribe.

 

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7.6 Non-Alienation of Benefits. The Severance Benefits payable under the Plan
shall not be subject to alienation, transfer, assignment, garnishment, execution
or levy of any kind, and any attempt to cause any Severance Benefit to be so
subjected shall not be recognized.

7.7 Governing Law. To the extent legally required, the Code and ERISA shall
govern the Plan and, if any provision hereof is in violation of any applicable
requirement thereof, the Company reserves the right to retroactively amend the
Plan to comply therewith. To the extent not governed by the Code and ERISA, the
Plan shall be governed by the laws of the State of Delaware, without regard to
the choice of law principles thereof.

7.8 Code Section 409A. The intent of the parties is that payments and benefits
under this Plan comply with Code Section 409A and, accordingly, to the maximum
extent permitted, this Plan shall be interpreted to be in compliance therewith.
If the Participant notifies the Company (with specificity as to the reason
therefor) that the Participant believes that any provision of this Plan (or of
any award of compensation, including equity compensation or benefits) would
cause the Participant to incur any additional tax or interest under Code
Section 409A and the Company concurs with such belief or the Company (without
any obligation whatsoever to do so) independently makes such determination, the
Company shall, after consulting with the Participant, reform such provision to
attempt to comply with Code Section 409A through good faith modifications to the
minimum extent reasonably appropriate to conform with Code Section 409A. To the
extent that any provision hereof is modified in order to comply with Code
Section 409A, such modification shall be made in good faith and shall, to the
maximum extent reasonably possible, maintain the original intent and economic
benefit to the Participant and the Company of the applicable provision without
violating the provisions of Code Section 409A. In no event whatsoever shall the
Company be liable for any additional tax, interest or penalty that may be
imposed on the Participant by Code Section 409A or damages for failing to comply
with Code Section 409A. With respect to any payment or benefit considered to be
nonqualified deferred compensation under Section 409A, a termination of
employment shall not be deemed to have occurred for purposes of any provision of
this Plan providing for the payment of any amounts or benefits upon or following
a termination of employment unless such termination is also a “separation from
service” within the meaning of Code Section 409A and, for purposes of any such
provision of this Plan, references to a “termination,” “termination of
employment” or like terms shall mean “separation from service.” Notwithstanding
anything to the contrary in this Plan, if the Participant is deemed on the date
of termination to be a “specified employee” within the meaning of that term
under Code Section 409A(a)(2)(B), then with regard to any payment or the
provision of any benefit that is considered nonqualified deferred compensation
under Code Section 409A payable on account of a “separation from service,” such
payment or benefit shall not be made or provided until the date which is the
earlier of (A) the expiration of the six (6) month period measured from the date
of such “separation from service” of the Participant, and (B) the date of the
Participant’s death, to the extent required under Code Section 409A. Upon the
expiration of the foregoing delay period, all payments and benefits delayed
pursuant to this Section 7.8 (whether they would have otherwise been payable in
a single sum or in installments in the absence of such delay) shall be paid or
reimbursed to the Participant in a lump sum, and any remaining payments and
benefits due under this Plan shall be paid or provided in accordance with the
normal payment dates specified for them herein. To the extent that
reimbursements or other in-kind benefits under this Plan constitute
“nonqualified deferred compensation” for purposes of Code Section 409A, (A) all
expenses or other reimbursements

 

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hereunder shall be made on or prior to the last day of the taxable year
following the taxable year in which such expenses were incurred by the
Participant, (B) any right to reimbursement or in-kind benefits shall not be
subject to liquidation or exchange for another benefit, and (C) no such
reimbursement, expenses eligible for reimbursement, or in-kind benefits provided
in any taxable year shall in any way affect the expenses eligible for
reimbursement, or in-kind benefits to be provided, in any other taxable year.
For purposes of Code Section 409A, the Participant’s right to receive any
installment payments pursuant to this Plan shall be treated as a right to
receive a series of separate and distinct payments. Whenever a payment under
this Plan specifies a payment period with reference to a number of days, the
actual date of payment within the specified period shall be within the sole
discretion of the Company. Notwithstanding any other provision of this Plan to
the contrary, in no event shall any payment under this Plan that constitutes
“nonqualified deferred compensation” for purposes of Code Section 409A be
subject to offset by any other amount unless otherwise permitted by Code
Section 409A.

7.9 Non-Exclusivity. The adoption of the Plan by the Company shall not be
construed as creating any limitations on the power of the Company to adopt such
other supplemental retirement income arrangements as it deems desirable, and
such arrangements may be either generally applicable or limited in application.
Nothing in this Plan shall prevent of limit the Participant’s continuing or
future participation in any benefit, bonus, incentive or other plan or program
provided by the Company of any of its Affiliates and for which the Participant
may qualify, nor shall anything herein limit or reduce such rights as the
Participant may have under any agreements with the Company or any of its
Subsidiaries (although any such severance benefits will not be paid to the
Participant in accordance with the Plan). Amounts which are vested benefits or
which the Participant is otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with the Company or any of
its Affiliates at or subsequent to the date of termination shall be payable in
accordance with such plan, policy, practice or program or contract or agreement,
except as explicitly modified by this Plan.

7.10 Non-Employment. The Plan is not an agreement of employment and it shall not
grant the Participant any rights of continued employment.

7.11 Headings and Captions. The headings and captions herein are provided for
reference and convenience only. They shall not be considered part of the Plan
and shall not be employed in the construction of the Plan.

7.12 Gender and Number. Whenever used in the Plan, the masculine shall be deemed
to include the feminine and the singular shall be deemed to include the plural,
unless the context clearly indicates otherwise.

7.13 Communications. All announcements, notices and other communications
regarding the Plan will be made by the Company in writing (whether in electronic
form or otherwise). Except for written amendments to the Plan or official
written communications issued by the Company in connection with the Plan,
Participants in the Plan may not rely on any representation or statement made by
the Employer or any of its officers, directors, employees or agents, whether
written or oral, regarding such Participants’ participation in the Plan and any
rights hereunder.

 

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ARTICLE VIII

CLAIMS AND REVIEW PROCEDURE

8.1 Claims Procedure. Any Participant who has not received benefits under this
Plan that he or she believes should be paid may make a claim for such benefits
as follows:

(a) Initiation - Written Claim. The Participant shall initiate a claim by
submitting to the Board a written claim for benefits.

(b) Timing of Board Response. The Board shall respond to the Participant within
90 days after receiving the claim. If the Board determines that special
circumstances require additional time for processing the claim, the Board can
extend the response period by an additional 90 days by notifying the Participant
in writing, prior to the end of the initial 90-day period, that an additional
period is required. The notice of extension must set forth the special
circumstances and the date by which the Board expects to render its decision.

(c) Notice of Decision. If the Board denies part or all of the claim, the Board
shall notify the Participant in writing of such denial. The Board shall write
the notification in a manner calculated to be understood by the participant. The
notification shall set forth:

(i) The specific reasons for the denial;

(ii) A reference to the specific provisions of the Plan on which the denial is
based;

(iii) A description of any additional information or material necessary for the
Participant to perfect the claim and an explanation of why it is needed;

(iv) An explanation of the Plan’s review procedures and the time limits
applicable to such procedures;

(v) And a statement of the Participant’s right to bring a civil action under
ERISA Section 502(a) following an adverse benefit determination on review.

8.2 Review Procedure. If the Board denies part or all of the claim, the
Participant shall have the opportunity for a full and fair review by the Board
of the denial, as follows:

(a) Initiation - Written Request. To initiate the review, the Participant,
within 60 days after receiving the Board’s notice of denial, must file with the
Board a written request for review.

(b) Additional Submissions - Information Access. The Participant shall then have
the opportunity to submit written comments, documents, records and other
information relating to the claim. The Board shall also provide the Participant,
upon request and free of charge, reasonable access to, and copies of, all
documents, records and other information relevant (as defined in applicable
ERISA regulations) to the Participant’s claim for benefits.

 

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(c) Considerations on Review. In consider the review, the Board shall take into
account all materials and information the Participant submits relating to the
claim, without regard to whether such information was submitted or considered in
the initial benefit determination.

(d) Timing of Board Response. The Board shall respond in writing to such
Participant within 60 days after receiving the request for review. If the Board
determines that special circumstances require additional time for processing the
claim, the Board can extend the response period by an additional 60 days by
notifying the Participant in writing, prior to the end of the initial 60-day
period, that an additional period is required. The notice of extension must set
forth the special circumstances and the date by which the Board expects to
render its decision.

(e) Notice of Decision. If the Board denies part or all of the claim, the Board
shall notify the Participant in writing of such denial. The Board shall write
the notification in a manner calculated to be understood by the participant. The
notification shall set forth:

(i) The specific reasons for the denial;

(ii) A reference to the specific provisions of the Plan on which the denial is
based;

(iii) A statement that the Participant is entitled to receive, upon request and
free of charge, reasonable access to, and copies of, all documents, records and
other information relevant (as defined in applicable ERISA regulations) to the
Participant’s claim for benefits; and

(iv) A statement of the Participant’s right to bring a civil action under ERISA
Section 502(a).

8.3 Plan Interpretation and Benefit Determination. The Board (or, where
applicable, any duly authorized delegee of the Board) shall have the exclusive
right, power, and authority, in its sole and absolute discretion, to administer,
apply and interpret the Plan and any other documents, and to decide all factual
and legal matters arising in connection with the operation or administration of
the Plan.

Without limiting the generality of the foregoing, the Board (or, where
applicable, any duly authorized delegee of the Board) shall have the sole and
absolute discretionary authority to:

(a) take all actions and make all decisions (including factual decisions) with
respect to the eligibility for, and the amount of, benefits payable under the
Plan;

(b) formulate, interpret and apply rules, regulations and policies necessary to
administer the Plan;

(c) decide questions, including legal or factual questions, relating to the
calculation and payment of benefits, and all other determinations made, under
the Plan;

 

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(d) resolve and/or clarify any factual or other ambiguities, inconsistencies and
omissions arising under the Plan or other Plan documents; and

(e) process, and approve or deny, benefit claims and rule on any benefit
exclusions.

All determinations made by the Board (or, where applicable, any duly authorized
delegee of the Board) with respect to any matter arising under the Plan shall be
final and binding on the Employer, the Participant, any beneficiary, and all
other parties affected thereby.

8.4 Notices. For purpose of this Plan, notices and all other communications
provided for in this Plan or contemplated hereby shall be in writing and shall
be deemed to have been duly given when personally delivered, delivered by a
nationally recognized overnight delivery service or when mailed United States
certified or registered mail, return receipt requested, postage prepaid, and
addressed, in the case of the Company, to the Company at: Sagent
Pharmaceuticals, Inc., 1901 N. Roselle Road, Suite 700, Schaumburg, IL 60195,
Attention: Legal Department, with a copy to Kirkland & Ellis LLP, 601 Lexington
Avenue, New York, NY 10022, Attention: George Stamas; and in the case of the
Participant, to the Participant at the most recent address of the Participant
that is set forth in the Company’s records.

 

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