Exhibit 10.1

 

AMENDED AND RESTATED
TRANSITION AND SEVERANCE AGREEMENT

 

This Amended and Restated Transition and Severance Agreement (the “Agreement”)
is entered into as of September 7, 2007 (the “Effective Date”), by and between
Sepracor Inc. (“Sepracor” or the “Company”) and W. James O’Shea (“O’Shea”)
(individually, a “Party,” and collectively, the “Parties”) and amends and
restates the Transition and Severance Agreement between the Parties entered into
as of March 1, 2007.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties agree as follows:

 

1.             TRANSITION PERIOD POSITION AND RESPONSIBILITIES. EFFECTIVE AS OF
MARCH 1, 2007 (THE “TRANSITION DATE”), O’SHEA SHALL RESIGN FROM HIS POSITIONS AS
PRESIDENT AND CHIEF OPERATING OFFICER OF SEPRACOR. BEGINNING ON THE TRANSITION
DATE AND ENDING ON AUGUST 31, 2007, OR EARLIER IF O’SHEA VOLUNTARILY TERMINATES
HIS EMPLOYMENT PRIOR TO AUGUST 31, 2007 (THE “TRANSITION PERIOD”), O’SHEA SHALL
BE EMPLOYED BY SEPRACOR AS ITS VICE CHAIRMAN, REPORTING TO TIMOTHY BARBERICH,
SEPRACOR’S EXECUTIVE CHAIRMAN. DURING THE TRANSITION PERIOD, O’SHEA SHALL
PERFORM SUCH DUTIES CONSISTENT WITH HIS POSITION AS ARE REASONABLY ASSIGNED TO
HIM BY MR. BARBERICH. THE PARTIES FURTHER AGREE THAT O’SHEA SHALL PERFORM ALL
WORK AND PROVIDE ALL ASSISTANCE HEREUNDER AT SUCH TIMES AND LOCATIONS AS ARE
REASONABLY DETERMINED BY MR. BARBERICH.

 

2.             TRANSITION PERIOD COMPENSATION. DURING THE TRANSITION PERIOD, THE
COMPANY SHALL COMPENSATE O’SHEA AT THE ANNUAL RATE OF $548,625, LESS APPLICABLE
TAXES AND WITHHOLDINGS, (THE “BASE SALARY”) TO BE PAID IN ACCORDANCE WITH THE
COMPANY’S REGULAR PAYROLL PRACTICES. IN ADDITION, PROVIDED O’SHEA HAS NOT
VOLUNTARILY TERMINATED HIS EMPLOYMENT PRIOR TO AUGUST 31, 2007, HE SHALL BE
ENTITLED TO AN ANNUAL BONUS FOR CALENDAR YEAR 2007 EQUAL TO $219,450, LESS
APPLICABLE TAXES AND WITHHOLDINGS. THE BONUS SHALL BE PAID TO O’SHEA IN A LUMP
SUM, ON OR PRIOR TO MARCH 1, 2008. FOR THE DURATION OF THE TRANSITION PERIOD,
THE COMPANY SHALL ALSO CONTINUE TO PROVIDE O’SHEA WITH THE BENEFITS WHICH HE
CURRENTLY ENJOYS UNDER THE COMPANY’S PLANS AND POLICIES, UNDER THE SAME TERMS
THAT APPLIED TO HIM IMMEDIATELY PRIOR TO THE EFFECTIVE DATE, SUBJECT TO THE
TERMS OF THOSE PLANS AND POLICIES.

 

3.             SEVERANCE PERIOD AND COMPENSATION. EFFECTIVE ON AUGUST 31, 2007
(THE “SEPARATION DATE”), O’SHEA’S EMPLOYMENT WITH THE COMPANY SHALL CEASE.
THEREAFTER, PROVIDED O’SHEA HAS NOT VOLUNTARILY TERMINATED HIS EMPLOYMENT PRIOR
TO AUGUST 31, 2007 AND EXECUTES, DELIVERS AND DOES NOT REVOKE A RELEASE OF
CLAIMS FOR THE BENEFIT OF THE COMPANY IN A FORM PROVIDED BY THE COMPANY, THE
COMPANY SHALL CONTINUE TO PAY O’SHEA THE BASE SALARY (THE “BASE SALARY
SEVERANCE”) FOR A PERIOD OF 12 MONTHS (THE “SEVERANCE PERIOD”), IN ACCORDANCE
WITH ITS REGULAR PAYROLL PRACTICES. HOWEVER, THE FIRST PAYMENT WILL NOT BE MADE
UNTIL MARCH 1, 2008 AND SUCH FIRST PAYMENT WILL BE EQUAL TO THOSE AMOUNTS TO
WHICH O’SHEA WOULD OTHERWISE HAVE BEEN ENTITLED IF NOT FOR THE SIX MONTH DELAY
DESCRIBED ABOVE. FOR THE REMAINING SIX (6) MONTHS OF THE SEVERANCE PERIOD,
O’SHEA WILL BE PAID THE BALANCE OF HIS BASE SALARY SEVERANCE IN EQUAL BI-WEEKLY
INSTALLMENTS.

 

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For the duration of the Severance Period, if allowed under the Company’s life
insurance policy, the Company further agrees to provide O’Shea with life
insurance in the same amount the Company currently provides him, the full
premium of which shall be paid by the Company.

 

Following the Separation Date, any entitlement O’Shea has, might have, had, or
might have had to compensation, bonuses, wages or participation in any benefit
plan, policy, program, contract or practice of the Company, shall terminate,
except as required by federal or state law, by applicable plan terms or stock
option agreements, or by the express terms of this Agreement.

 

4.             STOCK OPTIONS AND RESTRICTED STOCK. THE PARTIES ACKNOWLEDGE THAT
O’SHEA HAS BEEN AWARDED OPTIONS TO PURCHASE 700,000 SHARES OF THE COMPANY’S
COMMON STOCK, ALL OF WHICH OPTIONS ARE FULLY VESTED, AS WELL AS OPTIONS TO
PURCHASE AN ADDITIONAL 25,700 SHARES OF THE COMPANY’S STOCK WHICH WILL VEST
PRIOR TO THE SEPARATION DATE. THE GRANT DATES AND EXERCISE PRICES OF SUCH
OPTIONS ARE SET FORTH IN EXHIBIT A HERETO. O’SHEA SHALL HAVE THE RIGHT TO
EXERCISE ANY OR ALL OF HIS OPTIONS FOR A PERIOD OF NINETY (90) DAYS AFTER THE
SEPARATION DATE. THE OPTIONS SHALL TERMINATE AT THE CLOSE OF BUSINESS ON THE
NINETIETH (90TH) DAY FOLLOWING THE SEPARATION DATE. IN ADDITION, THE PARTIES
ACKNOWLEDGE THAT O’SHEA IS THE OWNER OF CERTAIN SHARES OF RESTRICTED STOCK OF
THE COMPANY. OF THESE SHARES, A TOTAL 6,850 SHARES WILL NO LONGER BE SUBJECT TO
ANY RESTRICTION AS OF MARCH 16, 2007, AND MAY BE RETAINED OR SOLD BY O’SHEA
AFTER THAT DATE IN HIS DISCRETION, SUBJECT TO THE COMPANY’S INSIDER TRADING
POLICY, THE TERMS OF THE INCENTIVE STOCK PLAN AND RESTRICTED STOCK AGREEMENT
UNDER WHICH SUCH SHARES WERE GRANTED AND THE FEDERAL SECURITIES LAWS. EXCEPT
WHERE EXPRESSLY MODIFIED BY THIS AGREEMENT, THE OPTIONS AND SHARES OF RESTRICTED
STOCK SET FORTH IN EXHIBIT A SHALL CONTINUE TO BE GOVERNED BY THE TERMS OF THE
APPLICABLE STOCK OPTION AGREEMENTS AND RESTRICTED STOCK AGREEMENT EXECUTED BY
THE PARTIES.

 

5.             COOPERATION. FROM THE EFFECTIVE DATE FORWARD, O’SHEA AGREES
REASONABLY TO COOPERATE WITH THE COMPANY IN THE DEFENSE OR PROSECUTION OF ANY
THREATENED OR ACTUAL CLAIMS OR ACTIONS WHICH MAY BE BROUGHT BY, AGAINST OR ON
BEHALF OF THE COMPANY, ITS PREDECESSORS OR ANY OF ITS CURRENT OR FORMER
PARTNERS, AGENTS, EMPLOYEES, DIRECTORS OR AFFILIATES AND WHICH RELATE TO EVENTS
OR OCCURRENCES THAT TRANSPIRED OR ARE ALLEGED TO HAVE TRANSPIRED DURING HIS
EMPLOYMENT WITH THE COMPANY. SUCH COOPERATION SHALL INCLUDE, WITHOUT IMPLICATION
OF LIMITATION, BEING AVAILABLE TO MEET WITH THE COMPANY’S COUNSEL TO PREPARE FOR
DISCOVERY OR TRIAL AND TO TESTIFY TRUTHFULLY AS A WITNESS WHEN REASONABLY
REQUESTED BY THE COMPANY AT REASONABLE TIMES AND FOR REASONABLE TIME PERIODS. IN
THE EVENT ANY SUCH COOPERATION IS REQUIRED FOLLOWING THE EXPIRATION OF THE
SEVERANCE PERIOD AND REQUIRES MORE THAN DE MINIMIS TIME OR EFFORT, THE COMPANY
AGREES TO COMPENSATE O’SHEA AT A REASONABLE HOURLY RATE FOR ANY COOPERATION
PROVIDED UNDER THIS SECTION. NOTWITHSTANDING THE FOREGOING, (I) THE HOURLY RATE
EXPENSES ELIGIBLE FOR REIMBURSEMENT MAY NOT AFFECT THE EXPENSES ELIGIBLE FOR
REIMBURSEMENT IN ANY OTHER TAXABLE YEAR, (II) SUCH REIMBURSEMENT MUST BE MADE ON
OR BEFORE THE LAST DAY OF THE YEAR FOLLOWING THE YEAR IN WHICH THE EXPENSE WAS
INCURRED, AND (III) THE RIGHT TO REIMBURSEMENT IS NOT SUBJECT TO LIQUIDATION OR
EXCHANGE FOR ANOTHER BENEFIT.

 

6.             LEGAL FEES. NOTHING CONTAINED IN THIS AGREEMENT SHALL CONSTITUTE
A RELINQUISHMENT OR WAIVER BY O’SHEA OF HIS RIGHT TO BE INDEMNIFIED BY THE
COMPANY PURSUANT TO THE TERMS OF THE COMPANY’S RESTATED CERTIFICATE OF
INCORPORATION, AS AMENDED (THE “INDEMNIFICATION PROVISIONS”) WITH RESPECT TO
CONDUCT OR EVENTS OCCURRING DURING, OR RELATING TO, HIS EMPLOYMENT BY SEPRACOR,
OR OF ANY RIGHT THAT HE MAY HAVE UNDER, OR WITH RESPECT TO, THE

 

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COMPANY’S DIRECTORS AND OFFICERS LIABILITY INSURANCE POLICIES. THE COMPANY
AGREES THAT TO THE FULL EXTENT ALLOWED BY APPLICABLE LAW AND SUBJECT TO THE
TERMS OF THE INDEMNIFICATION PROVISIONS AND ANY APPLICABLE DIRECTOR AND OFFICER
LIABILITY INSURANCE POLICY, IT WILL CONTINUE TO PAY O’SHEA’S REASONABLE LEGAL
FEES RELATING TO ANY MATTER THAT OCCURRED DURING, OR THAT RELATES TO O’SHEA’S
EMPLOYMENT BY THE COMPANY. NOTWITHSTANDING THE FOREGOING, (I) THE LEGAL FEE
EXPENSES ELIGIBLE FOR REIMBURSEMENT MAY NOT AFFECT THE EXPENSES ELIGIBLE FOR
REIMBURSEMENT IN ANY OTHER TAXABLE YEAR, (II) SUCH REIMBURSEMENT MUST BE MADE ON
OR BEFORE THE LAST DAY OF THE YEAR FOLLOWING THE YEAR IN WHICH THE EXPENSE WAS
INCURRED, AND (III) THE RIGHT TO REIMBURSEMENT IS NOT SUBJECT TO LIQUIDATION OR
EXCHANGE FOR ANOTHER BENEFIT.

 

7.             BINDING NATURE OF AGREEMENT. THIS AGREEMENT SHALL BE BINDING UPON
AND INURE TO THE BENEFIT OF THE PARTIES AND THEIR RESPECTIVE HEIRS,
ADMINISTRATORS, REPRESENTATIVES, EXECUTORS, SUCCESSORS AND ASSIGNS.

 

8.             USE OF THE AGREEMENT AS EVIDENCE. THIS AGREEMENT MAY NOT BE USED
AS EVIDENCE IN ANY SUBSEQUENT PROCEEDING OF ANY KIND, EXCEPT ONE IN WHICH EITHER
PARTY ALLEGES A BREACH OF THE TERMS OF THIS AGREEMENT OR ELECTS TO USE THIS
AGREEMENT AS A DEFENSE TO ANY CLAIM.

 

9.             ENTIRE AGREEMENT; MODIFICATIONS. WITH THE EXCEPTION OF THE STOCK
OPTION AND RESTRICTED STOCK AGREEMENTS APPLICABLE TO THE GRANTS SET FORTH IN
EXHIBIT A HERETO, THE COMPANY’S STOCK OPTION AND INCENTIVE STOCK PLAN UNDER
WHICH SUCH EQUITY INCENTIVES WERE GRANTED, THE INVENTION, NON-DISCLOSURE AND
PERSONAL CONDUCT AGREEMENT EXECUTED BY O’SHEA ON OCTOBER 1, 1999, AND THE
EXECUTIVE RETENTION AGREEMENT DATED FEBRUARY 1, 2002, WHICH WILL SURVIVE AND
REMAIN IN FULL FORCE AND EFFECT, THIS AGREEMENT CONTAINS THE ENTIRE AGREEMENT
AMONG THE PARTIES HERETO WITH RESPECT TO THE MATTERS COVERED HEREBY, AND
SUPERSEDES ALL PRIOR AND CONTEMPORANEOUS COMMUNICATIONS, E-MAILS, AGREEMENTS,
REPRESENTATIONS, UNDERSTANDINGS OR NEGOTIATIONS BETWEEN O’SHEA, THE COMPANY
AND/OR THEIR AGENTS AND ATTORNEYS, INCLUDING BUT NOT LIMITED TO THE OFFER LETTER
SIGNED BY THE PARTIES AND BEARING THE TYPED DATE SEPTEMBER 10, 1999 AND THE
TRANSITION AND SEVERANCE AGREEMENT ENTERED INTO BETWEEN THE PARTIES ON MARCH 1,
2007, WHICH THIS AGREEMENT AMENDS AND RESTATES. THIS AGREEMENT MAY BE MODIFIED
ONLY BY A WRITTEN AGREEMENT SIGNED BY AN AUTHORIZED REPRESENTATIVE OF EACH OF
THE PARTIES HERETO. NO WAIVER OF THIS AGREEMENT OR ANY PROVISION HEREOF SHALL BE
BINDING UPON THE PARTY AGAINST WHOM ENFORCEMENT OF SUCH WAIVER IS SOUGHT UNLESS
IT IS MADE IN WRITING AND SIGNED BY OR ON BEHALF OF SUCH PARTY.

 

10.          SECTION 409A.      NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY IN
THIS AGREEMENT, TO THE EXTENT THAT ANY OF THE PAYMENTS THAT MAY BE MADE
HEREUNDER CONSTITUTE “NONQUALIFIED DEFERRED COMPENSATION”, WITHIN THE MEANING OF
SECTION 409A AND YOU ARE A “SPECIFIED EMPLOYEE” UPON YOUR SEPARATION (AS DEFINED
UNDER SECTION 409A), THE TIMING OF ANY SUCH PAYMENT FOLLOWING THE SEPARATION
DATE SHALL BE MODIFIED IF, ABSENT SUCH MODIFICATION, SUCH PAYMENT WOULD
OTHERWISE BE SUBJECT TO PENALTY UNDER SECTION 409A. IN ANY EVENT, THE COMPANY
MAKES NO REPRESENTATION OR WARRANTY AND SHALL HAVE NO LIABILITY TO YOU OR TO ANY
OTHER PERSON IF ANY PROVISIONS OF THIS AGREEMENT ARE DETERMINED TO CONSTITUTE
“NONQUALIFIED DEFERRED COMPENSATION” SUBJECT TO SECTION 409A BUT DO NOT SATISFY
THE REQUIREMENTS OF THAT SECTION.

 

11.          FURTHER ASSURANCES. THE PARTIES AGREE TO EXECUTE, ACKNOWLEDGE (IF
REASONABLY REQUESTED), AND DELIVER SUCH DOCUMENTS, CERTIFICATES OR OTHER
INSTRUMENTS AND TAKE SUCH OTHER ACTIONS AS MAY BE REASONABLY REQUIRED FROM TIME
TO TIME TO CARRY OUT THE INTENTS AND PURPOSES OF

 

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THIS AGREEMENT, PROVIDED THEY DO NOT IMPOSE ANY MATERIAL ADDITIONAL OBLIGATIONS
UPON EITHER PARTY.

 

12.          ACKNOWLEDGMENTS AND OTHER TERMS. O’SHEA AGREES THAT HE HAS
CAREFULLY READ AND UNDERSTANDS ALL OF THE PROVISIONS OF THIS AGREEMENT, THAT HE
HAS BEEN ADVISED TO CONSULT WITH AND HAS CONSULTED WITH AN ATTORNEY, AND THAT HE
IS VOLUNTARILY ENTERING THIS AGREEMENT. O’SHEA FURTHER REPRESENTS AND
ACKNOWLEDGES THAT IN EXECUTING THIS AGREEMENT, HE IS NOT RELYING AND HAS NOT
RELIED UPON ANY REPRESENTATION OR STATEMENT MADE BY THE COMPANY WITH REGARD TO
THE SUBJECT MATTER, BASIS OR EFFECT OF THIS AGREEMENT.

 

13.          INTERPRETATION. THE LANGUAGE OF ALL PARTS OF THIS AGREEMENT SHALL
IN ALL CASES BE CONSTRUED AS A WHOLE, ACCORDING TO ITS FAIR MEANING, AND NOT
STRICTLY FOR OR AGAINST ANY OF THE PARTIES. THIS AGREEMENT SHALL BE INTERPRETED
IN SUCH A MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY
PROVISION HEREOF SHALL BE PROHIBITED OR INVALID UNDER ANY SUCH LAW, SUCH
PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY
WITHOUT INVALIDATING OR NULLIFYING THE REMAINDER OF SUCH PROVISION OR ANY OTHER
PROVISIONS OF THIS AGREEMENT. THE CAPTIONS OF THE SECTIONS OF THIS AGREEMENT ARE
FOR CONVENIENCE OF REFERENCE ONLY, AND IN NO WAY DEFINE, LIMIT OR AFFECT THE
SCOPE OR SUBSTANCE OF ANY SECTION OF THIS AGREEMENT.

 

14.          COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS AND MAY BE DELIVERED BY FACSIMILE, EACH OF WHICH SHALL BE DEEMED TO
BE AN ORIGINAL BUT ALL OF WHICH TOGETHER SHALL CONSTITUTE ONE AND THE SAME
INSTRUMENT.

 

15.          GOVERNING LAW; PREVAILING PARTY. THIS AGREEMENT SHALL TAKE EFFECT
AS AN INSTRUMENT UNDER SEAL AND SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF MASSACHUSETTS, WITHOUT REGARD TO ITS CONFLICTS OF LAWS
PRINCIPLES. IN THE EVENT EITHER PARTY RETAINS LEGAL COUNSEL IN CONNECTION WITH
THE ENFORCEMENT OF ITS RIGHTS UNDER THIS AGREEMENT AND THE OTHER PARTY IS FOUND
BY A COURT HAVING COMPETENT JURISDICTION TO HAVE BREACHED ITS OBLIGATIONS
HEREUNDER, THE PREVAILING PARTY SHALL BE ENTITLED TO RECOVER ALL REASONABLE
LEGAL FEES AND RELATED REASONABLE CHARGES AND DISBURSEMENTS INCURRED BY IT IN
CONNECTION WITH SUCH ENFORCEMENT ACTION AND ANY NEGOTIATIONS LEADING UP TO IT.

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as an
instrument under seal as of the Effective Date.

 

 

SEPRACOR INC.

 

 

By:

 

/s/ Adrian Adams

 

 

 

 

Name and Title:

Mr. Adrian Adams, President & CEO

 

 

 

 

 

 

 

 

/s/ W. James O’Shea

 

W. JAMES O’SHEA

 

 

 

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Exhibit A

 

O’Shea Stock Option Grants as of March 1, 2007

 

 

 

 

 

 

 

 

 

Total Vesting

 

 

 

Options

 

 

 

Total Currently

 

Prior to

 

Grant Date

 

Outstanding

 

Price

 

Vested

 

Separation Date

 

 

 

 

 

 

 

 

 

 

 

10/21/99

 

200,000

 

$

35.75

 

200,000

 

200,000

 

10/21/99

 

11,814

 

$

35.75

 

11,184

 

11,184

 

10/21/99

 

468,816

 

$

35.75

 

468,816

 

468,816

 

2/24/05

 

7,750

 

$

64.50

 

1,550

 

3,100

 

2/24/05

 

92,250

 

$

64.50

 

18,450

 

36,900

 

3/16/06

 

1,800

 

$

55.54

 

0

 

0

 

3/16/06

 

26,700

 

$

55.54

 

0

 

5,700

 

 

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