EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the “Agreement”) dated as of March 27, 2017 by and
between Alexion Pharmaceuticals, Inc., a Delaware corporation (the “Company”),
and Ludwig Hantson (the “Employee”).
WITNESSETH
WHEREAS, the Company agrees to employ the Employee, subject to the terms and
conditions contained in this Agreement; and
WHEREAS, the Employee agrees to accept employment with the Company, subject to
the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1.Employment Duties and Acceptance.
(a)    The Company hereby employs the Employee, for the Term (as hereinafter
defined), to render full-time services to the Company as Chief Executive Officer
and to perform such duties commensurate with such office or other office as the
Employee shall reasonably be directed by the Company to perform. The Employee
hereby accepts such employment and agrees to render the services described
above. The Employee shall report to the Board of Directors of the Company (the
“Board”).
(b)    The Employee further agrees to accept election and to serve during all or
any part of the Term as a Director of the Company without any compensation
therefor other than that specified in this Agreement, if elected to such
position by the shareholders of the Company. During the Term, the Company shall
use its best efforts to cause the Employee to be elected as a Director and shall
include him in the management slate for election as a Director at every
shareholders meeting at which his term as a Director would otherwise expire. The
Employee hereby agrees to resign from the Board of Directors immediately upon
termination of Employee’s employment.
(c)    During the Term, the Employee shall devote his full business time and his
best efforts, business judgment, skill and knowledge exclusively to the
advancement of the business and interests of the Company and its Affiliates and
to the discharge of his duties and responsibilities hereunder. Notwithstanding
anything to the contrary herein, although the Employee shall provide services as
a full time employee, it is understood that the Employee, with consent of the
Board, may (1) have non full-time academic appointments; (2) participate in
professional activities; (3) publish academic articles; and (4) participate in
community and/or philanthropic activities (collectively, “Permitted
Activities”); provided, however, that such Permitted Activities do not interfere
with the Employee’s duties to the Company.
(d)    Effective on and after January 1, 2018, Employee may with the consent of
the Board, serve on one outside board of directors.

 
 
 

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2.    Term of Employment. The term of the Employee’s employment under this
Agreement shall commence as of March 27, 2017 (the “Effective Date”) and shall
end on the third anniversary thereof, unless sooner terminated pursuant to
Section 6, 7 or 8 of this Agreement. Notwithstanding the foregoing, unless
notice is given by the Employee or the Company at least sixty (60) days prior to
the expiration of the Term of this Agreement (or at least sixty (60) days prior
to the expiration of any extension hereof), the Term of the Agreement shall be
automatically extended by one (1) year from the date it would otherwise end
(whether upon expiration of the original Term or any extension(s) thereof),
unless sooner terminated pursuant to Section 6, 7 or 8 hereof. The term of this
Agreement as from time to time extended or renewed is hereafter referred to as
“the Term of this Agreement” or “the Term”.
3.    Compensation and Benefits.
(a)    As compensation for services to be rendered pursuant to this Agreement,
the Company agrees to pay the Employee, during the Term, an annual base salary
of $1,200,000, subject to taxes and withholdings and subject to increase from
time to time (the “Base Salary”), payable in accordance with its regular payroll
practices. The Employee’s Base Salary hereunder shall be reviewed at least
annually thereafter during the Term of the Agreement for increase at the
discretion of the Company.
(b)    The Company agrees that the Employee shall be eligible for an annual
performance bonus from the Company with respect to each fiscal year of the
Company that ends during the Term, pursuant to the Company’s management
incentive bonus program in effect from time to time (such plan, as so in effect,
the “Bonus Plan”). The Employee’s target bonus under the Bonus Plan will be 120%
of the Base Salary. The actual amount of any such bonus payable to the Employee
under the Bonus Plan shall be determined by the Board of Directors of the
Company (the “Board”) or the Compensation Committee thereof (the “Committee”)
and paid by the Company in accordance with the terms of the Bonus Plan, subject
to the Employee’s remaining employed on the date that bonuses are paid under the
Bonus Plan, except as otherwise expressly provided herein.
(c)    In addition to the previously-described stock-based awards that will be
granted to the Employee on the Effective Date, the Employee shall be eligible to
receive stock-based awards under the equity incentive plan or program maintained
by the Company as in effect from time to time (such plan, as so in effect, the
“Equity Plan”) in the discretion of the Board or the Committee. Any such
stock-based award will be subject to the terms of the Equity Plan, the terms of
the award agreement evidencing such stock-based award, and such other
restrictions and limitations as are generally applicable to shares of the
Company’s common stock or Company employees or otherwise imposed by law.
(d)    The Company shall pay or reimburse the Employee for all reasonable,
customary and necessary business expenses actually incurred or paid by the
Employee during the Term in the performance of services under this Agreement,
subject to travel and other policies and such reasonable substantiation and
documentation as may be required by the Company from time to time, provided that
(i) the amount of expenses eligible for reimbursement during any calendar year
may not affect the expenses eligible for reimbursement in any other taxable
year, (ii) reimbursement is made not later than December 31 of the calendar year
following the calendar

 
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year in which the expense was incurred, and (iii) the right to reimbursement is
not subject to liquidation or exchange for any other benefit. In addition, the
Company shall reimburse the Employee for the reasonable attorneys’ fees incurred
by him for the negotiation and documentation of this Agreement and related
agreements, up to $20,000.
(e)    During the Term, the Employee shall be eligible to participate in all
employee benefit plans from time to time in effect for employees of the Company
generally, except to the extent such plans are duplicative of benefits otherwise
provided under this Agreement (e.g., a severance pay plan). Participation in
such employee benefit plans will be subject to the terms of the applicable plan
documents and generally applicable Company policies, as the same may be in
effect from time to time, and any other restrictions or limitations imposed by
law.
(f)    During the Term, the Employee shall be eligible for paid vacation of four
weeks and two personal days per calendar year taken in accordance with
applicable Company policy.
(g)    On the first regular payroll date following the Effective Date, the
Employee will be paid a gross amount of $200,000, subject to taxes and other
withholdings, in lieu of relocation benefits. The Employee shall be required to
repay the full gross amount of such payment to the Company if this Agreement is
terminated under Sections 6(c) or 7(a) hereof prior to the first anniversary of
the Effective Date; the Employee shall be required to repay 50% of the gross
amount of such payment to the Company if this Agreement is terminated under
Sections 6(c) or 7(a) hereof between the first and second anniversaries of the
Effective Date.
4.    Confidentiality. The Employee acknowledges and agrees that he is bound by
the terms and conditions of the Proprietary Information and Inventions Agreement
separately entered into with the Company. Notwithstanding any other provision of
this Agreement, the Employee shall continue to be bound by the terms of such
Proprietary Information and Inventions Agreement which shall survive the
termination of this Agreement in accordance with its terms.
5.    Non-Competition, Non-Solicitation and Non-Disparagement.
(a)    During the Term, the Employee shall not (1) provide any services,
directly or indirectly, to any other business or commercial entity without the
consent of the Company, which may be withheld in the Company’s sole discretion,
or (2) participate in the formation of any business or commercial entity without
the consent of the Company, which may be withheld in the Company’s sole
discretion; provided, however, that nothing contained in this Section 5(a) shall
be deemed to prohibit the Employee from acquiring, solely as an investment,
shares of capital stock (or other interests) of any corporation (or other
entity) not exceeding 2% of such corporation’s (or other entity’s) then
outstanding shares of capital stock and provided, further, that nothing
contained herein shall be deemed to limit the Employee’s Permitted Activities
pursuant to Section 1(c) or limit his ability to serve on an outside board of
directors if first approved by the Board under Section 1(d).
(b)    Upon a termination of the Employee’s employment by the Company for any
reason other than pursuant to Section 6(a) or Section 6(b), or upon a
termination of the Employee’s employment by the Employee for any reason,
following such termination of employment and during the Restricted Period, the
Employee shall not (1) provide any services in the Company’s Field of

 
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Interest (as defined in Section 14), directly or indirectly, to any other
business or commercial entity, (2) participate in the formation of any business
or commercial entity engaged primarily in the Company’s Field of Interest, or
(3) directly or indirectly employ, or seek to employ or secure the services in
any capacity of, any person employed at that time by the Company or any of its
Affiliates, or otherwise encourage or entice any such person to leave such
employment, or solicit or encourage any customer, consultant, independent
contractor, or vendor of the Company to terminate or diminish its relationship
with the Company; provided, however, that nothing contained in this Section 5(b)
shall be deemed to prohibit the Employee from acquiring, solely as an
investment, shares of capital stock (or other interests) of any corporation (or
other entity) in the Company’s Field of Interest not exceeding 2% of such
corporation’s (or other entity’s) then outstanding shares of capital stock and
provided, further, that nothing contained herein shall be deemed to limit
Employee’s Permitted Activities pursuant to Section 1(c). This Section 5(b)
shall be subject to written waivers that may be obtained by the Employee from
the Company.
(c)    At no time during the Term of this Agreement or thereafter, regardless of
the reason for termination, will Employee knowingly make any written or verbal
untrue statement that disparages the Company, its Affiliates, its business, its
management, or its products in communications with any customer, client or the
public. The employee will, furthermore, not otherwise do or say anything that
could disrupt the good morale of employees of the Company or any of its
Affiliates, or that harms the interests or reputation of the Company or any of
its Affiliates.
(d)    Nothing in this Agreement or the Proprietary Information and Inventions
Agreement limits, restricts, or in any other way affects the Employee’s
communicating with any governmental agency or entity, or communicating with any
official or staff person of a governmental agency or entity, concerning matters
relevant to the governmental agency or entity.
(e)    The Employee acknowledges that he has read and considered all the terms
and conditions of this Agreement, including the restraints imposed upon him
pursuant to Sections 5(a)-(c) above. The Employee agrees without reservation
that these restraints are necessary for the reasonable and proper protection of
the Company and its Affiliates, and are reasonable in respect to subject matter,
length of time, and geographic area. If the Employee commits a breach, or
threatens to commit a breach, of any of the provisions of this Section 5, the
Company shall have the right and remedy to have the provisions of this Agreement
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Company and that money damages may not provide an
adequate remedy to the Company. The Employee therefore agrees that the Company,
in addition to any other remedies available to it, shall be entitled to
preliminary and permanent injunctive relief against any breach or threatened
breach by the Employee of any of the provisions of this Section 5, without
having to post bond. So that the Company may enjoy the full benefit of the
covenants contained above, the Employee agrees that the Restricted Period shall
be tolled, and shall not run, during the period of any breach by the Employee of
such covenants.
(f)    If any of the covenants contained in this Section 5, or any part thereof,
is hereafter construed to be invalid or unenforceable, the same shall not affect
the remainder of the covenant or covenants, which shall be given full effect
without regard to the invalid portions.

 
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(g)    If any of the covenants contained in this Section 5, or any part thereof,
is held to be unenforceable because of the duration or scope of such provision
or the area covered thereby, the parties agree that the court making such
determination shall have the power to reduce the duration and/or area of such
provision, and that the parties intend for the court to modify the duration
and/or area of such provision to the maximum extent permitted by law. The
parties agree that in its reduced form, such provision shall then be
enforceable.
(h)    In the event that the courts of any one or more of such states shall hold
any such covenant wholly unenforceable by reason of the breadth of such scope or
otherwise, it is the intention of the parties hereto that such determination not
bar or in any way affect the Company’s right to the relief provided above in the
courts of any other states within the geographical scope of such other
covenants, as to breaches of such covenants in such other respective
jurisdictions, the above covenants as they relate to each state being, for this
purpose, severable into diverse and independent covenants.
6.    Termination by the Company. The Company may terminate the employment of
the Employee as follows during the Term of this Agreement if any one or more of
the following shall occur:
(a)    Death. If the Employee shall die during the Term, the Employee’s
employment hereunder shall automatically terminate.
(b)    Disability. If the Employee shall become physically or mentally disabled
so that the Employee is unable substantially to perform his services hereunder
for (1) a period of 120 consecutive days, or (2) for shorter periods aggregating
to 180 days during any twelve-month period, the Company may terminate the
Employee’s employment hereunder upon written notice given by the Company to the
Employee.
(c)    For Cause. If the Employee acts, or fails to act, in a manner that
provides Cause for termination, the Company may at any time terminate the
Employee’s employment hereunder upon written notice given by the Company to the
Employee. For purposes of this Agreement, the term “Cause” means (1) the
Employee’s indictment for, or conviction of, a felony or other crime involving
moral turpitude, or any crime or serious offense involving money or other
property which constitutes a felony in the jurisdiction involved, (2) the
Employee’s willful and continual neglect or failure to discharge duties
(including fiduciary duties), responsibilities and obligations with respect to
the Company hereunder; provided such neglect or failure, if susceptible of cure,
remains uncured for a period of thirty (30) days after written notice describing
the same is given to the Employee; provided further that isolated and
insubstantial neglect or failures shall not constitute Cause hereunder, (3) the
Employee’s material breach of this Agreement or any other material agreement
with the Company, (4) the Employee’s violation of Section 5 hereof or the
Employee’s breach of any confidentiality provisions contained in the Proprietary
Information and Inventions Agreement, or (5) any act of fraud or embezzlement by
the Employee involving the Company or any of its Affiliates.
(d)    Without Cause. The Company may at any time terminate the Employee’s
employment hereunder without Cause upon written notice given by the Company to
the Employee.

 
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7.    Termination by the Employee.
(a)    Other than for Constructive Termination. The Employee may terminate his
employment hereunder at any time, for any reason and for no reason, upon not
less than sixty (60) days’ prior written notice to the Company.
(b)    Constructive Termination. The Employee may terminate his employment
hereunder upon written notice to the Company if any one or more of the following
shall occur, each of which is deemed a Constructive Termination:
(i)    a material breach of the terms of this Agreement by the Company and such
breach continues uncured for thirty (30) days after the Employee first gives
written notice of such breach to the Company;
(ii)    a relocation of the Employee’s place of employment to a location beyond
a 30-mile radius of New Haven, Connecticut; or
(iii)    a material breach by the Company of any other material agreement with
the Employee and such breach continues uncured for thirty (30) days after the
Employee first gives written notice of such breach to the Company
Notwithstanding the foregoing, the Employee shall not be deemed to have a
“Constructive Termination” unless the Employee gives the Company written notice
of such a condition within ninety (90) days after such condition first comes
into existence, the Company fails to remedy such condition within thirty (30)
days after receiving the Employee’s written notice and the Employee terminates
this Agreement not later than thirty (30) days after the Company so fails to
remedy such condition.
8.    Termination by Employee for Good Reason Following a Change in Control. In
addition to Section 7(b)(i) through (iii) above, during the period commencing on
the Change in Control (as defined in Section 14) and ending on the eighteen (18)
month anniversary of such Change in Control, the Employee may terminate this
Agreement upon expiration of ninety (90) days’ prior written notice if “Good
Reason” exists for the Employee’s termination. For this purpose, termination by
the Employee for “Good Reason” shall mean a termination by the Employee of his
employment hereunder following the initial occurrence, without his prior written
consent, of any of the following events, unless the Company or its successor
fully cures all grounds for such termination within thirty (30) days after
receipt of the Employee’s written notice (it being understood that a termination
of employment hereunder shall only be for Good Reason if the Employee terminates
his employment not later than thirty (30) days after the Company so fails to
cure such grounds):
(a)    any material adverse change in the Employee’s authority, duties, titles
or offices (including reporting responsibility), from those existing immediately
prior to the Change in Control;

 
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(b)    a diminution of the Employee’s Base Salary or annual bonus opportunity as
provided for in Section 3; or
(c)    the failure of the Company to obtain the assumption in writing of its
obligation to perform this Agreement by any successor to all or substantially
all of the assets of the Company upon a merger, consolidation, sale or similar
transaction.
9.    Severance and Benefit Continuation.
(a)    Termination for Cause or Voluntary Termination. In the event of a
termination of the Employee’s employment by the Company for Cause pursuant to
Section 6(c) hereof or by the Employee pursuant to Section 7(a) hereof, no
severance or other termination pay or benefits shall be due to the Employee and
the only obligation of the Company shall be to pay the Employee any accrued but
unpaid Base Salary as of the date of termination and any accrued but unpaid
vacation as of the date of termination (the “Accrued Obligations”), which
amounts shall be paid to the Employee within thirty (30) days of the date of
termination. In the event of a termination of the Employee’s employment pursuant
to Section 7(a), the Company may elect to waive the period of notice required by
Section 7(a), or any portion thereof, and, if the Company so elects, the Company
will pay the Employee his Base Salary for the period so waived. Upon a
termination covered by this Section 9(a), the Employee shall have the same
opportunity to continue group health benefits at the Employee’s expense in
accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”) as is available generally to other employees terminating employment
with the Company. Any outstanding equity awards previously granted to the
Employee under the Equity Plan shall be treated in accordance with the terms of
the Equity Plan and any individual award agreements under which such equity
awards were granted. A termination of the Employee’s employment that occurs by
reason of the Employee’s notice to the Company of non-renewal of the Term under
Section 2 hereof will be treated as a termination by the Employee under
Section 7(a).
(b)    Termination for Death or Disability. In the event of termination of the
Employee’s employment pursuant to Section 6(a) or Section 6(b) by reason of the
death or disability of the Employee, the Company shall pay the Employee (or his
estate in the event of a termination due to death), a pro-rata annual bonus for
the year in which such termination of employment occurs, calculated by
multiplying the Employee’s target annual bonus by a fraction, the numerator of
which is the number of days the Employee was employed during such year and the
denominator of which is 365 and shall provide the Health Continuation Benefits
(as defined in Section 9(c)(ii)). In the event of a termination of the
Employee’s employment due to death, the Company shall also pay to the Employee’s
estate an amount equal to three (3) months of Base Salary. The Base Salary (if
applicable) and the pro-rata bonus shall be paid within thirty (30) days of the
date of termination. All equity awards for which the vesting schedule is based
solely on the passage of time and continuation of employment (“Time-Vesting
Equity Awards”) previously granted to the Employee shall become immediately
vested and shall remain exercisable for such periods as provided under the terms
of the Equity Plan and any individual award agreements under which such awards
were granted. All other equity awards previously granted to the Employee will
vest as determined in good faith by the Board of Directors based on the
percentage of goals and objectives achieved by the Employee and the Company.

 
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(c)    Involuntary Termination Other Than for Cause, Voluntary Termination
Following Constructive Termination, or Non-Renewal by the Company. If (1) the
Company terminates the Employee’s employment pursuant to Section 6(d) hereof,
(2) the Employee terminates his employment pursuant to Section 7(b) hereof or
(3) at the end of the Term of this Agreement the Employee shall cease to be
employed by the Company by reason of the Company’s decision not to renew the
Term under Section 2 hereof (“Non-Renewal”), and in each case the termination of
employment does not occur within eighteen (18) months following the consummation
of a Change in Control of the Company, then, in addition to the Accrued
Obligations:
(i)    the Company shall pay the Employee two (2) times the amount equal to the
sum of (A) the Employee’s Base Salary at the time of his termination of
employment plus (B) the greater of (I) the average bonus received by the
Employee from the Company for the two years preceding the year in which his
termination of employment occurs or (II) the amount equal to the Employee’s
bonus target under the Bonus Plan as determined by the Company for the year in
which the termination of employment occurs. Subject to Section 9(g) below, such
amounts will be paid to the Employee in equal installments over a twenty-four
(24) month period following the Separation Date, payable in accordance with the
Company’s regular payroll practices, with the first payment being made on the
Company’s next regular payday following the expiration of sixty (60) calendar
days from the Separation Date, and with the first payment being retroactive to
the day following the Separation Date;
(ii)    if the Employee timely elects to continue his participation and that of
his eligible dependents in the Company’s group medical, dental and vision plans
under COBRA, the Company shall pay the Employee a lump-sum amount that, after
all applicable taxes and withholdings are deducted, is the economic equivalent
of the monthly health premiums paid by the Company on behalf of the Employee and
his eligible dependents immediately prior to the date of his Separation from
Service for a period of eighteen (18) months (the “Health Continuation
Benefits”); provided that all such payments shall comply with the reimbursement
rules of Treasury Regulations Sections 1.409A-1(b)(9)(v) or 1.409A-3(i)(1)(iv);
(iii)    all Time-Vesting Equity Awards granted to the Employee on March 27,
2017 shall fully and immediately vest as of the Separation Date, and all other
Time-Vesting Equity Awards that have both been previously granted to the
Employee and are at least 50% vested as of the Separation Date shall fully and
immediately vest as of the Separation Date, and any such awards that consist of
options shall become exercisable immediately prior to such termination of
employment, and shall remain exercisable for such periods as provided under the
terms of the Equity Plan and any individual award agreements under which such
equity awards were granted; and
(iv)    equity awards, other than the Time-Vested Equity Awards, that have been
granted to and earned by the Employee and are at least 50% vested as of the
Separation Date, shall fully and immediately vest as of the Separation Date and
become exercisable immediately prior to such termination of employment, and
shall remain exercisable for such

 
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periods as provided under the terms of the Equity Plan and any individual award
agreements under which such equity awards were granted.
(d)    Involuntary Termination Other Than for Cause, Voluntary Termination
Following Constructive Termination or for Good Reason, or Non-Renewal by the
Company, Upon a Change in Control. In the event that (1) the Company terminates
this Agreement pursuant to Section 6(d) hereof, (2) the Employee terminates this
Agreement Following Constructive Termination under Section 7(b) hereof or for
Good Reason under Section 8 hereof, or (3) there is a Non-Renewal by the
Company, and in each case the termination of employment or Non-Renewal occurs
within eighteen (18) months following the consummation of a Change in Control,
then, in addition to the Accrued Obligations:
(i)    the Company shall pay the Employee three (3) times the amount equal to
the sum of (A) the Employee’s Base Salary at the time of his termination of
employment plus (B) the greater of (I) the average bonus received by the
Employee from the Company for the two years preceding the year in which his
termination of employment occurs or (II) the amount equal to the Employee’s
bonus target under the Bonus Plan as determined by the Company for the year in
which the termination of employment occurs. The Company shall also pay the
Employee a pro-rata annual bonus for the year in which such termination of
employment occurs, calculated by multiplying the Employee’s target annual bonus
by a fraction, the numerator of which is the number of days the Employee was
employed during such year and the denominator of which is 365. Subject to
Section 9(g), such amounts will be paid to the Employee sixty (60) days after
such Separation from Service in a cash lump sum; and the Company shall provide
the Employee with the Health Continuation Benefits; provided that all such
payments shall comply with the reimbursement rules of Treasury Regulations
Sections 1.409A-1(b)(9)(v) or 1.409A-3(i)(1)(iv);
(ii)    all Time-Vesting Equity Awards previously granted to the Employee under
the Equity Plan shall fully and immediately vest and become exercisable
immediately prior to such termination of employment and shall remain exercisable
for such periods as provided under the terms of the Equity Plan and any
individual award agreements under which such equity awards were granted; and
(iii)    all equity awards, other than the Time-Vesting Equity Awards, that have
been granted to and earned by the Employee as of the Separation Date shall fully
and immediately vest and become exercisable immediately prior to such
termination of employment and shall remain exercisable for such periods as
provided under the terms of the Equity Plan and any individual award agreements
under which such equity awards were granted. All other non-Time Vesting awards
previously granted to the Employee, but not earned as of the date of termination
of employment, will vest, if at all, as determined in good faith by the Board of
Directors based upon the achievement of performance conditions by the Employee
and the Company.
(e)    The payments provided in Section 9(c) and 9(d) are intended as enhanced
severance for a termination by the Company or by the Employee in the
circumstances provided and are subject to the Employee’s continued compliance
with the provisions of Section 5 hereof. As a

 
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condition to receiving such payments, the Employee shall first execute and
deliver a general release of all claims against the Company, its Affiliates,
agents and employees (other than any claims or rights pursuant to this Agreement
or pursuant to equity or employee benefit plans), in a form and substance
reasonably satisfactory to the Company (the “Release”). The payments and
benefits referenced in Section 9(c)(ii) and Section 9(d)(i), as applicable,
shall be paid in a lump sum sixty (60) days after the Employee’s Separation from
Service, subject to Section 9(g) below. The Employee must execute and return the
Release on or before the date specified by the Company in the prescribed form
(the “Release Deadline”). The Release Deadline will in no event be later than
fifty (50) days after the Employee’s Separation from Service. If the Employee
fails to return the Release on or before the Release Deadline, or if the Release
is revoked by the Employee, then the Employee will not be entitled to the
payments or benefits, including any accelerated vesting of equity, described in
Section 9(c) and 9(d).
(f)    Termination of Employment and Separation from Service. All references in
the Agreement to termination of employment, a termination, retirement, cessation
of employment, separation from service, and correlative terms, that result in
the payment or vesting of any amounts or benefits that constitute “nonqualified
deferred compensation” within the meaning of Section 409A shall be construed to
require a Separation from Service, and the date of such termination in any such
case shall be construed to mean the date of the Separation from Service.
(g)    Payment to a “Specified Employee”. To the extent any payment hereunder
that is payable by reason of termination of the Employee’s employment
constitutes “nonqualified deferred compensation” subject to Section 409A and
would otherwise have been required to be paid during the six (6)-month period
following such termination of employment, it shall instead (unless at the
relevant time the Employee is no longer a Specified Employee) be delayed and
paid, without interest, in a lump sum on the date that is six (6) months and one
(1) day after the Employee’s termination (or, if earlier, the date of the
Employee’s death).
(h)    Other. In the event that the Employee’s employment with the Company
terminates for any reason, except as otherwise expressly provided by the
Company, the Employee’s employment with, or other service to, all Affiliates of
the Company by which he is then employed or otherwise engaged in service shall
automatically and immediately terminate.
10.    Cooperation. Following his termination of employment, the Employee agrees
to cooperate with, and assist, the Company to ensure a smooth transition in
management and, if requested by the Company, will make himself available to
consult during regular business hours at mutually agreed upon times for up to a
three month period thereafter. At any time following his termination of
employment for any reason, the Employee will provide such information as the
Company may reasonably request with respect to any Company-related transaction
or other matter in which the Employee was involved in any way while employed by
the Company. The Employee further agrees to assist and cooperate with the
Company in connection with the defense, prosecution, government investigation,
or internal investigation of any claim or matter that may be made against,
concerning, or by, the Company or its Affiliates. Such assistance and
cooperation shall include timely, comprehensive, and truthful disclosure of all
relevant facts known to the Company, including through in-person interview(s)
with the Company’s internal Legal Department or outside counsel

 
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for the Company. The Employee shall be entitled to reimbursement for all
properly documented expenses incurred in connection with rendering services
under this Section, including, but not limited to, reimbursement for all
reasonable travel, lodging, and meal expenses.
11.    Indemnification. The Company shall indemnify the Employee to the fullest
extent permitted by applicable law and its then-current articles of
incorporation and by-laws. The Employee agrees to promptly notify the Company of
any actual or threatened claim arising out of or as a result of his employment
with the Company, or consultant pursuant to Section 10 above. The Company shall
provide, at its expense, Directors and Officers insurance for the Employee in
amounts reasonably satisfactory to the Employee, to the extent such insurance is
available at reasonable rates, which determination shall be made by the Board of
Directors. The Employee shall also be party to an Indemnification Agreement with
the Company in substantially the form attached as Exhibit A hereto.
12.    Excise Tax. If any payment or benefit that Employee would receive
following a Change in Control of the Company or otherwise (“Payment”) would
(i) constitute a “parachute payment” within the meaning of Section 280G of the
Code, and (ii) but for this sentence, be subject to the excise tax imposed by
Section 4999 of the Code (the “Excise Tax”), then such Payment shall be reduced
to the Reduced Amount. The “Reduced Amount” shall be either (a) the largest
portion of the Payment that would result in no portion of the Payment being
subject to the Excise Tax or (b) the largest portion, up to and including the
total amount, of the Payment, whichever of the amounts determined under (a) and
(b), after taking into account all applicable federal, state and local
employment taxes, income taxes, and the Excise Tax (all computed at the highest
applicable marginal rate), results in the Employee’s receipt, on an after-tax
basis, of the greater amount of the Payment notwithstanding that all or some
portion of the Payment may be subject to the Excise Tax. If a reduction in
payments or benefits constituting “parachute payments” is necessary so that the
Payment equals the Reduced Amount, reduction shall occur in the following order:
reduction of cash payments; cancellation of accelerated vesting of outstanding
awards under the Equity Plan; and reduction of employee benefits. In the event
that acceleration of vesting of outstanding awards under the Equity Plan is to
be reduced, such acceleration of vesting shall be undertaken in the reverse
order of the date of grant of the Employee’s outstanding equity awards.
The accounting firm engaged by the Company for general audit purposes as of the
day prior to the effective date of the Change in Control of the Company shall
perform the foregoing calculations. If the accounting firm so engaged by the
Company is serving as accountant or auditor for the individual, entity or group
effecting the Change in Control, then the Company shall appoint another,
nationally recognized accounting firm to make the determinations required
hereunder. The Company shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder.
The accounting firm engaged to make the determinations hereunder shall provide
its calculations, together with detailed supporting documentation, to the
Employee and the Company within a commercially reasonable period of time after
the date on which the Employee’s right to a Payment is triggered (if requested
at that time by the Employee or the Company). Any good faith

 
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determinations of the accounting firm made hereunder shall be final, binding and
conclusive upon the Employee and the Company.
13.    No Mitigation. The Employee shall not be required to mitigate the amount
of any payment provided for hereunder by seeking other employment or otherwise,
nor shall the amount of any payment provided for hereunder be reduced by any
compensation earned by the Employee as the result of employment by another
employer after the date of termination of employment by the Company (other than
as described above in Section 9(c)(ii) and Section 9(d)(ii)).
14.    Definitions. As used herein, the following terms have the following
meaning:
(a)    “Affiliate” means and includes any person, corporation or other entity
controlling, controlled by or under common control with the corporation in
question.
(b)    “Change in Control” means the occurrence of any of the following events:
(i)    Any Person, other than the Company, its affiliates (as defined in Rule
12b-2 under the Exchange Act) or any Company employee benefit plan (including
any trustee of such plan acting as trustee), is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing more than 40%
of the combined voting power of the then outstanding securities entitled to vote
generally in the election of Directors (“Voting Securities”) of the Company, or
(ii)    Individuals who constitute the Board of Directors of the Company (the
“Incumbent Directors”) as of the beginning of any twenty-four month period (not
including any period prior to the date of this Agreement), cease for any reason
to constitute at least a majority of the Directors. Notwithstanding the
foregoing, any individual becoming a Director subsequent to the beginning of
such period, whose election or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds of the Directors then
comprising the Incumbent Directors, shall be considered an Incumbent Director;
or
(iii)    Consummation by the Company of a recapitalization, reorganization,
merger, consolidation or other similar transaction (a “Business Combination”),
with respect to which all or substantially all of the individuals and entities
who were the Beneficial Owners of the Voting Securities immediately prior to
such Business Combination (the “Incumbent Shareholders”) do not, following
consummation of all transactions intended to constitute part of such Business
Combination, beneficially own, directly or indirectly, 50% or more of the Voting
Securities of the corporation, business trust or other entity resulting from or
being the surviving entity in such Business Combination (the “Surviving
Entity”), in substantially the same proportion as their ownership of such Voting
Securities immediately prior to such Business Combination; or
(iv)    Consummation of a complete liquidation or dissolution of the Company, or
the sale or other disposition of all or substantially all of the assets of the
Company, other than to a corporation, business trust or other entity with
respect to which,

 
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following consummation of all transactions intended to constitute part of such
sale or disposition, more than 50% of the combined Voting Securities is then
owned beneficially, directly or indirectly, by the Incumbent Shareholders in
substantially the same proportion as their ownership of the Voting Securities
immediately prior to such sale or disposition.
For purposes of this definition 14(b), the following terms shall have the
meanings set forth below:
(A)    “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under
the Exchange Act;
(B)    “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended; and
(C)    “Person” shall have the meaning as used in Sections 13(d) and 14(d) of
the Exchange Act.
To the extent required to comply with Section 409A and to the extent necessary
to establish a time or form of payment that complies with Section 409A,
including under Treasury Regulation § 1.409A-3(c)(1), a Change in Control shall
be deemed to occur only if such event also constitutes a “change in the
ownership”, “change in effective control”, and/or a “change in the ownership of
a substantial portion of assets” of the Company, as those terms are defined
under Treasury Regulation § 1.409A-3(i)(5). If a Change in Control does not
satisfy this requirement, to the extent required to comply with Section 409A,
the time or form of payment hereunder shall be determined in a manner
disregarding the fact that a Change in Control has occurred (e.g., any severance
entitlements shall be paid in installments over the post-termination period that
would have applied absent such Change in Control or such shorter period that
would comply with Section 409A).
(c)    “Code” means the Internal Revenue Code of 1986, as amended.
(d)    "Company’s Field of Interest” means products, product candidates,
processes or services of the Company with which the Employee works during the
time of his employment with the Company or about which the Employee acquires
confidential information through his work with the Company.
(e)     “Restricted Period” shall mean twenty-four (24) months.
(f)     “Section 409A” shall mean Section 409A of the Code.
(g)    “Separation from Service” shall mean a “separation from service” (as that
term is defined at Section 1.409A-1(h) of the Treasury Regulations under
Section 409A) from the Company and from all other corporations and trades or
businesses, if any, that would be treated as a single “service recipient” with
the Company under Section 1.409A-1(h)(3) of such Treasury Regulations. The Board
of Directors or the Compensation Committee of the Board of Directors may, but
need not, elect in writing, subject to the applicable limitations under
Section 409A, any of the special elective rules prescribed in
Section 1.409A-1(h) of the Treasury Regulations for

 
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purposes of determining whether a “separation from service” has occurred. Any
such written election shall be deemed part of the Agreement.
(h)    “Specified Employee” shall mean an individual determined by the Board of
Directors, Compensation Committee of the Board of Directors or their delegate to
be a specified employee as defined in subsection (a)(2)(B)(i) of Section 409A.
The Committee may, but need not, elect in writing, subject to the applicable
limitations under Section 409A, any of the special elective rules prescribed in
Section 1.409A-1(i) of the Treasury Regulations for purposes of determining
“specified employee” status. Any such written election shall be deemed part of
the Agreement.
15.    Representations by the Parties. The Employee represents and warrants that
he has full right, power and authority to execute the terms of this Agreement;
this Agreement has been duly executed by the Employee and such execution and the
performance of this Agreement by the Employee does not result in any conflict,
breach or violation of or default under any other agreement or any judgment,
order or decree to which the Employee is a party or by which he is bound. The
Employee acknowledges and agrees that any material breach of the representations
set forth in this Section will constitute Cause under Section 6. The Company
represents and warrants that it will not attempt to induce or otherwise require
the Employee to violate any such agreement, judgment, order or decree that the
Executive has disclosed in writing to the Company.
16.    Arbitration. Any controversy or claim arising out of or relating to this
Agreement or the breach thereof, or arising out of Employee’s employment and the
termination of such employment, shall be settled by arbitration in Connecticut,
in accordance with the employment dispute rules then existing of the American
Arbitration Association, and judgment upon the award rendered may be entered in
any court having jurisdiction thereof. Such claims shall include, without
limitation, claims for breach of contract or breach of the covenant of good
faith and fair dealing, any claims of discrimination or other claims under Title
VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in
Employment Act of 1967, as amended by the Older Workers Benefits Protection Act,
the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair
Labor Standards Act, ERISA, and/or any applicable or equivalent state or local
laws, claims for wrongful termination, including employment termination in
violation of public policy, and claims for personal injury including, without
limitation, defamation, fraud and infliction of emotional distress. The parties
shall be free to pursue any remedy before the arbitrator that they shall be
otherwise permitted to pursue in a court of competent jurisdiction. As a
material part of this agreement to arbitrate claims, the Employee and the
Company expressly waive all rights to a jury trial in court on all statutory or
other claims. The award of the arbitrator shall be final and binding. The costs
of the American Arbitration Association and the arbitrator will be borne by the
Company, and the parties will otherwise bear their own costs (including
attorneys fees). Nothing contained herein, however, shall limit the right of the
Company or any of its Affiliates to seek equitable or other relief from any
court of competent jurisdiction for violation of any provision of Sections 4 and
5 above.
17.    Recoupment. The Employee hereby acknowledges and agrees that the annual
bonus described in Section 3(b) and all other payments of incentive-based
compensation payable to the Employee by the Company or its Affiliates (whether
under this Agreement or otherwise) shall be

 
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subject to any applicable clawback or recoupment policy of the Company, as such
policy may be amended and in effect from time to time, and shall be subject to
recoupment as otherwise required by applicable law or applicable stock exchange
listing standards, including, without limitation, Section 10D of the Securities
Exchange Act of 1934, as amended.
18.    Notices. All notices, requests, consents and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if sent by private overnight mail service
(delivery confirmed by such service), registered or certified mail (return
receipt requested and received), telecopy (confirmed receipt by return fax from
the receiving party) or delivered personally, as follows (or to such other
address as either party shall designate by notice in writing to the other in
accordance herewith):
If to the Company:

Alexion Pharmaceuticals, Inc.
100 College Street
New Haven, Connecticut 06510
Telephone: (203) 272-2596
Fax: (203) 271-8198
Attn: General Counsel
If to the Employee: to the Employee’s Address on file with the Company.
19.    General.
(a)    This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Connecticut applicable to agreements
made and to be performed entirely in Connecticut by Connecticut residents.
(b)    This Agreement, the Proprietary Information and Inventions Agreement and
the agreements attached as Exhibits hereto set forth the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.
(c)    This Agreement may be amended, modified, superseded, canceled, renewed or
extended, and the terms or covenants hereof may be waived, only by a written
instrument executed by the parties hereto, or in the case of a waiver, by the
party waiving compliance. The failure of a party at any time or times to require
performance of any provision hereof shall in no manner affect the right at a
later time to enforce the same. No waiver by a party of the breach of any term
or covenant contained in this Agreement, whether by conduct or otherwise, or any
one or more or continuing waivers of any such breach, shall constitute a waiver
of the breach of any other term or covenant contained in this Agreement.

 
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(d)    This Agreement shall be binding upon the legal representatives, heirs,
distributees, successors and assigns of the parties hereto. The Company may not
assign its rights and obligation under this Agreement without the prior written
consent of the Employee, except to a successor of substantially all the
Company’s business which expressly assumes the Company’s obligations hereunder
in writing. In the event of a sale of all or substantially all of the assets of
the Company, the Company shall use its best efforts to cause the purchaser to
expressly assume this Agreement. The Employee may not assign, transfer, alienate
or encumber any rights or obligations under this Agreement, except by will or
operation of law, provided that the Employee may designate beneficiaries to
receive any payments permitted under the terms of the Company’s benefit plans.
(e)    If any portion or provision of this Agreement shall to any extent be
declared illegal or unenforceable by a court of competent jurisdiction, then the
remainder of this Agreement, or the application of such portion or provision in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.
(f)    Provisions of this Agreement shall survive any termination of employment
if so provided herein or if necessary or desirable fully to accomplish the
purposes of other surviving provisions, including without limitation, the
obligations of the Employee under Section 5 hereof. Upon termination of the
Employee’s employment hereunder by either the Employee or the Company as
permitted hereby, all rights, duties and obligations of the Employee and the
Company to each other pursuant to this Agreement shall cease, except for the
provisions hereof that contemplate performance after termination, including
without limitation the obligations of the Employee under Section 5 hereof.
(g)    This Agreement is intended to comply with the applicable requirements of
Section 409A and shall be construed accordingly. Each payment made under this
Agreement shall be treated as a separate payment and the right to a series of
installment payments under this Agreement is to be treated as a right to a
series of separate payments. In no event shall the Company have any liability
relating to the failure or alleged failure of any payment or benefit under this
Agreement to comply with, or be exempt from, the requirements of Section 409A.

 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
 
ALEXION PHARMACEUTICALS, INC. 

 
By:    /s/ Clare Carmichael     
   Name: Clare A. Carmichael 
   Title: EVP & Chief Human Resources  
      Officer
 
EMPLOYEE 

      /s/ Ludwig Hantson    
   Name: Ludwig Hantson 
   Title: Chief Executive Officer

 
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