Exhibit 10.17


 


SEPRACOR
INC.


 


Executive
Retention Agreement


 


THIS EXECUTIVE RETENTION
AGREEMENT by and between Sepracor Inc., a Delaware corporation (the “Company”),
and Adrian Adams (the “Executive”) is made as of March 1, 2007 (the “Effective
Date”).


 


WHEREAS, the Company
recognizes that, as is the case with many publicly-held corporations, the
possibility of a change in control of the Company exists and that such
possibility, and the uncertainty and questions which it may raise among key
personnel, may result in the departure or distraction of key personnel to the
detriment of the Company and its stockholders, and


 


WHEREAS, the Board of
Directors of the Company (the “Board”) has determined that appropriate steps
should be taken to reinforce and encourage the continued employment and
dedication of the Company’s key personnel without distraction from the
possibility of a change in control of the Company and related events and
circumstances.


 


NOW, THEREFORE, as an
inducement for and in consideration of the Executive remaining in its employ,
the Company agrees that the Executive shall receive the severance benefits set
forth in this Agreement (including a certain “gross up” payment originally
authorized by the Board on February 25, 1999 and set forth in Section 4.3
of this Agreement) upon the occurrence of a Change in Control (as defined in Section 1.1).


 


1.             Key
Definitions.


 


As used herein, the
following terms shall have the following respective meanings:


 


1.1           “Change in Control” means an event or
occurrence set forth in any one or more of subsections (a) through (d) below
(including an event or occurrence that constitutes a Change in Control under
one of such subsections but is specifically exempted from another such
subsection):


 


(a)           the acquisition by an individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership of any capital stock of the Company if, after such
acquisition, such Person beneficially owns (within the meaning of Rule 13d-3
promulgated under the Exchange Act) 30%  or more of either (x) the
then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (y) the combined voting power of the
then-outstanding securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this subsection (a), the following acquisitions
shall not constitute a Change in Control: (i) any acquisition directly
from the Company (excluding an acquisition pursuant to the exercise, conversion
or exchange of any security exercisable for, convertible into or exchangeable
for common stock or voting securities of the Company, unless the Person
exercising, converting or exchanging such security acquired such security
directly from the


 

















 


Company
or an underwriter or agent of the Company), (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company, or (iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i) and (ii) of subsection (c) of
this Section 1.1; or


 


(b)           such time as the Continuing Directors (as
defined below) do not constitute a majority of the Board (or, if applicable,
the Board of Directors of a successor corporation to the Company), where the
term “Continuing Director” means at any date a member of the  Board (i) who was a member of the Board
on the date of the execution of this Agreement or (ii) who was nominated
or elected subsequent to such date by at least a majority of the directors who
were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from
this clause (ii) any individual whose initial assumption of office
occurred as a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or threatened
solicitation of proxies or consents, by or on behalf of a person other than the
Board; or


 


(c)           the consummation of a merger, consolidation,
reorganization, recapitalization or statutory share exchange involving the
Company or a sale or other disposition of all or substantially all of the
assets of the Company in one or a series of transactions (a “Business
Combination”), unless, immediately following such Business Combination, each of
the following two conditions is satisfied: (i) the beneficial owners of
all or substantially all of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such
Business Combination (which shall include, without limitation, a corporation
which as a result of such transaction owns the Company or substantially all of
the Company’s assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively; and (ii) no
Person (excluding the Acquiring Corporation or any employee benefit plan (or
related trust) maintained or sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly, 30% or more of the then
outstanding shares of common stock of the Acquiring Corporation, or of the
combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent
that such ownership existed prior to the Business Combination); or


 


(d)           approval by the stockholders of the Company
of a complete liquidation or dissolution of the Company.


 


1.2           “Change in Control Date” means the
first date during the Term (as defined in Section 2) on which a Change in
Control occurs.  Anything in this
Agreement to the contrary notwithstanding, if (a) a Change in Control
occurs, (b)  the Executive’s employment with the


 


2

















 


Company
is terminated prior to the date on which the Change in Control occurs, and (c) either
(i) such termination of employment (x) was at the request of a third
party who has taken steps reasonably calculated to effect a Change in Control
or (y) otherwise arose in connection with or in anticipation of a Change
in Control, or (ii) such termination of employment occurs following the
execution of a definitive agreement for such Change in Control, then for all
purposes of this Agreement the “Change in Control Date” shall mean the date
immediately prior to the date of such termination of employment.


 


2.             Term
of Agreement.  This Agreement, and
all rights and obligations of the parties hereunder, shall take effect upon the
Effective Date and shall expire upon the first to occur of (a) the
expiration of the Term (as defined below) if a Change in Control has not
occurred during the Term, (b) the termination of the Executive’s
employment with the Company prior to the Change in Control Date, or (c) if
a Change in Control has occurred during the Term, the fulfillment by the
Company of all of its obligations under Sections 4 and 5.2 and 5.3.  “Term” shall mean the period commencing as of
the Effective Date and continuing in effect through March 1, 2010; provided,
however, that commencing on March 1,
2010 and each March 1 thereafter, the Term shall be automatically extended
for one additional year unless, not later than 90 days prior to the scheduled
expiration of the Term (or any extension thereof), the Company shall have given
the Executive written notice that the Term will not be extended.


 


3.             Employment
Status; Not an Employment Contract. 
The Executive acknowledges that this Agreement does not constitute a
contract of employment or impose on the Company any obligation to retain the
Executive as an employee and that this Agreement does not prevent the Executive
from terminating employment at any time. 
If the Executive’s employment with the Company terminates for any reason
and subsequently a Change in Control shall occur, the Executive shall not be
entitled to any benefits hereunder except as otherwise provided pursuant to Section 1.2.


 


4.             Benefits
to Executive.


 


4.1           Stock Acceleration.  If
the Change in Control Date occurs during the Term, then, effective upon the
Change in Control Date, (a) each outstanding option to purchase shares of
Common Stock of the Company held by the Executive shall vest and become
immediately exercisable in full and shares of Common Stock of the Company
received upon exercise of any options will no longer be subject to a right of
repurchase by the Company, (b) each outstanding restricted stock award
shall be deemed to be fully vested and will no longer be subject to a right of
repurchase by the Company and (c) notwithstanding any provision in any
applicable option agreement to the contrary, if Executive’s employment is
terminated in connection with, in anticipation of, or within six months after a
Change in Control, each such option shall continue to be exercisable by the
Executive (to the extent such option was exercisable on the Change in Control
Date) for a period of six months following the date of termination of such
employment.


 


4.2           Compensation.  If
the Change in Control Date occurs during the Term:


 


(a)           the Company shall pay to the Executive in a
lump sum in cash within 30 days after the Change in Control Date the aggregate
of the following amounts:


 


3

















 


(i)            the sum of (1) the Executive’s base
salary through the Change in Control Date, (2) the product of (A) the
annual bonus paid or payable (including any bonus or portion thereof which has
been earned but deferred) for the most recently completed fiscal year and (B) a
fraction, the numerator of which is the number of days in the current fiscal
year through the Change in Control Date, and the denominator of which is 365
and (3) the amount of any compensation previously deferred by the
Executive (together with any accrued interest or earnings thereon) and any
accrued vacation pay, in each case to the extent not previously paid (the sum
of the amounts described in clauses (1), (2), and (3) shall be hereinafter
referred to as the “Accrued Obligations”); and


 


(ii)           the amount equal to (1) three multiplied
by (2) the sum of (A) the Executive’s highest annual base salary
during the five-year period prior to the Change in Control Date and (B) the
Executive’s highest annual bonus during the five-year period prior to the
Change in Control Date.


 


(b)           for 24 months after the Change in Control
Date, or such longer period as may be provided by the terms of the appropriate
plan, program, practice or policy, the Company shall continue to provide
benefits to the Executive and the Executive’s family at least equal to those
provided to them immediately prior to the Change in Control Date, in accordance
with the applicable Benefit Plans in effect on the Measurement Date or, if more
favorable to the Executive and his family, in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies; provided, however, that if the Executive’s
employment is terminated during this period and the Executive becomes
reemployed with another employer and is eligible to receive a particular type
of benefits (e.g., health insurance benefits) from such employer on terms at
least as favorable to the Executive and his family as those being provided by
the Company, then the Company shall no longer be required to provide those
particular benefits to the Executive and his family; and


 


(c)           if the Executive’s employment is terminated
during the 24-month period following the Change in Control Date, to the extent
not previously paid or provided, the Company shall timely pay or provide to the
Executive any other amounts or benefits required to be paid or provided or
which the Executive is eligible to receive following the Executive’s
termination of employment under any plan, program, policy, practice, contract
or agreement of the Company and its affiliated companies (such other amounts
and benefits shall be hereinafter referred to as the “Other Benefits”).


 


4.3           Taxes.


 


(a)           In the event that the Company undergoes
a  “Change in Ownership or Control” (as
defined below), the Company shall, within 30 days after each date on which the
Executive becomes entitled to receive (whether or not then due) a Contingent
Compensation Payment (as defined below) relating to such Change in Ownership or
Control, determine and notify the Executive (with reasonable detail regarding
the basis for its determinations) (i) which of the payments or benefits
due to the Executive (under this Agreement or otherwise) following such Change
in Ownership or Control constitute Contingent Compensation Payments, (ii) the
amount, if any, of the excise tax (the “Excise Tax”) payable pursuant to Section 4999
of the Internal Revenue Code of 1986, as amended (the “Code”), by the Executive
with respect to such


 


4

















 


Contingent
Compensation Payment and (iii) the amount of the Gross-Up Payment (as
defined below) due to the Executive with respect to such Contingent
Compensation Payment.  Within 30 days
after delivery of such notice to the Executive, the Executive shall deliver a
response to the Company (the “Executive Response”) stating either (A) that
he agrees with the Company’s determination pursuant to the preceding sentence
or (B) that he disagrees with such determination, in which case he shall
indicate which payment and/or benefits should be characterized as a Contingent
Compensation Payment, the amount of the Excise Tax with respect to such
Contingent Compensation Payment and the amount of the Gross-Up Payment due to
the Executive with respect to such Contingent Compensation Payment.  The amount and characterization of any item
in the Executive Response shall be final; provided, however, that in the event
that the Executive fails to deliver an Executive Response on or before the
required date, the Company’s initial determination shall be final.  Within 90 days after the due date of each
Contingent Compensation Payment to the Executive, the Company shall pay to the
Executive, in cash, the Gross-Up Payment with respect to such Contingent
Compensation Payment, in the amount determined pursuant to this Section 4.3(a).


 


(b)           For purposes of this Section 4.3, the following terms shall have
the following respective meanings:


 


(i)            “Change in Ownership or Control” shall mean a
change in the ownership or effective control of the Company or in the ownership
of a substantial portion of the assets of the Company determined in accordance
with Section 280G(b)(2) of the Code.


 


(ii)           “Contingent Compensation Payment” shall mean
any payment (or benefit) in the nature of compensation that is made or made
available (under this Agreement or otherwise) to a “disqualified individual”
(as defined in Section 280G(c) of the Code) and that is contingent
(within the meaning of Section 280G(b)(2)(A)(i) of the Code) on a
Change in Ownership or Control of the Company.


 


(iii)          “Gross-Up Payment” shall mean an amount equal
to the sum of (i) the amount of the Excise Tax payable with respect to a
Contingent Compensation Payment and (ii) the amount necessary to pay all
additional taxes imposed on (or economically borne by) the Executive (including
the Excise Taxes, state and federal income taxes and all applicable employment
taxes) attributable to the receipt of such Gross-Up Payment.  For purposes of the preceding sentence, all
taxes attributable to the receipt of the Gross-Up Payment shall be computed
assuming the application of the maximum tax rates provided by law.


 


4.4           Mitigation.  The Executive shall not be
required to mitigate the amount of any payment or benefits provided for in this
Section 4. Further, except as provided in Section 4.2(b), the amount
of any payment or benefits provided for in this Section 4 shall not be
reduced by any compensation earned by the Executive as a result of employment
by another employer, by retirement benefits, by offset against any amount
claimed to be owed by the Executive to the Company or otherwise.


 


4.5           Outplacement Services.  In
the event of the termination of the Executive’s employment in connection with,
in anticipation of, or within six months after a Change in Control, the Company
shall provide outplacement services through one or more outside firms of


 


5

















 


the
Executive’s choosing up to an aggregate amount equal to 15 percent of the
Executive’s annual base salary, with such services to extend until the earlier
of (i) 12 months following the termination of Executive’s employment or (ii) the
date the Executive secures full time employment.


 


4.6           Six Month Delay.  If
any payment, compensation or other benefit provided to the Executive in
connection with his employment termination is determined, in whole or in part,
to constitute “nonqualified deferred compensation” within the meaning of Section 409A
and the Executive is a specified employee as defined in Section 409A(2)(B)(i),
no part of such payments shall be paid before the day that is six (6) months
plus one (1) day after the date of his termination (the “New Payment Date”).  In the case of welfare benefit continuation,
the Company shall use its best efforts to enable Executive to obtain such
benefits at Executive’s expense prior to the New Payment Date.  The aggregate of any payments that otherwise
would have been paid to the Executive (or on Executive’s behalf) during the
period between the date of his termination and the New Payment Date shall be
paid to the Executive in a lump sum on such New Payment Date.  Thereafter, any payments that remain
outstanding as of the day immediately following the New Payment Date shall be paid
without delay over the time period originally scheduled, in accordance with the
terms of this Agreement.


 


5.             Disputes.


 


5.1           Settlement
of Disputes; Arbitration.  All claims by the Executive for benefits
under this Agreement shall be directed to and determined by the Board of
Directors of the Company and shall be in writing.  Any denial by the Board of Directors of a
claim for benefits under this Agreement shall be delivered to the Executive in
writing and shall set forth the specific reasons for the denial and the
specific provisions of this Agreement relied upon.  The Board of Directors shall afford a
reasonable opportunity to the Executive for a review of the decision denying a
claim.  Any further dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in Boston, Massachusetts, in accordance with the rules of
the American Arbitration Association then in effect.  Judgment may be entered on the arbitrator’s
award in any court having jurisdiction.


 


5.2           Expenses.  The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal, accounting and other fees and expenses which the Executive may
reasonably incur as a result of any claim or contest by the Company or others,
or any bona fide claim or contest by the Executive, regarding the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive regarding the amount of any payment or benefits pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code,
provided that the Executive shall reimburse any fees and expenses to the extent
any such claim or contest is not resolved in favor of the Executive.


 


5.3           Compensation
During a Dispute.  If the Change in Control Date occurs during
the Term and the Executive’s employment with the Company terminates within 24
months following the Change in Control Date, and the right of the Executive to
receive benefits under Section 4 (or the amount or nature of the benefits
to which he is entitled to receive) are the


 


6

















 


subject of a dispute between the Company and the Executive, the Company
shall continue (a) to pay to the Executive his base salary in effect as of
the Measurement Date and (b) to provide benefits to the Executive and the
Executive’s family at least equal to those which would have been provided to
them, if the Executive’s employment had not been terminated, in accordance with
the applicable Benefit Plans in effect on the Measurement Date, until such
dispute is resolved either by mutual written agreement of the parties or by an
arbitrator’s award pursuant to Section 5.1.  Following the resolution of such dispute, the
sum of the payments made to the Executive under this Section 5.3 shall be
deducted from any cash payment which the Executive is entitled to receive
pursuant to Section 4; and if such sum exceeds the amount of the cash
payment which the Executive is entitled to receive pursuant to Section 4,
the excess of such sum over the amount of such payment shall be repaid (with
interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Code) by the Executive to the Company within 60 days of the resolution of
such dispute.


 


6.             Successors.


 


6.1           Successor to Company.  The
Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Company expressly to assume and agree to perform this
Agreement to the same extent that the Company would be required to perform it
if no such succession had taken place. 
Failure of the Company to obtain an assumption of this Agreement at or
prior to the effectiveness of any succession shall be a breach of this
Agreement.  As used in this Agreement, “Company”
shall mean the Company as defined above and any successor to its business or
assets as aforesaid which assumes and agrees to perform this Agreement, by
operation of law or otherwise.


 


6.2           Successor to Executive.  This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. 
If the Executive should die while any amount would still be payable to
the Executive or his family hereunder if the Executive had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to the executors, personal representatives or
administrators of the Executive’s estate.


 


7.             Notice.  All notices, instructions and other
communications given hereunder or in connection herewith shall be in
writing.  Any such notice, instruction or
communication shall be sent either (i) by registered or certified mail,
return receipt requested, postage prepaid, or (ii) prepaid via a reputable
nationwide overnight courier service, in each case addressed to the Company, at
111 Locke Drive, Marlborough, MA  01752,
and to the Executive at the Executive’s address indicated on the signature page of
this Agreement (or to such other address as either the Company or the Executive
may have furnished to the other in writing in accordance herewith).  Any such notice, instruction or communication
shall be deemed to have been delivered five business days after it is sent by
registered or certified mail, return receipt requested, postage prepaid, or one
business day after it is sent via a reputable nationwide overnight courier
service. Either party may give any notice, instruction or other communication
hereunder using any other means, but no such notice, instruction or other
communication shall be


 


7

















 


deemed to have been duly
delivered unless and until it actually is received by the party for whom it is
intended.


 


8.             Miscellaneous.


 


8.1           Employment by Subsidiary.  For
purposes of this Agreement, the Executive’s employment with the Company shall
not be deemed to have terminated solely as a result of the Executive continuing
to be employed by a wholly-owned subsidiary of the Company.


 


8.2           Severability.  The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.


 


8.3           Injunctive Relief.  The
Company and the Executive agree that any breach of this Agreement by the
Company is likely to cause the Executive substantial and irrevocable damage and
therefore, in the event of any such breach, in addition to such other remedies
which may be available, the Executive shall have the right to specific
performance and injunctive relief.


 


8.4           Governing Law.  The
validity, interpretation, construction and performance of this Agreement shall
be governed by the internal laws of the Commonwealth of Massachusetts, without
regard to conflicts of law principles.


 


8.5           Waivers.  No waiver by the Executive at
any time of any breach of, or compliance with, any provision of this Agreement
to be performed by the Company shall be deemed a waiver of that or any other
provision at any subsequent time.


 


8.6           Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original but both of which together shall constitute one and the same
instrument.


 


8.7           Tax Withholding.  Any
payments provided for hereunder shall be paid net of any applicable tax
withholding required under federal, state or local law.


 


8.8           Entire Agreement.  This
Agreement, together with the Employment Agreement by and between the Company
and the Executive of even date herewith, sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer,
employee or representative of any party hereto in respect of the subject matter
contained herein. For the avoidance of doubt, except as specifically described
herein in Section 4.1, the stock options and restricted stock awards held
by Executive shall continue to be governed by the applicable stock option or
stock incentive plan under which they were granted or issued (or any successor
plan thereto) and any related stock option or restricted stock agreement, as
the same may be amended or modified.


 


8.9           Amendments.  This Agreement may be amended
or modified only by a written instrument executed by both the Company and the
Executive.


 


8

















 


8.10         Executive’s Acknowledgements.  The
Executive acknowledges that he: (a) has read this Agreement; (b) has
been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of the Executive’s own choice or has voluntarily
declined to seek such counsel; (c) understands the terms and consequences
of this Agreement; and (d) understands that the law firm of Wilmer Cutler
Pickering Hale and Dorr LLP is acting as counsel to the Company in connection
with the transactions contemplated by this Agreement, and is not acting as
counsel for the Executive.


 


9

















 


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


 


	
  

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Barberich

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Chairman and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Adrian Adams

  
	
   

  	
  Adrian Adams

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
				



 


10






 










 


SEPRACOR INC.


 


December 23,
2008


 


Adrian Adams


322 Winfield Road


Devon, Pennsylvania 
19333


 


Dear Adrian:


 


In
order to ensure compliance with Section 409A of the Internal Revenue Code
of 1986, as amended, Sepracor Inc., a Delaware corporation (the “Company”), and
you hereby agree to amend the Executive Retention Agreement dated as of March 1,
2007  by and between the Company and you
(the “Retention Agreement”), as set forth on Exhibit A hereto, and
to further amend the Amended and Restated Employment Agreement dated as of November 6,
2008 by and between the Company and you (the “Employment Agreement”), as set
forth on Exhibit B hereto.


 


Except as modified by this letter, all other
terms and conditions of the Retention Agreement and Employment Agreement shall
remain in full force and effect.  This
letter may be executed in counterparts, each of which shall be deemed to be an
original, and all of which shall constitute one and the same document.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Barberich

  
	
   

  	
   

  	
   

  	
  Name: Timothy J. Barberich

  
	
   

  	
   

  	
   

  	
  Title: Chairman of the Board

  
	
   

  	
   

  
	
  Acknowledged and agreed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Adrian Adams

  	
   

  	
   

  
	
  Adrian Adams

  	
   

  
					



 

















 


Exhibit A


 


Retention Agreement


 


1.               Section 4.1 of the Retention Agreement
be and hereby is deleted in its entirety and the following is inserted in lieu
thereof:


 


“4.1                           Stock Acceleration.  If
the Change in Control Date occurs during the Term, then, effective upon the
Change in Control Date, (a) each outstanding option to purchase shares of
Common Stock of the Company held by the Executive shall vest and become
immediately exercisable in full and shares of Common Stock of the Company
received upon exercise of any options will no longer be subject to a right of
repurchase by the Company, (b) each outstanding restricted stock award
shall be deemed to be fully vested and will no longer be subject to a right of
repurchase by the Company and (c) notwithstanding any provision in any
applicable option agreement to the contrary, if Executive’s employment is
terminated in connection with, in anticipation of, or within six months after a
Change in Control, each such option shall continue to be exercisable by the
Executive (to the extent such option was exercisable on the Change in Control
Date) for a period of six months following the date of termination of such
employment but not later than the expiration date of such option.”


 


2.               Section 4.3(a) of the Retention
Agreement be and hereby is amended by deleting the last sentence in its
entirety and inserting the following in lieu thereof:


 


“Within 90 days after the due date of each Contingent Compensation
Payment to the Executive but no later than the end of the year following the
year in which the Executive paid the Excise Tax, the Company shall pay to the
Executive, in cash, the Gross-Up Payment with respect to such Contingent
Compensation Payment, in the amount determined pursuant to this Section 4.3(a).”


 


3.               Section 5.3 of the Retention Agreement
by and hereby is amended by adding the following at the end of the paragraph:


 


“Notwithstanding the foregoing, if the continued payment of base salary
and/or continued provision of benefits to Executive pending resolution of any
dispute would cause the Executive to become subject to penalties, interest or
other adverse tax consequences under Section 409A, then (i) the
Executive shall be entitled to the payments and benefits at the time and in the
manner set forth in Section 4 hereof and (ii) following the
resolution of the dispute if the payments made and/or benefits provided to
the Executive under clause (i) exceed the amount that the Executive is
entitled to receive pursuant to Section 4, the excess of such amount shall
be repaid (with interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Code) by the Executive to the Company within 60 days of the resolution of
the dispute.”


 


4.               Section 7 of the Retention Agreement be
and hereby is amended by deleting “111 Locke Drive” and replacing it with “84
Waterford Drive”.


 

















 


Exhibit B


 


Employment Agreement


 


1.               Any Annual Bonus or Pro Rata Bonus payable to
you under the Employment Agreement will be paid to you no later than March 15th of the calendar year following
the year in which you earned such bonus.


 


2.               Section 5.3 of the Employment Agreement
be and hereby is amended by deleting the last sentence in its entirety and
inserting the following in lieu thereof:


 


“In addition, the Company shall permit Executive or Executive’s estate
or representative to exercise the vested stock option portion of the Initial
Grant for a period of no less than one year after any such termination of
employment but not later than the expiration date of such option.”


 


3.               Section 5.4 of the Employment Agreement
be and hereby is amended by deleting the second sentence in its entirety and inserting
the following in lieu thereof:


 


“In addition, provided the Executive executes the Separation Agreement
and any applicable revocation period with respect to the Separation Agreement
has expired on or before the 60th day following the date of Executive’s
termination of employment (the “Payment Commencement Date”), the Company shall (1) continue
to pay the Executive the Base Salary for twenty four (24) months in accordance
with the Company’s regular payroll practices, commencing on the Payment Commencement
Date (provided, however, that if the Separation Agreement has
been signed, and any applicable revocation period has expired, on or before the
30th day
following the date of the Executive’s termination of employment, then the
payments may commence on such 30th day, unless the Payment Commencement Date
occurs in the calendar year following the year in which the Executive’s
employment is terminated, in which case the payments shall commence no earlier
than January 1 of such subsequent year); (2) pay the Executive a Pro
Rata Bonus; (3) pay the Executive, in bi-weekly installments, over a
twenty four month period, commencing on the Payment Commencement Date (provided,
however, that if the Separation Agreement has been signed, and any
applicable revocation period has expired, on or before the 30th day following the date of the
Executive’s termination of employment, then the payments may commence on such
30th day,
unless the Payment Commencement Date occurs in the calendar year following the
year in which the Executive’s employment is terminated, in which case the
payments shall commence no earlier than January 1 of such subsequent
year), an amount equal in the aggregate to two (2) times the average
Annual Bonus earned for the two years prior to the date of his termination (in
the event Executive has not been employed for a sufficient period to earn two
such bonuses, such calculation shall be made assuming Executive earned a bonus
for any such year at a target level of performance (taking into account any minimum
bonus amount)); (4) provide to the Executive for two (2) years
following the date of his termination payment of COBRA premiums for medical,
dental, and vision benefits pursuant to plans maintained by the Company under
which Executive and/or Executive’s family is eligible to receive benefits; provided,
however, that, notwithstanding the foregoing, the benefits described in
this subsection may be discontinued prior the end of the period, but only to
the extent, that Executive receives substantially similar benefits from a
subsequent employer; and (5) permit Executive to exercise the stock option
portion of the Initial Grant for a period of no less than six months after the
date of termination but not later than the expiration date of such option.”