Exhibit 10.21


 


AMENDED AND RESTATED


EMPLOYMENT AGREEMENT


 


THIS AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), made this 6th day of November 2008 (the “Effective Date”),
is entered into by Sepracor Inc., a Delaware corporation with its principal
place of business at 84 Waterford Drive, Marlborough, Massachusetts 01752-7231
(the “Company”), and Richard Ranieri, residing at 7910 Entrada De Luz , San
Diego, CA 92127 (the “Executive”).


 


The Company
desires to employ the Executive and the Executive desires to be employed by the
Company, and in connection therewith the Company and the Executive entered into
an Employment Agreement, dated August 18, 2008 (the “Original Agreement”).  The Company and the Executive wish to amend
and restate the Original Agreement as provided for herein.  In consideration of the mutual covenants and
promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
the parties agree that the Original Agreement is amended and restated in its
entirety as follows:


 


1.             Term
of Employment.  The Company hereby
agrees to employ the Executive and the Executive hereby agrees to be employed
by the Company, upon the terms set forth in this Agreement, for the period
commencing on August 19, 2008 (the “Commencement Date”) and ending on the
fifth anniversary of the Commencement Date (the “Term”).  Notwithstanding
the foregoing, the Term shall be extended automatically without further action
by either party by one (1) additional year (added to the end of the Term)
on each succeeding anniversary of the Commencement Date, unless either party
shall have served written notice upon the other party at least sixty (60) days
preceding the date upon which such Term would end (such period, as it may


 


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be extended, the “Employment
Period”), unless sooner terminated in accordance with the provisions of Section 4.


 


2.             Title and Capacity.  The Executive shall serve as Executive
Vice-President, Human Resources and Administration of the Company.  Executive shall report directly to the Chief
Executive Officer of the Company and shall, except as permitted hereby, devote
all of his business time and services to the business and affairs of the
Company.  Executive shall also perform
such other duties consistent with his position as Executive Vice-President,
Human Resources and Administration as may be reasonably assigned by the Chief
Executive Officer and the Board of Directors of the Company (the “Board”) from
time to time.  The Executive agrees to
abide by the rules, regulations, instructions, personnel practices and policies
of the Company and any changes therein that may be adopted from time to time by
the Company.


 


Notwithstanding
anything herein to the contrary, Executive shall be entitled to engage in (a) service
on the board of directors of two companies, businesses or trade organizations
with prior Board approval, (b) service on the board of directors for a
not-for-profit or charitable organization with prior Board approval, (c) other
charitable activities and community affairs, and (d) managing his personal
investments and affairs, in each case to the extent such activities do not
materially interfere with the performance of his duties and responsibilities to
the Company.


 


3.             Compensation and
Benefits.


 


3.1        Salary.  During the term of this Agreement, the
Company agrees to continue to pay the Executive a base salary at the annualized
rate of $405,000 (“Base Salary”) commencing on the Commencement Date.  The Base Salary shall be subject to annual
review by the Board but shall not be reduced below $ 405,000 per annum.  Such salary shall be payable


 


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to Executive in
bi-weekly installments and in accordance with the Company’s normal payroll
procedures.


 


3.2        Bonus.  The Executive shall be eligible for a
performance-based annual bonus for each fiscal year of the Term (the “Annual
Bonus”). The Annual Bonus shall be based upon annual quantitative and
qualitative performance targets as established by the Board in its sole
discretion in accordance with the Company’s bonus plan; provided, that
the Executive’s annual bonus level target shall be set at fifty percent (50%)
or more of Base Salary.  For 2008,
Executive shall be entitled to a guaranteed Annual Bonus in an amount equal to
fifty percent (50%) of his Base Salary. 
The Annual Bonus is not earned until the close of business on the last
business day of the Company’s fiscal year. 
Any Annual Bonus payable hereunder shall be payable, if at all, after
the date of the delivery of the audited financial statements for the applicable
fiscal year. In addition, Executive shall receive a one-time “ Sign On” bonus
of $150,000 less applicable taxes and withholdings to be paid within thirty
(30) days of the Commencement Date, provided, however, if the Executive’s
employment is terminated within twelve (12) months of the Commencement Date,
for Cause by the Company pursuant to Section 4.2, or at the election of
the Executive pursuant to Section 4.5, the Executive will be required to
repay the portion of the Sign On bonus retained by Executive after payment of
all taxes.


 


3.3           Stock and Option
Grant.  At the first meeting of the
Compensation Committee of the Board of Directors following the Executive’s
first day of employment, the Company shall grant to the Executive, under the
Company’s 2000 Stock Incentive Plan (the “Stock Plan”), 40,000 shares of
restricted stock ( the “Initial Stock Grant”) and an option to purchase 55,000
shares of Company stock (the “Initial Option Grant”).  The terms and conditions


 


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of the Initial Stock
Grant and the Initial Option Grant (other than the exercise price per share,
which shall be equal to the closing price of the Company’s stock on the grant
date) shall be set forth in the award agreements attached hereto as Schedules A
and B.  The Initial Stock Grant shall
vest in three equal installments on each of the first three anniversaries of
the Commencement Date.  The Initial
Option Grant shall vest in five equal installments on each of the first five
anniversaries of the Commencement Date. The Board, in its sole discretion, may
grant further incentive compensation awards to the Executive from time to
time.  The Company represents and
warrants to Executive that the Company has full power and authority, subject to
Compensation Committee approval, and shares available under the Stock Plan, to
make the Initial Grant.


 


3.4           Benefits.  The Executive shall be entitled to
participate in all bonus and benefit programs that the Company establishes and
makes available to its employees, to the extent that the Executive is eligible
under (and subject to the provisions of) the plan documents governing those
programs.  The Executive shall be
entitled to no less than four weeks paid vacation per year, subject to the
other terms of the Company’s standard vacation policy, attached hereto as
Schedule C.


 


3.5           Reimbursement of
Expenses.  The Company shall
reimburse the Executive for all reasonable travel (which shall be deemed to
include first class airfare), entertainment and other expenses incurred or paid
by the Executive until December 31, 2008 and throughout his employment
with the Company in connection with, or related to, the performance of his
duties, responsibilities or services under this Agreement or in connection with
Executive’s commuting to and from his personal residence in San Diego,
California and the Company’s offices, upon presentation by the Executive of
documentation, expense statements, vouchers and/or such other


 


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supporting information as
the Company may request.  All
reimbursement payments made pursuant to this Section 3.5 shall be made on
a fully tax grossed-up basis.


 


3.6           Housing
Expenses.  The Company understands
that the Executive intends to maintain his primary residence outside the
Massachusetts area until December 31, 2008 and then intends to relocate to
the Massachusetts area. Until December 31, 2008, the Company agrees to
provide the Executive with a housing allowance of $3,750 per month, which
payments shall be increased on a fully tax grossed-up basis.  The Company also will reimburse the Executive
and his spouse for reasonable travel, meals and lodging expenses incurred by
them for up to two trips for the purpose of securing such house or apartment
within a suitable distance to the Company’s headquarters.  Executive shall be entitled to relocation
benefits afforded by the Company to other Company executives if and when
Executive decides to permanently relocate his primary residence to the
Massachusetts area.


 


3.7           Executive’s
Legal Fees.  The Company agrees to
pay the Executive’s reasonable legal costs and expenses in connection with
negotiating and drafting this Agreement up to a maximum of $15,000.


 


3.8           Automobile.  The Company agrees to provide the Executive
with an automobile allowance or a leased automobile with a retail value of up
to $60,000, which payments shall be made on a fully tax grossed-up basis.  In addition, the Company agrees to pay all
insurance, maintenance, fuel and other customary costs associated with
operating the automobile.


 


3.9           Withholding.  All salary, bonus and other compensation
payable to the Executive shall be subject to applicable withholding taxes.


 


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4.             Employment
Termination.  The employment of the
Executive under this Agreement shall terminate upon the occurrence of any of
the following:


 


4.1        On the expiration date of
the Employment Period.


 


4.2        At the election of the
Company, for Cause (as defined below), immediately upon written notice by the
Company to the Executive, which notice shall identify the Cause upon which
termination is based.  For the purposes
of this Section 4.2, Cause for termination shall mean:  (a) the Executive’s willful and
continued failure to substantially perform his reasonable assigned duties
(other than any such failure resulting from incapacity due to physical or
mental illness or any failure after the Executive gives notice of termination
for Good Reason and Good Reason exists), which failure is not cured within 30
days after a written demand for substantial performance is received by the
Executive from the Board of Directors of the Company which specifically
identifies the manner in which the Board of Directors believes the Executive
has not substantially performed the Executive’s duties; (b) the Executive’s
willful engagement in illegal conduct or gross misconduct which is materially
and demonstrably injurious to the Company; or (c) a material breach of Section 6
or 7 of  this Agreement by the
Executive.  For purposes of this Section 4.2,
no act or failure to act by the Executive shall be considered “willful” unless
it is done, or omitted to be done, in bad faith and without reasonable belief
that the Executive’s action or omission was in the best interests of the
Company.


 


4.3        Upon the death or
disability of the Executive.  As used in
this Agreement, the term “disability” shall mean the Executive’s absence from
the full-time performance of the Executive’s duties with the Company for one
hundred eighty (180) consecutive calendar days as a result of incapacity due to
mental or physical illness which is determined to be total and


 


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permanent by a
physician selected by the Company or its insurers and acceptable to the
Executive or the Executive’s legal representative.


 


4.4        At the election of the
Executive for Good Reason as defined herein. 
The Executive may terminate his employment for Good Reason at any time,
following 30-days prior written notice of such termination to the Company. Such
notice shall provide factual details of the basis behind such termination and
the Company shall have a thirty (30) day period thereafter to cure such
matter.  As used herein, the term “Good
Reason” shall mean:  (a) a material
breach by the Company of the terms of this Agreement, including the failure to
pay Base Salary or any Annual Bonus when due; or (b) any material adverse
change by the Company in Executive’s titles, authorities, duties,
responsibilities or lines of reporting inconsistent with the terms hereof or
the assignment to Executive by the Company of titles, authorities, duties,
responsibilities or lines of reporting inconsistent with the terms hereof, or (c) a
relocation of the offices of the Company where the Executive is working to an
area more than forty (40) miles from the location of such offices as of the
date hereof.


 


4.5        At the election of the
Executive without Good Reason, upon not less than sixty (60) calendar days
prior written notice of termination by the Executive to the Company; provided,
however, that the Company may, in its sole discretion, determine that
the termination of the Executive shall become effective immediately and in
which case the termination shall still be considered at the election of the
Executive without Good Reason.


 


4.6        At the election of the
Company, without Cause, upon not less than sixty (60) days written notice to
Executive.


 


4.7        At the election of the
Company or the Executive in connection with a Change in Control, as set forth
in the Executive Retention Agreement between the Company


 


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and the Executive
(the “ERA”), dated as of the date hereof. 
“Change in Control” shall have the meaning set forth in the ERA.


 


5.             Effect of
Termination.


 


5.1        Non-Renewal,
Termination Without Good Reason By the Executive or Termination For Cause By
the Company.  In the event the
Executive’s employment is terminated by non-renewal pursuant to Section 4.1,
for Cause by the Company pursuant to Section 4.2, or at the election of
the Executive pursuant to Section 4.5, the Company shall pay to the
Executive the compensation and benefits otherwise payable to him under Section 3
through the last calendar day of his actual employment by the Company..


 


5.2        Termination for Death
or Disability.  In the event the
Executive’s employment is terminated by death or because of disability pursuant
to Section 4.3, the Company shall pay to the estate of the Executive or to
the Executive, as the case may be, (A) within thirty (30) days of the date
of the Executive’s death or determination of disability, the compensation which
would otherwise be payable to the Executive up to the end of the month in which
the termination of his employment because of death or disability occurs; and (B) an
annual bonus, payable when bonuses are paid for that year, in an amount equal
to the total bonus he would be paid for such year, if any, multiplied by a
fraction, the numerator of which is the number of days in the year that have
elapsed since January 1 and the denominator of which is 365 (a “Pro Rata
Bonus”).  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.


 


5.3        Termination By the
Executive With Good Reason or By the Company Without “Cause”.  In the event the Executive’s employment is terminated
by the Executive with


 


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Good Reason
pursuant to Section 4.4 or by the Company without Cause pursuant to Section 4.6,
the Company shall pay to the Executive the compensation and benefits otherwise
payable to him under Section 3 through the last calendar day of his actual
employment by the Company.  In addition,
provided the Executive executes and does not revoke a Separation Agreement and
Release of Claims for the benefit of the Company substantially in the form set
forth on Schedule D hereto, the Company shall  (a) continue to pay the
Executive the Base Salary for twenty four (24) months in accordance with the
Company’s regular payroll practices; (b) pay the Executive a Pro Rata
Bonus; (c) pay the Executive, in bi-weekly installments, over a twenty
four (24) month period, an amount equal in the aggregate to 1.5 times the
average Annual Bonus earned for the two years prior to the date of his termination
(in the event the 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)).; and (d) provide to the Executive for 24
months 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 to the end of the
period, but only to the extent, that Executive receives substantially similar
benefits from a subsequent employer; and (e) 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.


 


5.4        Termination Following a Change in Control.  In the event the Executive’s employment is
terminated pursuant to Section 4.7 by the Company or by the Executive
within


 


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24 months following the Change in Control Date as defined
in the ERA, the Executive will be entitled to the benefits set forth in the ERA
in accordance with the terms of the ERA.


 


5.5        Participation in
Executive Retirement Health Benefit Program.  Following the date of the Executive’s
termination, for any reason whatsoever, and, if applicable, the twenty-four
(24) month period referred to in Section 5.3(d) or the period
referred to in Section 4.2(a)(ii) of the ERA, in the event the
Executive elects to participate in the Company’s executive retiree health
benefit program set forth on Exhibit A hereto (the “Program”), he
will reimburse the Company with respect to his participation in the Program at
the lesser of (a) the actual cost to the Company of the employee’s
participation and (b) the rate applicable to former employees of the
Company to elect COBRA health coverage.


 


5.6        Payments Subject to Section 409A.


 


(a)           Subject to this Section 5.6,
payments or benefits under Section 5 
shall begin only upon the date of a “separation from service” of the
Executive (determined as set forth below) which occurs on or after the
termination of the Executive’s employment. 
The following rules shall apply with respect to distribution of the
payments and benefits, if any, to be provided to the Executive under Section 5,
as applicable:


 


(i)            It is intended that
each installment of the payments and benefits provided under Section 5  shall be treated as a separate “payment” for
purposes of Section 409A of the Code and the guidance issued thereunder (“Section 409A”).  Neither the Company nor the Executive shall
have the right to accelerate or defer the delivery of any such payments or
benefits except to the extent specifically permitted or required by Section 409A.


 


(ii)           If, as of the date of
the “separation from service” of the Executive from the Company, the Executive
is not a “specified employee” (within the meaning


 


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of Section 409A),
then each installment of the payments and benefits shall be made on the dates
and terms set forth in Section 5.


 


(iii)          If, as of the date of
the “separation from service” of the Executive from the Company, the Executive
is a “specified employee” (within the meaning of Section 409A), then:


 


(1)           Each
installment of the payments and benefits due under Section 5 that, in
accordance with the dates and terms set forth herein, will in all
circumstances, regardless of when the separation from service occurs, be paid
within the Short-Term Deferral Period (as hereinafter defined) shall be treated
as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to
the maximum extent permissible under Section 409A.  For purposes of this Agreement, the “Short-Term
Deferral Period” means the period ending on the later of the 15th day of the third month following the end of
the Executive’s tax year in which the separation from service occurs and the 15th day of the third month following the end of
the Company’s tax year in which the separation from service occurs; and


 


(2)           Each
installment of the payments and benefits due under Section 5 that is not
described in Section 5.6
(a)(iii)(1) and that would, absent this subsection, be paid within the
six-month period following the “separation from service” of the Executive from
the Company shall not be paid until the date that is six months and one day
after such separation from service (or, if earlier, the Executive’s death),
with any such installments that are required to be delayed being accumulated
during the six-month period and paid in a lump sum on the date that is six
months and one day following the Executive’s separation from service and any
subsequent installments, if any, being paid in accordance with the dates and


 


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terms
set forth herein; provided, however, that the preceding
provisions of this sentence shall not apply to any installment of payments and
benefits if and to the maximum extent that that such installment is deemed to
be paid under a separation pay plan that does not provide for a deferral of
compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii)
(relating to separation pay upon an involuntary separation from service).  Any installments that qualify for the
exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must
be paid no later than the last day of the Executive’s second taxable year
following his taxable year in which the separation from service occurs.


 


(b)           The determination of
whether and when a separation from service of the Executive from the Company
has occurred shall be made and in a manner consistent with, and based on the
presumptions set forth in, Treasury Regulation Section 1.409A-1(h).  Solely for purposes of this Section 5.6 (b),
“Company” shall include all persons with whom the Company would be considered a
single employer under Section 414(b) and 414(c) of the Code.


 


(c)           All reimbursements and
in-kind benefits provided under the Agreement shall be made or provided in
accordance with the requirements of Section 409A to the extent that such
reimbursements or in-kind benefits are subject to Section 409A.


 


6.             Non-Competition
and Non-Solicitation.


 


(a)           While the Executive is
employed by the Company, and for a period of twelve (12) months following the
Executive’s termination or cessation of such employment for any reason, the Executive
will not directly or indirectly:


 


(i)            Engage in any business
or enterprise (whether as an owner, partner, officer, employee, director,
investor, lender, consultant, independent contractor or otherwise, except as
the holder of not more than 5% of the combined voting power of the


 


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outstanding stock of a
publicly held company) that (A) is competitive with the Company’s
business, and (B) develops, designs, produces, markets, sells or renders
any product or service competitive with any product developed, produced,
marketed, sold or rendered by the Company while the Executive was employed by
the Company;


 


(ii)           Either alone or in association with others, recruit or solicit, any person who was employed by the
Company at any time during the period of the Executive’s employment with the
Company, except for an individual whose employment with the Company has been
terminated for a period of six months or longer; and


 


(iii)          Either alone or in association with others, solicit, divert or take away, or attempt to divert or to take
away, the business or patronage of any of the clients, customers or accounts,
or prospective clients, customers or accounts, of the Company which were
contacted, solicited or served by the Executive while he was employed by the
Company.


 


(b)           If any restriction set forth in this Section 6 is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of
time or over too great a range of activities or in too broad a geographic area,
it shall be interpreted to extend only over the maximum period of time, range
of activities or geographic area as to which it may be enforceable.


 


(c)           The Executive acknowledges that the restrictions contained in this Agreement are necessary for the
protection of the business and goodwill of the Company and are considered by
the Executive to be reasonable for such purpose.  The Executive agrees that any breach of this
Agreement will cause the Company substantial and irrevocable damage and
therefore, in the event of any such breach, in addition to such other remedies
which may be


 


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available,
the Company shall have the right to seek specific performance and injunctive
relief without posting a bond.


 


(d)           The geographic scope of this Section shall extend to anywhere the
Company or any of its subsidiaries is doing business, or has plans, during the
Term, to do business.


 


(e)           The Executive agrees to provide a copy of
this Agreement to all persons and entities with whom the Executive seeks to be hired or do
business before accepting employment or engagement with any of them.


 


(f)            If the Executive violates the provisions of this Section, the Executive shall continue
to be held by the restrictions set forth in this Section, until a period equal
to the period of restriction has expired without any violation.


 


7.             Proprietary
Information and Developments.


 


7.1        Proprietary Information.


 


(a)           The Executive agrees
that all information, whether or not in writing, of a private, secret or
confidential nature concerning the Company’s business, business relationships
or financial affairs (collectively, “Proprietary Information”) is and shall be
the exclusive property of the Company. 
By way of illustration, but not limitation, Proprietary Information may
include discoveries, inventions, products, product improvements, product
enhancements, processes, methods, techniques, formulas, compositions,
compounds, negotiation strategies and positions, projects, developments, plans
(including business and marketing plans), research data, clinical data,
financial data (including sales, costs, profits and pricing methods), personnel
data, computer programs (including software used pursuant to a license
agreement), customer and supplier lists, and contacts at or knowledge of
customers or prospective customers


 


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of the Company.  Except as required by applicable law, the
Executive will not disclose any Proprietary Information to any person or entity
other than employees of the Company or use the same for any purposes (other
than in the performance of his duties as an employee of the Company) without
prior written approval from the Chief Executive Officer, either during or after
his employment with the Company, unless and until such Proprietary Information
has become public knowledge without fault by the Executive.


 


(b)           The Executive agrees
that all files, documents, letters, memoranda, reports, records, data,
sketches, drawings, methods, laboratory notebooks, program listings, computer
equipment or devices, computer programs or other written, photographic, or
other tangible material containing Proprietary Information, whether created by
the Executive or others, which shall come into his custody or possession, shall
be and are the exclusive property of the Company and are to be used by the
Executive only in the performance of his duties for the Company.  All such materials or copies thereof and all
tangible property of the Company in the custody or possession of the Executive
shall be delivered to the Company upon the earlier of (i) a request by the
Company or (ii) termination of his employment.  After such delivery, the Executive shall not
retain any such materials or copies thereof or any such tangible property.


 


(c)           The Executive agrees
that his obligation not to disclose or to use information and materials of the
types set forth in subsections (a) and (b) above, and his obligation
to return materials and tangible property set forth in subsection (b) above,
also extends to such types of information, materials and tangible property of
customers of the Company or suppliers to the Company or other third parties who
may have disclosed or entrusted the same to the Company or to the Executive.


 


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7.2        Developments.


 


(a)           The Executive will make
full and prompt disclosure to the Company of all inventions, creations,
improvements, discoveries, trade secrets, secret processes, technology,
know-how, copyrightable materials, methods, developments, software, and works
of authorship or other creative works, whether patentable or not, which are
created, made, conceived or reduced to practice by him or under his direction
or jointly with others during his employment by the Company, whether or not
during normal working hours or on the premises of the Company (all of which are
collectively referred to in this Agreement as “Developments”).


 


(b)           The Executive agrees to
assign and does hereby assign to the Company (or any person or entity
designated by the Company) all his right, title and interest in and to all
Developments and all related patents, patent applications, copyrights and
copyright applications.  However, this
subsection (b) shall not apply to Developments that do not relate to any
business or research and development conducted or planned to be conducted by
the Company at the time such Development is created, made, conceived or reduced
to practice and that are made and conceived by the Executive not during normal
working hours, not on the Company’s premises and not using the Company’s tools,
devices, equipment or Proprietary Information. 
The Executive understands that, to the extent this Agreement shall be
construed in accordance with the laws of any state that precludes a requirement
in an employee agreement to assign certain classes of inventions made by an
employee, this subsection (b) shall be interpreted not to apply to any
invention that a court rules and/or the Company agrees falls within such
classes.  The Executive also hereby
waives all claims to moral rights in any Developments.


 


(c)           The Executive agrees to
cooperate fully with the Company and to take such further actions as may be
necessary or desirable, both during and after his employment


 


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with the Company, with
respect to the procurement, maintenance and enforcement of copyrights, patents
and other intellectual property rights (both in the United States and foreign
countries) relating to Developments.  The
Executive shall sign all papers, including, without limitation, copyright
applications, patent applications, declarations, oaths, formal assignments,
assignments of priority rights and powers of attorney, that the Company may
deem necessary or desirable in order to protect its rights and interests in any
Development.  The Executive further
agrees that if the Company is unable, after reasonable effort, to secure the
signature of the Executive on any such papers, the Chief Executive Officer of
the Company shall be entitled to execute any such papers as the agent and the
attorney-in-fact of the Executive, and the Executive hereby irrevocably
designates and appoints the Chief Executive Officer of the Company as his agent
and attorney-in-fact to execute any such papers on his behalf and to take any
and all actions as the Company may deem necessary or desirable in order to
protect its rights and interests in any Development under the conditions
described in this sentence.


 


7.3        United States
Government Obligations.  The
Executive acknowledges that the Company from time to time may have agreements
with other parties or with the United States Government, or agencies thereof,
which impose obligations or restrictions on the Company regarding inventions
made during the course of work under such agreements or regarding the
confidential nature of such work.  The
Executive agrees to be bound by all such obligations and restrictions that are
made known to the Executive and to take all action necessary to discharge the
obligations of the Company under such agreements.


 


7.4        Other Agreements.  The Executive hereby represents that he is
not bound by the terms of any agreement with any previous employer or other
party to refrain from competing, directly or indirectly, with the business of
such previous employer or any other


 


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party.  The Executive further represents that his
performance of all the terms of this Agreement and the performance of his
duties as an employee of the Company does not and will not breach any agreement
to keep in confidence proprietary information, knowledge or data acquired by
him in confidence or in trust prior to his employment with the Company and that
the Executive will not disclose to the Company or induce the Company to use any
confidential or proprietary information, knowledge or material belonging to any
previous employer or others.  The
Executive further represents that his performance of all the terms of this
Agreement and the performance of his duties as an employee of the Company does
not and will not breach any agreement to refrain from soliciting employees,
customers or suppliers of any former employer or others.


 


8.             Indemnification.  The Company shall indemnify the Executive in
accordance with applicable laws, its Certificate of Incorporation and By-Laws
and any other policy or plan of any kind that provides for indemnification of
the Executive and is, or may become, applicable or available to the Executive.


 


9.             Survival.  The provisions of Sections 6, 7 and 8
shall survive the termination of this Agreement for any reason.


 


10.           Notices.  Any notices delivered under this Agreement
shall be deemed duly delivered three (3) business days after it is sent by
registered or certified mail, return receipt requested, postage prepaid, or one
(1) business day after it is sent for next-business day delivery via a
reputable nationwide overnight courier service, in each case to the address of
the recipient set forth in the introductory paragraph hereto.  Either party may change the address to which
notices are to be delivered by giving notice of such change to the other party
in the manner set forth in this Section 10.


 


18

















 


11.           Compliance with Code
Section 409A.  This Agreement is
intended to comply with the provisions of Section 409A and the Agreement
shall, to the extent practicable, be construed in accordance therewith.  The Company makes no representation or
warranty and shall have no liability to the Executive or any other person if
any provisions of this Agreement are determined to constitute deferred
compensation subject to Section 409A and do not satisfy an exemption from,
or the conditions of, Section 409A.


 


12.           Pronouns.  Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular forms of nouns and pronouns shall
include the plural, and vice versa.


 


13.           Entire Agreement.  This Agreement, together with the ERA,
constitutes the entire agreement between the parties and supersedes all prior
agreements and understandings, whether written or oral, relating to the subject
matter of this Agreement, including, without limitation, the Original
Agreement.


 


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


 


15.           Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts
(without reference to the conflict of laws provisions thereof).  Any action, suit or other legal proceeding
arising under or relating to any provision of this Agreement shall be commenced
only in a court of the Commonwealth of Massachusetts (or, if appropriate, a federal
court located within the Commonwealth of Massachusetts), and the Company and
the Executive each consents to the jurisdiction of such a court.  The Company and the Executive each hereby
irrevocably waive any right to a trial by jury in any action, suit or other
legal proceeding arising under or relating to any


 


19

















 


provision of this
Agreement or any other dealing between them relating to the subject matter of
this transaction and the relationship that is being established.


 


16.           Successors and
Assigns.  This Agreement shall be
binding upon and inure to the benefit of both parties and their respective
successors and assigns, including any corporation with which or into which the
Company may be merged or which may succeed to its assets or business; provided,
however, that the obligations of the Executive are personal and shall
not be assigned by him.


 


17.           Acknowledgment.  The Executive states and represents that he
has had an opportunity to fully discuss and review the terms of this Agreement
with an attorney.  The Executive further
states and represents that he has carefully read this Agreement, understands
the contents herein, freely and voluntarily assents to all of the terms and
conditions hereof, and signs his name of his own free act.


 


18.           Miscellaneous.


 


18.1      No delay or omission by the
Company or the Executive in exercising any right under this Agreement shall
operate as a waiver of that or any other right. 
A waiver or consent given by the Company or the Executive on any one
occasion shall be effective only in that instance and shall not be construed as
a bar to or waiver of any right on any other occasion.


 


18.2      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.


 


18.3      In case any provision of
this Agreement shall be invalid, illegal or otherwise unenforceable, the
validity, legality and enforceability of the remaining provisions shall in no
way be affected or impaired thereby.


 


20

















 


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


 


	
   

  	
  Sepracor Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Adrian Adams

  
	
   

  	
  Title:

  	
  President and Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Richard Ranieri

  
	
   

  	
  Richard Ranieri

  



 


21

















 


Exhibit A


 


Program Terms


 


The
Executive shall be entitled to continued access to health benefits under, at
the Executive’s election, the Company’s Blue Cross Blue Shield PPO Policy or
BlueChoice Policy (the “Policies”), following the Executive’s retirement from
the Company, for so long as (A) the Company continues to offer such Policy
and (B) the Policy allows for such continued access; and, to the extent
the Company no longer maintains at least one of the Policies, or access is no
longer allowed under either of the Policies, the Company shall allow the
Executive continued access to health benefits under a successor policy, or
otherwise, for so long as it offers health benefits to its employees.


 


1














 


SCHEDULE
A


 


FORM OF
RESTRICTED STOCK AGREEMENT


 


SEE
ATTACHED AGREEMENT


 

















 


SEPRACOR INC.


 


Restricted Stock Agreement


 


	
  

  	
  Name of Recipient:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Number of shares of restricted common

  stock awarded:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Grant Date:

  	
   

  	
   

  



 


Sepracor Inc. (the “Company”) has selected you to receive the
restricted stock award described above, which is subject to the provisions of
the Company’s 2000 Stock Incentive Plan (the “Plan”) and the terms and
conditions contained in this Restricted Stock Agreement.  Please confirm your acceptance of this
restricted stock award and of the terms and conditions of this Agreement by
signing a copy of this Agreement where indicated below.


 


	
  

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  [insert name and
  title]

  
	
  Accepted and Agreed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [insert name of recipient]

  	
   

  
				



 

















 


SEPRACOR INC.


 


Restricted Stock Agreement


 


The terms and conditions of the award of shares of restricted common
stock of the Company (the “Restricted Shares”) made to the Recipient, as set
forth on the cover page of this Agreement, are as follows:


 


Issuance
of Restricted Shares.


 


18.4         The Restricted Shares are
issued to the Recipient, effective as of the Grant Date (as set forth on the
cover page of this Agreement), in consideration of employment services
rendered and to be rendered by the Recipient to the Company.


 


18.5         The Restricted Shares
will initially be issued by the Company in book entry form only, in the name of
the Recipient.  Following the vesting of
any Restricted Shares pursuant to Section 2 below, the Company shall, if
requested by the Recipient, issue and deliver to the Recipient a certificate
representing the vested Restricted Shares.    The Recipient agrees that the Restricted Shares
shall be subject to the forfeiture provisions set forth in Section 3 of
this Agreement and the restrictions on transfer set forth in Section 4 of
this Agreement.


 


19.           Vesting.


 


Vesting
Schedule.  Unless
otherwise provided in this Agreement or the Plan, the Restricted Shares shall
vest in accordance with the following vesting schedule:  one-third of the total number of Restricted
Shares shall vest on the first anniversary of your Commencement Date (as
defined in the Employment Agreement entered into between you and the Company
dated as of [           ,2008] and
one-third of the total number of Restricted Shares shall vest on each
successive anniversary thereafter, through and including the 3rd anniversary of the Commencement Date.   Any fractional number of Restricted Shares
resulting from the application of the foregoing percentages shall be rounded
down to the nearest whole number of Restricted Shares.


 


Acceleration
of Vesting. 
Notwithstanding the foregoing vesting schedule, as provided in the Plan,
all unvested Restricted Shares  shall
vest effective immediately prior to a Change in Control Event (as defined in
the Plan).


 


20.           Forfeiture of
Unvested Restricted Shares Upon Employment Termination.


 


In the event that the Recipient ceases to be employed by, a director
of, or a consultant or advisor to, the Company for any reason or no reason,
with or without cause all of the Restricted Shares that are unvested as of the
time of such employment termination shall be forfeited immediately and
automatically to the Company, without the payment of any consideration to the
Recipient, effective as of such termination of employment.  The Recipient shall have no further rights
with respect to any Restricted Shares that are so forfeited.  If the Recipient is employed by a subsidiary
of the Company, any references in this Agreement to employment with the Company
shall instead be deemed to refer to employment with such subsidiary.


 


3

















 


21.           Restrictions on
Transfer.


 


The Recipient shall not sell, assign, transfer, pledge, hypothecate or
otherwise dispose of, by operation of law or otherwise (collectively “transfer”)
any Restricted Shares, or any interest therein, until such Restricted Shares
have vested, except that the Recipient may transfer such Restricted Shares as
part of the sale of all or substantially all of the shares of capital stock of
the Company (including pursuant to a merger or consolidation).  The Company shall not be required (i) to
transfer on its books any of the Restricted Shares which have been transferred
in violation of any of the provisions of this Agreement or (ii) to treat
as owner of such Restricted Shares or to pay dividends to any transferee to
whom such Restricted Shares have been transferred in violation of any of the
provisions of this Agreement.


 


22.           Restrictive Legends.


 


The book entry account reflecting the issuance of the Restricted Shares
in the name of the Recipient shall bear a legend or other notation upon
substantially the following terms:


 


“These shares of stock are subject to forfeiture provisions and
restrictions on transfer set forth in a certain Restricted Stock Agreement
between the corporation and the registered owner of these shares (or his or her
predecessor in interest), and such Agreement is available for inspection
without charge at the office of the Secretary of the corporation.”


 


23.           Rights as a
Shareholder.


 


Except as otherwise provided in this Agreement, for so long as the
Recipient is the registered owner of the Restricted Shares, the Recipient shall
have all rights as a shareholder with respect to the Restricted Shares, whether
vested or unvested, including, without limitation, any rights to receive
dividends and distributions with respect to the Restricted Shares and to vote
the Restricted Shares and act in respect of the Restricted Shares at any
meeting of shareholders.


 


24.           Provisions of the
Plan.


 


This Agreement is subject to the provisions of the Plan, a copy of
which is furnished to the Recipient with this Agreement.  As provided in the Plan, upon the occurrence
of a Reorganization Event (as defined in the Plan), the rights of the Company
hereunder (including the right to receive forfeited Restricted Shares) shall
inure to the benefit of the Company’s successor and, unless the Board
determines otherwise, shall apply to the cash, securities or other property
which the Restricted Shares were converted into or exchanged for pursuant to
such Reorganization Event in the same manner and to the same extent as they
applied to the Restricted Shares under this Agreement.


 


25.           Tax Matters.


 


25.1         Acknowledgments; Section 83(b) Election.  The Recipient acknowledges that he or she is
responsible for obtaining the advice of the Recipient’s own tax advisors with
respect to the acquisition of the Restricted Shares and the Recipient is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents with respect to the tax consequences relating
to the Restricted Shares.  The Recipient
understands that the Recipient (and not the Company) shall be responsible for
the Recipient’s tax liability that may arise in connection with the
acquisition, vesting and/or disposition of the Restricted Shares.  The Recipient acknowledges that he or she has
been informed of the availability of making an election under Section 83(b) of
the Internal Revenue Code, as amended, with respect to the


 


4

















 


issuance of the
Restricted Shares and that the Recipient has decided not to file a Section 83(b) election.


 


25.2         Withholding. The
Recipient acknowledges and agrees that the Company has the right to deduct from
payments of any kind otherwise due to the Recipient any federal, state, local
or other taxes of any kind required by law to be withheld with respect to the
vesting of the Restricted Shares.  On
each date on which Restricted Shares vest, the Company shall deliver written
notice to the Recipient of the amount of withholding taxes due with respect to
the vesting of the Restricted Shares that vest on such date; provided, however,
that the total tax withholding cannot exceed the Company’s minimum statutory
withholding obligations (based on minimum statutory withholding rates for
federal and state tax purposes, including payroll taxes, that are applicable to
such supplemental taxable income).  The
Recipient shall satisfy such tax withholding obligations by making a cash
payment to the Company on the date of vesting of the Restricted Shares, in the
amount of the Company’s withholding obligation in connection with the vesting
of such Restricted Shares.


 


26.           Miscellaneous.


 


26.1         No Right to Continued
Employment.  The Recipient
acknowledges and agrees that, notwithstanding the fact that the vesting of the
Restricted Shares is contingent upon his or her continued employment by the
Company, this Agreement does not constitute an express or implied promise of
continued employment or confer upon the Recipient any rights with respect to
continued employment by the Company.


 


26.2         Governing Law.  This Agreement shall be construed,
interpreted and enforced in accordance with the internal laws of the State of
Delaware without regard to any applicable conflicts of laws provisions.


 


5

















 


SCHEDULE
B

FORM OF STOCK OPTION AGREEMENT


 


SEE
ATTACHED AGREEMENT


 


6

















 


SEPRACOR INC.


 


Nonstatutory Stock
Option Agreement


Granted Under 2000
Stock Incentive Plan


 


1.             Grant of Option.


 


This agreement evidences
the grant by Sepracor Inc., a Delaware corporation (the “Company”), on the
Grant Date indicated on the preceding Certificate of Stock Option Grant (the “Certificate”)
to  an employee, consultant, or director
of the Company (the “Participant”), of an option to purchase, in whole or in
part, on the terms provided herein and in the Company’s 2000 Stock Incentive
Plan (the “Plan”), the number of shares (the “Shares”) of common stock, $.10  par value per share, of the Company (“Common Stock”),
indicated on the Certificate at the price 
per Share indicated on the Certificate. Unless earlier terminated, this
option shall expire on the Grant Expiration Date indicated on the Certificate (“Grant
Expiration Date”).


 


It is intended that the
option evidenced by this agreement shall not be an incentive stock option as
defined in Section 422 of the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder (the “Code”).  Except as otherwise indicated by the context,
the term “Participant”, as used in this option, shall be deemed to include any
person who acquires the right to exercise this option validly under its terms.


 


2.             Vesting Schedule.


 


This option will become
exercisable (“vest”) pursuant to the Vesting Schedule indicated on the
Certificate (“Vesting Schedule”).


 


The right of exercise
shall be cumulative so that to the extent the option is not exercised in any
period to the maximum extent permissible it shall continue to be exercisable,
in whole or in part, with respect to all shares for which it is vested until
the earlier of the Grant Expiration Date or the termination of this option
under Section 3 hereof or the Plan.


 


3.             Exercise of Option.


 


(a)           Form of
Exercise. Each election to exercise this option shall be in writing, signed
by the Participant, and received by the Company at its principal office,
accompanied by this agreement, and payment in full in the manner provided in
the Plan. The Participant may purchase less than the number of shares covered
hereby, provided that no partial exercise of this option may be for any
fractional share.


 


(b)           Continuous
Relationship with the Company Required. 
Except as otherwise provided in this Section 3, this option may not
be exercised unless the Participant, at the time he or she exercises this
option, is, and has been at all times since the Grant Date, an [employee or
officer of], or consultant or advisor to, the Company or any parent or
subsidiary of the Company as defined in Section 424(e) or (f) of
the Code (an “Eligible Participant”).


 


(c)           Termination of
Relationship with the Company. If the Participant ceases to be an Eligible
Participant for any reason, then, except as provided in paragraphs (d) and
(e) below, the right to exercise this option shall terminate  six months after such cessation (but in no event after the
Grant Expiration Date), provided  that this option shall be
exercisable only to the extent that


 


7

















 


the Participant was
entitled to exercise this option on the date of such cessation.  Notwithstanding the foregoing, if, following
the time the Participant has ceased to be an Eligible Participant, but prior to
the Grant Expiration Date, the Participant materially breaches Section 6
or 7 of the Employment Agreement between the Participant and the Company dated
[          ], 2008 (the “Employment
Agreement”), the right to exercise this option shall terminate immediately upon
written notice to the Participant from the Company describing  such violation.


 


(d)           Exercise Period Upon
Death or Disability.  If the Participant
dies or becomes disabled (within the meaning of Section 22(e)(3) of
the Code) prior to the Grant Expiration Date while he or she is an Eligible
Participant and the Company has not terminated such relationship for “cause” as
specified in paragraph (e) below, this option shall be exercisable, within
the period of one year following the date of death or disability of the
Participant, by the Participant (or in the case of death by an authorized
transferee), provided  that this option shall be exercisable only
to the extent that this option was exercisable by the Participant on the date
of his or her death or disability, and further provided that this option shall
not be exercisable after the Grant Expiration Date.


 


(e)           Discharge for Cause.  If the Participant, prior to the Grant
Expiration Date, is discharged by the Company for “cause” (as defined below),
the right to exercise this option shall terminate immediately upon the
effective date of such discharge.  “Cause”
shall have the meaning set forth in the Employment Agreement.


 


4.             Withholding.


 


No Shares will be issued
pursuant to the exercise of this option unless and until the Participant pays
to the Company, or makes provision satisfactory to the Company for payment of,
any federal, state or local withholding taxes required by law to be withheld in
respect of this option.


 


5.             Nontransferability
of Option.


 


This option may not be
sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the
laws of descent and distribution, and, during the lifetime of the Participant,
this option shall be exercisable only by the Participant.


 


6.             Provisions of the
Plan.


 


This option is subject to
the provisions of the Plan, a copy of which is furnished to the Participant
with this option.


 


IN WITNESS WHEREOF, the
Company has caused this option to be executed under its corporate seal by its
duly authorized officer.  This option
shall take effect as a sealed instrument.


 


SEPRACOR INC.


 


PARTICIPANT’S
ACCEPTANCE


 


8

















 


The Participant hereby
accepts the foregoing option and agrees to the terms and conditions
thereof.  The Participant hereby
acknowledges receipt of a copy of the Company’s 2000 Stock Incentive Plan.


 


9

















 


SCHEDULE
C

VACATION POLICY


 


SEE
ATTACHED POLICY


 


10

















 


	
  Sepracor Companies

  	
   

  	
  Human Resource Policy

  



 


	
  Division:

  

  All

  	
   

  	
  Effective Date:

  

  January 1, 2005

  	
   

  	
  Index No.:

  

  3-60

  	
   

  	
  Page No:

  

  1 of 2

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  

  Accrued Vacation Policy

  Director Level and Above

  	
   

  	
  Supersedes:

  

  All

  	
   

  	
  Approved By:

  

  Signature on File

  	
   

  	
   

  



 


1.             Introduction


 


1.1                                      The
purpose of the Accrued Vacation Policy is to provide paid time off for employees
to cover vacations and personal time.


 


2.             Accrual rate for
employees at Director level and above


 


2.1                                 Employees
accrue vacation hours monthly that may be used for paid time off to cover
vacations and personal time. Regular full-time employees, Director level or
above, will accrue vacation time at a rate of ten (10) hours per month
during the first year of employment, for a total of fifteen (15) days per year,
equal to one hundred twenty (120) hours. 
Additional time begins to accrue in the month of the employee’s
anniversary date, up to a maximum of twenty-three (23) days per year, equal to
one hundred eighty-four (184) hours. Please see schedule below for details on
total hours accrued monthly:


 


	
  Years of

  Service

  	
   

  	
  Director

  and Above

  Total Days

  	
   

  	
  Monthly

  Accrual

  (Hours)

  
	
  0-1

  	
   

  	
  15

  	
   

  	
  10.00

  
	
  1-2

  	
   

  	
  16

  	
   

  	
  10.67

  
	
  2-3

  	
   

  	
  17

  	
   

  	
  11.33

  
	
  3-4

  	
   

  	
  18

  	
   

  	
  12.00

  
	
  4-5

  	
   

  	
  19

  	
   

  	
  12.67

  
	
  5-10

  	
   

  	
  20

  	
   

  	
  13.33

  
	
  10-13

  	
   

  	
  20

  	
   

  	
  13.33

  
	
  13-15

  	
   

  	
  20

  	
   

  	
  13.33

  
	
  15-17

  	
   

  	
  20

  	
   

  	
  13.33

  
	
  17-19

  	
   

  	
  21

  	
   

  	
  14.00

  
	
  19-20

  	
   

  	
  22

  	
   

  	
  14.67

  
	
  20+

  	
   

  	
  23

  	
   

  	
  15.33

  



 


3.             Administration


 


3.1           Accrual of vacation
time is pro-rated for employees who are regularly scheduled to work less than
forty (40) hours but work at least twenty (20) hours per week.  For example, an employee with a weekly
schedule of twenty (20) hours will accrue five (5) hours per month, and a
thirty (30) hour employee will accrue seven and a half (7.5) hours of vacation
time per month.


 


11

















 


Accrued Vacation Policy: Director Level and Above


 


3.                                                                                      Administration
(Continued)


 


3.2                                              The
current month’s accrual is accrued on the 15th of
every month.  An employee must be
employed on the 15th in order to receive that monthly accrual.  For example, if an employee is hired on or
before the 15th, they will
receive that month’s accrual, and if they are hired after the 15th, they will not.  Also, if an employee terminates employment
before the 15th they will not be paid for that month’s
accrual, but if they terminate after the 15th they will.


 


3.3                                              Employees
may carry over a maximum of forty (40) accrued vacation hours into the next
calendar year.  The carryover vacation
hours must be used by July 31st of the new calendar year.  Any carried over vacation hours not used by
this date will be forfeited.*


 


3.3.1                        *In accordance with state law,
California residents will not have a limit on carryover time into the next
calendar year.  Once an employee accrues
twenty-three (23) days of vacation, equal to one hundred eighty-four (184)
hours, the employee will cease to accrue any additional vacation time until the
vacation balance falls below that level. 
Please refer to Sepracor Human Resources for more information.


 


3.4                                              It
is your responsibility to request and schedule the use of accrued vacation time
with your manager.  Approval of vacation
time will depend on the business needs of the organization.  It is your responsibility to accurately track
your use of accrued vacation time through the iTime Tracking system.


 


3.5                                              At
the minimum, vacation time for full time employees should be taken in four (4) hour
increments, with the norm being eight (8) hour increments. For those with
schedules of 20-39 hours, increments of time used would be pro-rated according
to hours worked.  For example, if you
were regularly scheduled to work six (6) hours, then you would be paid a
six (6) hour vacation day.


 


3.6                                             Your
manager may approve the borrowing of vacation time, up to a maximum of forty
(40) hours for regular full-time employees and pro-rated accordingly for
regular part-time employees.  Employees
with a negative vacation balance may not borrow additional vacation time until
the existing vacation time balance has been satisfied and then upon approval
from your manager.  Under no
circumstances may an employee borrow vacation time from a future calendar year.


 


3.7                                             If
it has been verified by Payroll and the manager that an employee has a balance
of accrued and unused vacation time left at the end of employment, the balance
will be converted to cash and included in his/her final paycheck.  In the event an employee ends his/her
employment before having enough accrued time to cover any borrowed vacation
time, the employee’s final paycheck will reflect a deduction equal to the cash
value of the borrowed vacation time.


 


12














 


SCHEDULE
D

FORM OF SEPARATION AGREEMENT AND RELEASE OF CLAIMS


 


SEE
ATTACHED AGREEMENT


 


13

















 


SCHEDULE
D


 


FORM OF
SEPARATION AGREEMENT AND RELEASE OF CLAIMS


 


In connection with your separation from Sepracor Inc. (the “Company”) on [     ],
and in order to receive the benefits as set forth in the Employment Agreement
(the “Agreement”) between you and the Company dated [                ],
2008,  this agreement must become
binding between you and the Company.  By
signing and returning this agreement, you will be entering into a binding
agreement with the Company and will be agreeing to the terms and conditions set
forth in the numbered paragraphs below, including the release of claims set
forth in paragraph 1.  Therefore, you are
advised to consult with an attorney before signing this agreement and you have
been given more than twenty-one (21) days to do so.  If you sign this agreement, you may change
your mind and revoke your agreement during the seven (7) day period after
you have signed it.  If you do not so
revoke, this agreement will become a binding agreement between you and the
Company upon the expiration of the seven (7) day revocation period.


 


The following numbered paragraphs set forth the terms and conditions
which will apply if you timely sign and return this agreement and do not revoke
it within the seven (7) day revocation period:


 


1.               Mutual Release –  In consideration of the payment of
the severance benefits, which you acknowledge you would not otherwise be
entitled to receive, you hereby fully, forever, irrevocably and unconditionally
release, remise and discharge the Company, its officers, directors,
stockholders, corporate affiliates, subsidiaries, parent companies, successors
and assigns, agents and employees (each in their individual and corporate
capacities) (hereinafter, the “Released Parties”) from any and all claims,
charges, complaints, demands, actions, causes of action, suits, rights, debts,
sums of money, costs, accounts, reckonings, covenants, contracts, agreements,
promises, doings, omissions, damages, executions, obligations, liabilities, and
expenses (including attorneys’ fees and costs), of every kind and nature which
you ever had or now have against the Released Parties, including, but not
limited to, those claims arising out of your employment with and/or separation
from the Company, including, but not limited to, all claims under Title VII of
the Civil Rights Act of 1964, 42 U.S.C. § 2000e et
seq., the Age Discrimination in Employment Act, 29 U.S.C. § 621 et  seq.,
the Americans With Disabilities Act of 1990, 42 U.S.C. § 12101 et  seq.,
the Family and Medical Leave Act, 29 U.S.C. § 2601 et  seq., the
Worker Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 et
seq., Section 806 of the Corporate and Criminal Fraud
Accountability Act of 2002, 18 U.S.C. § 1514(A), the Rehabilitation Act of
1973, 29 U.S.C. § 701 et  seq., Executive Order 11246, Executive
Order 11141, the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq.,
the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001
et  seq.,
the Massachusetts Fair Employment Practices Act., M.G.L. c. 151B, § 1 et seq., the Massachusetts Civil Rights Act,
M.G.L. c. 12, §§ 11H and 11I, the Massachusetts Equal Rights Act, M.G.L. c. 93,
§ 102 and M.G.L. c. 214, § 1C, the Massachusetts Labor and Industries Act,
M.G.L. c. 149, § 1 et  seq., the Massachusetts Privacy Act, M.G.L. c. 214, § 1B, and the
Massachusetts Maternity Leave Act, M.G.L. c. 149, § 105D, all as amended; all
common law claims including, but not limited to, actions in tort, defamation
and breach of contract; all claims to
any non-vested ownership interest in the Company, contractual or otherwise,
including, but not limited to, claims to stock or stock options; and any
claim or damage arising out of your employment with or separation from


 


14

















 


the Company
(including a claim for retaliation) under any common law theory or any federal,
state or local statute or ordinance not expressly referenced above.  Notwithstanding the foregoing, the release
set forth in this Section 1 shall not apply to (a) your rights under
the Agreement, (b) any vested equity interest in the Company, including
vested stock options or (c) the rights you have to be indemnified and
defended  by the Company pursuant to the
terms of the Company’s Restated Certificate of Incorporation, as amended, or
other organizing documents, and the rights that you have under, or with respect
to, the Company’s Directors and Officers liability insurance policies with
respect to conduct or events occurring during, or relating to, your employment
by, or while serving as an officer or director of, the Company,  Without limiting the generality of the
foregoing,  the Company shall continue to cover you under
its Directors and Officers liability insurance policies following the
Separation Date in substantially the same amount and on substantially the same
terms as the Company covers its other former officers and directors.


 


The Company hereby fully, forever, irrevocably and unconditionally
releases, remises and discharges you from any and all claims, charges,
complaints, demands, actions, causes of action, suits, rights, debts, sums of
money, costs, accounts, reckonings, covenants, contracts, agreements, promises,
doings, omissions, damages, executions, obligations, liabilities and expenses
(including attorney’s fees and costs), of every kind and nature that the
Company ever had or now has against you as of the date of this agreement.


 


2.               On-Going Obligations – You acknowledge
and reaffirm your obligation to keep confidential and not to disclose any and
all Proprietary Information (as defined in the Agreement) concerning the
Company which you acquired during the course of your employment with the
Company, including, but not limited to, any non-public information concerning
the Company’s business affairs, business prospects and financial condition. You
further acknowledge and reaffirm your obligations under the Agreement for the
benefit of the Company.


 


3.               Return of Company Property  – You confirm that you have returned to the
Company all keys, files, records (and copies thereof), equipment (including,
but not limited to, computer hardware, software and printers, wireless handheld
devices, cellular phones, pagers, etc.), Company identification, Company
vehicles and any other Company owned property in your possession or control and
have left intact all electronic Company documents, including but not limited
to, those that  you developed or helped
develop during your employment.  You
further confirm that you have cancelled all accounts for your benefit, if any,
in the Company’s name, including but not limited to, credit cards, telephone
charge cards, cellular phone and/or pager accounts and computer accounts.


 


4.               Business Expenses and Compensation –
You acknowledge that you have been reimbursed by the Company for all business
expenses incurred in conjunction with your employment with the Company and that
no other reimbursements are owed to you. 
You further acknowledge that you have received payment in full for all
services rendered in conjunction with your employment by the Company and that
no other compensation is owed to you except as provided in the Agreement.


 


5.               Non-Disparagement
– You understand and agree that, as a condition for payment to you of the
consideration herein described and described in the Agreement, you shall not
make any false, disparaging or derogatory statements to any media outlet,
industry group, financial institution or current or former employee,
consultant, client or customer of the Company


 


15

















 


regarding the
Company or any of its directors, officers, employees, agents or representatives
or about the Company’s business affairs and financial condition; provided,
however, that nothing herein shall prevent you from making truthful
disclosures to any governmental entity or in any litigation or
arbitration.  The Company agrees not to
make any false, disparaging or derogatory statements about you to any media
outlet, industry group, financial institution, or current or former employee,
consultant, client, or customer; provided, however, that nothing
herein shall prevent the Company from making truthful disclosures to any
governmental entity or in any litigation or arbitration.  In the event that any inquiries are directed
to the Company’s Human Resources Office regarding you from prospective
employers, the Company will explain its neutral reference policy, confirm only
the fact of your former employment with the Company, starting and ending dates
and your job title in the last position held.


 


6.               Amendment -
This agreement shall be binding upon the parties and may not be modified in any
manner, except by an instrument in writing of concurrent or subsequent date
signed by duly authorized representatives of the parties hereto.  This agreement is binding upon and shall
inure to the benefit of the parties and their respective agents, assigns,
heirs, executors, successors and administrators.


 


7.               Waiver of Rights - No delay or
omission by the Company or you in exercising any right under this agreement
shall operate as a waiver of that or any other right.  A waiver or consent given by the Company or
you on any one occasion shall be effective only in that instance and shall not
be construed as a bar or waiver of any right on any other occasion.


 


8.               Validity -
Should any provision of this agreement be declared or be determined by any
court of competent jurisdiction to be illegal or invalid, the validity of the
remaining parts, terms or provisions shall not be affected thereby and said
illegal or invalid part, term or provision shall be deemed not to be a part of
this agreement.


 


9.               Tax Provision - In connection with the
severance benefits provided to you pursuant to this agreement and the
Agreement, the Company shall withhold and remit to the tax authorities the
amounts required under applicable law, and you shall be responsible for all
applicable taxes with respect to such severance benefits under applicable
law.  You acknowledge that you are not
relying upon advice or representation of the Company with respect to the tax
treatment of any of the severance benefits.


 


10.         Nature of Agreement - You
understand and agree that this agreement, together with the Agreement, is a
severance agreement and does not constitute an admission of liability or
wrongdoing on the part of the Company.


 


11.         Acknowledgments
- You acknowledge that you have been given at least twenty-one (21) days to
consider this agreement and that the Company advised you to consult with an
attorney of your own choosing prior to signing this agreement.  You understand that you may revoke this
agreement for a period of seven (7) days after you sign this agreement,
and the agreement shall not be effective or enforceable until the expiration of
this seven (7) day revocation period. 
You understand and agree that by entering into
this agreement you are waiving any and all rights or claims you might have
under The Age Discrimination in Employment Act, as amended by The Older Workers
Benefit Protection Act, and that you have received consideration for that
waiver.


 


16

















 


12.         Voluntary Assent - You affirm that,
other than as contained in the Agreement, no other promises or agreements of
any kind have been made to or with you by any person or entity whatsoever to
cause you to sign this agreement, and that you fully understand the meaning and
intent of this agreement.  You state and
represent that you have had an opportunity to fully discuss and review the
terms of this agreement with an attorney. 
You further state and represent that you have carefully read this
agreement, understand the contents herein, freely and voluntarily assent to all
of the terms and conditions hereof, and sign your name of your own free act.


 


13.         Applicable Law - This agreement
shall be interpreted and construed by the laws of the Commonwealth of
Massachusetts, without regard to conflict of laws provisions.  You hereby irrevocably submit to and
acknowledge and recognize the jurisdiction of the courts of the Commonwealth of
Massachusetts, or if appropriate, a federal court located in Massachusetts
(which courts, for purposes of this agreement, are the only courts of competent
jurisdiction), over any suit, action or other proceeding arising out of, under
or in connection with this agreement or the subject matter hereof.


 


14.         Entire Agreement - This agreement,
together with the Agreement, contains and constitutes the entire understanding
and agreement between the parties hereto with respect to your severance
benefits and the settlement of claims against the Company and cancels all
previous oral and written negotiations, agreements, commitments and writings in
connection therewith. Nothing in this
paragraph, however, shall modify, cancel or supersede your obligations set
forth in paragraph 2 herein.


 


17

















 


	
   

  	
  Sepracor
  Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				



 


 


I
hereby agree to the terms and conditions set forth above.  I have been given at least twenty-one (21)
days to consider this agreement and I have chosen to execute this on the date
below.  I intend that this agreement
become a binding agreement between me and the Company if I do not revoke my
acceptance in seven (7) days by notifying
                                              
in writing.


 


 


	
   

  	
   

  	
  Date

  	
   

  
	
  Name

  	
   

  	
   

  



 


18






 










 


SEPRACOR INC.


 


December 23, 2008


 


Richard Ranieri


7910 Entrada De Luz


San Diego, CA  92127


 


Dear Richard:


 


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 August 18,
2008 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/ Adrian Adams

  
	
   

  	
   

  	
    Name:  Adrian Adams

  
	
   

  	
   

  	
    Title:  President and Chief Executive Officer

  
	
  Acknowledged and agreed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Richard Ranieri

  	
   

  	
   

  
	
  Richard Ranieri

  	
   

  	
   

  



 

















 


Exhibit A


 


Retention Agreement


 


1.     Section 1.1. of the Retention Agreement be and hereby is amended
by deleting the first paragraph in its entirety and inserting the following in
lieu thereof:


 


“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), provided that such event constitutes a “change in control event”
within the meaning of Section 409A (as defined below):”


 


2.     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) if
the Executive’s employment is thereafter terminated for any reason (other than
by the Company for Cause), then each such option (or any option into which such
option is converted, exchanged or substituted in connection with the Change in
Control) shall continue to be exercisable by the Executive (to the extent such
option was exercisable on the Date of Termination) for a period of six months
following the Date of Termination, notwithstanding any provision in any
applicable option agreement to the contrary but not later than the expiration
date of the option; provided however that if stock options held generally by
employees of the Company under the stock option or stock incentive plan under
which Executive’s stock option was granted terminate or expire if not exercised
upon, immediately prior to or otherwise in connection with the Change in
Control, such stock option held by Executive shall likewise terminate or
expire.”


 


3.     Section 4.2(a)(i)(2) of the Retention Agreement be and hereby
is deleted in its entirety and the following is inserted in lieu thereof:


 


“(2)         the amount equal to (A) two multiplied
by (B) the sum of (x) the Executive’s highest annual base salary
during the five-year period prior to the Change in Control Date and (y) the
Executive’s highest annual bonus during the five-year period prior to the
Change in Control Date, provided, however, that if the Executive is terminated
prior to the Closing of the Change in Control and the Executive is entitled to
these payments solely pursuant to the second sentence of Section 1.2
hereof, then the amount payable pursuant to this subsection shall be paid over
the 24-month period commencing 30 days following the date of termination in
accordance with the Company’s regular payroll practices.”


 


4.     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.”


 


5.     Section 4.6 of the Retention Agreement be and hereby is deleted in
its entirety and the following is inserted in lieu thereof:


 


“4.6         Payments Subject
to Section 409A.  Any
severance payments or benefits under Section 4 of the
Agreement shall begin only upon
the date of Executive’s “separation from service” (determined as set
forth below) which occurs on or after the
date of termination of employment. 
The following rules shall apply with respect to distribution of the
payments and benefits, if any, to be
provided to Executive under Section 4 of the Agreement:


 


(a)           It is intended that each installment of the severance payments and
benefits provided under the Agreement shall
be treated as a separate “payment” for purposes of Section 409A of the
Internal Revenue Code and the guidance issued thereunder (“Section 409A”).  Neither the Company nor the Executive shall
have the right to accelerate or defer the delivery of any such payments or
benefits except to the extent specifically permitted or required by Section 409A.


 


(b)           If, as of the date of Executive’s “separation from service” from the
Company, Executive is not a “specified employee”
(within the meaning of Section 409A), then each installment of the
severance payments and benefits shall be made on the dates and terms set forth
in the Agreement.


 


(c)           If, as of the date of Executive’s “separation from service” from the
Company, Executive is a “specified employee” (within the meaning of Section 409A),
then:


 


(i)            Each installment of the severance payments
and benefits due under the Agreement that, in accordance with the dates and
terms set forth herein, will in all circumstances, regardless of when the
separation from service occurs, be paid within the short-term deferral period
(as defined under Section 409A) shall be treated as a short-term deferral
within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to
the maximum extent permissible under Section 409A; and


 


(ii)           Each installment of the severance payments and benefits due under the
Agreement that is not described in paragraph (c)(i) above and that would,
absent this subparagraph, be paid within the six-month period following
Executive’s “separation from service” from the Company shall not be paid until
the date that is six months and one day after such separation from service (or,
if earlier, Executive’s death), with any such installments that are required to
be delayed being accumulated during the six-month period and paid in a lump sum
on the date that is six months and one day following Executive’s separation
from service and any subsequent installments, if any, being paid in accordance
with the dates and terms set forth herein; provided, however,
that the preceding provisions of this sentence shall not apply to any
installment of severance payments and benefits if and to the maximum extent
that that such installment is deemed to be paid under a separation pay plan
that does not provide for a deferral of compensation by reason of the
application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to
separation pay upon an involuntary separation from service).  Any installments that qualify for the
exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must
be paid no later than the last day of Executive’s second taxable year following
the taxable year in which the separation from service occurs.


 

















 


(d)           The determination of whether and when
Executive’s separation from service from the Company has occurred shall be made
and in a manner consistent with, and based on the presumptions set forth in,
Treasury Regulation Section 1.409A-1(h). 
Solely for purposes of this paragraph (d), “Company” shall include all
persons with whom the Company would be considered a single employer as
determined under Treasury Regulation Section 1.409A-1(h)(3).


 


(e)           All reimbursements and in-kind benefits provided
under the Agreement shall be
made or provided in accordance with the requirements of Section 409A to
the extent that such reimbursements or in-kind benefits are subject to Section 409A,
including, where applicable, the requirements that (A) any reimbursement
is for expenses incurred during Executive’s lifetime (or during a shorter
period of time specified in this Agreement), (B) the amount of expenses
eligible for reimbursement during a calendar year may not affect the expenses
eligible for reimbursement in any other calendar year, (C) the
reimbursement of an eligible expense will be made on or before the last day of
the calendar year following the year in which the expense is incurred and (D) the
right to reimbursement is not subject to set off or liquidation or exchange for
any other benefit.”


 


6.     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.”


 


7.     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 5.2 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 5.3 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 a Separation Agreement
and Release of Claims for the benefit of the Company substantially in the form
set forth on Schedule D hereto (the “Release”) and any applicable revocation
period with respect to the Release has expired on or before the 60th day following
the date of Executive’s termination of employment (the “Payment Commencement
Date”), the Company shall (a) 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 Release 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); (b) pay the
Executive a Pro Rata Bonus; (c) pay the Executive, in bi-weekly
installments, over a twenty four-month period, commencing on the Payment
Commencement Date (provided, however, that if the Release 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 1.5 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)); (d) provide
to the Executive for 24 months 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
to the end of the period, but only to the extent, that Executive receives
substantially similar benefits from a subsequent employer; and (e) 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.”