Exhibit 10.22


 


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 Robert F. Scumaci, residing at 174 Clinton
Street, Hopkinton, MA 01748 (the “Executive”).


 


WHEREAS, on May 14,
2008, the Company and the Executive entered into an Employment Agreement (the “Original
Agreement”); and


 


WHEREAS, the
Company and the Executive wish to amend and restate the Original Agreement as
provided for herein.


 


NOW THEREFORE, 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 continue to employ the Executive and the Executive hereby agrees to
continue to be employed by the Company, upon the terms set forth in this
Agreement, until the fifth anniversary of the Effective 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 Effective 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 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, Chief Financial Officer 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,
Chief Financial Officer 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 one company, business or trade organization with
prior Board approval, (b) continued service on the board of directors of
the MS Society (c) service on the board of directors for a not-for-profit
or charitable organization with prior Board approval, (d) other charitable
activities and community affairs and (e) 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 $520,000 (“Base Salary”).  The
Base Salary shall be subject to annual review by the Board but shall not be
reduced below $520,000 per annum.  Such
salary shall be payable to Executive in bi-weekly installments and in
accordance with the Company’s normal payroll procedures.


 


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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.  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.


 


3.3           Benefits.  The Executive shall be entitled to
participate in all bonus and benefit programs that the Company establishes and
makes available to its employees, including its other executives,  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 (Schedule A).


 


3.4           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 in connection with, or related to, the performance of his
duties, responsibilities or services under this Agreement, upon presentation by
the Executive of documentation, expense statements, vouchers and/or such other
supporting information as the Company may request.


 


3.5           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 $10,000.


 


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3.6           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.


 


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


 


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 


 


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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 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 


 


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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 and the Executive (the
“ERA”), dated as of February 1, 2002. 
“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, or at
the end of the sixty (60) day period referenced in Section 4.5, whichever
is longer.


 


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 


 


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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”).


 


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 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 B
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-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; and (d) for twenty four (24) months following the date of his
termination, allow the Executive to participate in the Company’s executive
retiree health benefit program based on the same cost sharing arrangement that
applied immediately prior to the date of his 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 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.


 


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


 


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(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
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 


 


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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
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


 


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


 


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


 


(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 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 


 


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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.


 


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 


 


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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 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 


 


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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 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 


 


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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 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.


 


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 


 


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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 letter agreement
between the Company and the Executive dated February 23, 1995 and 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 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.


 


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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.


 


18

















 


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/ Robert F. Scumaci

  
	
   

  	
  Robert F. Scumaci

  



 


19

















 


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 employee.


 














 


SCHEDULE
A


 


VACATION POLICY


 


SEE ATTACHED POLICY


 

















 


	
  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.


 

















 


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.


 

















 


SCHEDULE B


 


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 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 


 


1

















 


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 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.


 


2

















 


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.


 


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 


 


3

















 


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.


 


	
   

  	
  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

  	
   

  



 


4














 


SEPRACOR INC.


 


December 23,
2008


 


Robert F. Scumaci


174 Clinton Street


Hopkinton, MA 
01748


 


Dear Bob:


 


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 February 1,
2002 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/ Robert F. Scumaci

  	
   

  
	
  Robert F. Scumaci

  	
   

  



 

















 


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 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.               The following new Section 4.6 be and
hereby is added to the Retention Agreement:


 


“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”.


 


8.               Section 8.10 of the Retention Agreement
be and hereby is amended by deleting “Hale and Dorr LLP” and replacing it with “Wilmer
Cutler Pickering Hale and Dorr LLP”.


 

















 


Exhibit B


 


Employment Agreement


 


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


 


2.               Section 5.3 of the Employment Agreement
be and hereby is amended by deleting the 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 B 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; and (d) for twenty four (24) months following the date
of his termination, allow the Executive to participate in the Company’s
executive retiree health benefit program based on the same cost sharing
arrangement that applied immediately prior to the date of his termination.”