**Exhibit10.3**

 

**SEPRACORINC.**

 

Executive Retention Agreement

 

THIS EXECUTIVE RETENTION AGREEMENT by and betweenSepracor Inc., a Delaware corporation (the “Company”), and Mark Iwicki (the “Executive”)is made as of October 15, 2007 (the “Effective Date”).

 

WHEREAS, the Company recognizes that, as is the casewith many publicly-held corporations, the possibility of a change in control ofthe Company exists and that such possibility, and the uncertainty and questionswhich it may raise among key personnel, may result in the departure ordistraction of key personnel to the detriment of the Company and itsstockholders, and

 

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

 

NOW, THEREFORE, as an inducement for and inconsideration of the Executive remaining in its employ, the Company agrees thatthe Executive shall receive the severance benefits set forth in this Agreement(including a certain “gross up” payment originally authorized by the Board onFebruary 25, 1999 and set forth in Section 4.3 of this Agreement) in the eventthe Executive’s employment with the Company is terminated under thecircumstances described below subsequent to a Change in Control (as defined inSection 1.1).

 

# 1.             Key Definitions.

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

 

## 1.1           “Changein Control” means an event or occurrence set forth in any one or more ofsubsections (a) through (d) below (including an event or occurrence thatconstitutes a Change in Control under one of such subsections but isspecifically exempted from another such subsection):

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#### (a)           theacquisition by an individual, entity or group (within the meaning of Section13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”)) (a “Person”) of beneficial ownership of any capital stock of the Companyif, after such acquisition, such Person beneficially owns (within the meaningof Rule 13d-3 promulgated under the Exchange Act) 30%****ormore of either (x) the then-outstanding shares of common stock of the Company(the “Outstanding Company Common Stock”) or (y) the combined voting power ofthe then-outstanding securities of the Company entitled to vote generally inthe election of directors (the “Outstanding Company Voting Securities”); provided,however, that for purposes of this subsection (a), the following acquisitionsshall not constitute a Change in Control: (i) any acquisition directly from theCompany (excluding an acquisition pursuant to the exercise, conversion orexchange of any security exercisable for, convertible into or exchangeable forcommon stock or voting securities of the Company, unless the Person 

 

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#### exercising,converting or exchanging such security acquired such security directly from theCompany or an underwriter or agent of the Company), (ii) any acquisition by theCompany, (iii) any acquisition by any employee benefit plan (or related trust)sponsored or maintained by the Company or any corporation controlled by theCompany, or (iv) any acquisition by any corporation pursuant to a transactionwhich complies with clauses (i) and (ii) of subsection (c) of this Section 1.1;or

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

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

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#### (d)           approvalby the stockholders of the Company of a complete liquidation or dissolution ofthe Company.

 

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## 1.2           “Changein Control Date” means the first date during the Term (as defined inSection 2) on which a Change in Control occurs. Anything in this Agreementto the contrary notwithstanding, if (a) a Change in Control occurs, (b) theExecutive’s employment with the Company is terminated prior to the date onwhich the Change in Control occurs, and (c) either (i) such termination ofemployment (x) was at the request of a third party who has taken stepsreasonably calculated to effect a Change in Control or (y) otherwise arose inconnection with or in anticipation of a Change in Control, or (ii) suchtermination of employment occurs following the execution of a definitiveagreement for such Change in Control, then for all purposes of this Agreementthe “Change in Control Date” shall mean the date immediately prior to the dateof such termination of employment.

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## 1.3           “Cause”means:

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#### (a)           theExecutive’s willful and continued failure to substantially perform hisreasonable assigned duties (other than any such failure resulting fromincapacity due to physical or mental illness or any failure after the Executivegives notice of termination for Good Reason and Good Reason exists), whichfailure is not cured within 30 days after a written demand for substantialperformance is received by the Executive from the Board of Directors of the Companywhich specifically identifies the manner in which the Board of Directorsbelieves the Executive has not substantially performed the Executive’s duties;

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#### (b)           theExecutive’s willful engagement in illegal conduct or gross misconduct which ismaterially and demonstrably injurious to the Company; or

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#### (c)           amaterial breach by the Executive of Section 6 or 7 of the Employment Agreementbetween the Company and the Executive of even date herewith (the “EmploymentAgreement”).

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For purposes of this Section 1.3, no act or failure toact by the Executive shall be considered “willful” unless it is done, oromitted to be done, in bad faith and without reasonable belief that theExecutive’s action or omission was in the best interests of the Company.

 

## 1.4           “GoodReason” means the occurrence, without the Executive’s written consent, ofany of the events or circumstances set forth in clauses (a) through (f) below. Notwithstandingthe occurrence of any such event or circumstance, such occurrence shall not bedeemed to constitute Good Reason if, prior to the Date of Termination specifiedin the Notice of Termination (each as defined in Section 3.2(a)) given bythe Executive in respect thereof, such event or circumstance has been fullycorrected and the Executive has been reasonably compensated for any losses ordamages resulting therefrom (provided that such right of correction by theCompany shall only apply to the first Notice of Termination for Good Reasongiven by the Executive).

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#### (a)           theassignment to the Executive of duties inconsistent in any material respect withthe Executive’s position (including status, offices, titles or reportingrequirements), authority or responsibilities in effect immediately prior to theearliest to occur of (i) the Change in Control Date, (ii) the date ofthe execution by the Company of the initial written agreement or instrumentproviding for the Change in Control or (iii) the date of the 

 

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#### adoption by theBoard of Directors of a resolution providing for the Change in Control (withthe earliest to occur of such dates referred to herein as the “Measurement Date”),or any other action or omission by the Company which results in a materialdiminution in such position, authority or responsibilities;

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#### (b)           areduction in the Executive’s annual base salary or bonus eligibility as ineffect on the Measurement Date or as the same was or may be increasedthereafter from time to time;

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#### (c)           thefailure by the Company to (i) continue in effect any material compensation orbenefit plan or program (including without limitation any life insurance,medical, health and accident or disability plan and any vacation or automobileprogram or policy) (a “Benefit Plan”) in which the Executive participates orwhich is applicable to the Executive immediately prior to the Measurement Date,unless an equitable arrangement (embodied in an ongoing substitute oralternative plan) has been made with respect to such plan or program, (ii)continue the Executive’s participation therein (or in such substitute oralternative plan) on a basis not materially less favorable, in terms of theamount of benefits provided, than the basis existing immediately prior to theMeasurement Date or (iii) award cash bonuses to the Executive in amounts and ina manner substantially consistent with past practice in light of the Company’sfinancial performance;

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#### (d)           achange by the Company in the location at which the Executive performs hisprincipal duties for the Company to a new location that increases the Executive’sdaily commute by more than 40 miles (as measured immediately prior to theMeasurement Date); or a requirement by the Company that the Executive travel onCompany business to a substantially greater extent than required immediatelyprior to the Measurement Date;

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#### (e)           thefailure of the Company to obtain the agreement from any successor to theCompany to assume and agree to perform this Agreement, as required by Section6.1; or

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#### (f)            anyfailure of the Company to pay or provide to the Executive any portion of theExecutive’s compensation or benefits due under any Benefit Plan within sevendays of the date such compensation or benefits are due, or any material breachby the Company of this Agreement or any employment agreement with the Executive.

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The Executive’s right to terminate his employment forGood Reason shall not be affected by his incapacity due to physical or mentalillness.

 

## 1.5           “Disability”means the Executive’s absence from the full-time performance of the Executive’sduties with the Company for 180 consecutive calendar days as a result ofincapacity due to mental or physical illness which is determined to be totaland permanent by a physician selected by the Company or its insurers andacceptable to the Executive or the Executive’s legal representative.

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# 2.             Term of Agreement. This Agreement, and all rights and obligationsof the parties hereunder, shall take effect upon the Effective Date and shallexpire upon the first to occur of (a) the expiration of the Term (as definedbelow) if a Change in Control has not occurred during the 

 

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# Term, (b) the termination of the Executive’semployment with the Company prior to the Change in Control Date, (c) thedate 24 months after the Change in Control Date, if the Executive is stillemployed by the Company as of such later date (unless the Company has providednotice of termination of Executive’s employment within such 24 month period inwhich case the Agreement shall expire on the termination of the Executive’semployment with the Company), or (d) the fulfillment by the Company of all ofits obligations under Sections 4 and 5.2 and 5.3****ifthe Executive’s employment with the Company terminates within 24 months (orafter 24 months if the Company provides notice to the Executive of terminationof his employment within such 24 month period) following the Change in ControlDate. “Term” shall mean the period commencing as of the Effective Date andcontinuing in effect through October 15, 2012; provided, however, thatcommencing on October 15, 2012 and each October 15th thereafter, the Term shallbe automatically extended for one additional year unless, not later than 90days prior to the scheduled expiration of the Term (or any extension thereof),the Company shall have given the Executive written notice that the Term willnot be extended.

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# 3.             Employment Status; Termination Following Change inControl.

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## 3.1           Notan Employment Contract. The Executive acknowledges that this Agreement doesnot constitute a contract of employment or impose on the Company any obligationto retain the Executive as an employee and that this Agreement does not preventthe Executive from terminating employment at any time. If the Executive’semployment with the Company terminates for any reason and subsequently a Changein Control shall occur, the Executive shall not be entitled to any benefitshereunder except as otherwise provided pursuant to Section 1.2.

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## 3.2           Terminationof Employment.

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#### (a)           Ifthe Change in Control Date occurs during the Term, any termination of theExecutive’s employment by the Company or by the Executive within 24 monthsfollowing the Change in Control Date (other than due to the death of theExecutive) shall be communicated by a written notice to the other party hereto(the “Notice of Termination”), given in accordance with Section 7. AnyNotice of Termination shall: (i) indicate the specific termination provision(if any) of this Agreement relied upon by the party giving such notice, (ii) tothe extent applicable, set forth in reasonable detail the facts andcircumstances claimed to provide a basis for termination of the Executive’semployment under the provision so indicated and (iii) specify the Date ofTermination (as defined below). The effective date of an employment termination(the “Date of Termination”) shall be the close of business on the datespecified in the Notice of Termination (which date may not be less than 15 daysor more than 45 days after the date of delivery of such Notice of Termination),in the case of a termination other than one due to the Executive’s death, orthe date of the Executive’s death, as the case may be. In the event the Companyfails to satisfy the requirements of Section 3.2(a) regarding a Notice ofTermination, the purported termination of the Executive’s employment pursuantto such Notice of Termination shall not be effective for purposes of thisAgreement.

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#### (b)           Thefailure by the Executive or the Company to set forth in the Notice ofTermination any fact or circumstance which contributes to a showing of GoodReason or Cause shall not waive any right of the Executive or the Company,respectively, hereunder or 

 

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#### preclude theExecutive or the Company, respectively, from asserting any such fact orcircumstance in enforcing the Executive’s or the Company’s rights hereunder.

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#### (c)           AnyNotice of Termination for Cause given by the Company must be given within 90days of the occurrence of the event(s) or circumstance(s) which constitute(s)Cause. Prior to any Notice of Termination for Cause being given (and prior toany termination for Cause being effective), the Executive shall be entitled toa hearing before the Board of Directors of the Company at which he may, at hiselection, be represented by counsel and at which he shall have a reasonableopportunity to be heard. Such hearing shall be held on not less than 15 daysprior written notice to the Executive stating the Board of Directors’ intentionto terminate the Executive for Cause and stating in detail the particularevent(s) or circumstance(s) which the Board of Directors believes constitutesCause for termination.

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#### (d)           AnyNotice of Termination for Good Reason given by the Executive must be givenwithin 90 days of the occurrence of the event(s) or circumstance(s) whichconstitute(s) Good Reason.

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# 4.             Benefits to Executive.

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## 4.1           StockAcceleration. If the Change in Control Date occurs during the Term, then,effective upon the Change in Control Date, (a) each outstanding option topurchase shares of Common Stock of the Company held by the Executive shall vestand become immediately exercisable in full and shares of Common Stock of theCompany received upon exercise of any options will no longer be subject to aright of repurchase by the Company, (b) each outstanding restricted stockaward shall be deemed to be fully vested and will no longer be subject to aright of repurchase by the Company and (c) if the Executive’s employmentis 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) shallcontinue to be exercisable by the Executive (to the extent such option wasexercisable on the Date of Termination) for a period of six months followingthe Date of Termination, notwithstanding any provision in any applicable optionagreement to the contrary; provided however that if stock options heldgenerally by employees of the Company under the stock option or stock incentiveplan under which Executive’s stock option was granted terminate or expire ifnot exercised upon, immediately prior to or otherwise in connection with theChange in Control, such stock option held by Executive shall likewise terminateor expire.

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## 4.2           Compensation.If the Change in Control Date occurs during the Term and the Executive’semployment with the Company terminates within 24 months following the Change inControl Date, the Executive shall be entitled to the following benefits:

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#### (a)           TerminationWithout Cause or for Good Reason. If the Executive’s employment with theCompany is terminated by the Company (other than for Cause, Disability orDeath) or by the Executive for Good Reason within 24 months following the Changein Control Date, then the Executive shall be entitled to the followingbenefits:

 

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##### (i)            theCompany shall pay to the Executive in a lump sum in cash within 30 days afterthe Date of Termination the aggregate of the following amounts:

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###### (1)           thesum of (A) the Executive’s base salary through the Date of Termination,(B) the product of (x) the annual bonus paid or payable (includingany bonus or portion thereof which has been earned but deferred) for the mostrecently completed fiscal year and (y) a fraction, the numerator of whichis the number of days in the current fiscal year through the Date ofTermination, and the denominator of which is 365 and (C) the amount of anycompensation previously deferred by the Executive (together with any accruedinterest or earnings thereon) and any accrued vacation pay, in each case to theextent not previously paid (the sum of the amounts described in clauses (A),(B), and (C) shall be hereinafter referred to as the “Accrued Obligations”);and

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###### (2)           theamount equal to (A) two multiplied by (B) the sum of (x) theExecutive’s highest annual base salary during the five-year period prior to theChange in Control Date and (y) the Executive’s highest annual bonus duringthe five-year period prior to the Change in Control Date.

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##### (ii)           for24 months after the Date of Termination, or such longer period as may beprovided by the terms of the appropriate plan, program, practice or policy, theCompany shall continue to provide benefits to the Executive and the Executive’sfamily at least equal to those which would have been provided to them if theExecutive’s employment had not been terminated, in accordance with theapplicable Benefit Plans in effect on the Measurement Date or, if more favorableto the Executive and his family, in effect generally at any time thereafterwith respect to other peer executives of the Company and its affiliatedcompanies; provided, however, that if the Executive becomes reemployedwith another employer and is eligible to receive a particular type of benefits(e.g., health insurance benefits) from such employer on terms at least asfavorable to the Executive and his family as those being provided by theCompany, then the Company shall no longer be required to provide thoseparticular benefits to the Executive and his family; and

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##### (iii)          to the extent not previously paid orprovided, the Company shall timely pay or provide to the Executive any otheramounts or benefits required to be paid or provided or which the Executive iseligible to receive following the Executive’s termination of employment underany plan, program, policy, practice, contract or agreement of the Company andits affiliated companies (such other amounts and benefits shall be hereinafterreferred to as the “Other Benefits”).

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#### (b)           Resignationwithout Good Reason; Termination for Death or Disability. If the Executivevoluntarily terminates his employment with the Company within 24 monthsfollowing the Change in Control Date, excluding a termination for Good Reason,or if the Executive’s employment with the Company is terminated by reason ofthe Executive’s death or Disability within 24 months following the Change inControl Date, then the Company shall (i) pay the Executive (or his estate,if applicable), in a lump sum in cash within 30 days after the Date ofTermination, the Accrued Obligations and (ii) timely pay or provide to theExecutive the Other Benefits.

 

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#### (c)           Terminationfor Cause. If the Company terminates the Executive’s employment with theCompany for Cause within 24 months following the Change in Control Date, thenthe Company shall (i) pay the Executive, in a lump sum in cash within 30days after the Date of Termination, the sum of (A) the Executive’s annualbase salary through the Date of Termination and (B) the amount of anycompensation previously deferred by the Executive, in each case to the extentnot previously paid, and (ii) timely pay or provide to the Executive theOther Benefits.

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## 4.3           Taxes.

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#### (a)           Inthe event that the Company undergoes a “Change in Ownership or Control” (asdefined below), the Company shall, within 30 days after each date on which theExecutive becomes entitled to receive (whether or not then due) a ContingentCompensation Payment (as defined below) relating to such Change in Ownership orControl, determine and notify the Executive (with reasonable detail regardingthe basis for its determinations) (i) which of the payments or benefitsdue to the Executive (under this Agreement or otherwise) following such Changein Ownership or Control constitute Contingent Compensation Payments, (ii) theamount, if any, of the excise tax (the “Excise Tax”) payable pursuant toSection 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), bythe Executive with respect to such Contingent Compensation Payment and(iii) the amount of the Gross-Up Payment (as defined below) due to theExecutive with respect to such Contingent Compensation Payment. Within 30 daysafter delivery of such notice to the Executive, the Executive shall deliver aresponse to the Company (the “Executive Response”) stating either (A) that heagrees with the Company’s determination pursuant to the preceding sentence or(B) that he disagrees with such determination, in which case he shall indicatewhich payment and/or benefits should be characterized as a ContingentCompensation Payment, the amount of the Excise Tax with respect to suchContingent Compensation Payment and the amount of the Gross-Up Payment due tothe Executive with respect to such Contingent Compensation Payment. The amountand characterization of any item in the Executive Response shall be final;provided, however, that in the event that the Executive fails to deliver anExecutive Response on or before the required date, the Company’s initialdetermination shall be final. Within 90 days after the due date of eachContingent Compensation Payment to the Executive, the Company shall pay to theExecutive, in cash, the Gross-Up Payment with respect to such ContingentCompensation Payment, in the amount determined pursuant to thisSection 4.3.

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#### (b)           Forpurposes of this Section 4.3, the following terms shall have the followingrespective meanings:

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##### (i)            “Changein Ownership or Control” shall mean a change in the ownership or effectivecontrol of the Company or in the ownership of a substantial portion of theassets of the Company determined in accordance with Section 280G(b)(2) of theCode.

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

 

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##### (iii)          “Gross-Up Payment” shall mean an amount equalto the sum of (i) the amount of the Excise Tax payable with respect to aContingent Compensation Payment and (ii) the amount necessary to pay alladditional taxes imposed on (or economically borne by) the Executive (includingthe Excise Taxes, state and federal income taxes and all applicable employmenttaxes) attributable to the receipt of such Gross-Up Payment. For purposes ofthe preceding sentence, all taxes attributable to the receipt of the Gross-UpPayment shall be computed assuming the application of the maximum tax ratesprovided by law.

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## 4.4           Mitigation.The Executive shall not be required to mitigate the amount of any payment orbenefits provided for in this Section 4 by seeking other employment orotherwise. Further, except as provided in Section 4.2(a)(ii), the amount of anypayment or benefits provided for in this Section 4 shall not be reduced by anycompensation earned by the Executive as a result of employment by anotheremployer, by retirement benefits, by offset against any amount claimed to beowed by the Executive to the Company or otherwise.

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## 4.5           OutplacementServices. In the event the Executive is terminated by the Company (otherthan for Cause, Disability or Death), or the Executive terminates employmentfor Good Reason, within 24 months following the Change in Control Date, theCompany shall provide outplacement services through one or more outside firmsof the Executive’s choosing up to an aggregate amount equal to 15 percent ofthe Executive’s annual base salary, with such services to extend until theearlier of (i) 12 months following the termination of Executive’s employment or(ii) the date the Executive secures full time employment.

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

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# 5.             Disputes.

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## 5.1           Settlementof Disputes; Arbitration. All claims by the Executive for benefits underthis Agreement shall be directed to and determined by the Board of Directors ofthe Company and shall be in writing. Any denial by the Board of Directors of aclaim for benefits under this Agreement shall be delivered to the Executive inwriting and shall set forth the specific reasons for the denial and thespecific provisions of this Agreement relied upon. The Board of Directors shallafford a reasonable opportunity to the Executive for a review of the decisiondenying a claim. Any further dispute or controversy arising under or inconnection with this Agreement shall be settled exclusively by arbitration inBoston, Massachusetts, in 

 

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## accordance withthe rules of the American Arbitration Association then in effect. Judgment maybe entered on the arbitrator’s award in any court having jurisdiction.

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## 5.2           Expenses.The Company agrees to pay as incurred, to the full extent permitted by law, alllegal, accounting and other fees and expenses which the Executive mayreasonably incur as a result of any claim or contest by the Company or others,or any bona fide claim or contest by the Executive, regarding the validity orenforceability of, or liability under, any provision of this Agreement or anyguarantee of performance thereof (including as a result of any contest by theExecutive regarding the amount of any payment or benefits pursuant to thisAgreement), plus in each case interest on any delayed payment at the applicableFederal rate provided for in Section 7872(f)(2)(A) of the Code, provided thatthe Executive shall reimburse any fees and expenses to the extent any suchclaim or contest is not resolved in favor of the Executive, provided furtherthat notwithstanding the forgoing, the Executive shall not be required toreimburse any fees and expenses if such claim or contest relates to terminationby the Executive for Good Reason

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## 5.3           CompensationDuring a Dispute. If the Change in Control Date occurs during the Term andthe Executive’s employment with the Company terminates within 24 monthsfollowing the Change in Control Date, and the right of the Executive to receivebenefits under Section 4 (or the amount or nature of the benefits to whichhe is entitled to receive) are the subject of a dispute between the Company andthe Executive, the Company shall continue (a) to pay to the Executive hisbase salary in effect as of the Measurement Date and (b) to providebenefits to the Executive and the Executive’s family at least equal to thosewhich would have been provided to them, if the Executive’s employment had notbeen terminated, in accordance with the applicable Benefit Plans in effect onthe Measurement Date, until such dispute is resolved either by mutual writtenagreement of the parties or by an arbitrator’s award pursuant toSection 5.1. Following the resolution of such dispute, the sum of thepayments made to the Executive under clause (a) of this Section 5.3 shallbe deducted from any cash payment which the Executive is entitled to receivepursuant to Section 4; and if such sum exceeds the amount of the cashpayment which the Executive is entitled to receive pursuant to Section 4,the excess of such sum over the amount of such payment shall be repaid (withinterest 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 resolutionof such dispute.

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# 6.             Successors.

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## 6.1           Successorto Company. The Company shall require any successor (whether direct orindirect, by purchase, merger, consolidation or otherwise) to all orsubstantially all of the business or assets of the Company expressly to assumeand agree to perform this Agreement to the same extent that the Company wouldbe required to perform it if no such succession had taken place. Failure of theCompany to obtain an assumption of this Agreement at or prior to theeffectiveness of any succession shall be a breach of this Agreement and shallconstitute Good Reason if the Executive elects to terminate employment, exceptthat for purposes of implementing the foregoing, the date on which any suchsuccession becomes effective shall be deemed the Date of Termination. As usedin this Agreement, “Company” shall mean the Company as defined above and anysuccessor to its business or assets as aforesaid which assumes and agrees toperform this Agreement, by operation of law or otherwise.

 

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

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# 7.             Notice. All notices, instructions and other communications given hereunder or inconnection herewith shall be in writing. Any such notice, instruction orcommunication shall be sent either (i) by registered or certified mail, returnreceipt requested, postage prepaid, or (ii) prepaid via a reputable nationwideovernight courier service, in each case addressed to the Company, at 111 LockeDrive, Marlborough, MA 01752, and to the Executive at the Executive’s addressindicated on the signature page of this Agreement (or to such other address aseither the Company or the Executive may have furnished to the other in writingin accordance herewith). Any such notice, instruction or communication shall bedeemed to have been delivered five business days after it is sent by registeredor certified mail, return receipt requested, postage prepaid, or one businessday after it is sent via a reputable nationwide overnight courier service.Either party may give any notice, instruction or other communication hereunderusing any other means, but no such notice, instruction or other communicationshall be deemed to have been duly delivered unless and until it actually isreceived by the party for whom it is intended.

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# 8.             Miscellaneous.

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

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## 8.2           Severability.The invalidity or unenforceability of any provision of this Agreement shall notaffect the validity or enforceability of any other provision of this Agreement,which shall remain in full force and effect.

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## 8.3           InjunctiveRelief. The Company and the Executive agree that any breach of thisAgreement by the Company is likely to cause the Executive substantial andirrevocable damage and therefore, in the event of any such breach, in additionto such other remedies which may be available, the Executive shall have theright to specific performance and injunctive relief.

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## 8.4           GoverningLaw. The validity, interpretation, construction and performance of thisAgreement shall be governed by the internal laws of the Commonwealth ofMassachusetts, without regard to conflicts of law principles.

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

 

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## 8.6           Counterparts.This Agreement may be executed in counterparts, each of which shall be deemedto be an original but both of which together shall constitute one and the sameinstrument.

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## 8.7           TaxWithholding. Any payments provided for hereunder shall be paid net of anyapplicable tax withholding required under federal, state or local law.

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

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

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## 8.10         Executive’sAcknowledgements. The Executive acknowledges that he: (a) has read thisAgreement; (b) has been represented in the preparation, negotiation, andexecution of this Agreement by legal counsel of the Executive’s own choice orhas voluntarily declined to seek such counsel; (c) understands the terms andconsequences of this Agreement; and (d) understands that the law firm of WilmerCutler Pickering Hale and Dorr LLP is acting as counsel to the Company inconnection with the transactions contemplated by this Agreement, and is notacting as counsel for the Executive.

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

 
|   | SEPRACOR INC. |
|--------|---------------|
|   |          |
|   | By:           | /s/ Adrian Adams |   |
|   |          |   |
|   | Title:        | President &  CEO |   |
|   |          |   |
|   |          |   |
|   |          | /s/ Mark Iwicki |   |
|   | Mark Iwicki   |   |
|   |          |   |
|   | Address:      |   |
|   |          | 12 Bristol  Terrace |   |
|   |          | Long Valley, NJ  07853 |   |
|   |          |   |
|        |               |  |  |  |

 

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