Exhibit 10.1


 


AMENDED AND RESTATED

TRANSITION AND SEVERANCE AGREEMENT


 


This
Amended and Restated Transition and Severance Agreement (the “Agreement”) is entered into as of September
7, 2007 (the “Effective Date”), by and between Sepracor Inc. (“Sepracor” or the
“Company”) and W. James O’Shea (“O’Shea”) (individually, a “Party,” and
collectively, the “Parties”) and amends and restates the Transition and
Severance Agreement between the Parties entered into as of March 1, 2007.


 


NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties agree as follows:


 


1.             Transition Period
Position and Responsibilities. Effective as of March 1, 2007 (the “Transition
Date”), O’Shea shall resign from his positions as President and Chief Operating
Officer of Sepracor. Beginning on the Transition Date and ending on
August 31, 2007, or earlier if O’Shea voluntarily terminates his
employment prior to August 31, 2007 (the “Transition Period”), O’Shea shall be
employed by Sepracor as its Vice Chairman, reporting to Timothy Barberich,
Sepracor’s Executive Chairman. During the Transition Period, O’Shea shall
perform such duties consistent with his position as are reasonably assigned to
him by Mr. Barberich. The Parties further agree that O’Shea shall perform
all work and provide all assistance hereunder at such times and locations as
are reasonably determined by Mr. Barberich.


 


2.             Transition Period
Compensation. During the Transition Period, the Company shall compensate O’Shea
at the annual rate of $548,625, less applicable taxes and withholdings, (the “Base
Salary”) to be paid in accordance with the Company’s regular payroll practices.
In addition, provided O’Shea has not voluntarily terminated his employment
prior to August 31, 2007, he shall be entitled to an annual bonus for calendar
year 2007 equal to $219,450, less applicable taxes and withholdings. The bonus
shall be paid to O’Shea in a lump sum, on or prior to March 1, 2008. For the
duration of the Transition Period, the Company shall also continue to provide O’Shea
with the benefits which he currently enjoys under the Company’s plans and
policies, under the same terms that applied to him immediately prior to the
Effective Date, subject to the terms of those plans and policies.


 


3.             Severance Period and
Compensation. Effective on August 31, 2007 (the “Separation Date”), O’Shea’s
employment with the Company shall cease. Thereafter, provided O’Shea has not
voluntarily terminated his employment prior to August 31, 2007 and executes,
delivers and does not revoke a release of claims for the benefit of the Company
in a form provided by the Company, the Company shall continue to pay O’Shea the
Base Salary (the “Base Salary Severance”) for a period of 12 months (the “Severance
Period”), in accordance with its regular payroll practices. However, the first
payment will not be made until March 1, 2008 and such first payment will be
equal to those amounts to which O’Shea would otherwise have been entitled if
not for the six month delay described above. For the remaining six (6) months
of the Severance Period, O’Shea will be paid the balance of his Base Salary
Severance in equal bi-weekly installments.


 


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For the duration of the Severance Period, if allowed
under the Company’s life insurance policy, the Company further agrees to
provide O’Shea with life insurance in the same amount the Company currently
provides him, the full premium of which shall be paid by the Company.


 


Following the Separation Date, any entitlement O’Shea
has, might have, had, or might have had to compensation, bonuses, wages or
participation in any benefit plan, policy, program, contract or practice of the
Company, shall terminate, except as required by federal or state law, by
applicable plan terms or stock option agreements, or by the express terms of
this Agreement.


 


4.             Stock Options and Restricted Stock. The Parties acknowledge that O’Shea has
been awarded options to purchase 700,000 shares of the Company’s common stock,
all of which options are fully vested, as well as options to purchase an
additional 25,700 shares of the Company’s stock which will vest prior to the
Separation Date. The grant dates and exercise prices of such options are set
forth in Exhibit A hereto. O’Shea shall have the right to exercise any or all
of his options for a period of ninety (90) days after the Separation Date. The
options shall terminate at the close of business on the ninetieth (90th)
day following the Separation Date. In addition, the Parties acknowledge that O’Shea
is the owner of certain shares of restricted stock of the Company. Of these
shares, a total 6,850 shares will no longer be subject to any restriction as of
March 16, 2007, and may be retained or sold by O’Shea after that date in
his discretion, subject to the Company’s insider trading policy, the terms of
the incentive stock plan and restricted stock agreement under which such shares
were granted and the federal securities laws. Except where expressly modified
by this Agreement, the options and shares of restricted stock set forth in
Exhibit A shall continue to be governed by the terms of the applicable stock
option agreements and restricted stock agreement executed by the Parties.


 


5.             Cooperation. From
the Effective Date forward, O’Shea agrees reasonably to cooperate with the
Company in the defense or prosecution of any threatened or actual claims or
actions which may be brought by, against or on behalf of the Company, its
predecessors or any of its current or former partners, agents, employees,
directors or affiliates and which relate to events or occurrences that
transpired or are alleged to have transpired during his employment with the
Company. Such cooperation shall include, without implication of limitation,
being available to meet with the Company’s counsel to prepare for discovery or
trial and to testify truthfully as a witness when reasonably requested by the
Company at reasonable times and for reasonable time periods. In the event any
such cooperation is required following the expiration of the Severance Period
and requires more than de minimis time
or effort, the Company agrees to compensate O’Shea at a reasonable hourly rate
for any cooperation provided under this section. Notwithstanding the foregoing,
(i) the hourly rate expenses eligible for reimbursement may not affect the
expenses eligible for reimbursement in any other taxable year, (ii) such
reimbursement must be made on or before the last day of the year following the
year in which the expense was incurred, and (iii) the right to reimbursement is
not subject to liquidation or exchange for another benefit.


 


6.             Legal Fees. Nothing
contained in this Agreement shall constitute a relinquishment or waiver by O’Shea
of his right to be indemnified by the Company pursuant to the terms of the
Company’s Restated Certificate of Incorporation, as amended (the “Indemnification
Provisions”) with respect to conduct or events occurring during, or relating
to, his employment by Sepracor, or of any right that he may have under, or with
respect to, the 


 


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Company’s Directors and Officers liability
insurance policies. The Company agrees that to the full extent allowed by
applicable law and subject to the terms of the Indemnification Provisions and
any applicable Director and Officer liability insurance policy, it will
continue to pay O’Shea’s reasonable legal fees relating to any matter that
occurred during, or that relates to O’Shea’s employment by the Company.
Notwithstanding the foregoing, (i) the legal fee expenses eligible for
reimbursement may not affect the expenses eligible for reimbursement in any
other taxable year, (ii) such reimbursement must be made on or before the last
day of the year following the year in which the expense was incurred, and (iii)
the right to reimbursement is not subject to liquidation or exchange for
another benefit.


 


7.             Binding Nature of
Agreement. This Agreement shall be binding upon and inure to the benefit of
the Parties and their respective heirs, administrators, representatives,
executors, successors and assigns.


 


8.             Use of the Agreement
as Evidence. This Agreement may not be used as evidence in any subsequent
proceeding of any kind, except one in which either Party alleges a breach of
the terms of this Agreement or elects to use this Agreement as a defense to any
claim.


 


9.             Entire Agreement;
Modifications. With the exception of the stock option and restricted stock
agreements applicable to the grants set forth in Exhibit A hereto, the Company’s
stock option and incentive stock plan under which such equity incentives were
granted, the Invention, Non-Disclosure and Personal Conduct Agreement executed
by O’Shea on October 1, 1999, and the Executive Retention Agreement dated
February 1, 2002, which will survive and remain in full force and effect, this
Agreement contains the entire agreement among the Parties hereto with respect
to the matters covered hereby, and supersedes all prior and contemporaneous
communications, e-mails, agreements, representations, understandings or
negotiations between O’Shea, the Company and/or their agents and attorneys,
including but not limited to the offer letter signed by the Parties and bearing
the typed date September 10, 1999 and the Transition and Severance Agreement
entered into between the parties on March 1, 2007, which this Agreement amends
and restates. This Agreement may be modified only by a written agreement signed
by an authorized representative of each of the Parties hereto. No waiver of
this Agreement or any provision hereof shall be binding upon the Party against
whom enforcement of such waiver is sought unless it is made in writing and
signed by or on behalf of such Party.


 


10.          Section 409A.      Notwithstanding anything
else to the contrary in this Agreement, to the extent that any of the payments
that may be made hereunder constitute “nonqualified deferred compensation”,
within the meaning of Section 409A and you are a “specified employee” upon your
separation (as defined under Section 409A), the timing of any such payment
following the Separation Date shall be modified if, absent such modification,
such payment would otherwise be subject to penalty under Section 409A. In any
event, the Company makes no representation or warranty and shall have no
liability to you or to any other person if any provisions of this Agreement are
determined to constitute “nonqualified deferred compensation” subject to
Section 409A but do not satisfy the requirements of that section.


 


11.          Further Assurances. The
Parties agree to execute, acknowledge (if reasonably requested), and deliver
such documents, certificates or other instruments and take such other actions
as may be reasonably required from time to time to carry out the intents and
purposes of 


 


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this Agreement, provided they do not impose
any material additional obligations upon either Party.


 


12.          Acknowledgments and
Other Terms. O’Shea agrees that he has carefully read and understands all
of the provisions of this Agreement, that he has been advised to consult with
and has consulted with an attorney, and that he is voluntarily entering this
Agreement. O’Shea further represents and acknowledges that in executing this
Agreement, he is not relying and has not relied upon any representation or
statement made by the Company with regard to the subject matter, basis or
effect of this Agreement.


 


13.          Interpretation. The
language of all parts of this Agreement shall in all cases be construed as a
whole, according to its fair meaning, and not strictly for or against any of
the Parties. This Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision hereof shall be
prohibited or invalid under any such law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating or
nullifying the remainder of such provision or any other provisions of this
Agreement. 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.


 


14.          Counterparts. This
Agreement may be executed in any number of counterparts and may be delivered by
facsimile, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.


 


15.          Governing Law;
Prevailing Party. This Agreement shall take effect as an instrument under
seal and shall be governed and construed in accordance with the laws of
Massachusetts, without regard to its conflicts of laws principles. In the event
either Party retains legal counsel in connection with the enforcement of its
rights under this Agreement and the other Party is found by a court having
competent jurisdiction to have breached its obligations hereunder, the
prevailing Party shall be entitled to recover all reasonable legal fees and
related reasonable charges and disbursements incurred by it in connection with
such enforcement action and any negotiations leading up to it.


 


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IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as an
instrument under seal as of the Effective Date.


 


 


SEPRACOR
INC.


 


 


	
  By:

  	
   

  	
  /s/ Adrian Adams

  	
   

  
	
   

  	
   

  	
   

  
	
  Name
  and Title:

  	
  Mr. Adrian Adams, President & CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ W. James O’Shea

  	
   

  
	
  W.
  JAMES O’SHEA

  	
   

  	
   

  
						



 


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Exhibit A


 


O’Shea
Stock Option Grants as of March 1, 2007


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Total Vesting

  	
   

  
	
   

  	
   

  	
  Options

  	
   

  	
   

  	
   

  	
  Total Currently

  	
   

  	
  Prior to

  	
   

  
	
  Grant Date

  	
   

  	
  Outstanding

  	
   

  	
  Price

  	
   

  	
  Vested

  	
   

  	
  Separation Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10/21/99

  	
   

  	
  200,000

  	
   

  	
  $

  	
  35.75

  	
   

  	
  200,000

  	
   

  	
  200,000

  	
   

  
	
  10/21/99

  	
   

  	
  11,814

  	
   

  	
  $

  	
  35.75

  	
   

  	
  11,184

  	
   

  	
  11,184

  	
   

  
	
  10/21/99

  	
   

  	
  468,816

  	
   

  	
  $

  	
  35.75

  	
   

  	
  468,816

  	
   

  	
  468,816

  	
   

  
	
  2/24/05

  	
   

  	
  7,750

  	
   

  	
  $

  	
  64.50

  	
   

  	
  1,550

  	
   

  	
  3,100

  	
   

  
	
  2/24/05

  	
   

  	
  92,250

  	
   

  	
  $

  	
  64.50

  	
   

  	
  18,450

  	
   

  	
  36,900

  	
   

  
	
  3/16/06

  	
   

  	
  1,800

  	
   

  	
  $

  	
  55.54

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  3/16/06

  	
   

  	
  26,700

  	
   

  	
  $

  	
  55.54

  	
   

  	
  0

  	
   

  	
  5,700

  	
   

  



 


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