Exhibit 10.2


 


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 Mark H. N.
Corrigan, residing at 389 Marlborough Street, Boston, MA 02115 (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, Research and Development 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,
Research and Development as may be reasonably assigned by the Chief Executive
Officer and the Board of Directors of the Company (the “Board”) from time to
time.  The Executive agrees to abide by
the rules, regulations, instructions, personnel practices and policies of the
Company and any changes therein that may be adopted from time to time by the
Company.


 


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


 


3.             Compensation and
Benefits.


 


3.1           Salary.  During the term of this Agreement, the
Company agrees to continue to pay the Executive a base salary at the annualized
rate of $545,000 (“Base Salary”).  The
Base Salary shall be subject to annual review by the Board but shall not be
reduced below $545,000 per annum.  Such
salary shall be payable to Executive in bi-weekly installments and in
accordance with the Company’s normal payroll procedures.


 


3.2           Bonus.  The Executive shall be eligible for a
performance-based annual bonus for each fiscal year of the Term (the “Annual
Bonus”). The Annual Bonus shall be based 


 


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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, 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           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.


 


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3.6           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 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 


 


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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 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.


 


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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 April 17, 2003.  “Change in
Control” shall have the meaning set forth in the ERA.


 


5.             Effect of Termination.


 


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


 


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


 


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


 


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Good Reason pursuant to Section 4.4
or by the Company without Cause pursuant to Section 4.6, the Company shall
pay to the Executive the compensation and benefits otherwise payable to him
under Section 3 through the last calendar day of his actual employment by
the Company.  In addition, provided the
Executive executes and does not revoke a Separation Agreement and Release of
Claims for the benefit of the Company substantially in the form set forth on
Schedule 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 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.


 


5.5           Participation
in Executive Retirement Health Benefit Program.  Following the date of the Executive’s
termination 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 


 


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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.


 


(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-


 


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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 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.


 


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(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 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


 


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(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.


 


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


 


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


 


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(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 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, 


 


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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
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”).


 


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(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 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 


 


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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
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 


 


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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.


 


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 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.


 


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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 March 11, 2003 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.


 


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.


 


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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 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 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.


 


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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/
  Mark H. N. Corrigan

  
	
   

  	
  Mark
  H. N. Corrigan

  



 


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 employees.


 














 


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.             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 shall continue to cover
you under its Directors and Officers liability insurance policies following the



 


1

















 


Separation Date in substantially the same amount and on substantially
the same terms as the Company covers its other former officers and directors.


 


2.             On-Going
Obligations—You acknowledge and reaffirm your obligation to keep
confidential and not to disclose any and all non-public information 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, as
is stated more fully in the Non-Disclosure and Invention Agreement, which you
executed during or prior to your employment with the Company (the
“Non-Disclosure Agreement”). 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.


 


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.


 


2

















 


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 beyond that to which
you were previously entitled.


 


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


 


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


 


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


 


	
   

  	
  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

  	
   

  	
   

  



 


3