Exhibit 10.5
TRANSITION AND SEVERANCE AGREEMENT
This Transition and Severance Agreement (the "Agreement") is entered into as of
March 1, 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").
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 CHIEF EXECUTIVE OFFICER.
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 FOR A PERIOD OF 12 MONTHS (THE "SEVERANCE PERIOD"), IN ACCORDANCE WITH
ITS REGULAR PAYROLL PRACTICES.
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