Document:

Exhibit 10.15

 

SEPRACOR
INC.

 

Executive Retention
Agreement

 

THIS EXECUTIVE RETENTION AGREEMENT by and between Sepracor Inc., a
Delaware corporation (the “Company”), and (the “Executive”) is made as                 
(the “Effective Date”).

 

WHEREAS, the Company recognizes that, as is the case with many
publicly-held corporations, the possibility of a change in control of the
Company exists and that such possibility, and the uncertainty and questions
which it may raise among key personnel, may result in the departure or
distraction of key personnel to the detriment of the Company and its
stockholders, and

 

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

 

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

 

1.             Key Definitions.

 

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

 

1.1           “Change in Control” means an
event or occurrence set forth in any one or more of subsections (a) through
(d) below (including an event or occurrence that constitutes a Change in
Control under one of such subsections but is specifically exempted from another
such subsection):

 

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

 

 

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

 

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

 

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

 

(d)           approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.

 

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1.2           “Change in Control Date”
means the first date during the Term (as defined in Section 2) on which a
Change in Control occurs.  Anything in this Agreement to the contrary
notwithstanding, if (a) a Change in Control occurs, (b)  the
Executive’s employment with the Company is terminated prior to the date on
which the Change in Control occurs, and (c) either (i) such
termination of employment (x) was at the request of a third party who has
taken steps reasonably calculated to effect a Change in Control or (y) otherwise
arose in connection with or in anticipation of a Change in Control, or (ii) such
termination of employment occurs following the execution of a definitive
agreement for such Change in Control, then for all purposes of this Agreement
the “Change in Control Date” shall mean the date immediately prior to the date
of such termination of employment.

 

1.3           “Cause” means:

 

(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 by the Executive of Section          
of the Employment Agreement between the Company and the Executive of even date
herewith (the “Employment Agreement”).

 

For purposes of this Section 1.3, 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.

 

1.4           “Good Reason” means the
occurrence, without the Executive’s written consent, of any of the events or
circumstances set forth in clauses (a) through (f) below. 
Notwithstanding the occurrence of any such event or circumstance, such
occurrence shall not be deemed to constitute Good Reason if, prior to the Date
of Termination specified in the Notice of Termination (each as defined in Section 3.2(a))
given by the Executive in respect thereof, such event or circumstance has been
fully corrected and the Executive has been reasonably compensated for any
losses or damages resulting therefrom (provided that such right of correction
by the Company shall only apply to the first Notice of Termination for Good
Reason given by the Executive).

 

(a)           the assignment to the Executive of duties inconsistent
in any material respect with the Executive’s position (including status,
offices, titles or reporting requirements), authority or responsibilities in
effect immediately prior to the earliest to occur of (i) the Change in
Control Date, (ii) the date of the execution by the Company of the initial
written agreement or instrument providing for the Change in Control or (iii) the
date of the

 

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adoption by the Board of Directors of a resolution
providing for the Change in Control (with the 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 material diminution in such position,
authority or responsibilities;

 

(b)           a reduction in the Executive’s annual base salary or
bonus eligibility as in effect on the Measurement Date or as the same was or
may be increased thereafter from time to time;

 

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

 

(d)           a change by the Company in the location at which the
Executive performs his principal duties for the Company to a new location that
increases the Executive’s daily commute by more than 40 miles (as measured
immediately prior to the Measurement Date); or a requirement by the Company
that the Executive travel on Company business to a substantially greater extent
than required immediately prior to the Measurement Date;

 

(e)           the failure of the Company to obtain the agreement
from any successor to the Company to assume and agree to perform this
Agreement, as required by Section 6.1; or

 

(f)            any failure of the Company
to pay or provide to the Executive any portion of the Executive’s compensation
or benefits due under any Benefit Plan within seven days of the date such
compensation or benefits are due, or any material breach by the Company of this
Agreement or any employment agreement with the Executive.

 

The Executive’s right to terminate his employment for Good Reason shall
not be affected by his incapacity due to physical or mental illness.

 

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

 

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

 

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Term, (b) the
termination of the Executive’s employment with the Company prior to the Change
in Control Date, (c) the date 24 months after the Change in Control Date,
if the Executive is still employed by the Company as of such later date (unless
the Company has provided notice of termination of Executive’s employment within
such 24 month period in which case the Agreement shall expire on the
termination of the Executive’s employment with the Company), or (d) the
fulfillment by the Company of all of its obligations under Sections 4 and
5.2 and 5.3  if the Executive’s
employment with the Company terminates within 24 months (or after 24 months if
the Company provides notice to the Executive of termination of his employment
within such 24 month period) following the Change in Control Date.  “Term”
shall mean the period commencing as of the Effective Date and continuing in
effect through                ;
provided, however, that commencing on                
and each                
thereafter, the Term shall be automatically extended for one additional year
unless, not later than 90 days prior to the scheduled expiration of the Term
(or any extension thereof), the Company shall have given the Executive written
notice that the Term will not be extended.

 

3.             Employment Status; Termination
Following Change in Control.

 

3.1           Not an Employment Contract.  The Executive
acknowledges that this Agreement does not constitute a contract of employment
or impose on the Company any obligation to retain the Executive as an employee
and that this Agreement does not prevent the Executive from terminating
employment at any time.  If the Executive’s employment with the Company
terminates for any reason and subsequently a Change in Control shall occur, the
Executive shall not be entitled to any benefits hereunder except as otherwise
provided pursuant to Section 1.2.

 

3.2           Termination of Employment.

 

(a)           If the Change in Control Date occurs during the
Term, any termination of the Executive’s employment by the Company or by the
Executive within 24 months following the Change in Control Date (other than due
to the death of the Executive) shall be communicated by a written notice to the
other party hereto (the “Notice of Termination”), given in accordance with Section 7. 
Any Notice of Termination shall: (i) indicate the specific termination
provision (if any) of this Agreement relied upon by the party giving such
notice, (ii) to the extent applicable, set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated and (iii) specify
the Date of Termination (as defined below).  The effective date of an employment
termination (the “Date of Termination”) shall be the close of business on the
date specified in the Notice of Termination (which date may not be less than 15
days or 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, or the date of the Executive’s death, as the case may be.  In the
event the Company fails to satisfy the requirements of Section 3.2(a) regarding
a Notice of Termination, the purported termination of the Executive’s
employment pursuant to such Notice of Termination shall not be effective for
purposes of this Agreement.

 

(b)           The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which contributes
to a showing of Good Reason or Cause shall not waive any right of the Executive
or the Company, respectively, hereunder or

 

5

 

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

 

(c)           Any Notice of Termination for Cause given by the
Company must be given within 90 days 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 to any termination for Cause
being effective), the Executive shall be entitled to a hearing before the Board
of Directors of the Company at which he may, at his election, be represented by
counsel and at which he shall have a reasonable opportunity to be heard. 
Such hearing shall be held on not less than 15 days prior written notice to the
Executive stating the Board of Directors’ intention to terminate the Executive
for Cause and stating in detail the particular event(s) or circumstance(s) which
the Board of Directors believes constitutes Cause for termination.

 

(d)           Any Notice of Termination for Good Reason given by
the Executive must be given within 90 days of the occurrence of the event(s) or
circumstance(s) which constitute(s) Good Reason.

 

4.             Benefits to Executive.

 

4.1           Stock Acceleration.  If the Change
in Control Date occurs during the Term, then, effective upon the Change in
Control Date, (a) each outstanding option to purchase shares of Common
Stock of the Company held by the Executive shall vest and become immediately
exercisable in full and shares of Common Stock of the Company received upon
exercise of any options will no longer be subject to a right of repurchase by
the Company, (b) each outstanding restricted stock award shall be deemed
to be fully vested and will no longer be subject to a right of repurchase by
the Company and (c) if the Executive’s employment is thereafter terminated
for any reason (other than by the Company for Cause), then each such option (or
any option into which such option is converted, exchanged or substituted in
connection with the Change in Control) shall continue to be exercisable by the
Executive (to the extent such option was exercisable on the Date of
Termination) for a period of six months following the Date of Termination,
notwithstanding any provision in any applicable option agreement to the
contrary; provided however that if stock options held generally by employees of
the Company under the stock option or stock incentive plan under which
Executive’s stock option was granted terminate or expire if not exercised upon,
immediately prior to or otherwise in connection with the Change in Control,
such stock option held by Executive shall likewise terminate or expire.

 

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

 

(a)           Termination Without
Cause or for Good Reason.  If the Executive’s employment with the
Company is terminated by the Company (other than for Cause, Disability or
Death) or by the Executive for Good Reason within 24 months following the Change
in Control Date, then the Executive shall be entitled to the following
benefits:

 

6

 

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

 

(1)           the sum of (A) the Executive’s
base salary through the Date of Termination, (B) the product of (x) the
annual bonus paid or payable (including any bonus or portion thereof which has
been earned but deferred) for the most recently completed fiscal year and (y) a
fraction, the numerator of which is the number of days in the current fiscal
year through the Date of Termination, and the denominator of which is 365 and (C) the
amount of any compensation previously deferred by the Executive (together with
any accrued interest or earnings thereon) and any accrued vacation pay, in each
case to the extent 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

 

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

 

(ii)           for 24 months after the Date of Termination, or such longer period as
may be provided by the terms of the appropriate plan, program, practice or
policy, the Company shall continue to provide benefits to the Executive and the
Executive’s family at least equal to those which would have been provided to
them if the Executive’s employment had not been terminated, in accordance with
the applicable Benefit Plans in effect on the Measurement Date or, if more favorable
to the Executive and his family, in effect generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies; provided, however, that if the Executive becomes reemployed
with another employer and is eligible to receive a particular type of benefits
(e.g., health insurance benefits) from such employer on terms at least as
favorable to the Executive and his family as those being provided by the
Company, then the Company shall no longer be required to provide those
particular benefits to the Executive and his family; and

 

(iii)          to the extent not previously paid or provided, the Company shall timely
pay or provide to the Executive any other amounts or benefits required to be
paid or provided or which the Executive is eligible to receive following the
Executive’s termination of employment under any plan, program, policy,
practice, contract or agreement of the Company and its affiliated companies
(such other amounts and benefits shall be hereinafter referred to as the “Other
Benefits”).

 

(b)           Resignation without
Good Reason; Termination for Death or Disability.  If the Executive
voluntarily terminates his employment with the Company within 24 months
following the Change in Control Date, excluding a termination for Good Reason,
or if the Executive’s employment with the Company is terminated by reason of
the Executive’s death or Disability within 24 months following the Change in
Control 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 of
Termination, the Accrued Obligations and (ii) timely pay or provide to the
Executive the Other Benefits.

 

7

 

(c)           Termination for
Cause.  If the Company terminates the Executive’s employment with the
Company for Cause within 24 months following the Change in Control Date, then
the Company shall (i) pay the Executive, in a lump sum in cash within 30
days after the Date of Termination, the sum of (A) the Executive’s annual
base salary through the Date of Termination and (B) the amount of any
compensation previously deferred by the Executive, in each case to the extent
not previously paid, and (ii) timely pay or provide to the Executive the
Other Benefits.

 

4.3           Taxes.

 

(a)           In the event that the Company undergoes a “Change in
Ownership or Control” (as defined below), the Company shall, within 30 days
after each date on which the Executive becomes entitled to receive (whether or
not then due) a Contingent Compensation Payment (as defined below) relating to
such Change in Ownership or Control, determine and notify the Executive (with
reasonable detail regarding the basis for its determinations) (i) which of
the payments or benefits due to the Executive (under this Agreement or
otherwise) following such Change in Ownership or Control constitute Contingent
Compensation Payments, (ii) the amount, if any, of the excise tax (the “Excise
Tax”) payable pursuant to Section 4999 of the Internal Revenue Code of
1986, as amended (the “Code”), by the Executive with respect to such Contingent
Compensation Payment and (iii) the amount of the Gross-Up Payment (as
defined below) due to the Executive with respect to such Contingent Compensation
Payment.  Within 30 days after delivery of such notice to the Executive,
the Executive shall deliver a response to the Company (the “Executive Response”)
stating either (A) that he agrees with the Company’s determination
pursuant to the preceding sentence or (B) that he disagrees with such
determination, in which case he shall indicate which payment and/or benefits
should be characterized as a Contingent Compensation Payment, the amount of the
Excise Tax with respect to such Contingent Compensation Payment and the amount
of the Gross-Up Payment due to the Executive with respect to such Contingent
Compensation Payment.  The amount and characterization of any item in the
Executive Response shall be final; provided, however, that in the event that the
Executive fails to deliver an Executive Response on or before the required
date, the Company’s initial determination shall be final.  Within 90 days
after the due date of each Contingent Compensation Payment to the Executive,
the Company shall pay to the Executive, in cash, the Gross-Up Payment with
respect to such Contingent Compensation Payment, in the amount determined
pursuant to this Section 4.3.

 

(b)           For purposes of this Section 4.3, the following
terms shall have the following respective meanings:

 

(i)            “Change in Ownership or Control” shall mean a change
in the ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company determined in accordance with Section 280G(b)(2) of
the Code.

 

(ii)           “Contingent Compensation Payment” shall mean any payment (or benefit)
in the nature of compensation that is made or made available (under this
Agreement or otherwise) to a “disqualified individual” (as defined in Section 280G(c) of
the Code) and that 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.

 

8

 

(iii)          “Gross-Up Payment” shall mean an amount equal to the sum of (i) the
amount of the Excise Tax payable with respect to a Contingent Compensation
Payment and (ii) the amount necessary to pay all additional taxes imposed
on (or economically borne by) the Executive (including the Excise Taxes, state
and federal income taxes and all applicable employment taxes) attributable to
the receipt of such Gross-Up Payment.  For purposes of the preceding
sentence, all taxes attributable to the receipt of the Gross-Up Payment shall
be computed assuming the application of the maximum tax rates provided by law.

 

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

 

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

 

4.6           Six Month Delay.  If any
payment, compensation or other benefit provided to the Executive in connection
with his employment termination is determined, in whole or in part, to
constitute “nonqualified deferred compensation” within the meaning of Section 409A
and the Executive is a specified employee as defined in Section 409A(2)(B)(i),
no part of such payments shall be paid before the day that is six (6) months
plus one (1) day after the date of his termination (the “New Payment Date”). 
In the case of welfare benefit continuation, the Company shall use its best
efforts to enable Executive to obtain such benefits at Executive’s expense
prior to the New Payment Date.  The aggregate of any payments that
otherwise 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 Date
shall 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 the New Payment Date shall be paid without delay over the time period
originally scheduled, in accordance with the terms of this Agreement.

 

5.             Disputes.

 

5.1           Settlement of Disputes; Arbitration.  All claims by
the Executive for benefits under this Agreement shall be directed to and
determined by the Board of Directors of the Company and shall be in
writing.  Any denial by the Board of Directors of a claim for benefits
under this Agreement shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the specific provisions of
this Agreement relied upon.  The Board of Directors shall afford a
reasonable opportunity to the Executive for a review of the decision denying a
claim.  Any further dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in Boston,
Massachusetts, in

 

9

 

accordance
with the rules of the American Arbitration Association then in
effect.  Judgment may be entered on the arbitrator’s award in any court
having jurisdiction.

 

5.2           Expenses.  The Company
agrees to pay as incurred, to the full extent permitted by law, all legal,
accounting and other fees and expenses which the Executive may reasonably 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 or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the Executive
regarding the amount of any payment or benefits pursuant to this Agreement),
plus in each case interest on any delayed payment at the applicable Federal
rate provided for in Section 7872(f)(2)(A) of the Code, provided that
the Executive shall reimburse any fees and expenses to the extent any such
claim or contest is not resolved in favor of the Executive, provided further
that notwithstanding the forgoing, the Executive shall not be required to
reimburse any fees and expenses if such claim or contest relates to termination
by the Executive for Good Reason

 

5.3           Compensation During a Dispute.  If the Change
in Control Date occurs during the Term and the Executive’s employment with the
Company terminates within 24 months following the Change in Control Date, and
the right of the Executive to receive benefits under Section 4 (or the
amount or nature of the benefits to which he is entitled to receive) are the
subject of a dispute between the Company and the Executive, the Company shall
continue (a) to pay to the Executive his base salary in effect as of the
Measurement Date and (b) to provide benefits to the Executive and the
Executive’s family at least equal to those which would have been provided to
them, if the Executive’s employment had not been terminated, in accordance with
the applicable Benefit Plans in effect on the Measurement Date, until such
dispute is resolved either by mutual written agreement of the parties or by an
arbitrator’s award pursuant to Section 5.1.  Following the resolution
of such dispute, the sum of the payments made to the Executive under
clause (a) of this Section 5.3 shall be deducted from any cash
payment which the Executive is entitled to receive pursuant to Section 4;
and if such sum exceeds the amount of the cash payment 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 (with interest at the applicable Federal
rate provided for in Section 7872(f)(2)(A) of the Code) by the
Executive to the Company within 60 days of the resolution of such dispute.

 

6.             Successors.

 

6.1           Successor to Company.  The Company
shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Company expressly to assume and agree to perform this Agreement
to the same extent that the Company would be required to perform it if no such
succession had taken place.  Failure of the Company to obtain an
assumption of this Agreement at or prior to the effectiveness of any succession
shall be a breach of this Agreement and shall constitute Good Reason if the
Executive elects to terminate employment, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.  As used in this
Agreement, “Company” shall mean the Company as defined above and any successor
to its business or assets as aforesaid which assumes and agrees to perform this
Agreement, by operation of law or otherwise.

 

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

 

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

 

8.             Miscellaneous.

 

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

 

8.2           Severability.  The invalidity
or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

 

8.3           Injunctive Relief.  The Company
and the Executive agree that any breach of this Agreement by the Company is
likely to cause the Executive substantial and irrevocable damage and therefore,
in the event of any such breach, in addition to such other remedies which may
be available, the Executive shall have the right to specific performance and
injunctive relief.

 

8.4           Governing Law.  The validity,
interpretation, construction and performance of this Agreement shall be
governed by the internal laws of the Commonwealth of Massachusetts, without
regard to conflicts of law principles.

 

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 deemed a waiver of
that or any other provision at any subsequent time.

 

11

 

8.6           Counterparts.  This Agreement
may be executed in counterparts, each of which shall be deemed to be an
original but both of which together shall constitute one and the same
instrument.

 

8.7           Tax Withholding.  Any payments
provided for hereunder shall be paid net of any applicable tax withholding
required under federal, state or local law.

 

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

 

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

 

8.10         Executive’s Acknowledgements.  The Executive
acknowledges that he: (a) has read this Agreement; (b) has been
represented in the preparation, negotiation, and execution of this Agreement by
legal counsel of the Executive’s own choice or has voluntarily declined to seek
such counsel; (c) understands the terms and consequences of this
Agreement; and (d) understands that the law firm of Wilmer Cutler
Pickering Hale and Dorr LLP is acting as counsel to the Company in connection
with the transactions contemplated by this Agreement, and is not acting as
counsel for the Executive.

 

[Remainder of Page Intentionally Left Blank]

 

12

 

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

 

	
   

  	
  SEPRACOR
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name
  of Executive]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
				

 

13

 

SEPRACOR INC.

 

December 23, 2008

 

[Name]

[Address]

 

Dear [Name]:

 

In
order to ensure compliance with Section 409A of the Internal Revenue Code
of 1986, as amended, Sepracor Inc., a Delaware corporation (the “Company”), and
you hereby agree to amend the Executive Retention Agreement dated as of [                 ] by and between the Company
and you (the “Retention Agreement”), as set forth on Exhibit A
hereto, and to further amend the Amended and Restated Employment Agreement
dated as of November 6, 2008 by and between the Company and you (the
“Employment Agreement”), as set forth on Exhibit B hereto.

 

Except as modified by this letter, all other
terms and conditions of the Retention Agreement and Employment Agreement shall
remain in full force and effect.  This
letter may be executed in counterparts, each of which shall be deemed to be an
original, and all of which shall constitute one and the same document.

 

	
   

  	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SEPRACOR INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Adrian Adams

  
	
   

  	
   

  	
   

  	
  Name:
  Adrian Adams

  
	
   

  	
   

  	
   

  	
  Title:
  President and Chief Executive Officer

  
	
  Acknowledged and agreed:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [Name]

  	
   

  	
   

  	
   

  

 

 

Exhibit A

 

Retention Agreement

 

1.               Section 1.1. of the Retention Agreement
be and hereby is amended by deleting the first paragraph in its entirety and
inserting the following in lieu thereof:

 

 “1.1                        “Change in Control” means an event or occurrence set forth in
any one or more of subsections (a) through (d) below (including an
event or occurrence that constitutes a Change in Control under one of such
subsections but is specifically exempted from another such subsection),
provided that such event constitutes a “change in control event” within the
meaning of Section 409A (as defined below):”

 

2.               Section 4.1 of the Retention Agreement
be and hereby is deleted in its entirety and the following is inserted in lieu
thereof:

 

“4.1                           “Stock Acceleration.  If the Change in Control Date occurs during
the Term, then, effective upon the Change in Control Date, (a) each
outstanding option to purchase shares of Common Stock of the Company held by
the Executive shall vest and become immediately exercisable in full and shares
of Common Stock of the Company received upon exercise of any options will no
longer be subject to a right of repurchase by the Company, (b) each
outstanding restricted stock award shall be deemed to be fully vested and will
no longer be subject to a right of repurchase by the Company and (c) if
the Executive’s employment is thereafter terminated for any reason (other than
by the Company for Cause), then each such option (or any option into which such
option is converted, exchanged or substituted in connection with the Change in
Control) shall continue to be exercisable by the Executive (to the extent such
option was exercisable on the Date of Termination) for a period of six months
following the Date of Termination, notwithstanding any provision in any
applicable option agreement to the contrary but not later than the expiration
date of the option; provided however that if stock options held generally by
employees of the Company under the stock option or stock incentive plan under
which Executive’s stock option was granted terminate or expire if not exercised
upon, immediately prior to or otherwise in connection with the Change in
Control, such stock option held by Executive shall likewise terminate or
expire.”

 

3.               Section 4.2(a)(i)(2) of the
Retention Agreement be and hereby is deleted in its entirety and the following
is inserted in lieu thereof:

 

“(2)                            the amount equal to (A) two multiplied
by (B) the sum of (x) the Executive’s highest annual base salary
during the five-year period prior to the Change in Control Date and (y) the
Executive’s highest annual bonus during the five-year period prior to the
Change in Control Date, provided, however, that if the Executive is terminated
prior to the Closing of the Change in Control and the Executive is entitled to
these payments solely pursuant to the second sentence of Section 1.2
hereof, then the amount payable pursuant to this subsection shall be paid over
the 24-month period commencing 30 days following the date of termination in
accordance with the Company’s regular payroll practices.”

 

4.               Section 4.3(a) of the Retention
Agreement be and hereby is amended by deleting the last sentence in its
entirety and inserting the following in lieu thereof:

 

“Within 90 days after the due date of each Contingent Compensation
Payment to the Executive but no later than the end of the year following the
year in which the Executive paid 

 

 

the Excise Tax, the Company shall pay to the Executive, in cash, the
Gross-Up Payment with respect to such Contingent Compensation Payment, in the
amount determined pursuant to this Section 4.3.”

 

5.               Section 4.6 of the Retention Agreement
be and hereby is deleted in its entirety and the following is inserted in lieu
thereof:

 

“4.6                           Payments Subject
to Section 409A.  Any
severance payments or benefits under Section 4 of the
Agreement shall begin only upon
the date of Executive’s “separation from service” (determined as set
forth below) which occurs on or after the
date of termination of employment. 
The following rules shall apply with respect to distribution of the
payments and benefits, if any, to be
provided to Executive under Section 4 of the Agreement:

 

(a)                                  It is intended that each installment of the
severance payments and benefits provided under the Agreement shall be treated as a separate “payment”
for purposes of Section 409A of the Internal Revenue Code and the guidance
issued thereunder (“Section 409A”). 
Neither the Company nor the Executive shall have the right to accelerate
or defer the delivery of any such payments or benefits except to the extent
specifically permitted or required by Section 409A.

 

(b)                                 If, as of the date of Executive’s “separation
from service” from the Company, Executive is not a “specified employee” (within the meaning of Section 409A),
then each installment of the severance payments and benefits shall be made on
the dates and terms set forth in the Agreement.

 

(c)                                  If, as of the date of Executive’s “separation
from service” from the Company, Executive is a “specified employee” (within the
meaning of Section 409A), then:

 

(i)                                     Each installment of the severance payments
and benefits due under the Agreement that, in accordance with the dates and
terms set forth herein, will in all circumstances, regardless of when the
separation from service occurs, be paid within the short-term deferral period
(as defined under Section 409A) shall be treated as a short-term deferral
within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to
the maximum extent permissible under Section 409A; and

 

(ii)                                  Each installment of the severance payments
and benefits due under the Agreement that is not described in paragraph (c)(i) above
and that would, absent this subparagraph, be paid within the six-month period
following Executive’s “separation from service” from the Company shall not be
paid until the date that is six months and one day after such separation from
service (or, if earlier, Executive’s death), with any such installments that
are required to be delayed being accumulated during the six-month period and
paid in a lump sum on the date that is six months and one day following
Executive’s separation from service and any subsequent installments, if any,
being paid in accordance with the dates and terms set forth herein; provided,
however, that the preceding provisions of this sentence shall not apply
to any installment of severance payments and benefits if and to the maximum
extent that that such installment is deemed to be paid under a separation pay plan
that does not provide for a deferral of compensation by reason of the
application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to
separation pay upon an involuntary separation from service).  Any installments that qualify for the
exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must
be paid no later than the last day of Executive’s second taxable year following
the taxable year in which the separation from service occurs.

 

 

(d)                                 The determination of whether and when
Executive’s separation from service from the Company has occurred shall be made
and in a manner consistent with, and based on the presumptions set forth in,
Treasury Regulation Section 1.409A-1(h). 
Solely for purposes of this paragraph (d), “Company” shall include all
persons with whom the Company would be considered a single employer as
determined under Treasury Regulation Section 1.409A-1(h)(3).

 

(e)                                  All reimbursements and in-kind benefits
provided under the Agreement
shall be made or provided in accordance with the requirements of Section 409A
to the extent that such reimbursements or in-kind benefits are subject to Section 409A,
including, where applicable, the requirements that (A) any reimbursement
is for expenses incurred during Executive’s lifetime (or during a shorter
period of time specified in this Agreement), (B) the amount of expenses
eligible for reimbursement during a calendar year may not affect the expenses
eligible for reimbursement in any other calendar year, (C) the
reimbursement of an eligible expense will be made on or before the last day of
the calendar year following the year in which the expense is incurred and (D) the
right to reimbursement is not subject to set off or liquidation or exchange for
any other benefit.”

 

6.               Section 5.3 of the Retention Agreement
by and hereby is amended by adding the following at the end of the paragraph:

 

“Notwithstanding the foregoing, if the continued payment of base salary
and/or continued provision of benefits to Executive pending resolution of any
dispute would cause the Executive to become subject to penalties, interest or
other adverse tax consequences under Section 409A, then (i) the
Executive shall be entitled to the payments and benefits at the time and in the
manner set forth in Section 4 hereof and (ii) following the
resolution of the dispute if the payments made and/or benefits provided to
the Executive under clause (i) exceed the amount that the Executive is
entitled to receive pursuant to Section 4, the excess of such amount shall
be repaid (with interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Code) by the Executive to the Company within 60 days of the resolution of
the dispute.”

 

7.               Section 7 of the Retention Agreement be
and hereby is amended by deleting “111 Locke Drive” and replacing it with “84
Waterford Drive”.Exhibit 10.16

 

AMENDED
AND RESTATED

EMPLOYMENT
AGREEMENT

 

THIS AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), made this 6th day of November 2008, 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
Adrian Adams, residing at 322 Winfield Road, Devon, Pennsylvania 19333 (the “Executive”).

 

The Company
desires to employ the Executive and the Executive desires to be employed by the
Company, and in connection therewith the Company and the Executive entered into
an Employment Agreement, dated March 1, 2007 (the “Original Agreement”).  The Company and the Executive wish to amend
and restate the Original Agreement as provided for herein.  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 employ the Executive and the Executive hereby accepts employment with
the Company, upon the terms set forth in this Agreement, for the period
commencing on March 1, 2007 (the “Commencement Date”)  and ending on March 1, 2012 (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  March 1,
2012, 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 initially serve as
President and Chief Operating Officer of the Company and in that capacity
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.  The Company acknowledges that it is the present
expectation of the Board and the parties hereto that Executive will be elected
to the position of Chief Executive Officer within six months of the
Commencement Date.  At such time as the
Executive is elected to the position of Chief Executive Officer, he shall
report directly to the Board and shall assume the duties and responsibilities
inherent in such position and such other duties and responsibilities as the
Board shall from time to time reasonably assign to him.

 

Executive shall
also perform such other duties consistent with his position at such time as may
be reasonably assigned by the Chief Executive Officer (if Executive does not
then hold such position) and/or the Board of Directors of the Company (the “Board”)
from time to time.  Executive shall serve
on the Board and may also serve as a director or officer of any of the Company’s
operating subsidiaries if the Executive shall be elected to such position, for
no additional compensation or benefits. 
The Executive hereby accepts such service and agrees to undertake the
duties and responsibilities inherent in such positions.  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.

 

2

 

Notwithstanding
anything herein to the contrary, Executive shall be entitled to engage in (a) service
on the board of directors of a no more than three other companies, businesses
or trade organizations, provided, that, the Executive shall
provide the Company prior written notice of his intention to join any such
board and provided further that he shall not serve on the
board of any entity that competes with the Company, (b) service on the
board of directors of not-for-profit or charitable organizations, (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 pay to the Executive a base salary at the annualized rate of
$800,000 (“Base Salary”) commencing on the Commencement Date.  The Base Salary shall be subject to annual
review by the Board but shall not be reduced below $800,000 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
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 one hundred
percent (100%) of Base Salary.  For
fiscal year 2007, the Executive shall be entitled to a pro rata guaranteed bonus
based on an Annual Bonus of one hundred percent (100%) of 

 

3

 

his 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           Stock and Option Grant.  At the first meeting of the Compensation
Committee of the Board of Directors following the Executive’s first day of
employment, the Company shall grant to the Executive, under the Company’s 2000
Stock Incentive Plan (the “Stock Plan”), 125,000 shares of restricted stock and
an option to purchase 500,000 shares of Company stock (the “Initial Grant”).  The terms and conditions of the Initial Grant
(other than the exercise price per share, which shall be equal to the closing
price of the Company’s stock on the grant date) shall be set forth in the award
agreements attached hereto as Schedules A and B.  The stock option portion of the Initial Grant
shall vest in five equal installments on each of the first five anniversaries
of the grant date, and the restricted stock award portion of the Initial Grant
shall vest in three equal installments on each of the first three anniversaries
of the grant date.  The Board, in its
sole discretion, may grant further incentive compensation awards to the
Executive from time to time.  The Company
represents and warrants to Executive that the Company has full power and
authority, subject to Compensation Committee approval, and shares available
under the Stock Plan to make the Initial Grant.

 

3.4           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 four (4) weeks 

 

4

 

paid vacation per year,
accruing at a rate of 1.67 days per month during the Employment Period and to
be taken at such times as may be reasonably determined by Executive consistent
with his duties.

 

3.5           Reimbursement of Expenses.  The Company shall reimburse the Executive for
all reasonable travel (which shall be deemed to include first class airfare or
reimbursement or equivalent to a first class airfare ticket in the event
Executive uses his personal time-share aircraft), 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 or in connection with Executive’s commuting to and from his personal
residence in the Philadelphia area and the Company’s offices, upon presentation
by the Executive of documentation, expense statements, vouchers and/or such
other supporting information as the Company may request.

 

3.6           Housing
Expenses.  The Company understands
that the Executive intends to maintain his primary residence outside the
Massachusetts area.  The Company agrees
to provide the Executive with a housing allowance for reasonable housing and
living expenses of $5,600 per month, related to the rental or purchase of a
home, within suitable distance to the Company’s headquarters, which payment
shall be made on a fully tax grossed-up basis. 
The Company also will reimburse the Executive for (i) reasonable
travel, meals and lodging expenses incurred by him for up to two trips for the
purpose of securing such house or apartment within a suitable distance to the
Company’s headquarters and (ii) reasonable moving expenses in relocating
his belongings from his residence in Florida to such house or apartment.

 

5

 

3.7           Executive’s
Legal Fees.  The Company agrees to
pay the Executive’s reasonable legal costs and expenses in connection with
negotiating and drafting this Agreement up to a maximum of $15,000.

 

3.8           Automobile.  The Company agrees to provide the Executive
with an automobile allowance or a leased automobile with a retail value of up
to $75,000, which payments shall be made on a fully tax grossed-up basis.  In addition, the Company agrees to pay all
insurance, maintenance, fuel and other customary costs associated with
operating the automobile.

 

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

 

4.             Employment Termination.  This Agreement and the employment of the
Executive under this Agreement shall terminate upon the occurrence of any of
the following:

 

4.1           At the election of the Executive if
the Company fails to name him Chief Executive Officer of the Company within six
(6) months from the Commencement Date, on the date of such election.

 

4.2           On the expiration date of the
Employment Period.

 

4.3           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 4.3,
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 

 

6

 

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 this Agreement by the Executive. 
For purposes of this Section 4.3, 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.

 

4.4           Upon the death or disability of the
Executive.  As used in this Agreement,
the term “disability” shall mean the Executive’s absence from the full-time
performance of the Executive’s duties with the Company for one hundred eighty
(180) consecutive calendar days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or the
Executive’s legal representative.

 

4.5           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 

 

7

 

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.

 

4.6           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.

 

4.7           At the election of the Company,
without Cause, upon not less than sixty (60) days written notice to Executive.

 

4.8           At the election of the Company or the
Executive in connection with a Change in Control of the Company as set forth in
the Executive Retention Agreement between the Company and the Executive (the “ERA”),
dated as of the date hereof.  For
purposes of this Agreement, “Change in Control” shall have the meaning set
forth in the ERA.

 

5.             Effect of
Termination.

 

5.1           Termination For Failing To Name
Executive CEO.  In the event the
Company fails to name Executive to the position of Chief Executive Officer of
the 

 

8

 

Company within six (6) months
from the Commencement Date, and he elects to terminate his employment, 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 C hereto (the “Separation Agreement”), the Company shall pay or cause
to be paid to Executive, within thirty (30) days of the date of his
termination: (1) a lump-sum payment of two million dollars ($2,000,000);
and (2) the amount of any accrued but unpaid Base Salary, unused vacation
and unreimbursed business, housing and automobile expenses and the Company
thereafter shall have no further obligation to Executive under this Agreement,
other than for payment of any other amounts or benefits accrued and vested
under any applicable benefit plan or otherwise in accordance with applicable
law.

 

5.2           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 4.2, for Cause by the
Company pursuant to Section 4.3, or at the election of the Executive
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.

 

5.3           Termination for Death or
Disability.  In the event the
Executive’s employment is terminated by death or because of disability pursuant
to Section 4.4, 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 

 

9

 

end of the month in which
the termination of his employment because of death or disability occurs; and (B) an
annual bonus 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, payable when bonuses are paid for that year (a “Pro Rata Bonus”).  In addition, the Company shall permit
Executive or Executive’s estate or representative to exercise the vested stock
option portion of the Initial Grant for a period of no less than one year after
any such termination of employment.

 

5.4           Termination By the Executive With Good Reason or
By the Company Without “Cause”.  In
the event the Executive’s employment is terminated by the Executive with Good
Reason pursuant to Section 4.5 or by the Company without Cause pursuant to
Section 4.7, 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 the Separation Agreement, the Company shall: (1) continue
to pay the Executive the Base Salary for twenty-four (24) months in accordance
with the Company’s regular payroll practices; (2) pay the Executive a Pro
Rata Bonus; (3) pay the Executive, in bi-weekly installments, over a
twenty-four month period, an amount equal in the aggregate to two (2) times
the average Annual Bonus earned for the two years prior to the date of his
termination (in the event Executive has not been employed for a sufficient
period to earn two such bonuses, such calculation shall be made assuming
Executive earned a bonus for any such year at a target level of performance
(taking into account any minimum bonus amount)); (4) provide to the
Executive for two (2) years 

 

10

 

following the date of his
termination, payment of COBRA premiums for medical, dental, and vision benefits
pursuant to plans maintained by the Company under which Executive and/or
Executive’s family is eligible to receive benefits; provided, however, that,
notwithstanding the foregoing, the benefits described in this subsection may be
discontinued prior the end of the period, but only to the extent, that
Executive receives substantially similar benefits from a subsequent employer;
and (5) permit Executive to exercise the stock option portion of the
Initial Grant for a period of no less than six months after the date of
termination.

 

5.5           Participation in Executive Retirement Health
Benefit Program.  Following the date
of the Executive’s termination, for any reason whatsoever, and, if applicable,
the twenty-four (24) month period referred to in Section 5.4(4) or
the period referred to in Section 4.2(b) of the ERA, in the event the
Executive elects to participate in the Company’s executive retiree health
benefit program set forth on Exhibit A hereto (the “Program”), he
will reimburse the Company with respect to his participation in the Program at
the lesser of (a) the actual cost to the Company of the employee’s
participation and (b) the rate applicable to former employees of the
Company to elect COBRA health coverage.

 

5.6           Termination Following a Change in Control.  In the event the Executive’s employment is
terminated pursuant to Section 4.8 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.

 

11

 

5.7           Payments Subject to Section 409A.

 

(a)           Subject to this Section 5.7,
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-Term Deferral Period (as hereinafter defined) shall be treated
as a short-term

 

12

 

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 5.7 (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.

 

13

 

(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 or service developed, produced,
marketed, sold or rendered by the Company while the Executive was employed by
the Company;

 

14

 

(ii)           Either
alone or in association with others, recruit or solicit any person who was
employed by the Company at any time during the period of the Executive’s
employment with the Company, except for an individual whose employment with the
Company has been terminated for a period of six months or longer; and

 

(iii)          Either
alone or in association with others, solicit, divert or take away, or attempt
to divert or 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 material breach of this Agreement will cause the
Company substantial and irrevocable damage and therefore, in the event of any
such material 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.

 

15

 

(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.

 

(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 

 

16

 

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 Board of Directors or a designee of the
Board of Directors, either during or after his employment with the Company, unless
and until such Proprietary Information has become public knowledge without
fault by the Executive.

 

(b)           The Executive agrees that all files,
documents, letters, memoranda, reports, records, data, sketches, drawings,
methods, laboratory notebooks, program listings, computer equipment or devices,
computer programs or other written, photographic, or other tangible material
containing Proprietary Information, whether created by the Executive or others,
which shall come into his custody or possession, shall be and are the exclusive
property of the Company and are to be used by the Executive only in the
performance of his duties for the Company. 
All such materials or copies thereof and all tangible property of the
Company in the custody or possession of the Executive shall be delivered to the
Company upon the earlier of (i) a request by the Company or (ii) termination
of his employment.  After such delivery,
the Executive shall not retain any such materials or copies thereof or any such
tangible property.

 

(c)           The Executive agrees that his
obligation not to disclose or to use information and materials of the types set
forth in subsections (a) and (b) above, and his obligation to return
materials and tangible property set forth in subsection (b) above, also extends
to such types of information, materials and tangible property of customers of
the Company or suppliers to the Company or other third parties who may have
disclosed or entrusted the same to the Company or to the Executive.

 

17

 

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”).

 

(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 

 

18

 

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 Executive Vice President of
Research and Development or the General Counsel of the Company shall be
entitled to execute any such papers as the agent and the attorney-in-fact of
the Executive, and the Executive hereby irrevocably designates and appoints the
Executive Vice President of Research and Development or the General Counsel 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

 

19

 

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, other
than documents filed with the Securities and Exchange Commission, 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 agreement to refrain from (i) competing, directly or
indirectly, with the business of any former employer or others or (ii) 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.

 

20

 

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.

 

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 Original
Agreement.

 

21

 

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.

 

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.

 

22

 

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.

 

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

 

	
   

  	
  Sepracor
  Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy J. Barberich

  
	
   

  	
  Title:

  	
  Chairman
  of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Adrian Adams

  
	
   

  	
  Adrian
  Adams

  

 

23

 

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

FORM OF RESTRICTED STOCK AGREEMENT

 

SEE
ATTACHED AGREEMENT

 

 

SEPRACOR
INC.

 

Restricted
Stock Agreement

 

	
  Name of Recipient: 

  	
   

  
	
   

  	
   

  
	
  Number of shares of restricted common 

  stock awarded: 

  	
   

  
	
   

  	
   

  
	
  Grant Date: 

  	
   

  

 

Sepracor Inc. (the “Company”)
has selected you to receive the restricted stock award described above, which
is subject to the provisions of the Company’s 2000 Stock Incentive Plan (the “Plan”)
and the terms and conditions contained in this Restricted Stock Agreement.  Please confirm your acceptance of this
restricted stock award and of the terms and conditions of this Agreement by
signing a copy of this Agreement where indicated below.

 

	
  

  	
  SEPRACOR INC. 

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  [insert name and
  title] 

  
	
   

  	
   

  
	
  Accepted and Agreed: 

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [insert name of recipient] 

  	
   

  
	
   

  	
   

  
				

 

 

SEPRACOR
INC.

 

Restricted
Stock Agreement

 

The terms and conditions
of the award of shares of restricted common stock of the Company (the “Restricted
Shares”) made to the Recipient, as set forth on the cover page of this
Agreement, are as follows:

 

1.             Issuance of Restricted Shares.

 

(a)           The Restricted Shares are issued to
the Recipient, effective as of the Grant Date (as set forth on the cover page of
this Agreement), in consideration of employment services rendered and to be
rendered by the Recipient to the Company.

 

(b)           The Restricted Shares will initially
be issued by the Company in book entry form only, in the name of the
Recipient.  Following the vesting of any
Restricted Shares pursuant to Section 2 below, the Company shall, if
requested by the Recipient, issue and deliver to the Recipient a certificate
representing the vested Restricted Shares.  
The Recipient agrees that the Restricted Shares shall be subject to the
forfeiture provisions set forth in Section 3 of this Agreement and the
restrictions on transfer set forth in Section 4 of this Agreement.

 

2.             Vesting.

 

(a)           Vesting Schedule.  Unless otherwise provided in this Agreement
or the Plan, the Restricted Shares shall vest in accordance with the following
vesting schedule:  [     %
of the total number of Restricted Shares shall vest on the first anniversary of
the Grant Date and      % of the total number of
Restricted Shares shall vest on each successive anniversary thereafter, through
and including the       anniversary of the Grant
Date].  Any fractional number of
Restricted Shares resulting from the application of the foregoing percentages
shall be rounded down to the nearest whole number of Restricted Shares.

 

(b)           Acceleration of Vesting.  Notwithstanding the foregoing vesting
schedule, as provided in the Plan, all unvested Restricted Shares shall vest
effective immediately prior to a Change in Control Event (as defined in the
Plan).

 

3.             Forfeiture of Unvested Restricted Shares Upon
Employment Termination.

 

In the event that the
Recipient ceases to be employed by, a director of, or a consultant or advisor
to, the Company for any reason or no reason, with or without cause all of the
Restricted Shares that are unvested as of the time of such employment
termination shall be forfeited immediately and automatically to the Company,
without the payment of any consideration to the Recipient, effective as of such
termination of employment.  The Recipient
shall have no further rights with respect to any Restricted Shares that are so
forfeited.  If the Recipient is employed
by a subsidiary of the Company, any references in this Agreement to employment
with the Company shall instead be deemed to refer to employment with such
subsidiary.

 

 

4.             Restrictions on Transfer.

 

                The Recipient shall not sell, assign, transfer, pledge,
hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively “transfer”) any Restricted Shares, or any interest therein, until
such Restricted Shares have vested, except that the Recipient may transfer such
Restricted Shares as part of the sale of all or substantially all of the shares
of capital stock of the Company (including pursuant to a merger or
consolidation).  The Company shall not be
required (i) to transfer on its books any of the Restricted Shares which
have been transferred in violation of any of the provisions of this Agreement
or (ii) to treat as owner of such Restricted Shares or to pay dividends to
any transferee to whom such Restricted Shares have been transferred in
violation of any of the provisions of this Agreement.

 

5.             Restrictive Legends.

 

                The book entry account reflecting the issuance of the
Restricted Shares in the name of the Recipient shall bear a legend or other
notation upon substantially the following terms:

 

                “These shares of stock are subject to forfeiture
provisions and restrictions on transfer set forth in a certain Restricted Stock
Agreement between the corporation and the registered owner of these shares (or
his or her predecessor in interest), and such Agreement is available for
inspection without charge at the office of the Secretary of the corporation.”

 

6.             Rights as a Shareholder.

 

                Except as otherwise provided in this Agreement, for
so long as the Recipient is the registered owner of the Restricted Shares, the
Recipient shall have all rights as a shareholder with respect to the Restricted
Shares, whether vested or unvested, including, without limitation, any rights
to receive dividends and distributions with respect to the Restricted Shares
and to vote the Restricted Shares and act in respect of the Restricted Shares
at any meeting of shareholders.

 

7.             Provisions of the Plan.

 

                This Agreement is subject to the provisions of the
Plan, a copy of which is furnished to the Recipient with this Agreement.  As provided in the Plan, upon the occurrence
of a Reorganization Event (as defined in the Plan), the rights of the Company
hereunder (including the right to receive forfeited Restricted Shares) shall
inure to the benefit of the Company’s successor and, unless the Board
determines otherwise, shall apply to the cash, securities or other property
which the Restricted Shares were converted into or exchanged for pursuant to
such Reorganization Event in the same manner and to the same extent as they
applied to the Restricted Shares under this Agreement.

 

8.             Tax Matters.

 

(a)            Acknowledgments; Section 83(b) Election.  The Recipient acknowledges that he or she is
responsible for obtaining the advice of the Recipient’s own tax advisors with
respect to the acquisition of the Restricted Shares and the Recipient is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents with respect to the tax consequences relating
to the Restricted Shares.  The Recipient
understands that the Recipient (and not the Company) shall be responsible for
the Recipient’s tax liability that may arise in connection with the
acquisition, vesting and/or disposition of the Restricted Shares.

 

 

The Recipient
acknowledges that he or she has been informed of the availability of making an
election under Section 83(b) of the Internal Revenue Code, as
amended, with respect to the issuance of the Restricted Shares and that the
Recipient has decided not to file a Section 83(b) election.

 

(b)           Withholding. The Recipient
acknowledges and agrees that the Company has the right to deduct from payments
of any kind otherwise due to the Recipient any federal, state, local or other
taxes of any kind required by law to be withheld with respect to the vesting of
the Restricted Shares.  On each date on
which Restricted Shares vest, the Company shall deliver written notice to the
Recipient of the amount of withholding taxes due with respect to the vesting of
the Restricted Shares that vest on such date; provided, however, that the total
tax withholding cannot exceed the Company’s minimum statutory withholding
obligations (based on minimum statutory withholding rates for federal and state
tax purposes, including payroll taxes, that are applicable to such supplemental
taxable income).  The Recipient shall
satisfy such tax withholding obligations by making a cash payment to the
Company on the date of vesting of the Restricted Shares, in the amount of the
Company’s withholding obligation in connection with the vesting of such
Restricted Shares.

 

9.             Miscellaneous.

 

(a)           No Right to Continued Employment.  The Recipient acknowledges and agrees that,
notwithstanding the fact that the vesting of the Restricted Shares is
contingent upon his or her continued employment by the Company, this Agreement
does not constitute an express or implied promise of continued employment or
confer upon the Recipient any rights with respect to continued employment by
the Company.

 

(b)           Governing Law.  This Agreement shall be construed,
interpreted and enforced in accordance with the internal laws of the State of
Delaware without regard to any applicable conflicts of laws provisions.

 

 

SCHEDULE
B

FORM OF STOCK OPTION AGREEMENTS

 

SEE
ATTACHED AGREEMENT

 

 

SEPRACOR INC.

 

Form of
Incentive Stock Option Agreement

Granted Under 2000
Stock Incentive Plan

 

1.             Grant of Option.

 

                This agreement evidences the grant by Sepracor Inc.,
a Delaware corporation (the “Company”), on the Grant Date indicated on the
preceding Certificate of Stock Option Grant (the “Certificate”) to an employee,
consultant, or director of the Company (the “Participant”), of an option to
purchase, in whole or in part, on the terms provided herein and in the Company’s
2000 Stock Incentive Plan (the “Plan”), the number of shares (the “Shares”) of
common stock, $.10 par value per share, 
of the Company (“Common Stock”),indicated on the certificate at the
price per Share indicated on the Certificate. Unless earlier terminated, this
option shall expire on the Grant Expiration Date indicated on the Certificate (“Grant
Expiration Date”).

 

                It is intended that the option evidenced by this
agreement shall not be an incentive stock option as defined in Section 422
of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the “Code”). 
Except as otherwise indicated by the context, the term “Participant”, as
used in this option, shall be deemed to include any person who acquires the
right to exercise this option validly under its terms.

 

2.             Vesting Schedule.

 

                This option will become exercisable (“vest”) pursuant
to the Vesting Schedule indicated on the Certificate (“Vesting Schedule”).

 

                The right of exercise shall be cumulative so that to
the extent the option is not exercised in any period to the maximum extent
permissible it shall continue to be exercisable, in whole or in part, with
respect to all shares for which it is vested until the earlier of the Grant
Expiration Date or the termination of this option under Section 3 hereof
or the Plan.

 

3.             Exercise of Option.

 

(a)            Form of Exercise. Each
election to exercise this option shall be in writing, signed by the
Participant, and received by the Company at its principal office, accompanied
by this agreement, and payment in full in the manner provided in the Plan. The
Participant may purchase less than the number of shares covered hereby,
provided that no partial exercise of this option may be for any fractional
share.

 

(b)           Continuous Relationship with the
Company Required.  Except as
otherwise provided in this Section 3, this option may not be exercised
unless the Participant, at the time he or she exercises this option, is, and
has been at all times since the Grant Date, an [employee or officer of], or
consultant or advisor to, the Company or any parent or subsidiary of the
Company as defined in Section 424(e) or (f) of the Code (an “Eligible
Participant”).

 

 

(c)            Termination of Relationship with
the Company. If the Participant ceases to be an Eligible Participant for
any reason, then, except as provided in paragraphs (d) and (e) below,
the right to exercise this option shall terminate three months after such
cessation (but in no event after the Grant Expiration Date), provided that this
option shall be exercisable only to the extent that the Participant was
entitled to exercise this option on the date of such cessation.  Notwithstanding the foregoing, if, following
the time the Participant has ceased to be an Eligible Participant, but prior to
the Grant Expiration Date, the Participant materially breaches Section 6
or 7 of the Employment Agreement between the Participant and the Company dated March 1,
2007 (the “Employment Agreement”), the right to exercise this option shall
terminate immediately upon written notice to the Participant from the Company
describing such violation.

 

(d)           Exercise Period Upon Death or
Disability.  If the Participant dies
or becomes disabled (within the meaning of Section 22(e)(3) of the
Code) prior to the Grant Expiration Date while he or she is an Eligible
Participant and the Company has not terminated such relationship for “cause” as
specified in paragraph (e) below, this option shall be exercisable, within
the period of one year following the date of death or disability of the
Participant, by the Participant (or in the case of death by an authorized
transferee), provided that this option shall be exercisable only to the extent
that this option was exercisable by the Participant on the date of his or her
death or disability, and further provided that this option shall not be
exercisable after the Grant Expiration Date.

 

(e)            Discharge for Cause.  If the Participant, prior to the Grant
Expiration Date, is discharged by the Company for “cause” (as defined below),
the right to exercise this option shall terminate immediately upon the
effective date of such discharge.  “Cause”
shall have the meaning set forth in the Employment Agreement.

 

4.             Withholding.

 

                No Shares will be issued pursuant to the exercise of
this option unless and until the Participant pays to the Company, or makes
provision satisfactory to the Company for payment of, any federal, state or
local withholding taxes required by law to be withheld in respect of this
option.

 

5.             Nontransferability of Option.

 

                This option may not be sold, assigned, transferred,
pledged or otherwise encumbered by the Participant, either voluntarily or by
operation of law, except by will or the laws of descent and distribution, and,
during the lifetime of the Participant, this option shall be exercisable only
by the Participant.

 

6.             Disqualifying Disposition.

 

                If the Participant diposes of Shares acquired upon
exercise of this option within two years from the Grant Date or one year after
such Shares were acquired pursuant to exercise of this option, the Participant
shall notify the Company in writing of such disposition.

 

 

7.             Provisions of the Plan.

 

                This option is subject to the provisions of the Plan,
a copy of which is furnished to the Participant with this option.

 

IN WITNESS WHEREOF, the
Company has caused this option to be executed under its corporate seal by its
duly authorized officer.  This option
shall take effect as a sealed instrument.

 

	
  

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  

 

PARTICIPANT’S
ACCEPTANCE

 

                The Participant hereby accepts
the foregoing option and agrees to the terms and conditions thereof.  The Participant hereby acknowledges receipt
of a copy of the Company’s 2000 Stock Incentive Plan.

 

	
  

  	
   

  
	
   

  	
  Name:

  

 

 

SEPRACOR INC.

 

Nonstatutory Stock
Option Agreement

Granted Under 2000 Stock Incentive Plan

 

1.             Grant of Option.

 

This agreement evidences
the grant by Sepracor Inc., a Delaware corporation (the “Company”), on the
Grant Date indicated on the preceding Certificate of Stock Option Grant (the “Certificate”)
to  an employee, consultant, or director
of the Company (the “Participant”), of an option to purchase, in whole or in
part, on the terms provided herein and in the Company’s 2000 Stock Incentive
Plan (the “Plan”), the number of shares (the “Shares”) of common stock, $.10  par value per share, 
of the Company (“Common Stock”),indicated on the certificate at the
price per Share indicated on the Certificate. Unless earlier terminated, this
option shall expire on the Grant Expiration Date indicated on the Certificate (“Grant
Expiration Date”).

 

It is intended that the
option evidenced by this agreement shall not be an incentive stock option as
defined in Section 422 of the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder (the “Code”).  Except as otherwise indicated by the context,
the term “Participant”, as used in this option, shall be deemed to include any
person who acquires the right to exercise this option validly under its terms.

 

2.             Vesting Schedule.

 

This option will become
exercisable (“vest”) pursuant to the Vesting Schedule indicated on the
Certificate (“Vesting Schedule”).

 

The right of exercise
shall be cumulative so that to the extent the option is not exercised in any
period to the maximum extent permissible it shall continue to be exercisable,
in whole or in part, with respect to all shares for which it is vested until
the earlier of the Grant Expiration Date or the termination of this option
under Section 3 hereof or the Plan.

 

3.             Exercise of Option.

 

(a)           Form of Exercise. Each
election to exercise this option shall be in writing, signed by the
Participant, and received by the Company at its principal office, accompanied
by this agreement, and payment in full in the manner provided in the Plan. The
Participant may purchase less than the number of shares covered hereby,
provided that no partial exercise of this option may be for any fractional
share.

 

(b)           Continuous Relationship with the
Company Required.  Except as otherwise
provided in this Section 3, this option may not be exercised unless the
Participant, at the time he or she exercises this option, is, and has been at
all times since the Grant Date, an [employee or officer of], or consultant or
advisor to, the Company or any parent or subsidiary of the Company as defined
in Section 424(e) or (f) of the Code (an “Eligible Participant”).

 

 

(c)           Termination of Relationship with
the Company. If the Participant ceases to be an Eligible Participant for
any reason, then, except as provided in paragraphs (d) and (e) below,
the right to exercise this option shall terminate  three
months after such cessation (but in no event after the Grant Expiration Date), provided that
this option shall be exercisable only to the extent that the Participant was
entitled to exercise this option on the date of such cessation.  Notwithstanding the foregoing, if, following
the time the Participant has ceased to be an Eligible Participant, but prior to
the Grant Expiration Date, the Participant materially breaches Section 6
or 7 of the Employment Agreement between the Participant and the Company dated March 1,
2007 (the “Employment Agreement”), the right to exercise this option shall
terminate immediately upon written notice to the Participant from the Company
describing  such violation.

 

(d)           Exercise Period Upon Death or
Disability.  If the Participant dies
or becomes disabled (within the meaning of Section 22(e)(3) of the
Code) prior to the Grant Expiration Date while he or she is an Eligible Participant
and the Company has not terminated such relationship for “cause” as specified
in paragraph (e) below, this option shall be exercisable, within the
period of one year following the date of death or disability of the
Participant, by the Participant (or in the case of death by an authorized
transferee), provided  that this option shall be exercisable only
to the extent that this option was exercisable by the Participant on the date
of his or her death or disability, and further provided that this option shall
not be exercisable after the Grant Expiration Date.

 

(e)           Discharge for Cause.  If the Participant, prior to the Grant
Expiration Date, is discharged by the Company for “cause” (as defined below),
the right to exercise this option shall terminate immediately upon the
effective date of such discharge.  “Cause”
shall have the meaning set forth in the Employment Agreement.

 

4.             Withholding.

 

No Shares will be issued
pursuant to the exercise of this option unless and until the Participant pays
to the Company, or makes provision satisfactory to the Company for payment of,
any federal, state or local withholding taxes required by law to be withheld in
respect of this option.

 

5.             Nontransferability of Option.

 

This option may not be
sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the
laws of descent and distribution, and, during the lifetime of the Participant,
this option shall be exercisable only by the Participant.

 

6.             Provisions of the Plan.

 

This option is subject to
the provisions of the Plan, a copy of which is furnished to the Participant
with this option.

 

 

IN WITNESS WHEREOF, the
Company has caused this option to be executed under its corporate seal by its duly
authorized officer.  This option shall
take effect as a sealed instrument.

 

	
  

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  

 

 

PARTICIPANT’S
ACCEPTANCE

 

The
Participant hereby accepts the foregoing option and agrees to the terms and
conditions thereof.  The Participant
hereby acknowledges receipt of a copy of the Company’s 2000 Stock Incentive
Plan.

 

	
  

  	
   

  
	
   

  	
  Name:

  

 

 

SCHEDULE
C

FORM OF SEPARATION AGREEMENT AND RELEASE OF CLAIMS

 

 

SEE
ATTACHED FORM

 

 

FORM OF
SEPARATION AGREEMENT AND RELEASE OF CLAIMS

 

In connection with your
employment separation from Sepracor, Inc. (the “Company”) on [INSERT TERMINATION DATE], and in order to receive the
benefits as set forth in Section 5 of the Employment agreement, this
agreement must become binding between you and the Company.  By signing and returning this agreement, you
will be entering into a binding agreement with the Company and will be agreeing
to the terms and conditions set forth in the numbered paragraphs below,
including the release of claims set forth in paragraph 1.  Therefore, you are advised to consult with an
attorney before signing this agreement and you have been given more than
twenty-one (21) days to do so.  If you
sign this agreement, you may change your mind and revoke your agreement during
the seven (7) day period after you have signed it.  If you do not so revoke, this agreement will
become a binding agreement between you and the Company upon the expiration of
the seven (7) day revocation period.

 

The following
numbered paragraphs set forth the terms and conditions which will apply if you
timely sign and return this agreement and do not revoke it within the seven (7) day
revocation period:

 

1.                                       Mutual Releases - 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; provided, however, that nothing in
this Agreement prevents you from filing, cooperating with, or participating in
any proceeding before the EEOC or a state Fair Employment Practices Agency (except
that you acknowledge that you may not be able to recover any monetary benefits
in connection with any such claim, charge or proceeding).  Notwithstanding the foregoing, the release
set forth in this Section 1 shall not apply to (a) any claim to severance
benefits under the Employment Agreement or your rights under this agreement or (b) any
vested equity interest in the Company, including vested stock options.

 

The
Company hereby fully, forever, irrevocably and unconditionally releases,
remises and discharges you from any and all claims, charges, complaints,
demands, actions, causes of action, suits, rights, debts, sums of money, costs,
accounts, reckonings, covenants, contracts, agreements, promises, doings,
omissions, damages, executions, obligations, liabilities and expenses
(including attorney’s fees and costs), of every kind and nature that the
Company ever had or now has against you as of the date of this agreement.

 

2.                                       Non-Disclosure, Non-Competition and
Non-Solicitation 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 [Name of the
Non-Disclosure Agreement] you executed at the inception of your
employment, which remains in full force and effect.  You further acknowledge and reaffirm your
obligations under the [Name of the
Non-Competition and/or Non-Solicitation Agreement(s)] you previously
executed for the benefit of the Company at the inception of your employment,
which also remain(s) in full force and effect.

 

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 the performance of your employment 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
herein.

 

 

5.                                       Non-Disparagement - You understand and
agree that, as a condition for payment to you of the consideration herein
described, 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.

 

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 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 or waiver
of any right on any other occasion.

 

8.                                       Validity - Should any provision of
this agreement be declared or be determined by any court of competent
jurisdiction to be illegal or invalid, the validity of the remaining parts, terms
or provisions shall not be affected thereby and said illegal or invalid part,
term or provision shall be deemed not to be a part of this agreement.

 

9.                                       Cooperation – You agree to
cooperate with the Company in the investigation, defense or prosecution of any
claims or actions now in existence or which may be brought in the future
against or on behalf of the Company. 
Your cooperation in connection with such claims or actions shall
include, but not be limited to, being available to meet with the Company’s
counsel to prepare for discovery or any mediation, arbitration, trial,
administrative hearing or other proceeding or to act as a witness when
reasonably requested by the Company at mutually agreeable times and at
locations mutually convenient to you and the Company.  You also agree to cooperate with the Company
in the transitioning of your work, and will be available to the Company for
this purpose or any other purpose reasonably requested by the Company.

 

10.                                 Tax Provision – In connection with
the severance benefits provided to you pursuant to this 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.

 

11.                                 Section 409A - No payments
that may be made pursuant to this agreement that constitute “nonqualified
deferred compensation” within the meaning of Section 409A of the Internal
Revenue Code and the guidance issued thereunder (“Section 409A”) may be
accelerated or deferred by the Company or by you.  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), any such
payment shall be delayed following your separation date if, absent such delay,
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.

 

12.                                 Nature of Agreement - You understand
and agree that this agreement is a severance agreement and does not constitute
an admission of liability or wrongdoing on the part of the Company.

 

13.                                 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.

 

14.                                 Voluntary Assent - You affirm that
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.

 

15.                                 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.

 

16.                                 Entire Agreement - This 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

  	
   

  
	
  Employee Name: 

  	
   

  	
   

  

 

 

SEPRACOR INC.

 

 

December 23,
2008

 

Adrian Adams

322 Winfield Road

Devon, Pennsylvania 
19333

 

Dear Adrian:

 

In
order to ensure compliance with Section 409A of the Internal Revenue Code
of 1986, as amended, Sepracor Inc., a Delaware corporation (the “Company”), and
you hereby agree to amend the Executive Retention Agreement dated as of March 1,
2007  by and between the Company and you
(the “Retention Agreement”), as set forth on Exhibit A hereto, and
to further amend the Amended and Restated Employment Agreement dated as of November 6,
2008 by and between the Company and you (the “Employment Agreement”), as set
forth on Exhibit B hereto.

 

Except as modified by this letter, all other
terms and conditions of the Retention Agreement and Employment Agreement shall
remain in full force and effect.  This
letter may be executed in counterparts, each of which shall be deemed to be an
original, and all of which shall constitute one and the same document.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Barberich

  
	
   

  	
   

  	
  Name: Timothy J. Barberich

  
	
   

  	
   

  	
  Title: Chairman of the
  Board

  
				

 

	
  Acknowledged and agreed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Adrian Adams 

  	
   

  	
   

  
	
  Adrian Adams

  	
   

  	
   

  

 

 

Exhibit A

 

Retention Agreement

 

1.               Section 4.1 of the
Retention Agreement be and hereby is deleted in its entirety and the following
is inserted in lieu thereof:

 

“4.1         Stock Acceleration.  If the Change in Control Date occurs during
the Term, then, effective upon the Change in Control Date, (a) each
outstanding option to purchase shares of Common Stock of the Company held by
the Executive shall vest and become immediately exercisable in full and shares
of Common Stock of the Company received upon exercise of any options will no
longer be subject to a right of repurchase by the Company, (b) each
outstanding restricted stock award shall be deemed to be fully vested and will
no longer be subject to a right of repurchase by the Company and (c) notwithstanding
any provision in any applicable option agreement to the contrary, if Executive’s
employment is terminated in connection with, in anticipation of, or within six
months after a Change in Control, each such option shall continue to be
exercisable by the Executive (to the extent such option was exercisable on the
Change in Control Date) for a period of six months following the date of
termination of such employment but not later than the expiration date of such
option.”

 

2.               Section 4.3(a) of
the Retention Agreement be and hereby is amended by deleting the last sentence
in its entirety and inserting the following in lieu thereof:

 

“Within 90 days after the due date of each Contingent Compensation
Payment to the Executive but no later than the end of the year following the
year in which the Executive paid the Excise Tax, the Company shall pay to the
Executive, in cash, the Gross-Up Payment with respect to such Contingent
Compensation Payment, in the amount determined pursuant to this Section 4.3(a).”

 

3.               Section 5.3 of the
Retention Agreement by and hereby is amended by adding the following at the end
of the paragraph:

 

“Notwithstanding the foregoing, if the continued payment of base salary
and/or continued provision of benefits to Executive pending resolution of any
dispute would cause the Executive to become subject to penalties, interest or
other adverse tax consequences under Section 409A, then (i) the
Executive shall be entitled to the payments and benefits at the time and in the
manner set forth in Section 4 hereof and (ii) following the
resolution of the dispute if the payments made and/or benefits provided to
the Executive under clause (i) exceed the amount that the Executive is
entitled to receive pursuant to Section 4, the excess of such amount shall
be repaid (with interest at the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Code) by the Executive to the Company within 60 days of the resolution of
the dispute.”

 

4.               Section 7 of the
Retention Agreement be and hereby is amended by deleting “111 Locke Drive” and
replacing it with “84 Waterford Drive”.

 

 

Exhibit B

 

Employment Agreement

 

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

 

2.               Section 5.3 of the
Employment Agreement be and hereby is amended by deleting the last sentence in
its entirety and inserting the following in lieu thereof:

 

“In addition, the Company shall permit Executive or Executive’s estate
or representative to exercise the vested stock option portion of the Initial Grant
for a period of no less than one year after any such termination of employment
but not later than the expiration date of such option.”

 

3.               Section 5.4 of the
Employment Agreement be and hereby is amended by deleting the second sentence
in its entirety and inserting the following in lieu thereof:

 

“In addition, provided the Executive executes the Separation Agreement
and any applicable revocation period with respect to the Separation Agreement
has expired on or before the 60th day following the date of Executive’s
termination of employment (the “Payment Commencement Date”), the Company shall (1) continue
to pay the Executive the Base Salary for twenty four (24) months in accordance
with the Company’s regular payroll practices, commencing on the Payment Commencement
Date (provided, however, that if the Separation Agreement has
been signed, and any applicable revocation period has expired, on or before the
30th day following the date of the Executive’s
termination of employment, then the payments may commence on such 30th day, unless the Payment Commencement Date
occurs in the calendar year following the year in which the Executive’s
employment is terminated, in which case the payments shall commence no earlier
than January 1 of such subsequent year); (2) pay the Executive a Pro
Rata Bonus; (3) pay the Executive, in bi-weekly installments, over a
twenty four month period, commencing on the Payment Commencement Date (provided,
however, that if the Separation Agreement has been signed, and any
applicable revocation period has expired, on or before the 30th day following the date of the Executive’s
termination of employment, then the payments may commence on such 30th day, unless the Payment Commencement Date
occurs in the calendar year following the year in which the Executive’s
employment is terminated, in which case the payments shall commence no earlier
than January 1 of such subsequent year), an amount equal in the aggregate
to two (2) times the average Annual Bonus earned for the two years prior
to the date of his termination (in the event Executive has not been employed
for a sufficient period to earn two such bonuses, such calculation shall be
made assuming Executive earned a bonus for any such year at a target level of
performance (taking into account any minimum bonus amount)); (4) provide
to the Executive for two (2) years following the date of his termination
payment of COBRA premiums for medical, dental, and vision benefits pursuant to
plans maintained by the Company under which Executive and/or Executive’s family
is eligible to receive benefits; provided, however, that,
notwithstanding the foregoing, the benefits described in this subsection may be
discontinued prior the end of the period, but only to the extent, that
Executive receives substantially similar benefits from a subsequent employer;
and (5) permit Executive to exercise the stock option portion of the
Initial Grant for a period of no less than six months after the date of
termination but not later than the expiration date of such option.”

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