Document:

Exhibit 10.3

Crimson Wine Group, Ltd.

2013 Omnibus Incentive Plan

Article 1. Establishment & Purpose

          1.1
Establishment. Crimson Wine Group, Ltd., a corporation registered in Delaware, hereby
establishes the Crimson Wine Group 2013 Omnibus Incentive Plan (hereinafter
referred to as the “Plan”) as set forth in this document. 

          1.2
Purpose of the Plan. The purpose of this Plan is to
attract, retain and motivate officers, employees, and non-employee directors
providing services to the Company, any of its Subsidiaries, or Affiliates and
to promote the success of the Company’s business by providing the participants
of the Plan with appropriate incentives. 

Article 2. Definitions

          
Whenever capitalized in the Plan, the following terms shall have the meanings
set forth below.

          2.1
“Affiliate” means any entity that the Company,
either directly or indirectly, is in common control with, is controlled by or
controls, or any entity that the Company has a substantial direct or indirect equity
interest, as determined by the Board.

          2.2
“Annual Award Limit” shall have the meaning set
forth in Section 5.1.

          2.3
“Award” means any Option, Stock Appreciation
Right, Restricted Stock, Other Stock-Based Award, or Performance-Based
Compensation Award that is granted under the Plan.

          2.4
“Award Agreement” means either (a) a written
agreement entered into by the Company and a Participant setting forth the terms
and provisions applicable to an Award granted under this Plan, or (b) a written
statement issued by the Company, a Subsidiary or Affiliate to a Participant
describing the terms and conditions of the actual grant of such Award.

          2.5
“Beneficial Owner” or “Beneficial Ownership”
shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules
and Regulations under the Exchange Act.

          2.6
“Board” means the Board of Directors of
the Company.

          2.7
“Change of Control” unless otherwise specified
in the Award Agreement, means the occurrence of any of the following events:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
any
consolidation, amalgamation, or merger of the Company with or into any other
Person, or any other corporate reorganization, business combination,
transaction or transfer of securities of the Company by its stockholders, or
a series of transactions (including the acquisition of capital stock of the
Company), whether or not the Company is a party thereto, in which the
stockholders of the Company immediately prior to such transaction,
collectively have Beneficial Ownership, directly or indirectly, of capital
stock representing directly, or indirectly through one 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
or more
entities, less than fifty percent (50%) of the equity (measured by economic
value or voting power (by contract, share ownership or otherwise)) of the
Company or other surviving entity immediately after such transaction;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
the sale or
disposition, in one transaction or a series of related transactions, of all
or substantially all of the assets of the Company to any Person;

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
during any
period of twelve consecutive months commencing on or after the Effective
Date, individuals who as of the beginning of such period constituted the
entire Board (together with any new directors whose election by such Board or
nomination for election by the Company’s shareholders was approved by a vote
of at least two-thirds of the directors of the Company, then still in office,
who were directors at the beginning of the period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority thereof; or 

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
approval by
the shareholders of the Company of a complete liquidation or dissolution of
the Company.

          2.8
“Code” means the U.S. Internal Revenue Code of
1986, as amended from time to time.

          2.9
“Committee” means the Compensation Committee of
the Board or any other committee designated by the Board to administer this
Plan, or in the absence of any Compensation Committee or other such designated
committee, the Board. To the extent applicable, the Committee shall have at
least two members, each of whom shall be (i) a Non-Employee Director, (ii) an
Outside Director, and (iii) an “independent director” within the meaning of the
listing requirements of any exchange on which the Company is listed.

          2.10
“Company” means Crimson Wine Group, Ltd., a
Delaware corporation, and
any successor thereto.

          2.11
“Covered Employee” means for any Plan Year, a
Participant designated by the Company as a potential “covered employee,”
as such term is defined in Section 162(m) of the Code.

          2.12
“Director” means a member of the Board who is
not an Employee.

          2.13
“Effective Date” means the date set forth in
Section 14.17.

          2.14
“Employee” means an officer or other employee
of the Company, a Subsidiary or Affiliate, including a member of the Board who
is an employee of the Company, a Subsidiary or Affiliate.

          2.15
“Exchange Act” means the Securities Exchange
Act of 1934, as amended from time to time.

          2.16
“Extraordinary Event” means, unless otherwise
specified in the Award Agreement, the occurrence of any of the following
events: 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
a Change of
Control;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
The
Company’s Board of Directors shall approve a partial liquidation of the
Company under Section 302(b)(4) of the Code or other extraordinary corporate
contraction or distribution or other extraordinary transaction that is
determined by the Board of Directors to be appropriate and in the best
interests of the Company and which by its terms precludes the existence of
Company securities convertible into Shares; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
The
Company’s Board of Directors shall approve any merger, consolidation, or like
business combination or reorganization of the Company, the consummation of
which would result in the occurrence of any event described in Article
2.16(b) above. 

          2.17
“Fair Market Value” means, as of any date, the
per Share value determined as follows, in accordance with applicable provisions
of Section 409A of the Code:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
The average of the high and low trading
price on the New York Stock Exchange or any other recognized stock exchange
or any established over-the-counter trading system on which Shares are
readily tradable, or if no trades were made on any such day, the immediately
preceding day on which trades were made; or

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
In the
absence of an established market for the Shares of the type described in (a)
above, the per Share Fair Market Value thereof shall be determined by the
Committee in good faith and in accordance with applicable provisions of
Section 409A of the Code.

          2.18
“Incentive Stock Option” means an Option
intended to meet the requirements of an incentive stock option as defined in
Section 422 of the Code and designated as an Incentive Stock Option.

          2.19
“New York Stock
Exchange” means the
New York Stock Exchange or any successor body carrying on the business of the
New York Stock Exchange.

          2.20
“Non-Employee Director” means a person defined
in Rule 16b-3(b)(3) promulgated by the Securities and Exchange Commission under
the Exchange Act, or any successor definition adopted by the Securities and
Exchange Commission.

          2.21
“Nonqualified Stock Option” means an Option
that is not an Incentive Stock Option.

          2.22
“Other Stock-Based Award” means any right
granted under Article 9 of the Plan.

          2.23
“Option” means any stock option granted from
time to time under Article 6 of the Plan.

          2.24
“Option Price” means the purchase price per
Share subject to an Option, as determined pursuant to Section 6.2 of the Plan.

          2.25
“Outside Director” means a member of the Board
who is an “outside director” within the meaning of Section 162(m) of the Code
and the regulations promulgated thereunder.

          2.26
“Participant” means any eligible person as set
forth in Section 4.1 to whom an Award is granted.

          2.27
“Performance-Based Compensation” means
compensation under an Award that is intended to constitute “Other
Performance-Based Compensation” within the meaning of Section 162(m) of the
Code or any successor provision or “qualified performance-based compensation”
within the meaning of the regulations promulgated under Section 162(m) of the
Code or any successor provision.

          2.28
“Performance Measures” means measures as
described in Section 10.1 on which the performance goals are based in order to
qualify Awards as Performance-Based Compensation.

          2.29
“Performance Period” means the period of time
during which the performance goals must be met in order to determine the degree
of payout and/or vesting with respect to an Award.

          2.30
“Person” shall have the meaning ascribed to
such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and
14(d) thereof, including a “group” as defined in Section 13(d) thereof.

          2.31
“Plan” means the Crimson Wine Group 2013
Omnibus Incentive Plan.

          2.32
“Plan Year” means the applicable fiscal year of
the Company.

          2.33
“Restricted Stock” means any Award granted
under Article 8. 

          2.34
“Restriction Period” means the period during
which Restricted Stock awarded under Article 8 of the Plan is subject to
forfeiture. 

          2.35
“Service” means service as an Employee or
Director. 

          2.36
“Share” means a common share of the Company,
par value $0.01 per share, or such other class or kind of shares or other
securities resulting from the application of Section 12.1.

          2.37
“Stock Appreciation Right” means any right
granted under Article 7.

          2.38
“Subsidiary” means any corporation (other than
the Company) in an unbroken chain of corporations beginning with the Company
(or any parent of the Company) if each of the corporations, other than the last
corporation in each unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.

          2.39
“Ten Percent Shareholder” means a person who on
any given date owns, either directly or indirectly (taking into account the
attribution rules contained in Section 424(d) of the Code), stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company or a Subsidiary or Affiliate. 

Article 3. Administration

          3.1
Authority of the Committee. The Plan shall be
administered by the Committee, which shall have full power to interpret and
administer the Plan and Award Agreements and full authority to select the
Employees and Directors to whom Awards will be granted, and to determine the
type and amount of Awards to be granted to each such Employee or Director, and
the terms and conditions of Awards and Award Agreements. Without limiting the
generality of the foregoing, the Committee may, in its sole discretion but
subject to the limitations in Article 13, clarify, construe or resolve any
ambiguity in any provision of the Plan or any Award Agreement, extend the term
or period of exercisability of any Awards, or waive any terms or conditions
applicable to any Award. Awards may, in the sole discretion of the Committee,
be made under the Plan in assumption of, or in substitution for, outstanding
awards previously granted by the Company or any of its Subsidiaries or Affiliates
or a company acquired by the Company or with which the Company combines. The
Committee shall have full and exclusive discretionary power to adopt rules,
forms, instruments, and guidelines for administering the Plan or any subplans
as the Committee deems necessary or proper. Notwithstanding anything in this
Section 3.1 to the contrary, the Board, or any other committee or sub-committee
established by the Board, is hereby authorized (in addition to any necessary
action by the Committee) to grant or approve Awards as necessary to satisfy the
requirements of Section 16 of the Exchange Act and the rules and regulations
thereunder and to act in lieu of the Committee with respect to Awards made to
Non-Employee Directors under the Plan. All actions taken and all interpretations
and determinations made by the Committee or by the Board (or any other
committee or sub-committee thereof), as applicable, shall be final and binding
upon the Participants, the Company, and all other interested individuals.

          3.2
Delegation. The Committee may delegate to one or more
of its members, one or more officers of the Company or any of its Subsidiaries
or Affiliates, and one or more agents or advisors such administrative duties or
powers as it may deem advisable; provided that the Committee shall not
delegate to officers of the Company or any of its Subsidiaries or Affiliates
the power to make grants of Awards to officers of the Company or any of its
Subsidiaries or Affiliates; provided, further, that no delegation
shall be permitted under the Plan that is prohibited by applicable law.

Article 4. Eligibility and Participation

          4.1
Eligibility. Participants will consist of such
Employees and Directors as the Committee in its sole discretion determines and
whom the Committee may designate from time to time to receive Awards.
Designation of a Participant in any year shall not require the Committee to
designate such person to receive an Award in any other year or, once
designated, to receive the same type or amount of Award as granted to the
Participant in any other year. 

          4.2
Type of Awards. Awards under the Plan may be granted
in any one or a combination of: (a) Options, (b) Stock Appreciation Rights, (c)
Restricted Stock, (d) Other Stock-Based Awards, and (e) Performance-Based
Compensation Awards. The Plan sets forth the performance goals and procedural
requirements to permit the Company to design Awards that qualify as
Performance-Based Compensation, as described in Article 10 hereof. Awards
granted under the Plan shall be evidenced by Award Agreements (which need not
be identical) that provide additional terms and conditions associated with such
Awards, as determined by the Committee in its sole discretion; provided,
however,
that in the event of any conflict between the provisions of the Plan and any
such Award Agreement, the provisions of the Plan shall prevail.

Article 5. Shares Subject to the Plan and Maximum
Awards

          5.1
Number of Shares Available for Awards.

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
(i) General. Subject
to adjustment as provided in Article 12 hereof, the maximum number of Shares
available for issuance to Participants pursuant to Awards under the Plan
shall be 1,000,000 Shares. The number of Shares available for granting Incentive
Stock Options under the Plan shall not exceed 1,000,000 Shares, subject to Article 12
hereof and the provisions of Sections 422 or 424 of the Code and any
successor provisions. The Shares available for issuance under the Plan may
consist, in whole or in part, of authorized and unissued Shares or treasury
Shares. Any Shares delivered to the Company as part or full payment for the
purchase price of an Award, or to the extent the Committee determines that
the availability of Incentive Stock Options will not be compromised, or to
satisfy the Company’s withholding obligation with respect to an Award, shall
again be available for Awards; provided, however, that such Shares
shall continue to be counted as outstanding for purposes of determining
whether an Annual Award Limit has been attained.

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Annual Award
Limits. The maximum number of Shares with respect to
Awards denominated in Shares that may be granted to any Participant in any
Plan Year shall be 600,000 Shares, subject to adjustments made in accordance
with Article 12 hereof (the “Annual Award Limit”).

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Additional Shares.
In the event that any outstanding Award expires, is forfeited, cancelled or
otherwise terminated without the issuance of Shares or is otherwise settled
for cash, the Shares subject to such Award, to the extent of any such
forfeiture, cancellation, expiration, termination or

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
settlement for cash,
shall again be available for Awards. If the Committee authorizes the
assumption under this Plan, in connection with any merger, consolidation,
acquisition of property or stock, or reorganization, of awards granted under
another plan, such assumption shall not (i) reduce the maximum number of
Shares available for issuance under this Plan or (ii) be subject to or
counted against a Participant’s Annual Award Limit.

Article 6. Stock Options

          6.1
Grant of Options. The Committee is hereby authorized
to grant Options to Participants. Each Option shall permit a Participant to
purchase from the Company a stated number of Shares at an Option Price
established by the Committee, subject to the terms and conditions described in
this Article 6 and to such additional terms and conditions, as established by
the Committee, in its sole discretion, that are consistent with the provisions
of the Plan. Options shall be designated as either Incentive Stock Options or
Nonqualified Stock Options, provided that Options granted to Directors shall be
Nonqualified Stock Options. An Option granted as an Incentive Stock Option
shall, to the extent it fails to qualify as an Incentive Stock Option, be
treated as a Nonqualified Stock Option. Neither the Committee nor the Company
or any of its Affiliates shall be liable to any Participant or to any other
Person if it is determined that an Option intended to be an Incentive Stock
Option does not qualify as an Incentive Stock Option. Options shall be
evidenced by Award Agreements which shall state the number of Shares covered by
such Option. Such agreements shall conform to the requirements of the Plan, and
may contain such other provisions, as the Committee shall deem advisable.

          6.2
Terms of Option Grant. The Option Price shall be
determined by the Committee at the time of grant, but shall not be less than
the Fair Market Value of a Share on the date of grant. In the case of any Incentive
Stock Option, the Option Price shall be (i) if granted to a person other
than a Ten Percent shareholder, not less than 100% of the Fair Market Value of
a Share on the date of grant or (ii) if granted to a Ten Percent
Shareholder, not be less than 110% of the Fair Market Value of a Share on the
date of grant. 

          6.3
Option Term. The term of each Option shall be
determined by the Committee at the time of grant and shall be stated in the
Award Agreement, but in no event shall such term be greater than ten years (or,
in the case on an Incentive Stock Option granted to a Ten Percent Shareholder,
five (5) years).

          6.4
Time of Exercise. Options granted under this Article 6
shall be exercisable based on the passage of time as the Committee shall in
each instance approve, which terms and restrictions need not be the same for
each grant or for each Participant.

          6.5
Method of Exercise. Except as otherwise provided in
the Plan or in an Award Agreement, an Option may be exercised for all, or from
time to time any part, of the Shares for which it is then exercisable. For
purposes of this Article 6, the exercise date of an Option shall be the later
of the date a notice of exercise is received by the Company and, if applicable,
the date payment is received by the Company pursuant to clauses (i), (ii),
(iii) or (iv) in the following sentence (including the applicable tax
withholding pursuant to Section 14.3 of the Plan). The aggregate Option Price
for the Shares as to which an Option is exercised shall be paid to the 

Company in full at the time of exercise at the election of the
Participant (i) in cash or its equivalent (e.g., by cashier’s check), (ii) to
the extent permitted by the Committee, in Shares (whether or not previously
owned by the Participant) having a Fair Market Value equal to the aggregate
Option Price for the Shares being purchased and satisfying such other
requirements as may be imposed by the Committee, (iii) partly in cash and, to
the extent permitted by the Committee, partly in such Shares (as described in
(ii) above) or (iv) if there is a public market for the Shares at such time,
subject to such requirements as may be imposed by the Committee, through the
delivery of irrevocable instructions to a broker to sell Shares obtained upon
the exercise of the Option and to deliver promptly to the Company an amount out
of the proceeds of such sale equal to the aggregate Option Price for the Shares
being purchased. The Committee may prescribe any other method of payment that
it determines to be consistent with applicable law and the purpose of the Plan.

          6.6
Limitations on Incentive Stock Options. Incentive
Stock Options may be granted only to employees of the Company or of a “parent
corporation” or “subsidiary corporation” (as such terms are defined in Section
424 of the Code) at the date of grant. The aggregate Fair Market Value
(generally determined as of the time the Option is granted) of the Shares with
respect to which Incentive Stock Options are exercisable for the first time by
a Participant during any calendar year under all plans of the Company and of
any “parent corporation” or “subsidiary corporation” shall not exceed one
hundred thousand dollars ($100,000), or the Option shall be treated as a
Nonqualified Stock Option. For purposes of the preceding sentence, Incentive
Stock Options will be taken into account generally in the order in which they
are granted. Each provision of the Plan and each Award Agreement relating to an
Incentive Stock Option shall be construed so that each Incentive Stock Option
shall be an incentive stock option as defined in Section 422 of the Code, and
any provisions of the Award Agreement thereof that cannot be so construed shall
be disregarded.

Article 7. Stock Appreciation Rights

          7.1
Grant of Stock Appreciation Rights. The Committee is
hereby authorized to grant Stock Appreciation Rights to Participants, including
a grant of Stock Appreciation Rights in tandem with any Option at the same time
such Option is granted (a “Tandem SAR”). Stock Appreciation Rights shall
be evidenced by Award Agreements that shall conform to the requirements of the
Plan and may contain such other provisions, as the Committee shall deem
advisable. Subject to the terms of the Plan and any applicable Award Agreement,
a Stock Appreciation Right granted under the Plan shall confer on the holder
thereof a right to receive, upon exercise thereof, the excess of (a) the
Fair Market Value of a specified number of Shares on the date of exercise over
(b) the grant price of the right as specified by the Committee on the date of
the grant. Such payment may be in the form of cash, Shares, other property or
any combination thereof, as the Committee shall determine in its sole
discretion.

          7.2
Terms of Stock Appreciation Right. Subject to the
terms of the Plan and any applicable Award Agreement, the grant price (which
shall not be less than 100% of the Fair Market Value of a Share on the date of
grant), term, methods of exercise, methods of settlement, and any other terms
and conditions of any Stock Appreciation Right shall be as determined by the
Committee. The Committee may impose such other conditions or restrictions on
the exercise 

of any Stock Appreciation Right as it may deem appropriate. No Stock
Appreciation Right shall have a term of more than 10 years from the date of
grant.

          7.3
Tandem Stock Appreciation Rights and Options. A Tandem
SAR shall be exercisable only to the extent that the related Option is
exercisable and shall expire no later than the expiration of the related
Option. Upon the exercise of all or a portion of a Tandem SAR, a Participant
shall be required to forfeit the right to purchase an equivalent portion of the
related Option (and, when a Share is purchased under the related Option, the
Participant shall be required to forfeit an equivalent portion of the Stock
Appreciation Right). 

Article 8. Restricted Stock 

          8.1
Grant of Restricted Stock. An Award of Restricted
Stock is a grant by the Committee of a specified number of Shares to the
Participant, which Shares are subject to forfeiture upon the occurrence of
specified events. Participants shall be awarded Restricted Stock in exchange
for consideration not less than the minimum consideration required by
applicable law. Restricted Stock shall be evidenced by an Award Agreement,
which shall conform to the requirements of the Plan and may contain such other
provisions, as the Committee shall deem advisable.

          8.2
Terms of Restricted Stock Awards. Each Award Agreement
evidencing a Restricted Stock grant shall specify the period(s) of restriction,
the number of Shares of Restricted Stock subject to the Award, the performance,
employment or other conditions (including the termination of a Participant’s
Service whether due to death, disability or other cause) under which the
Restricted Stock may be forfeited to the Company and such other provisions as
the Committee shall determine. Any Restricted Stock granted under the Plan
shall be evidenced in such manner as the Committee may deem appropriate,
including book-entry registration or issuance of a stock certificate or
certificates (in which case, the certificate(s) representing such Shares shall
be legended as to sale, transfer, assignment, pledge or other encumbrances
during the Restriction Period and deposited by the Participant, together with a
stock power endorsed in blank, with the Company, to be held in escrow during
the Restriction Period). At the end of the Restriction Period, the restrictions
imposed hereunder and under the Award Agreement shall lapse with respect to the
number of Shares of Restricted Stock as determined by the Committee, and the
legend shall be removed and such number of Shares delivered to the Participant
(or, where appropriate, the Participant’s legal representative). 

          8.3
Voting and Dividend Rights. The Committee shall
determine and set forth in a Participant’s Award Agreement whether or not a
Participant holding Restricted Stock granted hereunder shall have the right to
exercise voting rights with respect to the Restricted Stock during the
Restriction Period (the Committee may require a Participant to grant an
irrevocable proxy and power of substitution) and have the right to receive
dividends on the Restricted Stock during the Restriction Period (and, if so, on
what terms). 

          8.4
Performance Goals. The Committee may condition the
grant of Restricted Stock or the expiration of the Restriction Period upon the
Participant’s achievement of one or more performance goal(s) specified in the
Award Agreement. If the Participant fails to achieve the specified performance
goal(s) as determined by the Committee in its sole discretion, subject to 

Article 10 hereto, the Committee shall not grant the Restricted Stock
to such Participant or the Participant shall forfeit the Award of Restricted
Stock to the Company, as applicable. 

          8.5
Section 83(b) Election. If a Participant makes an
election pursuant to Section 83(b) of the Code concerning Restricted Stock, the
Participant shall be required to file promptly a copy of such election with the
Company. 

Article 9. Other Stock-Based Awards

          The
Committee, in its sole discretion, may grant Awards of Shares and Awards that
are valued, in whole or in part, by reference to, or are otherwise based on the
Fair Market Value of, Shares (the “Other Stock-Based Awards”), including
without limitation, restricted stock units and other phantom awards. Such Other
Stock-Based Awards shall be in such form, and dependent on such conditions, as
the Committee shall determine, including, without limitation, the right to
receive one or more Shares (or the equivalent cash value of such Shares) upon
the completion of a specified period of Service, the occurrence of an event
and/or the attainment of performance objectives, as determined by the Committee
in its sole discretion, subject to Article 10 hereto. Other Stock-Based Awards
may be granted alone or in addition to any other Awards granted under the Plan.
Subject to the provisions of the Plan, the Committee shall determine to whom
and when Other Stock-Based Awards will be made, the number of Shares to be
awarded under (or otherwise related to) such Other Stock-Based Awards, whether
such Other Stock-Based Awards shall be settled in cash, Shares or a combination
of cash and Shares, and all other terms and conditions of such Awards
(including, without limitation, the vesting provisions thereof and provisions
ensuring that all Shares so awarded and issued shall be fully paid and
non-assessable). The vesting period for Other Stock-Based Awards shall be as
determined by the Committee.

Article 10. Performance-Based Compensation

          To the
extent permitted by Section 162(m) of the Code, the Committee is authorized to
design any Award so that the amounts or Shares payable or distributed pursuant
to such Award are treated as “qualified performance-based compensation” within
the meaning of Section 162(m) of the Code and related regulations.

          10.1
Performance Measures. The vesting, crediting and/or
payment of Performance-Based Compensation shall be based on the achievement of
objective performance goals based on one or more of the following Performance
Measures (or such other Performance Measures as may be determined by the
Committee): (i) consolidated earnings before or after taxes (including earnings
before interest, taxes, depreciation and amortization); (ii) net income; (iii)
operating income; (iv) earnings per Share; (v) book value per Share; (vi)
return on shareholders’ equity; (vii) expense management; (viii) return on
investment; (ix) improvements in capital structure; (x) profitability of an
identifiable business unit or product; (xi) maintenance or improvement of
profit margins; (xii) stock price; (xiii) market share; (xiv) revenues or
sales; (xv) costs; (xvi) cash flow; (xvii) working capital, (xviii) return on
assets, (xix) store openings or refurbishment plans, (xx) staff training, and
(xxi) corporate social responsibility policy implementation. 

                    Any
Performance Measure may be (i) used to measure the performance of the Company
and/or any of its Subsidiaries or Affiliates as a whole, any business unit
thereof or any combination thereof against any goal including past performance
or (ii) compared to the performance of a group of comparable companies, or a
published or special index, in each case that the Committee, in its sole
discretion, deems appropriate. Subject to Section 162(m) of the Code, the Committee may adjust the performance
goals (including to prorate goals and payments for a partial Plan Year) in the
event of the following occurrences: (i) non-recurring events, including
divestitures, spin-offs, or changes in accounting standards or policies; (ii)
mergers and acquisitions; and (iii) financing transactions, including selling
accounts receivable.

          10.2
Establishment of Performance Goals for Covered Employees. No
later than ninety (90) days after the commencement of a Performance Period (but
in no event after twenty-five percent (25%) of such Performance Period has
elapsed), the Committee shall establish in writing: (a) the performance goals
applicable to the Performance Period; (b) the Performance Measures to be
used to measure the performance goals in terms of an objective formula or
standard; (c) the formula for computing the amount of compensation payable to
the Participant if such performance goals are obtained; and (d) the
Participants or class of Participants to which such performance goals apply.
The outcome of such performance goals must be substantially uncertain when the
Committee establishes the goals. 

          10.3
Adjustment of Performance-Based Compensation. Awards
that are designed to qualify as Performance-Based Compensation may not be
adjusted upward. The Committee shall retain the sole discretion to adjust such
Awards downward, either on a formula or discretionary basis or any combination,
as the Committee determines.

          10.4
Certification of Performance. Except for Awards that
pay compensation attributable solely to an increase in the value of Shares, no
Award designed to qualify as Performance-Based Compensation shall be vested,
credited or paid, as applicable, with respect to any Participant until the
Committee certifies in writing that the performance goals and any other
material terms applicable to such Performance Period have been satisfied.

          10.5
Each provision of the Plan and each Award Agreement
relating to Performance-Based Compensation shall be construed so that each such
Award shall be “qualified performance-based compensation” within the meaning of
Section 162(m) of the Code and related regulations, and any provisions of the
Award Agreement thereof that cannot be so construed shall be disregarded. 

Article 11. Compliance with Section 409A of the Code
and Section 457A of the Code

          11.1
General. The Company intends that any Awards be
structured in compliance with, or to satisfy an exemption from, Section 409A of
the Code and all regulations, guidance, compliance programs and other
interpretative authority thereunder (“Section 409A”), such that there
are no adverse tax consequences, interest, or penalties as a result of the
payments. Notwithstanding the Company’s intention, in the event any Award is
subject to Section 409A and potentially subject to any adverse tax consequences
thereunder, the Committee may, in its sole discretion and without a
Participant’s prior consent, amend the Plan and/or Awards, adopt policies and
procedures, or take any other actions (including amendments, policies,
procedures 

and actions with retroactive effect) as are necessary or appropriate to
(a) exempt the Plan and/or any Award from the application of
Section 409A, (b) preserve the intended tax treatment of any such Award
and minimize any adverse tax consequences of such Award, or (c) comply
with the requirements of Section 409A, including without limitation any
such regulations guidance, compliance programs and other interpretative
authority that may be issued after the date of the grant. 

          11.2
Payments to Specified Employees. Notwithstanding any
contrary provision in the Plan or Award Agreement, any payment(s) of
nonqualified deferred compensation (within the meaning of Section 409A) that
are otherwise required to be made under the Plan to a “specified employee” (as
defined under Section 409A) as a result of his or her separation from
service (other than a payment that is not subject to Section 409A) shall
be delayed for the first six (6) months following such separation from
service (or, if earlier, the date of death of the specified employee) and shall
instead be paid (in a manner set forth in the Award Agreement) on the payment
date that immediately follows the end of such six-month period or as soon as
administratively practicable thereafter. 

          11.3
Separation from Service. A termination of employment
shall not be deemed to have occurred for purposes of any provision of the Plan
or any Award Agreement providing for the payment of any amounts or benefits
that are considered nonqualified deferred compensation under Section 409A upon
or following a termination of employment, unless such termination is also a
“separation from service” within the meaning of Section 409A and the payment
thereof prior to a “separation from service” would violate Section 409A. For
purposes of any such provision of the Plan or any Award Agreement relating to
any such payments or benefits, references to a “termination,” “termination of
employment” or like terms shall mean “separation from service.”

          11.4
Section 457A. The Company intends that any Awards be
structured in compliance with, or to satisfy an exemption from, Section 457A of
the Code (“Section 457A”) and all regulations, guidance, compliance
programs and other interpretative authority thereunder, such that there are no
adverse tax consequences, interest, or penalties as a result of the payments.
Notwithstanding the Company’s intention, in the event any Award is subject to
Section 457A and potentially subject to any adverse tax consequences
thereunder, the Committee may, in its sole discretion and without a
Participant’s prior consent, amend the Plan and/or Awards, adopt policies and
procedures, or take any other actions (including amendments, policies,
procedures and actions with retroactive effect) as are necessary or appropriate
to (a) exempt the Plan and/or any Award from the application of Section 457A,
(b) preserve the intended tax treatment of any such Award and minimize any
adverse tax consequences of such Award, or (c) comply with the requirements of
Section 457A, including without limitation any such regulations, guidance,
compliance programs and other interpretative authority that may be issued after
the date of the grant.

Article 12. Adjustments

          12.1
Adjustments in Authorized Shares. In the event of any
corporate event or transaction involving the Company, a Subsidiary and/or an
Affiliate (including, but not limited to, a change in the Shares of the Company
or the capitalization of the Company) such as a 

merger, consolidation, reorganization, recapitalization, separation,
stock dividend, stock split, reverse stock split, split up, spin-off,
combination of Shares, exchange of Shares, dividend in kind, amalgamation, or
other like change in capital structure (other than normal cash dividends to
shareholders of the Company), or any similar corporate event or transaction,
the Committee, to prevent dilution or enlargement of Participants’ rights under
the Plan, shall substitute or adjust, in its sole discretion, the number and
kind of Shares or other property that may be issued under the Plan or under
particular forms of Awards, the number and kind of Shares or other property
subject to outstanding Awards, the Option Price, grant price or purchase price
applicable to outstanding Awards, the Annual Award Limits, and/or other value
determinations applicable to the Plan or outstanding Awards. 

          12.2
Change of Control. Upon the occurrence of a Change of
Control after the Effective Date, unless otherwise specifically prohibited
under applicable laws or by the rules and regulations of any governing
governmental agencies or national securities exchanges, or unless the Committee
shall determine otherwise in the Award Agreement, the Committee is authorized
(but not obligated) to make adjustments in the terms and conditions of
outstanding Awards, including without limitation the following (or any
combination thereof): (i) continuation or assumption of such outstanding Awards
under the Plan by the Company (if it is the surviving company or corporation)
or by the surviving company or corporation or its parent; (ii) substitution by
the surviving company or corporation or its parent of awards with substantially
the same terms for such outstanding Awards; (iii) accelerated exercisability,
vesting and/or lapse of restrictions under outstanding Awards immediately prior
to the occurrence of such event; (iv) upon written notice, provide that any
outstanding Awards must be exercised, to the extent then exercisable, during a
reasonable period of time immediately prior to the scheduled consummation of
the event, or such other period as determined by the Committee (contingent upon
the consummation of the event), and at the end of such period, such Awards
shall terminate to the extent not so exercised within the relevant period; and
(v) cancellation of all or any portion of outstanding Awards for fair value (as
determined in the sole discretion of the Committee and which may be zero)
which, in the case of Options and Stock Appreciation Rights or similar Awards,
may equal the excess, if any, of the value of the consideration to be paid in
the Change of Control transaction to holders of the same number of Shares
subject to such Awards (or, if no such consideration is paid, Fair Market Value
of the Shares subject to such outstanding Awards or portion thereof being
canceled) over the aggregate Option Price or grant price, as applicable, with
respect to such Awards or portion thereof being canceled. 

          12.3
Extraordinary Event. Notwithstanding any other
provision of this Plan, if there is an Extraordinary Event with respect to the
Company, the Committee, in its sole discretion, may provide for accelerated
exercisability, vesting and/or lapse of restrictions of all then outstanding
Awards that have not vested or become exercisable at the time of such
Extraordinary Event; provided, that (A) any spin-off of a
division or subsidiary of the Company to its stockholders and (B) any event
that the Board of Directors determines not to be an Extraordinary Event with
respect to the Company, shall not constitute an Extraordinary Event with
respect to the Company. The Committee, in its sole discretion, may determine
that, upon the occurrence of an Extraordinary Event with respect to the
Company, each Award outstanding hereunder shall terminate within a specified
number of days after notice to the holder, and such holder shall receive with
respect to each Share that is subject to an Award (assuming no exercise) an
amount equal to (i) the excess of the Fair Market Value of such Share over the
exercise price per share of 

such Option or
Stock Appreciation Right (as the case may be), (ii) the Fair Market Value of
such Share in respect of a Restricted Stock Award, or (iii) such other amount
as determined by the Committee in accordance with the terms of the applicable
Award Agreement. Such amount is to be payable in cash, in one or more kinds of
property (including the property, if any, payable in the transaction, if any)
or in a combination thereof, as the Committee, in its sole discretion, shall
determine. The provisions contained in the preceding sentence shall be
inapplicable to an Award granted within six (6) months before the occurrence of
an Extraordinary Event if the holder of such Award is subject to the reporting
requirements of Section 16(a) of the Exchange Act and no exception from
liability under Section 16(b) of the Exchange Act is otherwise available to
such holder.

Article 13. Duration, Amendment, Modification,
Suspension, and Termination

          13.1
Duration of the Plan. Unless sooner terminated as
provided in Section 13.2, the Plan shall terminate on the tenth (10th)
anniversary of the Effective Date.

          13.2
Amendment, Modification, Suspension, and Termination of Plan.
The Committee may amend, alter, suspend, discontinue, or terminate (for
purposes of this Section 13.2, an “Action”) the Plan or any portion
thereof or any Award (or Award Agreement) thereunder at any time; provided
that no such Action shall be made, other than as permitted under Article 11 or
12, (i) without shareholder approval (A) if such approval is necessary to
comply with any tax or regulatory requirement applicable to the Plan, (B) if
such Action increases the number of Shares available under the Plan (other than
an increase permitted under Article 5 absent shareholder approval), (C) if such
Action results in a material increase in benefits permitted under the Plan (but
excluding increases that are immaterial or that are minor and to benefit the
administration of the Plan, to take account of any changes in legislation, or
to obtain or maintain favorable tax, exchange, or regulatory treatment for the
Company, a Subsidiary, and/or an Affiliate) or a change in eligibility
requirements under the Plan, or (D) for any Action that results in a reduction
of the Option Price or grant price per Share, as applicable, of any outstanding
Options or Stock Appreciation Rights or cancellation of any outstanding Options
or Stock Appreciation Rights in exchange for cash, or for other Awards, such as
other Options or Stock Appreciation Rights, with an Option Price or grant price
per Share, as applicable, that is less than such price of the original Options
or Stock Appreciation Rights, and (ii) without the written consent of the
affected Participant, if such Action would materially diminish the rights of
any Participant under any Award theretofore granted to such Participant under
the Plan; provided,
however,
that the Committee may amend the Plan, any Award or any Award Agreement without
such consent of the Participant in such manner as it deems necessary to comply
with applicable laws. 

Article 14. General Provisions

          14.1
No Right to Service. The granting of an Award under
the Plan shall impose no obligation on the Company, any Subsidiary or any
Affiliate to continue the Service of a Participant and shall not lessen or
affect any right that the Company, any Subsidiary or any Affiliate may have to
terminate the Service of such Participant. No Participant or other Person shall
have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Participants, or holders or beneficiaries of Awards.
The terms and conditions of 

Awards and the Committee’s determinations and interpretations with
respect thereto need not be the same with respect to each Participant (whether
or not such Participants are similarly situated).

          14.2
Settlement of Awards; Fractional Shares. Each Award
Agreement shall establish the form in which the Award shall be settled. The
Committee shall determine whether cash, Awards, other securities or other
property shall be issued or paid in lieu of fractional Shares or whether such
fractional Shares or any rights thereto shall be rounded, forfeited or
otherwise eliminated.

          14.3
Tax Withholding. The Company shall have the power and
the right to deduct or withhold automatically from any amount deliverable under
the Award or otherwise, or require a Participant to remit to the Company, the
minimum statutory amount to satisfy federal, state, and local taxes, domestic
or foreign, required by law or regulation to be withheld with respect to any
taxable event arising as a result of the Plan. With respect to required
withholding, Participants may elect (subject to the Company’s automatic
withholding right set out above), subject to the approval of the Committee, to
satisfy the withholding requirement, in whole or in part, by having the Company
withhold Shares having a Fair Market Value on the date the tax is to be
determined equal to the minimum statutory total tax that could be imposed on
the transaction. 

          14.4
No Guarantees Regarding Tax Treatment. Participants
(or their beneficiaries) shall be responsible for all taxes with respect to any
Awards under the Plan. The Committee and the Company make no guarantees to any
Person regarding the tax treatment of Awards or payments made under the Plan.
Neither the Committee nor the Company has any obligation to take any action to
prevent the assessment of any tax on any Person with respect to any Award under
Section 409A of the Code or Section 457A of the Code or otherwise and none of
the Company, any of its Subsidiaries or Affiliates, or any of their employees
or representatives shall have any liability to a Participant with respect
thereto.

          14.5
Non-Transferability of Awards. Unless otherwise
determined by the Committee, an Award shall not be transferable or assignable
by the Participant except in the event of his death (subject to the applicable
laws of descent and distribution) and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate. No transfer shall be
permitted for value or consideration. An award exercisable after the death of a
Participant may be exercised by the legatees, personal representatives or
distributees of the Participant. Any permitted transfer of the Awards to heirs
or legatees of the Participant shall not be effective to bind the Company
unless the Committee shall have been furnished with written notice thereof and
a copy of such evidence as the Committee may deem necessary to establish the
validity of the transfer and the acceptance by the transferee or transferees of
the terms and conditions hereof. 

          14.6
Conditions and Restrictions on Shares. The Committee
may impose such other conditions or restrictions on any Shares received in
connection with an Award as it may deem advisable or desirable. These
restrictions may include, but shall not be limited to, a requirement that the
Participant hold the Shares received for a specified period of time or a
requirement that a Participant represent and warrant in writing that the
Participant is acquiring the Shares for investment and without any present
intention to sell or distribute such Shares. The certificates 

for Shares may include any legend which the Committee deems appropriate
to reflect any conditions and restrictions applicable to such Shares.

          14.7
Compliance with Law. The granting of Awards and the
issuance of Shares under the Plan shall be subject to all applicable laws,
rules, and regulations, and to such approvals by any governmental agencies, or
any stock exchanges on which the Shares are admitted to trading or listed, as
may be required. The Company shall have no obligation to issue or deliver
evidence of title for Shares issued under the Plan prior to:

	
 

	
 

	
 

	
 

	
(a)

	
Obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and

	
 

	
 

	
 

	
 

	
(b)

	
Completion of any registration or other qualification of the Shares
under any applicable national, state or foreign law or ruling of any
governmental body that the Company determines to be necessary or advisable.

The restrictions contained in this Section 14.7 shall be in addition to
any conditions or restrictions that the Committee may impose pursuant to
Section 14.6. The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company’s
counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not
have been obtained. 

          14.8
Awards to Non-U.S. Employees or Directors. To comply
with the laws in countries other than the United States in which the Company or
any of its Subsidiaries or Affiliates operates or has Employees or Directors,
the Committee, in its sole discretion, shall have the power and authority to:

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Determine which Subsidiaries or Affiliates shall be covered by the
Plan;

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Determine which Employees or Directors outside the United States are
eligible to participate in the Plan;

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Modify the terms and conditions of any Award granted to Employees or
Directors outside the United States to comply with applicable foreign laws;

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
Take any action, before or after an Award is made, that it deems
advisable to obtain approval or comply with any necessary local government
regulatory exemptions or approvals; and

	
 

	
 

	
 

	
 

	
 

	
 

	
(e)

	
Establish subplans and modify exercise procedures and other terms and
procedures, to the extent such actions may be necessary or advisable. Any
subplans and modifications to Plan terms and procedures established under this
Section 14.8 by the Committee shall be attached to this Plan document as
appendices.

          14.9
Rights as a Shareholder. Except as otherwise provided
herein or in the applicable Award Agreement, a Participant shall have none of
the rights of a shareholder with respect to Shares covered by any Award until
the Participant becomes the record holder of such Shares.

          14.10
Severability. If any provision of the Plan or any
Award is or becomes or is deemed to be invalid, illegal, or unenforceable in
any jurisdiction, or as to any Person or Award, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to applicable laws, or if it
cannot be so construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Award, such
provision shall be stricken as to such jurisdiction, Person, or Award, and the
remainder of the Plan and any such Award shall remain in full force and effect.

          14.11
Unfunded Plan. Participants shall have no right,
title, or interest whatsoever in or to any investments that the Company or any
of its Subsidiaries or Affiliates may make to aid it in meeting its obligations
under the Plan. Nothing contained in the Plan, and no action taken pursuant to
its provisions, shall create or be construed to create a trust of any kind, or
a fiduciary relationship between the Company and any Participant, beneficiary,
legal representative, or any other Person. To the extent that any Person
acquires a right to receive payments from the Company under the Plan, such
right shall be no greater than the right of an unsecured general creditor of
the Company. All payments to be made hereunder shall be paid from the general
funds of the Company and no special or separate fund shall be established and
no segregation of assets shall be made to assure payment of such amounts. The
Plan is not subject to the U.S. Employee Retirement Income Security Act of
1974, as amended from time to time.

          14.12
No Constraint on Corporate Action. Nothing in the Plan
shall be construed to (a) limit, impair, or otherwise affect the Company’s
right or power to make adjustments, reclassifications, reorganizations, or
changes of its capital or business structure, or to merge or consolidate, or
dissolve, liquidate, sell, or transfer all or any part of its business or
assets, or (b) limit the right or power of the Company to take any action which
such entity deems to be necessary or appropriate.

          14.13
Successors. All obligations of the Company under the
Plan with respect to Awards granted hereunder shall be binding on any successor
to the Company, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business or assets of the Company.

          14.14
Governing Law. The Plan and each Award Agreement shall
be governed by the laws of the State of Delaware, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of the Plan
to the substantive law of another jurisdiction.

          14.15
Waiver of Certain Claims. By participating in the
Plan, the Participant waives all and any rights to compensation or damages in
consequence of the termination of his or her office or Service with the
Company, any Subsidiary or Affiliate for any reason whatsoever, whether
lawfully or otherwise, insofar as those rights arise or may arise from his or
her ceasing 

to have rights under the Plan as a result of such termination, or from
the loss or diminution in value of such rights or entitlements, including by
reason of the operation of the terms of the Plan, any determination by the
Board or Committee pursuant to a discretion contained in the Plan or any Award
Agreement or the provisions of any statute or law relating to taxation.

          14.16
Data Protection. By participating in the Plan, the
Participant consents to the collection, processing, transmission and storage by
the Company in any form whatsoever, of any data of a professional or personal
nature which is necessary for the purposes of introducing and administering the
Plan. The Company may share such information with any Subsidiary or Affiliate,
the trustee of any employee benefit trust, its registrars, trustees, brokers,
other third party administrator or any Person who obtains control of the
Company or acquires the company, undertaking or part-undertaking which employs
the Participant, wherever situated.

          14.17
Effective Date. The Plan shall be effective as of the
date of adoption by the Board, which date is set forth below (the “Effective
Date”).

          14.18
Shareholder Approval. The Plan will be submitted for
approval by the shareholders of the Company at an annual meeting or any special
meeting of shareholders of the Company within twelve (12) months of the
Effective Date. Any Awards granted under the Plan prior to such approval of
shareholders shall be effective as of the date of grant, but no such Award may
be exercised or settled and no restrictions relating to any Award may lapse
prior to such shareholder approval, and if shareholders fail to approve the
Plan as specified hereunder, the Plan and any Award shall be terminated and
cancelled without consideration. 

*               *               *

          This
Plan was duly adopted and approved by the Board of Directors of the Company by
resolution at a meeting held on the 1st day of February, 2013.EXHIBIT 10.29

 

Confidential: Privileged and Confidential

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”), dated as of October 24, 2012, by and between Shire Pharmaceuticals, LLC., a Delaware limited liability company (the “Company”), and Flemming Ornskov (“Executive”). This Agreement shall become effective on the date on which Executive’s employment with the Company commences (the “Effective Date”), which date shall be communicated to the Company by Executive and shall not be later than May 1, 2013.

 

BACKGROUND

 

WHEREAS, the Company and Executive wish to set forth and confirm the terms and conditions of Executive’s employment by the Company as hereinafter set forth.

 

NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants and agreements hereinafter set forth, and intending to be legally bound, the parties hereto hereby agree as follows:

 

1           Employment.

 

1.1        Executive here by accepts employment with the Company in accordance with the terms and conditions set forth in this Agreement. Upon the Effective Date, Executive shall serve as the Chief Executive Officer Designate of Shire plc in accordance with the terms and conditions set forth in this Agreement. On the date determined by the Board of Directors of Shire plc (the “Board”) (which date shall be not later than six months after the Effective Date), Executive shall be appointed to serve as the Chief Executive Officer of Shire plc, provided that Executive is still employed by Shire (as defined in Section 3.2 below) on such date and notice of termination has not been provided prior to such date. Following Executive’s appointment as Chief Executive Officer of Shire plc, Executive shall cease to serve as the Chief Executive Officer Designate of Shire plc. Effective as of the Effective Date, in connection with Executive’s appointment to the position of Chief Executive Officer Designate and subsequently Chief Executive Officer of Shire plc, Executive shall be appointed to the Board; provided, however, that Executive’s continued service on the Board shall be subject to approval by the shareholders of Shire plc at the applicable shareholder meetings. Executive’s employment with Shire is at all times expressly conditioned on his obtaining and maintaining all required authorizations and documents necessary for him to legally work as a full-time employee in the United States. The Company and Executive shall each use their best efforts to obtain authorization for Executive to legally work as a full-time employee in the United States. In addition, the Company shall promptly reimburse Executive for all reasonable costs and expenses 

 

  

  

  

 

he incurs in attempting to receive authorization to legally work as a full-time employee in the United States. Executive further acknowledges that his position will require travel and performance of work outside of the United States. As a result, the Company and Executive shall each use their best efforts to obtain authorization for Executive to legally work in any such non-United States jurisdiction and the Company shall promptly reimburse Executive for all reasonable costs and expenses he incurs in attempting to receive authorization to legally work in such jurisdictions. Executive agrees to promptly notify the Board of becoming aware of any reason that would preclude his ability to legally perform any of his duties. Executive represents that he is not bound by or party to any employment contract, restrictive covenant or other restriction (contractual or otherwise) (collectively, the “Existing RC Agreements”) preventing or impairing him from entering into employment with or carrying out his responsibilities for Shire under this Agreement or otherwise, or which is in any way inconsistent with the terms of this Agreement.

 

1.2.       Notwithstanding Section 1.1 above, the parties hereto agree that if Executive’s authorization to work in the United States is delayed despite Executive’s best efforts to obtain such authorization, Executive’s employment shall commence at the time contemplated by this Agreement, but the Company may assign this Agreement to an Affiliated Company (as defined in Section 3.2 below) outside of the United States. In such event, Executive’s legal employer shall be such Affiliated Company (although the Company shall continue to be secondarily liable for its obligations under this Agreement). On and after the date on which Executive is legally authorized to work in the United States (and assuming no earlier termination of employment has occurred), such Affiliated Company shall assign this Agreement to the Company and Executive’s legal employer shall thereafter be the Company. Executive hereby consents to any such assignment and waives any claims he may have relating thereto.

 

2           Term of Agreement and Employment. The term of this Agreement shall commence on the Effective Date and shall continue until Executive’s employment is terminated as provided in Section 9 hereof (the “Employment Period”); provided, however, that the Company’s payment obligations in Section 9 and the provisions of Sections 5,6,7,8, 9.5, 9.6, 10 and 11 shall survive the termination of this Agreement and Executive’s employment. In the event that Executive’s employment hereunder has not commenced as of May 1, 2013, this Agreement shall be null and void ab initio and neither the Company, Shire plc nor any Affiliated Company shall have any liabilities or obligations hereunder.

 

3           Duties and Responsibilities.

3.1        In Executive’s capacity as Chief Executive Officer Designate of Shire plc, Executive shall report to the Chief Executive Officer of Shire plc. In Executive’s capacity as Chief Executive Officer of Shire plc, Executive shall report to the Chairman of the Board and shall owe his responsibilities to, and take direction from, the full Board. In his capacity as Chief Executive Officer of Shire plc, Executive shall have the customary powers, responsibilities and authorities of chief executive officers of corporations of the size, type and nature of Shire plc, subject to direction of the Board as provided in the immediately preceding sentence. In performing Executive’s duties and responsibilities hereunder, Executive shall (i) faithfully and diligently perform such duties and exercise such powers consistent with his position as the Board and, for such period that Executive is serving as Chief Executive Officer Designate of Shire plc, the Chief Executive Officer of Shire plc, may from time to time assign to or confer upon him in connection with the business of Shire; (ii) protect, promote, develop and extend the business interests and reputation of Shire; (iii) conform to and comply with the lawful and reasonable directions of the Board that are

 

  

  

  

 

consistent with his position and, for such period that Executive is serving as the Chief Executive Officer Designate of Shire plc, the Chief Executive Officer of Shire plc; (iv) upon receiving reasonable notice promptly give (in writing if so requested) to the Board and, for such period that Executive is serving as Chief Executive Officer Designate of Shire plc, the Chief Executive Officer of Shire plc, all such information, explanations and assistance as it or he may require in connection with the business and affairs of Shire for which he is required to perform duties and which are consistent with his position; (v) comply with Shire’s Code of Ethics Policy; (vi) in relation to any dealings in securities, comply with all laws affecting dealings in the securities of such companies and all regulations of any relevant stock exchanges on which such dealings take place; (vii) not directly or indirectly procure, accept or obtain for his own benefit (or for the benefit of any other person) any payment, rebate, discount, commission, vouchers, gift, entertainment or other benefit from any third party in respect of any business transacted or proposed to be transacted (excluding air miles or similar vouchers from other such schemes) (whether or not by him) by or on behalf of Shire (“Gratuities”); (viii) observe the terms of any policy issued by Shire in relation to Gratuities; and (ix) promptly disclose and account to Shire for any Gratuities received by him (or by any other person on his behalf or at his instruction). During the Employment Period, Executive shall also serve as a director or officer (without additional compensation) of the Company or any Affiliated Company as may be determined by the Board from time to time.

 

3.2           Executive shall devote all of Executive’s business time, attention and skill to the business and interests of Shire plc, the Company and any company or entity which from time to time, directly or indirectly owns, is owned by or is under common ownership with Shire plc (each an “Affiliated Company” and, together with the Company and Shire plc, collectively “Shire”) in a proper and efficient manner, and shall further and promote the business of Shire. Except as otherwise specifically provided in Section 3.5 hereof, during the Employment Period, Executive may not be employed or engaged in any other business (whether paid or unpaid), including serving on any board of directors or similar governing bodies (other than a board of Shire) without first obtaining the Board’s prior written consent; provided, however, that nothing here in shall limit or restrict Executive from engaging in charitable or civic activities (e.g., coaching children’s soccer) or from providing unpaid assistance to friends and family members, provided that such activities do not in any material respect interfere with Executives duties, responsibilities or obligations to Shire.

 

3.3           Subject to Section 1.2, Executive’s place of work shall initially be at the Company’s offices in Wayne, Pennsylvania, or at such other place to which such executive offices may be relocated from time to time. Subject to Section 1.2, it is required that Executive would physically work out of such offices until Executive is appointed as Chief Executive Officer of Shire plc, at which point, a permanent US-based location (either Wayne, Pennsylvania or Lexington, Massachusetts) will be determined by the Board after taking into account the recommendation of Executive. The Executive will permanently relocate to this US-based location within twelve months after the Effective Date, or within six months after the determination of his permanent US-based location, whichever is later. Provided that Executive uses reasonable efforts to relocate to the area which the Board designates as his permanent US-based location (as described above) as promptly as practicable after such designation, the Company shall reimburse the Executive for reasonable temporary living

 

  

  

  

 

expenses consistent with his position (excluding meals) until he relocates to such area, including temporary housing, travel expenses for visits to Executive’s family once every month, and the cost of a rental car (excluding private fuel). The Company shall also reimburse Executive for the reasonable moving expenses incurred by Executive in connection with his move to his temporary residence in the Wayne, Pennsylvania area and to his permanent residence in either the Wayne, Pennsylvania area or the Lexington, Massachusetts area, in each case, in accordance with Shire’s relocation policy that is then in effect and covering Executive. Should Executive’s principal place of work change, Executive shall be entitled to all benefits under the Shire relocation policy that is in effect and covering Executive at such time (it is acknowledged that any such change between the Lexington, Massachusetts area and the Wayne, Pennsylvania area shall not give rise to a constructive termination). Executive understands that he shall be required in the performance of his duties to travel to such places in the United States or abroad as business of Shire may require. All air travel by Executive shall be in accordance with Shire’s air travel policies for employees of Executive’s level, as may be in effect from time to time.

 

3.4.         Executive shall not, other than at the request of the Board, (a) voluntarily resign as a member of the Board or (b) take any action or fail to take any action that would result in him no longer being permitted to serve on the Board (whether by law or otherwise).

 

3.5          Executive shall resign from all boards of directors and similar positions he holds as of immediately prior to the Effective Date (with such resignations to be effective as of the Effective Date), and Executive shall provide the Company with evidence of such resignations; provided, however, that Executive shall be permitted to remain on the board of directors of Evotec until its first meeting of equityholders that occurs after the Effective Date (which is scheduled to occur in June, 2013), at which time Executive shall resign from the board of directors of Evotec.

 

4             Compensation and Benefits.

 

4.1          Base Salary. During the portion of the Employment Period that Executive is serving as the Chief Executive Officer Designate of Shire plc, Executive shall be paid an annual base salary of $900,000 in accordance with the normal payroll practices of the Company (as may be in effect from time to time). During the portion of the Employment Period that Executive is serving as the Chief Executive Officer of Shire plc, Executive shall be paid an annual base salary of $1 ,200,000 in accordance with the normal payroll practices of the Company (as may be in effect from time to time). Executive’s base salary, as it may be in effect from time to time, is referred to herein as the “Base Salary.” The Base Salary shall be inclusive of any directors’ fees payable to Executive under the Articles of Association or other governing documents of Shire plc, the Company or any Affiliated Company (and any such fees as the Executive shall receive shall be paid by him to the Company promptly upon receipt) Such Base Salary shall also be inclusive of an annual amount payable in respect of Board duties performed by Executive in the Republic of Ireland (the “Irish Board Fee”), which is currently £92,500. Executive’s Base Salary shall be reviewed annually (commencing in the first quarter of 2014) and may be increased at the sole discretion of the

 

  

  

  

 

Remuneration Committee of Shire plc (the “Remuneration Committee). All amounts set forth herein are in U.S. dollars (except with respect to the Irish Board Fee).

 

4.2           Executive Annual Incentive Plan. During the Employment Period, Executive shall be eligible to earn an annual bonus in accordance with the rules and terms of Shire’s Executive Annual Incentive Plan or such successor bonus plan (“Incentive Plan”). Such bonus, if any, shall be subject to a target bonus level of ninety percent (90%) of Executive’s Base Salary (the “Target Bonus”) during the applicable period, subject to adjustment by the Remuneration Committee (with seventy-five percent (75%) payable in cash and twenty-five percent (25%) payable in deferred shares). Any additional bonus payable on an annual basis shall be determined at the sole discretion of the Remuneration Committee and shall be subject to a maximum of one-hundred and eighty percent (180%) of Executive’s Base Salary during the applicable period, subject to adjustment by the Remuneration Committee (with seventy-five percent (75%) of the maximum award payable in cash and twenty-five percent (25%) of the maximum award payable in deferred shares). Any cash bonus earned under the Incentive Plan shall be paid by no later than March 15th of the year following the year in which such bonus was earned and any non-cash bonus earned under the Incentive P Jan shall be paid in accordance with the terms of the Incentive Plan. All bonus payments shall be subject to tax and other withholdings and deductions as appropriate. Notwithstanding anything contained herein to the contrary, Executive’s annual bonus, if any, for the fiscal year in which the Employment Period begins shall be pro-rated based on the number of months during which Executive is employed by Shire during such fiscal year. In the event that Executive’s employment hereunder terminates during any bonus year, his eligibility for a bonus with respect to the year of termination shall be determined under, and in accordance with, the terms of the Incentive Plan.

 

4.3           Replacement Payment. Executive shall be eligible to receive a replacement payment (the “Replacement Payment”) in the amount of One Million Eight Hundred and Fifty Thousand Dollars ($1,850,000). Four Hundred and Fifty Thousand Dollars ($450,000) of the Replacement Payment is payable in cash on April 19, 2013, or the first payroll date after the Effective Date, whichever is later, subject to Executive’s employment with the Company on the payment date. The remaining One Million Four Hundred Thousand Dollars ($1,400,000) of the Replacement Payment is to be awarded in deferred shares of Shire stock (with such shares having a value of $1,400,000 at the time of grant) within 60 days after the Effective Date (or as soon as reasonably practicable thereafter if the issuance of such shares is restricted by applicable law), with such shares to vest and be delivered to Executive on the second anniversary of the date of grant, subject to Executive’s continued employment with the Company on the applicable vesting date. One Million Dollars ($1,000,000) of the Replacement Payment is intended to compensate Executive for the sign on bonus that Executive forfeited in connection with his termination of employment from his prior employer, and the remaining Eight Hundred and Fifty Thousand Dollars ($850,000) of the Replacement Payment is intended to compensate Executive for any annual bonus compensation forfeited by Executive in connection with his termination of employment from his prior employer. If Executive’s prior employer pays him any portion of his sign-on or 2012 bonus compensation, then the Replacement Payment shall be reduced by an equivalent amount (with the cash portion of the Replacement Payment to be fully reduced

 

  

  

  

 

prior to any reduction of the deferred share portion of the Replacement Payment, and with the deferred share portion of the Replacement Payment to be reduced based on the value of the shares as of the grant date). Executive agrees to promptly notify the Company upon receiving any such amounts from his prior employer and to promptly repay the Company (on an after-tax basis) a portion of the Replacement Payment equal to the amount so received. In the event that Executive voluntarily terminates employment with the Company (other than for Good Reason (as defined in Section 9.1 (c) below) or due to Permanent Disability (as defined in Section 9.1(d) below)), or in the event that the Company terminates Executive’s employment for Cause (other than pursuant to clause (vii) of the definition thereof, but only if Executive has used his best efforts to obtain the authorization described therein), in any case, within two years after the commencement of the Employment Period, then Executive shall be required to repay to the Company (on an after-tax basis) the amount of the cash portion of the Replacement Payment previously paid, and the deferred shares shall lapse, subject to the waiver of such requirements by the Remuneration Committee at the time of such termination. The Replacement Payment shall be subject to tax and other with holdings and deductions as appropriate. Executive understands and agrees that the ultimate value of the deferred share portion of the Replacement Payment will depend on the value of the underlying shares on the settlement date, and may be more or less than One Million Four Hundred Thousand Dollars ($1,400,000).

 

4.4           Intentionally Omitted.

 

4.5           Equity Grants. During the Employment Period, commencing with the fiscal year beginning January 1, 2013, Executive will be eligible for performance-based equity-based incentive awards (“Shire Equity Award”) that may be granted to Executive at such times, in such amounts and to the extent the Remuneration Committee may determine in its sole discretion. If Executive is at any time granted a Shire Equity Award, such Shire Equity Award will be granted on and subject to the rules of the relevant plan or such other applicable regulations as are established by the Remuneration Committee (including without limitation performance conditions and Shire’s clawback policy). If Executive’s employment should terminate for any reason, Executive’s rights in relation to any Shire Equity Award shall be entirely governed by the terms of the relevant plan (or such regulations) and Executive shall not be entitled to any compensation under this Agreement for the loss of any right or benefit under any such plan (including in relation to any cancelled or forfeited Shire Equity Award) or for the loss of any prospective right or benefit under any such plan.

 

4.6           Replacement Equity Awards. As soon as reasonably practicable following the commencement of the Employment Period (in accordance with Shire’s policy for the timing of equity grants for new hires), Shire plc will grant a Replacement Shire Equity Award (the “Replacement Equity Award”) to Executive having an expected value of $925,000 (determined at the time the award is granted) and vesting in accordance with plan terms (which generally require the achievement of performance goals and a minimum service period of three years). Twenty-five percent (25%) of the Replacement Equity Award will be in the form of performance-based stock appreciation rights and the remaining seventy-five percent (75%) of the Replacement Equity Award will be in the form of a performance share

 

  

  

  

 

award. Executive’s Replacement Equity Award shall be subject to the terms and conditions of the equity plan under which it is granted (including without limitation performance conditions and Shire’s clawback policy) and other applicable documents.

 

4.7           Expenses. The Company shall reimburse Executive for all reasonable expenses which Executive is authorized to incur while carrying out Executive’s duties under this Agreement, provided the applicable claims procedure is followed and invoices or other evidence of payment is produced. All reimbursements which are subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), shall be paid to Executive as soon as practicable after submission of the required documentation, but no later than December 31st of the year following the year during which such expense was incurred.

 

4.8           Company Car and Benefits. During the Employment Period, Executive shall be eligible to participate in the Company’s employee benefit plans (including any executive-level plans, such as financial planning) in accordance with the terms and conditions of such plans, as may be amended by the Company in its sole discretion from time to time. During the Employment Period, Executive shall be provided with a cash benefit of $1,800 per calendar month, representing the cash alternative to providing Executive with a company car. This amount shall be paid ratably every pay period with Executive’s Base Salary and will be subject to applicable tax and other withholdings and deductions as appropriate.

 

4.9           Welfare and Retirement Benefits. The Company shall provide Executive during the Employment Period with coverage under all employee pension and welfare benefit programs, plans and practices (commensurate with his position) in accordance with the terms thereof, which the Company makes available to its senior executives. During the Employment Period, the Company shall contribute an aggregate amount equal to 30% of Executive’s Base Salary on an annual basis to the Company’s 401 (k) Plan and/or the Shire Group Supplemental Executive Retirement Plan (the “SERP”), or into such other equivalent arrangement under the Company’s policies on pensions. Such contributions shall be made on a quarterly basis and are subject to Executive’s employment with Shire on the date of the contribution. In addition, the full contribution is contingent upon Executive’s participation in the Company’s 401(k) Plan at a minimum personal contribution level of 3%. The provisions of this Section 4.9 shall in all events be subject to the terms of the Company’s 401 (k) Plan, the SE RP and any other applicable policies of Shire as may be established from time to time.

 

4.10           Vacation. During the Employment Period, Executive shall be entitled to paid vacation of 30 days per annum, or such greater number as may be provided with the approval of the Remuneration Committee, exclusive of national and customary holidays recognized by the Company. The vacation year is from January 1st to December 31 51 and up to 5 unused vacation days may be carried forward into the first quarter of the succeeding vacation year; and if vacation days carried forward into the succeeding vacation year are not used by March 31st of that year, those vacation days shall be forfeited to the extent permissible under applicable state law with no compensation due Executive. Entitlement to vacation pay in the first and last year of employment will be calculated pro rata by reference to the number of completed months worked in that year. On termination of employment, a

 

  

  

  

 

payment will be made by the Company or refunded by Executive (as appropriate) depending on whether vacation entitlement has been unused or exceeded.

 

5           Intellectual Property

 

5.1        Definitions.

(a)         Intellectual Property Rights (“IPRs”) means any and all patents, trade and service marks, unregistered design rights, registered design rights, trade and business names, copyrights (including copyright in software), database rights, topography rights and all other intellectual property rights (whether or not any of these is registered and including applications for registration of any such thing) and all rights or forms of protection of a similar nature or having equivalent or similar effect to any of these which may subsist anywhere in the world.

 

(b)         “Work” or “Works” means inventions, discoveries, designs, developments, improvements, formulas, ideas, intellectual property, processes, techniques, related documentation and any other work of authorship, whether or not patentable, copyrightable or susceptible to other forms of protection.

 

5.2        If, during the Employment Period or during the one-year period thereafter, Executive creates, makes, authors, originates, conceives or writes (either alone or with others) any Work(s), irrespective of whether it or they are related to Shire:

 

	
  

	
(a)

	
Executive will promptly disclose to the Company full details of any and all such Works;

	
  

	
(b)

	
All rights (including, without limitation, all IPRs) in and to such Works shall legally and beneficially vest solely in Shire immediately upon their creation without any payment to Executive;

	
  

	
(c)

	
Executive acknowledges that all original works of authorship which are made by Executive, solely or jointly with others, during the period of Executive’s employment with Shire and which are protectible by copyright are “works made for hire,” as that term is defined in the United States Copyright Act;

	
  

	
(d)

	
Executive hereby irrevocably and unconditionally waives, in favor of Shire, its licensees and successors-in-title any and all moral rights conferred on Executive in relation to the Works (existing or future); and

	
  

	
(e)

	
Executive shall not knowingly do anything, or omit to do anything, to imperil the validity of any patent or protection, or any application therefore, relating to any Work.

 

5.3        To the extent such rights and IPR s do not so vest in Shire, Executive hereby (i) assigns to the Company or its nominee all future copyright, database rights and unregistered design rights in the Works and (ii) in respect of all other rights and IPRs, agrees to assign to the Company or its nominee all of Executive’s right, title and interest (including without limitation all IPRs) in the Works.

 

5.4        Executive hereby irrevocably authorizes the Company or its nominee to be Executive’s attorney, and to make use of Executive’s name and to sign and execute any

 

  

  

  

 

documents and/or perform any act on Executive’s behalf, for the purpose of giving to Shire the full benefit of the provisions of this Section 5 and, where permissible, to obtain patent or other protection in respect of any of the Works in the name of the Company or its nominee.

 

5.5        Executive shall from time to time, both during the Employment Period and thereafter, at the request and expense of the Company or its nominee, promptly do all things and execute all documents necessary or desirable to give effect to the provisions of this Section 5, including, without limitation, all things necessary to obtain and/or maintain patent or other protection with respect to any Work in any part of the world and to vest such rights (including, without limitation, all IPRs) in and to the Works in the Company or its nominee.

 

5.6        For the avoidance of doubt, the provisions of this Section 5 shall apply to any rights (including, without limitation, any IPRs) in the Works arising in any jurisdiction, and the provisions of this Section 5 shall apply in respect of any jurisdiction to the extent permitted by the directives, statutes, regulations and other laws of any such jurisdiction.

 

5.7        Maintenance of Records. Executive will keep and maintain adequate and current written records of all Works made by Executive, solely or jointly with others, during the period of Executive’s employment with Shire. The records will be in the form of notes, sketches, drawings and any other format that may be specified by Shire. The records will be available to and remain the sole property of Shire at all times.

 

5.8        Excluded Works. Notwithstanding this Section 5 of this Agreement, Executive’s obligation to assign Works to Shire shall not apply to any Works about which Executive proves all of the following:

 

	
  

	
(a)

	
the Work was developed entirely by Executive without materially interfering with Executive’s duties to Shire;

	
  

	
(b)

	
no Shire Confidential Information (as defined in Section 6 below), equipment, supplies or facility was used in the development of the Work;

	
  

	
(c)

	
the Work does not relate directly to the business of Shire or to the anticipated business, research or development of Shire; and

	
  

	
(d)

	
the Work does not result from any work performed by Executive for Shire.

 

5.9        Executive attaches hereto a complete list of all Works, made or conceived by Executive prior to Executive’s employment with Shire and which satisfy the criteria set forth in Sections 5.8(a) through (d) above, and those Works are excluded from this Agreement. If no such list is attached, then there are no such Works.

 

6           Confidentiality

6.1        Definitions. Confidential Information is any information, idea or material:

 

	
  

	
(a)

	
generated, collected by or used in the operations of Shire that relates to the actual or anticipated business or research and development of Shire and that has not been made available generally to the public, or

 

  

  

  

 

	
  

	
(b)

	
suggested by or resulting from any task assigned to Executive or work performed by Executive for Shire, or known to Executive as a consequence of Executive’s employment with Shire, and that has not been made available generally to the public.

 

Confidential Information includes, but is not limited to, information relating to the business of Shire, including information relating to its suppliers, customers, personnel, commercial and scientific data, strategic plans, IPRs, profits, markets, sales, budgets, pricing policies, accounting, finance, products, product development, marketing strategies, operational methods, technical processes, research and development techniques, strategic plans, formulas, Work (as defined above in Section 5.1), discoveries, research, patent applications, business forecasts, agreements, personnel files and other business affairs and methods not generally available to the public and anything that is a trade secret within the meaning of the Pennsylvania Uniform Trade Secret Act. Information shall cease to be Confidential Information if it is or becomes public knowledge, other than through any unauthorized disclosure or other breach of the restrictions in Section 6 on the part of Executive.

 

6.2        All Confidential Information acquired or generated by Executive in connection with Executive’s employment with Shire (whether written, oral or in any other medium) shall be the property of Shire, shall be used by Executive only as required in the performance of Executive’s duties and shall be returned to the Company on request or on termination of Executive’s employment.

 

6.3        Executive will use his best efforts to protect the confidentiality of Shire’s Confidential Information and shall keep the Confidential Information secret. Except as required in the performance of Executive’s duties for Shire, Executive will not, without the Board’s express written permission, disclose Confidential Information to anyone outside Shire or use Confidential Information in other than Shire’s business, either during or after Executive’s employment by Shire; provided, however, that nothing in this Agreement or otherwise shall restrict Executive from disclosing Confidential Information (i) as required by law (provided that, prior to such disclosure, Executive shall, if permitted by law, provide the Company with prompt written notice of his requirement to disclose such information and shall work with the Company (at the Company’s expense) to limit the disclosure so required and to otherwise protect the confidentiality of such information) or (ii) solely to the limited extent necessary in connection with the defense or prosecution of any claim against the Company or its affiliates.

 

6.4        Executive acknowledges that Shire may receive from others their confidential information, subject to a duty on Shire’s part to maintain the confidentiality of such information. During and after Executive’s employment with Shire, Executive will not disclose such confidential information to anyone outside Shire or use such information for any purpose other than as is required in the performance of Executive’s duties for Shire and as is consistent with Shire’s duty to maintain the confidentiality of such information; provided, however, that nothing in this Agreement or otherwise shall restrict Executive

 

  

  

  

 

from disclosing such information (i) as required by law (provided that, prior to such disclosure, Executive shall, if permitted by law, provide the Company with prompt written notice of his requirement to disclose such information and shall work with the Company (at the Company’s expense) to limit the disclosure so required and to otherwise protect the confidentiality of such information) or (ii) solely to the limited extent necessary in connection with the defense or prosecution of any claim against the Company or its affiliates.

 

6.5        Executive will not disclose to Shire and will not use or induce Shire to use any proprietary, confidential or trade secret information of others, including, but not limited to, former employers. Shire shall not cause Executive to use any proprietary, confidential or trade secret information of others, including, but not limited to, former employers.

 

7           Executive’s Restrictive Covenants

7.1        Executive acknowledges that during the course of Executive’s employment with Shire, Executive will receive and have access to Confidential Information and Executive will also receive and have access to detailed employee data and information relating to the operations and business of Shire and accordingly, Executive is willing to enter into the covenants described in this Section 7 in order to provide Shire with what Executive considers to be reasonable protection for those interests.

 

7.2        Executive covenants and agrees that during the Employment Period and for a period of one year following the date on which a Notice of Termination is provided (which period shall be inclusive of the Notice Period (as defined in Section 9.1 below)) (such period, the “Restricted Period”), regardless of whether the termination is initiated by Executive or Shire, Executive will not directly or indirectly engage in any business or activity or render service, whether as principal, agent, officer, director, employee, consultant or otherwise, with or to any person, business, corporation or other entity with respect to the research, development, production, licensing, marketing, sale or supply of any product or service that is similar in kind, type or purpose to the business or therapeutic areas in which Executive worked at any time during Executive’s last 12 months of active employment with Shire (“Restricted Business”); provided however, that this Section 7.2 shall not prohibit Executive from acquiring, solely as an investment and through open market purchases, securities of any entity which are publicly traded, so long as Executive is not part of any control group of such entity, and such securities do not constitute more than five percent (5%) of the outstanding voting power of that entity.

 

7.3           During the Restricted Period, regardless of whether the termination is initiated by Executive or Shire, Executive will not solicit, divert, or attempt to solicit or divert, or accept Restricted Business from, any customer or account, or prospective customer or account, of Shire with whom Executive or those employees who reported, directly or indirectly, to Executive had contact with at any time during the last 12 months of Executive’s active employment with Shire.

 

7.4           During the Restricted Period, regardless of whether the termination is initiated by Executive or Shire, Executive will not solicit, or assist or encourage the

 

  

  

  

 

solicitation of, any employee of Shire to work for Executive or for any entity with which Executive may become employed or affiliated, without the prior written consent of the Board. The term “solicit” shall mean Executive’s contacting, or providing information to others who may be reasonably expected to contact, any employee of Shire regarding such employee’s interest in seeking employment with Executive or any entity with which Executive may become employed or affiliated.

 

7.5           During the Restricted Period, regardless of whether the termination is initiated by Executive or Shire, Executive shall not employ, and shall not cause any entity that Executive controls to employ, any person who is a full-time employee of Shire, or who was a full-time employee of Shire as of the date of the termination of Executive’s employment or within twelve (12) months prior thereto, without the prior written consent of the Board.

 

7.6           Intentionally Omitted.

 

7.7           This Section 7 shall not restrain Executive from being engaged or concerned in any business activity in so far as Executive’s duties or work shall relate solely:

 

	
  

	
(a)

	
to geographical areas where the business cancer n is not in competition with the Restricted Business; or

	
  

	
(b)

	
to services or activities of a kind with which Executive was not concerned to a material extent during the last 12 months of Executive’s active employment with Shire.

 

8           Remedies. Executive acknowledges and agrees that the restrictions and covenants outlined in Sections 5, 6 and 7 are reasonable and necessary protections of the immediate interests of Shire, and that Shire would not have employed Executive without receiving additional consideration offered by Executive in binding Executive to such restrictions and covenants. Executive agrees that no claim that Executive may have against Shire, whether predicated on this Agreement or otherwise, shall constitute a defense to the Company’s, Shire plc’s or any Affiliated Company’s enforcement of such restrictions and covenants. In addition to such other rights and remedies as the Company, Shire plc and each Affiliated Company may have at equity or in law with respect to any breach of this Agreement, Executive agrees that if Executive breaches (or threatens to breach) any of the provisions of Sections 5, 6 or 7, the Company, Shire plc and each Affiliated Company shall have the right and remedy to have such provisions specifically enforced by any court having equity jurisdiction, and Executive acknowledges and agrees that any such breach or threatened breach will cause irreparable injury to Shire and that money damages will not provide an adequate remedy to Shire. If it shall be judicially determined that Executive has violated any of Executive’s obligations under Section 7 of this Agreement, then the period of time applicable to the obligation which Executive shall have been determined to have violated shall automatically be extended by a period of time equal in length to the period during which said violations(s) occurred. It is expressly acknowledged and agreed that Shire plc and each Affiliated Company are third party beneficiaries of the provisions of Sections 5,

 

  

  

  

 

6 and 7 hereof and may enforce the terms of such Sections as if Shire plc and each such Affiliated Company was a party hereto.

 

9           Termination.

9.1        Definitions. For purposes of this Agreement, the following terms shall have the respective meanings set forth below:

 

(a)         “Cause” shall mean:

	
  

	
(i)

	
for so long as Executive is the Chief Executive Officer Designate of Shire plc, the willful failure or refusal by Executive substantially to perform Executive’s duties and responsibilities as Chief Executive Officer Designate of Shire plc (other than any such failure resulting from Executive’s incapacity due to Executive’s physical or mental illness) after written demand by the Board or Chief Executive Officer of Shire plc identifying the nature of such failure or refusal;

	
  

	
(ii)

	
for so long as Executive is the Chief Executive Officer of Shire plc, the willful failure or refusal by Executive substantially to perform Executive’s duties and responsibilities as Chief Executive Officer of Shire plc (other than any such failure resulting from Executive’s incapacity due to Executive’s physical or mental illness) after written demand by the Board identifying the nature of such failure or refusal;

	
  

	
(iii)

	
Executive has engaged in conduct which brings or is likely to bring himself or Shire into disrepute;

	
  

	
(iv)

	
the willful misconduct by Executive which is materially injurious to Shire, monetarily or otherwise, or which results or is intended to result in personal gain or enrichment at the expense of Shire (provided that no act or failure to act shall be considered ‘‘willful” unless done, or omitted to be done, by him in bad faith and without reasonable belief that his action or omission was in the best interest of Shire);

	
  

	
(v)

	
Executive’s conviction of or plea of no contest to a felony, or to a crime involving moral turpitude;

	
  

	
(vi)

	
Executive’s material breach of the terms of this Agreement (including, without limitation, any breach of Section 3.4), provided that such breach, to the extent capable of cure, is not cured within 10 days after written notice describing such breach is provided to Executive by the Board; or

	
  

	
(vii)

	
Executive’s failure to be legally authorized to work in the United States at any time after December 31, 2013.

 

(b)        Date of Termination. “Date of Termination” or “Termination Date” shall mean:

	
  

	
(i)

	
In the event Executive’s employment is terminated by Executive’s death, the date of Executive’s death;

 

  

  

  

 

	
  

	
(ii)

	
If Executive’s employment is terminated by Shire by reason of Executive’s Permanent Disability, the date that is thirty (30) days following the date the Board provides Executive with a Notice of Termination;

	
  

	
(iii)

	
If Executive’s employment is terminated by Shire without Cause, the date that is twelve (12) months following the date the Board provides Executive with a Notice of Termination;

	
  

	
(iv)

	
If Executive’s employment is terminated by Executive for any reason (including retirement in accordance with Shire’s policy applicable to executive directors (as determined by the Board in its sole discretion) or due to Good Reason), the date that is twelve (12) months following the date Executive provides the Board with a Notice of Termination;

	
  

	
(v)

	
If Executive’s employment is terminated by Shire for Cause, the date on which the Notice of Termination is provided to Executive.

 

For all purposes of this Agreement, the time between the Notice of Termination and the Date of Termination, if any, shall constitute the “Notice Period.” In the case of Executive’s termination as a result of Executive’s death or as a result of a termination for Cause, there shall not be a Notice Period.

 

	
  

	
(c)

	
“Good Reason” shall mean the failure by Shire plc to promote the Executive to the Chief Executive Officer position by the date specified in Section 1.1 (provided that the Company has not provided Executive with Notice of Termination prior thereto); provided, however, that Executive must provide Notice of Termination within 60 days following the date specified in Section 1.1 in order for such termination to be for Good Reason.

 

	
  

	
(d)

	
“Permanent Disability” shall mean any physical or mental ailment or incapacity as determined by a licensed physician agreed to by the Board and Executive (or Executive’s legal representatives) (or, in the event that Executive and the Board cannot so agree, by a licensed physician agreed upon by two physicians, one selected by Executive (or Executive’s legal representatives) and the other selected by the Board), which prevents Executive from performing the duties incident to Executive’s employment hereunder and which ailment or incapacity has continued for a period of either (A) ninety (90) consecutive days or (B) one hundred eighty (180) total days in any 12-month period, and which, in each case, is expected to render Executive incapable of performing Executive’s duties hereunder for not less than one (1) year, provided, however, in no event shall Executive have incurred a Permanent Disability hereunder unless he is eligible to receive disability benefits pursuant to the Company’s long-term disability plan.

 

9.2           Notice Period: Notice of Termination. During the Notice Period, the Executive shall remain employed by Shire and the Executive’s relationship with Shire shall

 

  

  

  

 

continue to be governed by the terms of this Agreement (subject to the Board’s right to accelerate the date of the Executive’s termination of employment in accordance with Section 9.3 hereof); provided, however, that during the Notice Period (i) the Board may require the Executive to perform such services as it, in good faith, deems appropriate, provided that such services are consistent with Executive’s education, skill, and experience (ii) the Board may exclude the Executive from any premises of the Company, Shire plc and any Affiliated Company (and need not give any reason for doing so), (iii) the Executive shall conduct himself with good faith towards Shire and not intentionally do anything that is harmful to Shire, (iv) the Executive may not directly or indirectly be employed by or retained by or advise or assist any other person or entity in any capacity either paid or unpaid (except Board approved non-executive positions and such other activities as are permitted under Section 3.2 hereof) and (v) the Board may require the Executive to resign from any positions he holds with the Company, Shire plc and any Affiliated Company (including director) and Executive shall resign as soon as reasonably practicable thereafter (Executive hereby irrevocably appoints the Board or its designee to execute any instrument on his behalf to effect such resignation if he fails to comply with the Board’s request to so resign). The Executive acknowledges that any action taken by the Board pursuant to this Section shall not be a breach of this Agreement and the Executive shall have no claim against the Company, Shire plc or any Affiliated Company for the same. Notwithstanding the foregoing, Executive shall be entitled to participate in the Company’s benefit plans during the Notice Period only if permitted under the terms of such plans (provided that if Executive is not permitted to participate in any health or welfare plan, the Company shall pay Executive a monthly amount during the Notice Period equal to the premiums paid by the Company for the benefit of Executive for coverage under such plan immediately prior to the date on which the Notice of Termination was provided). Any termination of Executive’s employment shall be communicated by a written Notice of Termination.

 

9.3       Compensation Upon Termination.

 

	
  

	
(a)

	
General. Upon termination of Executive’s employment, Executive shall be entitled to receive all compensation, vested benefits and other payments which were earned and vested but unpaid at the time of Executive’s termination of employment in accordance with the terms of the applicable benefit plans in which Executive is then participating (the “Accrued Benefits”). In the event of Executive’s death, the Accrued Benefits shall be paid to Executive’s estate, designated beneficiary or personal representative, as applicable.

 

	
  

	
(b)

	
Pay in Lieu of Notice. Notwithstanding anything contained herein to the contrary, following the delivery of a Notice of Termination by either party, the Board may, in its sole discretion, accelerate the Date of Termination to a date that is earlier than the date specified in Section 9.1 (b) above (including to the date on which a Notice of Termination is provided); provided, however, that in the event of a termination of employment by Executive for Good Reason, the Board shall be deemed to have accelerated the Date of Termination to the date that is not later than 30 days after the Notice of

 

  

  

  

 

	
  

	
 

	
Termination is provided. In such an event, the Company shall provide Executive with the following payments and benefits: (A) continued Base Salary through the last day of the Notice Period, payable in accordance with the Company’s normal payroll practices as in effect from time to time; (B) an amount, to be decided at the absolute discretion of the Remuneration Committee, which may be anywhere from zero up to the target annual bonus under the Incentive Plan, to which the Executive would have been entitled pursuant to Section 4.2 for the bonus year in which the Notice Period terminates (based on the Executive’s Base Salary at the date on which his employment terminated and pro-rated based on the number of unserved months in the Notice Period in relation to 12), with such bonus to be paid at the same time as if Executive’s employment had not terminated; (C) an amount equal to the SERP contributions that Executive would have received during the remainder of the Notice Period, payable in equal monthly installments through the last day of the Notice Period; (D) continued monthly car allowance payments for the remainder of the Notice Period; and (E) continued participation in the Company’s medical and dental benefit plans (to the extent permitted by such plans) for the remainder of the Notice Period (provided that if Executive is not permitted to participate in such plans, the Company shall pay Executive a monthly amount during the remainder of the Notice Period equal to the premiums paid by the Company for the benefit of Executive for coverage under such plans immediately prior to the date of Executive’s termination).

 

	
  

	
(c)

	
Mitigation and Offset. If the Executive obtains an alternative remunerated position (as defined below) during the period that Executive is entitled to receive monthly payments under Section 9.3(b) above, then each such monthly payment shall be reduced by the basic monthly remuneration for such month to which the Executive is entitled from the alternative remunerated position, and only the balance of such monthly payment under Section 9.3(b) above shall be due to the Executive. In the event that such required reduction would result in any monthly payment being reduced below zero, such monthly payment shall be reduced to zero and the additional amount by which such monthly payment was required to be reduced shall reduce any additional monthly payments that Executive is eligible to receive under Section 9.3(b); provided, however, that if any portion of such additional amount cannot be used to reduce the monthly payments under Section 9.3(b) because such would result in the last monthly payment being less than zero, such portion of such additional amount shall reduce the bonus, if any, payable to Executive under clause (B) of Section 9.3(b) above (with the cash portion of such bonus reduced first, and the share portion of such bonus to be reduced based on the value of the shares on the grant date of the shares). In addition, the benefit described in clause (E) of Section 9.3(b) shall immediately cease if Executive becomes entitled to health coverage from an alternative remunerated position. For the purposes of calculating the amount of the deduction in respect of remuneration from

 

  

  

  

 

	
  

	
 

	
the alternative remunerated position, any basic salary or fees shall be included, together with the value of any pension provided, but not any entitlement to bonus or the value of any equity or equity-based incentive arrangements. The value of any entitlement to pension shall be calculated as the amount which the new employer contributes to a pension scheme on the Executive’s behalf (in the case of a defined benefit arrangement, being the long term contribution rate, ignoring any adjustment to reflect an overall deficit or surplus in the scheme). For the purposes of this Agreement, “alternative remunerated position” shall mean any new position, whether under a contract of employment, consultancy arrangement, non-executive appointment or otherwise, whereby the Executive is directly or indirectly remunerated. Executive shall immediately notify the Company in the event that he obtains an alternative remunerated position.

 

	
  

	
(d)

	
Equity Awards. Except as provided in clause (e) below, Executive’s rights under his Shire Equity Awards will be determined in accordance with the rules of the relevant scheme; provided, however, that a termination for “Good Reason” shall be deemed to be a termination without “Cause” for purposes of any such scheme.

 

	
  

	
(e)

	
Replacement Payment. In the event that Executive’s employment with the Company has been terminated due to the death or Permanent Disability of Executive, by the Company without Cause, by the Company pursuant to clause (vii) of the definition of Cause (but only if Executive has used his best efforts to obtain the authorization described therein) or by Executive for Good Reason, then (i) any unpaid cash portion of the Replacement Payment shall be paid to Executive within 60 days after the date of such termination of employment and (ii) any unpaid share portion of the Replacement Payment and Replacement Equity Award shall become fully vested and shall be settled within 60 days after the date of such termination of employment.

 

	
  

	
9.4

	
Release of Shire. As a condition to the Company’s provision of the payments and benefits described in Sections 9.3(b) and (e) (other than the Accrued Benefits}, Executive shall execute and deliver to the Company a General Release in form and substance satisfactory to the Company such that such General Release is effective (with all revocation periods having expired unexercised) by the 60th day following Executive’s termination of employment. The benefits described in Sections 9.3(b) and (e) (other than the Accrued Benefits) shall not commence until the General Release becomes effective (with all payments that would have been made prior to such effective date to be made in a lump sum on the first payroll date after the effective date of the General Release, and all remaining payments to be made as if no such delay had occurred). Notwithstanding the foregoing, in the event that the 60 day release period overlaps two calendar years, then to the extent required by Code Section 409A, no payments under Sections 9.3(b) and (e) shall be made prior to the first payroll date of such second

 

  

  

  

 

	
  

	
 

	
calendar year (with all delayed payments to be made in a lump sum and all other payments to be made as if no such delay had occurred).

 

9.5           Specified Employee. Notwithstanding any other provision of this Agreement, if (a) Executive becomes entitled to receive payments or benefits under this Agreement as a result of Executive’s separation from service (within the meaning of Code Section 409A), (b) Executive is a “specified employee” within the meaning of Code Section 409A and (c) such payments or benefits would be subject to tax under Code Section 409A if the payments or benefits are paid within six (6) months after Executive’s separation from service, then any such payments or benefits that are otherwise scheduled to be paid during such six (6) month period shall be delayed for a period of six (6) months after Executive’s separation from service, as required by Code Section 409A. The accumulated delayed amount shall be paid, without interest, in a lump sum payment within ten (1 0) days after the end of such six (6) month period (the “Delayed Payment Date”). In the event of Executive’s death prior to the Delayed Payment Date, the payments and benefits delayed on account of Code Section 409A shall be paid to Executive’s personal representative within thirty (30) days after the date of Executive’s death.

 

9.6           Parachute Payment. In the event that (i) Executive becomes entitled to any payments or benefits hereunder or otherwise from the Company, Shire plc or any Affiliated Company which constitute a “parachute payment” as defined in Code Section 280G (the “Total Payments”) and (ii) Executive is subject to an excise tax imposed under Code Section 4999 (the “Excise Tax”), then, if it would be economically advantageous for Executive, the Total Payments shall be reduced by an amount that results in the receipt by Executive on an after tax basis (including the applicable federal, state and local income taxes, and the Excise Tax) of the greatest Total Payment, notwithstanding that some or all of the portion of the Total Payment may be subject to the Excise Tax. Any such reduction in payments and benefits shall be applied first against the latest scheduled cash payments; then current cash payments; then any equity or equity derivatives that are included under Section 280G of the Code at full value rather than accelerated value; then any equity or equity derivatives included under Section 280G of the Code at an accelerated value (and not at full value) shall be reduced with the highest value reduced first (as such values are determined under Treasury Regulation Section 1.280G-1, Q&A 24); finally any other non-cash benefits will be reduced.

 

10           Data Protection. Executive consents to the Company, Shire plc and any Affiliated Company holding and processing both electronically and manually the data it collects which relates to Executive for the purposes of the administration and management of its employees and its business and for compliance with applicable procedures, laws and regulations. Executive also consents to the transfer of such personal information to other offices the Company may have or to Shire plc or an Affiliated Company or to other third parties whether or not outside the United States or the European Economic Area for administration purposes and other purposes in connection with Executive’s employment where it is necessary for the Company to do so.

 

  

  

  

 

11           Miscellaneous

11.1        409A Compliance. This Agreement is intended to comply with Code Section 409A (to the extent applicable) and the parties hereto agree to interpret, apply and administer this Agreement in the least restrictive manner necessary to comply therewith and without resulting in any increase in the amounts owed hereunder by the Company. Notwithstanding anything herein to the contrary, neither the Company, Shire plc nor any Affiliated Company shall have any liability to Executive or to any other person if the payments and benefits provided in this Agreement are not exempt from or compliant with Code Section 409A. Executive’s right to reimbursement or in-kind benefits under this Agreement may not be liquidated or exchanged for any other benefit and no reimbursement under this Agreement may occur later than the last day of the calendar year immediately following the calendar year in which such expenses were incurred, nor shall the amount available for reimbursement, or in-kind benefits provided, during one year affect the amount available for reimbursement, or in-kind benefits to be provided, in any other year. In addition, the phrase “termination of employment” and similar phrases as used throughout the Agreement shall mean Executive’s “separation from service” within the meaning of Code Section 409A, and any amounts payable to Executive hereunder upon Executive’s termination of employment that are treated as “non-qualified deferred compensation” under Code Section 409A shall not be paid to Executive until Executive has incurred a separation from service within the meaning of Code Section 409A. To the extent that any schedule of notice or severance payments herein would violate Code Section 409A, such schedule shall not apply and any payments subject to such schedule shall be made pursuant to a schedule that complies with Code Section 409A (as reasonably determined by the Company). Each payment made under this Agreement shall be designated as a “separate payment” within the meaning of Code Section 409A.

 

11.2           Entire Agreement; Counterparts; Withholding. This Agreement supersedes any and all previous employment agreements, offer letters or other agreements or other communications, in whatever medium, between the parties with respect to the subject matter hereof. This Agreement may be executed and delivered in separate counterparts (including by means of facsimile), each of which is deemed to be an original and all of which taken together constitute one and the same Agreement. All amounts payable hereunder will be subject to applicable tax and other withholdings and deductions as appropriate.

 

11.3           No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

11.4           Severability. If any provision of this Agreement is held to be invalid or unenforceable, it is to that extent to be deemed omitted; and the remainder of the Agreement shall be valid and enforceable to the maximum extent possible; provided, however, that should a court of competent jurisdiction conclude that any restriction in Section 7 is 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, then such restriction shall be enforced to the maximum extent permitted by law and the court making such

 

  

  

  

 

determination shall have the power to modify Section 7 in order to conform it with applicable Jaw.

 

11.5           Assignment. This Agreement shall not be assign able by Executive. The Company shall have the right to assign this Agreement, including Executive’s restrictive covenants in Section 7 hereof to Shire plc or an Affiliated Company. Following such assignment, all references herein to the “Company” shall be deemed to refer to such assignee entity.

 

11.6           Notices. All notices, demands and other communications which are required to be given, served or sent pursuant to this Agreement shall be in writing and shall be delivered personally, or by facsimile or sent by air courier or first-class certified or registered mail, return receipt requested and postage pre paid, addressed as follows:

 

If to Executive:

 

Flemming Ornskov

Chapfstrasse 2

CH-8703 Erlenbach

Switzerland

 

with a copy to

 

Pryor Cashman LLP

7 Times Square

NY, NY 10036

Attn: Edward Rayner and Alice Stock

Facsimile:

If to Shire:

 

Shire Pharmaceuticals, LLC

Attention: Chief Human Resources Officer

725 Chesterbrook Blvd.

Wayne, PA 19087-5637

All notices and other communications given to any party in accordance with the provisions of this Agreement will be deemed to have been given on the date of delivery if personally delivered; upon confirmation of receipt if faxed; on the business day after the date which sent by air courier; and on the third business day after the date when sent if sent by first-class mail, in each case addressed to such party as provided in this Section 11.6 or in accordance with the latest unrevoked direction from such party.

 

11.7           Governing Law and Forum. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to its choice of laws provisions. The Company and Executive agree that any action at law, suit in equity, or judicial proceeding relating to the validity, construction,

 

  

  

  

 

interpretation, and enforcement of this Agreement, or any provision hereof or otherwise relating to Executive’s employment with Shire, shall be instituted and determined exclusively in the United States District Court for the Eastern District of Pennsylvania or the Court of Common Pleas for Chester County, Pennsylvania, and the Company and Executive each hereby consents to the personal jurisdiction of such courts for such purpose.

 

11.8           Waiver of Jury Trial. The Company and Executive each hereby waive a trial by jury in any action, proceeding or counterclaim brought or asserted by either the Company or Executive against the other on any matters whatsoever arising out of this Agreement or Executive’s employment with Shire. By their initials following this sentence, the Company and Executive acknowledge that each has read, understands and consents to their waivers of a trial by jury /s/, /s/.

 

11.9.           Indemnification. Executive shall be entitled to indemnification under, and in accordance with, the terms of the Deed of Indemnity attached hereto as Exhibit A.

 

11.10.         Legal Fees. The Company shall promptly pay, or reimburse Executive for up to $20,000 in legal fees and expenses Executive incurred in the negotiation and review of this Agreement (and the agreements referred to herein).

 

*       *       *       *       *

 

  

  

  

 

IN WITNESSETH, WHEREOF, each of the Company and Executive have executed and delivered this Agreement, as of the date first written above.

 

 

	 	Shire Pharmaceuticals, LLC	 
	 	 	 
	 	 	 
	 	By:	
/s/ Ann Judge

	 
	 	 	 	 
	 	 	 	 
	 	 	
/s/ Flemming Ornskov

	 
	 	 	
Flemming Ornskov

	 

 

  

  

  

 

EXHIBIT A

 

Deed of Indemnity

 

THIS AGREEMENT is made on the [date employment starts].

 

BETWEEN:

 

(1)           SHIRE PLC, a company incorporated in Jersey (registered number 99854) whose registered office is at 22 Grenville Street, St Hellier, Jersey (the “Company”); and

 

(2)           DR. FLEMMING ORNSKOV, of 22 Grenville Street, St Hellier, Jersey (the “Director’’).

 

WHEREAS:

 

	
(A)

	
The Director has been appointed an executive director of the Company with effect from [date employment starts].

 

	
(B)

	
The Company has agreed to indemnify the Director, and the Director has agreed to give certain undertakings to the Company, in each case on the terms of and subject to the conditions of this Agreement.

 

THIS AGREEMENT PROVIDES as follows:

 

1.           INTERPRETATION

 

1.1         In this Agreement:

 

	 	
(A)

	
“Associated Company” means any Subsidiary of the Company, any holding company of the Company (if created) and any Subsidiary of that holding company (if created);

 

	 	
(B)

	
“Companies Law” means the Companies (Jersey) Law 1991;

 

	 	
(C)

	
“Subsidiary” means any subsidiary of the Company, as defined in the Companies Law;

 

	 	
(D)

	
“Effective Date” means [date employment starts]

 

	 	
(E)

	
references to Clauses and sub-clauses are to clauses and sub-clauses of this Agreement;

 

	 	
(F)

	
use of any gender includes the other genders;

 

	 	
(G)

	
a reference to any statute or statutory provision shall be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or reenacted; and

 

  

  

  

 

	 	
(H)

	
headings and titles are inserted for convenience only and are to be ignored in the interpretation of this Agreement.

 

	
1.2

	
If there is any inconsistency between the provisions of this Agreement and the provisions of any contract of employment between the Director and the Company in effect on the Effective Date, the provisions of this Agreement shall prevail.

 

INDEMNITIES

 

2.1        Claims by Third Parties

 

Subject to Clauses 2.2, 2.5 and 2.6, the Company undertakes to indemnify the Director against any liability suffered or incurred by the Director on or after the Effective Date:

 

(A)           in respect of the Director’s acts or omissions (whether on or after the Effective Date) while, or in the course of acting as, a director or employee of the Company or a director or employee of any Subsidiary; and/or

 

(B)           which otherwise arise by virtue of the Director holding or having held such office;

 

in each case, to the extent arising out of or in connection with, directly or indirectly, any claim, action or proceedings brought against the Director or any other person by or on behalf of any third party (not being the Company or an Associated Company) in any jurisdiction in respect of any alleged loss, liability or damage actually or allegedly suffered by any third party, the Company or an Associated Company.

2.2        Scope of Indemnity for Claims by Third Parties

 

The indemnity in Clause 2.1 shall not apply to any liability incurred by the Director:

 

(A)           to pay a fine imposed in criminal proceedings;

 

	
  

	
(B)

	
to pay a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature;

 

	 	
(C)

	
in defending any criminal proceedings in which he is convicted;

 

	
  

	
(D)

	
in connection with any application made under Article 212 of the Companies Law in connection with which the court refuses to grant him relief; and

 

	
  

	
(E)

	
unless, in connection with the matters giving rise to the liability, the Director acted in good faith with a view to the best interests of the Company, or in connection only with any liability incurred in defending civil proceedings (regardless of whether the Director has acted in good faith with a view to the best interests of the Company), judgment is given in favour of the Director.

 

  

  

  

 

2.3        Claims by or on behalf of the Company or an Associated Company

 

Subject to Clauses 2.4, 2.5 and 2.6, the Company undertakes to indemnify the Director from the Effective Date against any liability incurred by him as a director in defending any civil or criminal claim, action or proceedings which relate to anything done or omitted, or claimed to have been done or omitted, by him which are brought against the Director or any other person by or on behalf of the Company or an Associated Company.

 

	
2.4

	
Exclusions from Indemnity for Claims by or on behalf of the Company or an Associated Company

 

The indemnity in Clause 2.3 shall not apply to any liability:

 

	
  

	
(A)

	
(for the avoidance of doubt) incurred by the Director to the Company or an Associated Company;

 

	
  

	
(B)

	
incurred by the Director in defending any criminal proceedings in which he is convicted;

 

	
  

	
(C)

	
incurred by the Director in defending any civil proceedings in which judgment is given against him; and

 

	
  

	
(D)

	
incurred by the Director in connection with any application made under Article 212 of the Companies Law in which the court refuses to grant him relief.

 

2.5       Funding of Expenditure

 

	
  

	
(A)

	
Subject to the provisions of this Agreement, the Company agrees to loan to the Director, on an interest free basis, such funds as may be required to meet any expenditure incurred or to be incurred by him, in defending any claim, action or proceedings falling within the scope of such claims, actions, or proceedings as are covered by the provisions of Clause 2.1 and 2.3.

 

	
  

	
(B)

	
Subject to Clause 2.5(C) below, if the Company loans funds to the Director pursuant to Clause 2.5(A) then such loan shall become due and repayable upon any conviction of, judgment given against, or refusal of relief to, the Director becoming final or the claim, action, or proceeding otherwise being settled or terminating.

 

	
  

	
(C)

	
In the event that the liability to which the loan relates can properly be discharged by way of indemnity in accordance with Clause 2, the obligation to repay such loan will be discharged by way of indemnity in accordance with this Clause 2.

 

  

  

  

 

	
  

	
(D)

	
For purposes of this Clause 2.5(8), a conviction, judgment or refusal of relief becomes final:

 

	
  

	
(i)

	
if not appealed against, at the end of the period for bringing an appeal; or

 

	
  

	
(i)

	
if appealed against, at the time when the appeal (or any further appeal) is determined and the period for bringing any further appeal has ended or if the appeal is abandoned or otherwise ceases to have effect.

 

2.6       Limitations on Indemnity

 

Without prejudice to any other rights or remedies which may be available to the Director, the indemnity granted by the Company to the Director in either Clause 2.1 or Clause 2.3 shall not apply to the extent that it is not permitted by, or consistent with, law or statute from time to time in force (including, without limitation, the Companies Law), the memorandum and articles of the Company or the rules and regulations of any regulatory body.

 

3.         Conduct of Claims and Access to Information

 

	
3.1

	
Without prejudice to the sub-clause 3.2, if the Director becomes aware of any claim, action or demand against him which could give rise to any claim, action or demand by him against the Company under Clause 2.1 (referred to herein as a “Third Party Claim”), the Director shall:

 

	
  

	
(A)

	
within 20 days of becoming so aware, notify the Company in writing of the existence of such Third Party Claim, giving reasonable details in that notification (or, to the extent that such details are not available to the Director at that time, as soon as possible thereafter) of the person(s) making such Third Party Claim, the circumstances leading to, and the grounds for, that Third Party Claim and the quantum or possible quantum of the Third Party Claim;

 

	
  

	
(B)

	
subject to the Company agreeing to pay the reasonable out-of-pocket expenses of the Director, give such access to premises, chattels, documents and records to the Company and its professional advisers as the Company may reasonably request;

 

	
  

	
(C)

	
take such action and give such information and assistance in order to avoid, dispute, resist, mitigate, settle, compromise, defend or appeal any Third Party Claim or judgment or adjudication with respect thereto as the Company may reasonably request;

 

	
  

	
(D)

	
at the request of the Company, allow the Company to take the sole conduct of such actions as the Company may deem appropriate in connection with

 

  

  

  

 

	
  

	
 

	
any such Third Party Claim in the name of the Director and in that connection the Director shall give or cause to be given to the Company all such assistance as the Company may reasonably require in avoiding, disputing, resisting, mitigating, settling, compromising, defending or appealing any such Third Party Claim and shall instruct such solicitors or other professional advisers as the Company may nominate to act on behalf of the Director in relation thereto but to act in accordance with the Company’s sole instructions;

 

	
  

	
(E)

	
make no admission of liability, agreement, settlement or compromise with any person in relation to any such Third Party Claim without the prior written consent of the Company; and

 

	
  

	
(F)

	
take all reasonable action to mitigate any loss suffered by him in respect of such Third Party Claim.

 

	
3.2

	
In any event, the Company shall be entitled at any stage and at its sole discretion to settle any Third Party Claim and shall be under no obligation in this respect to notify the Director of its decision so to settle such Third Party Claim.

 

	
3.3

	
If the Director intends to make a claim, action or demand against the Company under Clause 2.4 (referred to herein as a “Costs Claim”) the Director shall:

 

	
  

	
(A)

	
promptly notify the Company in writing of his intention to make such a Costs Claim, giving reasonable details in that notification (or, to the extent that such details are not available to the Director at that time, as soon as possible thereafter) of the grounds for that Costs Claim and the quantum or possible quantum of the Costs Claim;

 

	
  

	
(B)

	
subject to the Company agreeing to pay the reasonable out-of-pocket expenses of the Director, take such action and give such information and access to premises, chattels, documents and records to the Company and its professional advisers as the Company may reasonably request;

 

	
  

	
(C)

	
take all reasonable action to mitigate any loss suffered by him in respect of such Costs Claim.

 

4.           Notices

 

	
4.1

	
A notice under this Agreement shall only be effective if it is in writing. Faxes are permitted. E-mail is not permitted.

 

	
4.2

	
Notices under this Agreement shall be sent to a party at its address or number and, in the case of the Company, for the attention of the individual, set out below:

 

  

  

  

 

	
Party and title of individual

	
Address

	
Fax number

	
Company

	
22 Grenville Street

St Hellier

Jersey

JE4 8PX

	
+44 (0) 1256 894710

	
Attention: Global General Counsel

	  	  
	 	 	 
	
With a copy to:

	
Hampshire International Business Park,

Basingstoke, Hampshire

RG24 8EP

	
+44 (0) 1256 894710

	 	 	 
	
Director

	
22 Grenville Street

St Hellier

Jersey

JE4 8PX

	
+44 (0) 1256 894710

	
4.3

	
Either party may change its notice details on giving notice to the other party of the change in accordance with this Clause. That notice shall only be effective on the date falling two Business Days after the notification has been received or on such later date as may be specified in the notice.

 

	
4.4

	
Subject to sub-clause 4.5 and without prejudice to sub-clause 4.6, any notice given under this Agreement shall not be effective until it is received by the intended recipient.

 

	
4.5

	
Any notice which is received by its intended recipient under this Agreement outside normal working hours in the place to which it is addressed shall be deemed to have been given at the start of the next period of normal working hours in such place.

 

	
4.6

	
No notice given under this Agreement may be withdrawn or revoked except by notice given in accordance with this Clause.

 

5.         Remedies and Waivers

 

	
5.1

	
No delay or omission by either party to this Agreement in exercising any right, power or remedy provided by law or under this Agreement shall:

 

	 	
(A)

	
affect that right, power or remedy; or

 

	 	
(B)

	
operate as a waiver of it.

 

	
5.2

	
The single or partial exercise of any right, power or remedy provided by law or under this Agreement shall not preclude any other or further exercise of it or the exercise of any other right, power or remedy.

 

  

  

  

 

	
5.3

	
The rights, powers and remedies provided in this Agreement are cumulative and not exclusive of any rights, powers and remedies provided by law.

 

6.         Invalidity

 

If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, that shall not affect or impair:

 

	
  

	
(A)

	
the legality, validity or enforceability in that jurisdiction of any other provision of this Agreement; or

 

	
  

	
(B)

	
the legality, validity or enforceability under the law of any other jurisdiction of that or any other provision of this Agreement.

 

7.         No Partnership

 

Nothing in this Agreement and no action taken by the parties under this Agreement shall constitute a partnership, association, joint venture or other co-operative entity between the parties.

 

8.         Entire Agreement

 

	
8.1

	
This Agreement, the Company’s Articles of Association and, subject to Clause 1.2, any provision of any employment contract under which the Director is, or is entitled to be, indemnified by the Company, constitute the whole and only agreement between the parties relating to the indemnification of the Director by the Company and the obligations of the parties in relation to Third Party Claims and Costs Claims.

 

8.2       This Agreement may only be varied in writing signed by each of the parties.

 

9.         Assignment

 

	
9.1

	
The Company may at any time assign all or any part of the benefit of, or its rights or benefits under, this Agreement to any Subsidiary.

 

	
9.2

	
The Director shall not assign, or purport to assign, all or any part of the benefit of, or his rights or benefits under, this Agreement, provided that the benefit of, and rights under, this Agreement shall ensure to the benefit of, and be enforceable by, the successors, heirs and personal representatives of the Director.

 

10.       Confidentiality

 

	
10.1

	
Subject to Clause 11.3, each party shall treat as confidential all information obtained as a result of entering into or performing this Agreement which relates to:

 

	 	
(A)

	
the provisions of this Agreement;

 

  

  

  

 

	 	
(B)

	
any negotiations relating to this Agreement;

 

	 	
(C)

	
the subject matter of this Agreement; or

 

	 	
(D)

	
the other party

 

(in each case referred to herein as “Confidential Information”).

 

10.2      Subject to Clause 11.3, each party shall:

 

	
  

	
(A)

	
not disclose any Confidential Information to any person other than any of its professional advisers and, in the case of the Company, directors and employees and directors and employees of any Subsidiary who need to know such information in order to discharge their respective duties; and

 

	
  

	
(B)

	
procure that any person to whom any Confidential Information is disclosed by it complies with the restrictions contained in this Clause as if such person were a party to this Agreement.

 

	
10.3

	
Notwithstanding the other provisions of this Clause, either party may disclose Confidential Information:

 

	 	
(A)

	
if and to the extent required by law;

 

	
  

	
(B)

	
in the case of the Company, if and to the extent required by any securities exchange or regulatory or governmental body to which the Company is subject or submits, wherever situated, including (amongst other bodies) the stock Exchange, the Jersey Financial Services Commission, the Financial Services Authority or The Panel on Takeovers and Mergers, whether or not the requirement for information has the force of law;

 

	
  

	
(C)

	
to its professional advisers, and, in the case of the Company, its auditors and bankers;

 

	
  

	
(D)

	
if and to the extent the Confidential Information has come into the public domain through no fault of that party; or

 

	
  

	
(E)

	
if and to the extent the other party has given prior written consent to the disclosure, such consent not to be unreasonably withheld or delayed.

 

Any Confidential Information to be disclosed by either party pursuant to paragraph (A), (B), (C) or (D) shall be disclosed only after notice to the other party.

 

	
10.4

	
The restrictions contained in this Clause shall continue to apply after the Director ceases to be a director of the Company, without limit in time.

 

  

  

  

 

11.       Counterparts

 

	
11.1

	
This Agreement may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart.

 

	
11.2

	
Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute but one and the same instrument.

 

12.       Choice of Governing Law

 

This Agreement is governed by, and shall be construed in accordance with, Jersey law.

 

13.       Jurisdiction

 

The courts of Jersey are to have jurisdiction to settle any dispute arising out of or in connection with this Agreement. Any proceedings relating to this Agreement may therefore be brought in the Jersey courts.

 

14.       Process agent

 

14.1     Without prejudice to any other mode of service allowed under Jersey law, the Director:

 

	
  

	
(A)

	
irrevocably appoints Mourant & Co Secretaries Limited of 22 Grenville Street, St Hellier, Jersey JE4 8PX, as its agent for service of process in relation to any proceedings before the Jersey courts in connection with this Agreement;

 

	
  

	
(B)

	
agrees that, if a process agent ceases to act as process agent or no longer has and address in Jersey, it shall appoint a substitute process agent acceptable to the Company within ten Business Days and to delivery the Company a copy of the new process agent’s acceptance of that appointment, and failing this, the Company may appoint another agent for this purpose; and

 

	
  

	
(C)

	
agrees that the failure by a process agent to notify him of any process will not invalidate the proceedings concerned.

 

	
14.2

	
The Company shall send by post to the Director a copy of the document served on his agent for service of process. However no failure or delay in so doing shall prejudice the effectiveness of service of such document or given rise to any claim by the Director against the Company.

 

  

  

  

 

IN WITNESS of which this document has been executed and delivered on the date which first appears on page 1 above.

 

Company

 

	
SIGNED for and on behalf of

	
)

	  	
)

	
SHIRE PLC

	
)

	  	  
	
Director

	  
	
SIGNED by

	
)

	  	
)

	
DR. FLEMMING ORNSKOV

	
)

	  	
)

 

 

Dated                                                           

 

 

 

SHIRE PLC

 

 

and

 

 

DR. FLEMMING ORNSKOV

 

 

 

DIRECTOR’S INDEMNITY

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