Document:

Exhibit 10.1

 

AMENDED AND RESTATED

TRANSITION AND SEVERANCE AGREEMENT

 

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

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

13.          Interpretation. The
language of all parts of this Agreement shall in all cases be construed as a
whole, according to its fair meaning, and not strictly for or against any of
the Parties. This Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision hereof shall be
prohibited or invalid under any such law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating or
nullifying the remainder of such provision or any other provisions of this
Agreement. The captions of the sections of this Agreement are for convenience
of reference only, and in no way define, limit or affect the scope or substance
of any section of this Agreement.

 

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

 

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

 

4

 

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

 

 

SEPRACOR
INC.

 

 

	
  By:

  	
   

  	
  /s/ Adrian Adams

  	
   

  
	
   

  	
   

  	
   

  
	
  Name
  and Title:

  	
  Mr. Adrian Adams, President & CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ W. James O’Shea

  	
   

  
	
  W.
  JAMES O’SHEA

  	
   

  	
   

  
						

 

5

 

Exhibit A

 

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

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Total Vesting

  	
   

  
	
   

  	
   

  	
  Options

  	
   

  	
   

  	
   

  	
  Total Currently

  	
   

  	
  Prior to

  	
   

  
	
  Grant Date

  	
   

  	
  Outstanding

  	
   

  	
  Price

  	
   

  	
  Vested

  	
   

  	
  Separation Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10/21/99

  	
   

  	
  200,000

  	
   

  	
  $

  	
  35.75

  	
   

  	
  200,000

  	
   

  	
  200,000

  	
   

  
	
  10/21/99

  	
   

  	
  11,814

  	
   

  	
  $

  	
  35.75

  	
   

  	
  11,184

  	
   

  	
  11,184

  	
   

  
	
  10/21/99

  	
   

  	
  468,816

  	
   

  	
  $

  	
  35.75

  	
   

  	
  468,816

  	
   

  	
  468,816

  	
   

  
	
  2/24/05

  	
   

  	
  7,750

  	
   

  	
  $

  	
  64.50

  	
   

  	
  1,550

  	
   

  	
  3,100

  	
   

  
	
  2/24/05

  	
   

  	
  92,250

  	
   

  	
  $

  	
  64.50

  	
   

  	
  18,450

  	
   

  	
  36,900

  	
   

  
	
  3/16/06

  	
   

  	
  1,800

  	
   

  	
  $

  	
  55.54

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  3/16/06

  	
   

  	
  26,700

  	
   

  	
  $

  	
  55.54

  	
   

  	
  0

  	
   

  	
  5,700

  	
   

  

 

6Exhibit 10.2

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT
AGREEMENT (the “Agreement”), made this 15th day of October 2007, is entered
into by Sepracor Inc., a Delaware corporation with its principal place of
business at 84 Waterford Drive, Marlborough, Massachusetts 01752-7231 (the “Company”),
and Mark Iwicki residing at 12 Bristol Terrace, Long Valley, New Jersey 07853
(the “Executive”).

 

The Company
desires to employ the Executive and the Executive desires to be employed by the
Company. In consideration of the mutual covenants and promises contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, the parties agree as
follows:

 

1.             Term
of Employment. The Company hereby agrees to employ the Executive and the
Executive hereby accepts employment with the Company, upon the terms set forth
in this Agreement, for the period commencing on October 15, 2007 (the “Commencement
Date”)  and ending on October 15,
2012 (the “Term”). Notwithstanding
the foregoing, the Term shall be extended automatically without further action
by either party by one (1) additional year (added to the end of the Term) on
each succeeding anniversary of October 15, 2012, unless either party shall have
served written notice upon the other party at least sixty (60) days preceding
the date upon which such Term would end (such period, as it may be extended,
the “Employment Period”), unless sooner terminated in accordance with the
provisions of Section 4.

 

2.             Title and Capacity.
The Executive shall serve as Executive Vice-President, Chief Commercial Officer
of the Company. Executive shall report directly to the Chief Executive Officer
of the Company and shall, except as permitted hereby, devote all of his
business time and services to the business and affairs of the Company. Executive
shall also perform such other duties consistent with his position as Executive
Vice-President, Chief Commercial Officer as 

 

 

may be reasonably
assigned by the Chief Executive Officer and the Board of Directors of the
Company (the “Board”) from time to time. The Executive agrees to abide by the
rules, regulations, instructions, personnel practices and policies of the
Company and any changes therein that may be adopted from time to time by the
Company.

 

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

 

3.             Compensation and
Benefits.

 

3.1           Salary. During
the term of this Agreement, the Company agrees to pay to the Executive a base
salary at the annualized rate of $475,000 (“Base Salary”) commencing on the
Commencement Date. The Base Salary shall be subject to annual review by the
Board but shall not be reduced below $475,000 per annum. Such salary shall be
payable to Executive in bi-weekly installments and in accordance with the
Company’s normal payroll procedures.

 

3.2           Bonus. The
Executive shall receive a one-time “Sign On” bonus of $175,000 less applicable
taxes and withholdings to be paid within thirty (30) days of the Commencement
Date, provided, however, if the Executive’s employment is terminated,
within twelve (12) months of the Commencement Date, for Cause by the Company
pursuant to Section 4.2 or at the election of the Executive pursuant to Section
4.5, the Executive will be required to repay the portion of the Sign On bonus
retained by Executive after the payment of all taxes. In addition, the
Executive shall be eligible for a performance-based annual bonus for each
fiscal 

 

 

year of the Term (the “Annual
Bonus”). The Annual Bonus shall be based upon annual quantitative and qualitative
performance targets as established by the Board in its sole discretion in
accordance with the Company’s bonus plan; provided, that the Executive’s
annual bonus level target shall be set at sixty percent (60%) of Base Salary. For
2007, Executive shall be entitled to a guaranteed bonus in the amount of
$75,000 payable on or about February 2008. For 2008, Executive shall be
entitled to a guaranteed Annual Bonus in an amount equal to sixty percent (60%)
of his Base Salary. The Annual Bonus is not earned until the close of business
on the last business day of the Company’s fiscal year. Any Annual Bonus payable
hereunder shall be payable, if at all, after the date of the delivery of the
audited financial statements for the applicable fiscal year. The Company’s fiscal
year currently ends December 31.

 

3.3           Stock and Option
Grant. At the first meeting of the Compensation Committee of the Board of
Directors following the Executive’s first day of employment, the Company shall
grant to the Executive, under the Company’s 2000 Stock Incentive Plan (the “Stock
Plan”), 80,000 shares of restricted stock and an option to purchase 150,000
shares of Company stock (the “Initial Grant”). The terms and conditions of the
Initial Grant (other than the exercise price per share, which shall be equal to
the closing price of the Company’s stock on the grant date) shall be set forth
in the award agreements attached hereto as Schedules A and B. The Initial Grant
shall vest in five equal installments on each of the first five anniversaries
of the Commencement Date. The Board, in its sole discretion, may grant further
incentive compensation awards to the Executive from time to time. The Company
represents and warrants to Executive that the Company has full power and
authority, subject to Compensation Committee approval, and shares available
under the Stock Plan to make the Initial Grant.

 

 

3.4           Benefits. The
Executive shall be entitled to participate in all bonus and benefit programs
that the Company establishes and makes available to its employees, to the
extent that the Executive is eligible under (and subject to the provisions of)
the plan documents governing those programs. The Executive shall be entitled to
no less than four weeks paid vacation per year, subject to the other terms of
the Company’s standard vacation policy (Schedule C).

 

3.5           Reimbursement of
Expenses. The Company shall reimburse the Executive for all reasonable
travel (which shall be deemed to include first class airfare), entertainment
and other expenses incurred or paid by the Executive during the one year period
beginning on this Commencement Date in connection with, or related to, the
performance of his duties, responsibilities or services under this Agreement or
in connection with Executive’s commuting to and from his personal residence in
New Jersey and the Company’s offices, upon presentation by the Executive of
documentation, expense statements, vouchers and/or such other supporting
information as the Company may request. All reimbursement payments made
pursuant to this Section 3.5 shall be made on a fully tax grossed-up basis.

 

3.6           Housing
Expenses. The Company understands that the Executive intends to maintain
his primary residence outside the Massachusetts area for up to twelve (12)
months and then intends to relocate to the Massachusetts area. Until the third
anniversary of the Commencement Date, the Company agrees to provide the
Executive with a housing allowance of $3,750 per month, which payments shall be
increased on a fully tax grossed-up basis. The Company also will reimburse the
Executive for reasonable travel, meals and lodging expenses incurred by him for
up to two trips for the purpose of securing such house or apartment within a
suitable distance to the Company’s headquarters. Executive shall be entitled to
relocation 

 

 

benefits afforded by the
Company to other Company executives if and when Executive decides to
permanently relocate his primary residence to the Massachusetts area.

 

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

 

3.8           Automobile. The
Company agrees to provide the Executive with an automobile allowance or a
leased automobile with a retail value of up to $60,000, which payments shall be
increased on a fully tax grossed-up basis. In addition, the Company agrees to
pay all insurance, maintenance, fuel and other customary costs associated with
operating the automobile.

 

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

 

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

 

4.1           On the expiration date
of the Employment Period.

 

4.2           At the election of the
Company, for Cause (as defined below), immediately upon written notice by the
Company to the Executive, which notice shall identify the Cause upon which
termination is based. For the purposes of this Section 4.2, Cause for
termination shall mean: (a) the Executive’s willful and continued failure to
substantially perform his reasonable assigned duties (other than any such
failure resulting from incapacity due to physical or mental illness or any
failure after the Executive gives notice of termination for Good Reason and
Good Reason exists), which failure is not cured within 30 days after a written
demand for substantial performance is received by the Executive from the Board
of Directors of 

 

 

the Company which
specifically identifies the manner in which the Board of Directors believes the
Executive has not substantially performed the Executive’s duties; (b) the
Executive’s willful engagement in illegal conduct or gross misconduct which is materially
and demonstrably injurious to the Company; or (c) a material breach of Section
6 or 7 of this Agreement by the Executive. For purposes of this Section 4.2, no
act or failure to act by the Executive shall be considered “willful” unless it
is done, or omitted to be done, in bad faith and without reasonable belief that
the Executive’s action or omission was in the best interests of the Company.

 

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

 

4.4           At the election of the
Executive for Good Reason as defined herein. The Executive may terminate his
employment for Good Reason at any time during the twenty-four (24) months
following the initial occurrence of the condition giving rise to Good Reason,
with 30-days prior written notice of such termination to the Company. Such
notice shall provide factual details of the basis behind such termination and
the Company shall have a thirty (30) day period thereafter to cure such matter.
As used herein, the term “Good Reason” shall mean: (a) a material breach by the
Company of the terms of this Agreement, including the failure to pay Base
Salary or any Annual Bonus when due; or (b) any material adverse change by the
Company in Executive’s titles, authorities, duties, responsibilities or lines
of reporting inconsistent with the terms hereof or the assignment to Executive
by the Company of titles, authorities, duties, 

 

 

responsibilities or lines
of reporting inconsistent with the terms hereof, or (c) a relocation of the
principal offices of the Company to an area more than forty (40) miles from the
location of such offices as of the date hereof.

 

4.5           At the election of the
Executive without Good Reason, upon not less than sixty (60) calendar days
prior written notice of termination by the Executive to the Company; provided,
however, that the Company may, in its sole discretion, determine that
the termination of the Executive shall become effective immediately and in
which case the termination shall still be considered at the election of the
Executive without Good Reason.

 

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

 

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

 

5.             Effect of
Termination.

 

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

 

5.2           Termination for
Death or Disability. In the event the Executive’s employment is terminated
by death or because of disability pursuant to Section 4.3, the Company 

 

 

shall pay to the estate
of the Executive or to the Executive, as the case may be, (A) within thirty
(30) days of the date of the Executive’s death or determination of disability,
the compensation which would otherwise be payable to the Executive up to the
end of the month in which the termination of his employment because of death or
disability occurs; and (B) an annual bonus, payable when bonuses are paid for
that year, in an amount equal to the total bonus he would be paid for such
year, if any, multiplied by a fraction, the numerator of which is the number of
days in the year that have elapsed since January 1 and the denominator of which
is 365 (a “Pro Rata Bonus”). In addition, the Company shall permit Executive or
Executive’s estate or representative to exercise the vested stock option
portion of the Initial Grant for a period of no less than one year after any
such termination of employment.

 

5.3           Termination
By the Executive With Good Reason or By the Company Without “Cause”. In the
event the Executive’s employment is terminated by the Executive with Good
Reason pursuant to Section 4.4 or by the Company without Cause pursuant to
Section 4.6, the Company shall pay to the Executive the compensation and
benefits otherwise payable to him under Section 3 through the last calendar day
of his actual employment by the Company. In addition, provided the Executive
executes and does not revoke a Separation Agreement and Release of Claims for
the benefit of the Company substantially in the form set forth on Schedule D
hereto, the Company shall  (a)  continue to pay the Executive the Base
Salary for eighteen (18) months in accordance with the Company’s regular
payroll practices; (b) pay the Executive a Pro Rata Bonus; (c) pay the
Executive, in bi-weekly installments, over an eighteen-month period, an amount
equal in the aggregate to 1.5 times the average Annual Bonus earned for
the two years prior to the date of his termination (in the event Executive has
not been employed for a sufficient period to earn two such bonuses, such
calculation shall be made assuming Executive earned a 

 

 

bonus for any such year
at a target level of performance (taking into account any minimum bonus
amount)); (d) provide to the Executive for 18 months following the date of his
termination payment of COBRA premiums for medical, dental, and vision benefits
pursuant to plans maintained by the Company under which Executive and/or
Executive’s family is eligible to receive benefits; provided, however, that,
notwithstanding the foregoing, the benefits described in this subsection may be
discontinued prior the end of the period, but only to the extent, that
Executive receives substantially similar benefits from a subsequent employer;
and (e) permit Executive to exercise the stock option portion of the Initial
Grant for a period of no less than six months after the date of termination.

 

5.4           Termination
Following a Change in Control. In the event the Executive’s
employment is terminated pursuant to Section 4.7 by the Company or by the
Executive within 24 months following the Change in Control Date as defined in
the ERA, the Executive will be entitled to the benefits set forth in the ERA in
accordance with the terms of the ERA.

 

5.5           Six
Month Delay. If any payment, compensation or other benefit provided to the
Executive in connection with his employment termination is determined, in whole
or in part, to constitute “nonqualified deferred compensation” within the
meaning of Section 409A and the Executive is a specified employee as defined in
Section 409A(a)(2)(B)(i), no part of such payments shall be paid before the day
that is six (6) months plus one (1) day after the date of termination (the “New
Payment Date”). In the case of welfare benefit continuation, the Company shall
use its best efforts to enable Executive to obtain such benefits at Executive’s
expense prior to the New Payment Date. The aggregate of any payments that
otherwise would have been paid to the Executive (or on Executive’s behalf)
during the period between the date of termination and the New Payment Date
shall be paid to the Executive in a lump sum on such 

 

 

New Payment Date. Thereafter,
any payments that remain outstanding as of the day immediately following the
New Payment Date shall be paid without delay over the time period originally
scheduled, in accordance with the terms of this Agreement.

 

6.             Non-Competition
and Non-Solicitation.

 

(a)           While the Executive is
employed by the Company and for a period of twelve (12) months following the
Executive’s termination or cessation of such employment for any reason, the
Executive will not directly or indirectly:

 

(i)            Engage in any business
or enterprise (whether as an owner, partner, officer, employee, director,
investor, lender, consultant, independent contractor or otherwise, except as
the holder of not more than 5% of the combined voting power of the outstanding
stock of a publicly held company) that (A) is competitive with the Company’s
business and (B) develops, designs, produces, markets, sells or renders
any product or service competitive with any product developed, produced,
marketed, sold or rendered by the Company while the Executive was employed by
the Company;

 

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

 

(iii)          Either alone or in
association with others, solicit, divert or take away, or attempt to divert or
to take away, the business or patronage of any of the clients, customers or
accounts, or prospective clients, customers or accounts, of the Company which
were contacted, solicited or served by the Executive while he was employed by
the Company.

 

 

(b)           If any restriction set
forth in this Section 6 is found by any court of competent jurisdiction to be
unenforceable because it extends for too long a period of time or over too
great a range of activities or in too broad a geographic area, it shall be
interpreted to extend only over the maximum period of time, range of activities
or geographic area as to which it may be enforceable.

 

(c)           The Executive
acknowledges that the restrictions contained in this Agreement are necessary
for the protection of the business and goodwill of the Company and are
considered by the Executive to be reasonable for such purpose. The Executive
agrees that any breach of this Agreement will cause the Company substantial and
irrevocable damage and therefore, in the event of any such breach, in addition
to such other remedies which may be available, the Company shall have the right
to seek specific performance and injunctive relief without posting a bond.

 

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

 

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

 

(f)            If the Executive
violates the provisions of this Section, the Executive shall continue to be
held by the restrictions set forth in this Section, until a period equal to the
period of restriction has expired without any violation.

 

 

7.             Proprietary
Information and Developments.

 

7.1           Proprietary
Information.

 

(a)           The Executive agrees
that all information, whether or not in writing, of a private, secret or confidential
nature concerning the Company’s business, business relationships or financial
affairs (collectively, “Proprietary Information”) is and shall be the exclusive
property of the Company. By way of illustration, but not limitation,
Proprietary Information may include discoveries, inventions, products, product
improvements, product enhancements, processes, methods, techniques, formulas,
compositions, compounds, negotiation strategies and positions, projects,
developments, plans (including business and marketing plans), research data,
clinical data, financial data (including sales, costs, profits and pricing
methods), personnel data, computer programs (including software used pursuant
to a license agreement), customer and supplier lists, and contacts at or
knowledge of customers or prospective customers of the Company. Except as
required by applicable law, the Executive will not disclose any Proprietary
Information to any person or entity other than employees of the Company or use
the same for any purposes (other than in the performance of his duties as an
employee of the Company) without prior written approval from the Chief
Executive Officer, either during or after his employment with the Company,
unless and until such Proprietary Information has become public knowledge
without fault by the Executive.

 

(b)           The Executive agrees
that all files, documents, letters, memoranda, reports, records, data,
sketches, drawings, methods, laboratory notebooks, program listings, computer
equipment or devices, computer programs or other written, photographic, or
other tangible material containing Proprietary Information, whether created by
the Executive or others, which shall come into his custody or possession, shall
be and are the exclusive property of the 

 

 

Company and are to be
used by the Executive only in the performance of his duties for the Company. All
such materials or copies thereof and all tangible property of the Company in
the custody or possession of the Executive shall be delivered to the Company
upon the earlier of (i) a request by the Company or (ii) termination
of his employment. After such delivery, the Executive shall not retain any such
materials or copies thereof or any such tangible property.

 

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

 

7.2           Developments.

 

(a)           The Executive will make
full and prompt disclosure to the Company of all inventions, creations,
improvements, discoveries, trade secrets, secret processes, technology,
know-how, copyrightable materials, methods, developments, software, and works
of authorship or other creative works, whether patentable or not, which are
created, made, conceived or reduced to practice by him or under his direction
or jointly with others during his employment by the Company, whether or not
during normal working hours or on the premises of the Company (all of which are
collectively referred to in this Agreement as “Developments”).

 

(b)           The Executive agrees to
assign and does hereby assign to the Company (or any person or entity
designated by the Company) all his right, title and interest in and to all
Developments and all related patents, patent applications, copyrights and
copyright applications. However, this subsection (b) shall not apply to
Developments that do not relate to 

 

 

any business or research
and development conducted or planned to be conducted by the Company at the time
such Development is created, made, conceived or reduced to practice and that
are made and conceived by the Executive not during normal working hours, not on
the Company’s premises and not using the Company’s tools, devices, equipment or
Proprietary Information. The Executive understands that, to the extent this
Agreement shall be construed in accordance with the laws of any state that
precludes a requirement in an employee agreement to assign certain classes of
inventions made by an employee, this subsection (b) shall be interpreted not to
apply to any invention that a court rules and/or the Company agrees falls
within such classes. The Executive also hereby waives all claims to moral
rights in any Developments.

 

(c)           The Executive agrees to
cooperate fully with the Company and to take such further actions as may be
necessary or desirable, both during and after his employment with the Company,
with respect to the procurement, maintenance and enforcement of copyrights,
patents and other intellectual property rights (both in the United States and
foreign countries) relating to Developments. The Executive shall sign all
papers, including, without limitation, copyright applications, patent
applications, declarations, oaths, formal assignments, assignments of priority
rights and powers of attorney, that the Company may deem necessary or desirable
in order to protect its rights and interests in any Development. The Executive
further agrees that if the Company is unable, after reasonable effort, to
secure the signature of the Executive on any such papers, the Chief Executive
Officer of the Company shall be entitled to execute any such papers as the
agent and the attorney-in-fact of the Executive, and the Executive hereby
irrevocably designates and appoints the Chief Executive Officer of the Company
as his agent and attorney-in-fact to execute any such papers on his behalf and
to take any and all actions as the 

 

 

Company may deem
necessary or desirable in order to protect its rights and interests in any
Development under the conditions described in this sentence.

 

7.3           United States
Government Obligations. The Executive acknowledges that the Company from
time to time may have agreements with other parties or with the United States
Government, or agencies thereof, which impose obligations or restrictions on
the Company regarding inventions made during the course of work under such
agreements or regarding the confidential nature of such work. The Executive
agrees to be bound by all such obligations and restrictions that are made known
to the Executive and to take all action necessary to discharge the obligations
of the Company under such agreements.

 

7.4           Other Agreements.
The Executive hereby represents that he is not bound by the terms of any
agreement with any previous employer or other party to refrain from competing,
directly or indirectly, with the business of such previous employer or any
other party. The Executive further represents that his performance of all the
terms of this Agreement and the performance of his duties as an employee of the
Company does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by him in confidence or in
trust prior to his employment with the Company and that the Executive will not
disclose to the Company or induce the Company to use any confidential or
proprietary information, knowledge or material belonging to any previous
employer or others. The Executive further represents that his performance of
all the terms of this Agreement and the performance of his duties as an
employee of the Company does not and will not breach any agreement to refrain
from soliciting employees, customers or suppliers of any former employer or
others.

 

 

8.             Indemnification.
The Company shall indemnify the Executive in accordance with its Certificate of
Incorporation and By-Laws.

 

9.             Survival. The
provisions of Sections 6, 7 and 8 shall survive the termination of this
Agreement for any reason.

 

10.           Notices. Any
notices delivered under this Agreement shall be deemed duly delivered three (3)
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one (1) business day after it is sent for
next-business day delivery via a reputable nationwide overnight courier
service, in each case to the address of the recipient set forth in the
introductory paragraph hereto. Either party may change the address to which
notices are to be delivered by giving notice of such change to the other party
in the manner set forth in this Section 10.

 

11.           Compliance with Code
Section 409A. It is intended that this Agreement comply with or be exempt
from the requirements of Sections 409A(a)(2) through (4) of the Internal
Revenue Code of 1986, as amended, and all regulations issued thereunder. The
Agreement shall be interpreted and administered for all purposes in accordance
with this intent and may be amended by the Company, following consultation with
Executive and Executive’s legal and tax advisors, at any time if such amendment
is deemed necessary to satisfy this intent.

 

12.           Pronouns. Whenever
the context may require, any pronouns used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular forms of
nouns and pronouns shall include the plural, and vice versa.

 

13.           Entire Agreement.
This Agreement, together with the ERA, constitutes the entire agreement between
the parties and supersedes all prior agreements and understandings, whether
written or oral, relating to the subject matter of this Agreement.

 

 

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

 

15.           Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts (without reference to the conflict of laws
provisions thereof). Any action, suit or other legal proceeding arising under
or relating to any provision of this Agreement shall be commenced only in a
court of the Commonwealth of Massachusetts (or, if appropriate, a federal court
located within the Commonwealth of Massachusetts), and the Company and the
Executive each consents to the jurisdiction of such a court.

 

16.           Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of
both parties and their respective successors and assigns, including any
corporation with which or into which the Company may be merged or which may
succeed to its assets or business; provided, however, that the
obligations of the Executive are personal and shall not be assigned by him.

 

17.           Acknowledgment. The
Executive states and represents that he has had an opportunity to fully discuss
and review the terms of this Agreement with an attorney. The Executive further
states and represents that he has carefully read this Agreement, understands
the contents herein, freely and voluntarily assents to all of the terms and
conditions hereof, and signs his name of his own free act.

 

18.           Miscellaneous.

 

18.1         No delay or omission by
the Company or Executive in exercising any right under this Agreement shall
operate as a waiver of that or any other right. A waiver or consent 

 

 

given by the Company or
Executive on any one occasion shall be effective only in that instance and
shall not be construed as a bar to or waiver of any right on any other
occasion.

 

18.2         The captions of the
sections of this Agreement are for convenience of reference only and in no way
define, limit or affect the scope or substance of any section of this
Agreement.

 

18.3         In case any provision of
this Agreement shall be invalid, illegal or otherwise unenforceable, the
validity, legality and enforceability of the remaining provisions shall in no
way be affected or impaired thereby.

 

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

 

	
   

  	
  Sepracor Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Adrian Adams

  	
   

  
	
   

  	
  Title:

  	
  President & CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Mark Iwicki

  	
   

  
	
   

  	
  Mark Iwicki

  	
   

  	
   

  
					

 

 

SCHEDULE
A

FORM OF RESTRICTED STOCK AGREEMENT

 

 

SEE
ATTACHED AGREEMENT

 

 

SEPRACOR INC.

 

Restricted
Stock Agreement

	
  Name of Recipient:

  	
   

  
	
   

  	
   

  
	
  Number of shares of restricted common 

  stock awarded:

  	
   

  
	
   

  	
   

  
	
  Grant Date:

  	
   

  

 

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

	
   

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  [insert name and
  title]

  
	
   

  	
   

  
	
  Accepted and Agreed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [insert name of recipient]

  	
   

  
	
   

  	
   

  
				

 

 

SEPRACOR
INC.

Restricted
Stock Agreement

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

1.             Issuance of
Restricted Shares.

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

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

2.             Vesting.

(a)           Vesting Schedule.  Unless otherwise provided in this Agreement
or the Plan, the Restricted Shares shall vest in accordance with the following
vesting schedule:  20% of the total
number of Restricted Shares shall vest on the first anniversary of your
Commencement Date (as defined in the Employment Agreement entered into between
you and the Company dated as of October 15, 2007) and 20% of the total number
of Restricted Shares shall vest on each successive anniversary thereafter,
through and including the 5th anniversary of the Grant Date.  Any fractional number of Restricted Shares
resulting from the application of the foregoing percentages shall be rounded
down to the nearest whole number of Restricted Shares.

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

3.             Forfeiture of
Unvested Restricted Shares Upon Employment Termination.

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

 

 

4.             Restrictions on
Transfer.

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

5.             Restrictive
Legends.

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

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

6.             Rights as a
Shareholder.

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

7.             Provisions of
the Plan.

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

8.             Tax Matters.

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

 

 

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

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

9.             Miscellaneous.

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

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

 

 

SCHEDULE
B

FORM OF STOCK OPTION AGREEMENTS

 

 

SEE
ATTACHED AGREEMENT

 

20

 

SEPRACOR INC.

 

Form of Incentive Stock
Option Agreement 

Granted Under 2000
Stock Incentive Plan 

1.             Grant of Option.

 

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

 

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

 

2.             Vesting Schedule.

 

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

 

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

 

3.             Exercise of
Option.

 

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

 

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

 

 

(c)            Termination of Relationship with
the Company. If the Participant ceases to be an Eligible Participant for any
reason, then, except as provided in paragraphs (d) and (e) below, the right to
exercise this option shall terminate three months after such cessation (but in
no event after the Grant Expiration Date), provided that this option shall be
exercisable only to the extent that the Participant was entitled to exercise
this option on the date of such cessation. 
Notwithstanding the foregoing, if, following the time the Participant
has ceased to be an Eligible Participant, but prior to the Grant Expiration
Date, the Participant materially breaches Section 6 or 7 of the Employment
Agreement between the Participant and the Company dated October 15, 2007 (the
“Employment Agreement”), the right to exercise this option shall terminate
immediately upon written notice to the Participant from the Company describing
such violation.

 

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

 

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

 

4.             Withholding.

 

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

 

5.             Nontransferability
of Option.

 

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

 

6.             Disqualifying
Disposition.

 

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

 

 

7.             Provisions of
the Plan.

 

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

 

 

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

 

	
   

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  

 

PARTICIPANT’S ACCEPTANCE

 

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

	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  

 

 

SEPRACOR INC.

 

Nonstatutory Stock
Option Agreement

Granted Under 2000 Stock Incentive Plan

1.             Grant of Option.

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

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

2.             Vesting Schedule.

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

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

3.             Exercise of Option.

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

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

 

 

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

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

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

4.             Withholding.

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

5.             Nontransferability of Option.

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

6.             Provisions of the Plan.

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

 

 

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

	
   

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  

 

PARTICIPANT’S
ACCEPTANCE

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

	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  

 

 

SCHEDULE
C

VACATION POLICY

 

 

SEE
ATTACHED POLICY

 

21

 

SCHEDULE
D

FORM OF SEPARATION AGREEMENT AND RELEASE OF CLAIMS

 

 

SEE
ATTACHED FORM

 

22

 

FORM OF SEPARATION AGREEMENT AND RELEASE OF CLAIMS

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

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

1.             Mutual Releases - In consideration
of the payment of the severance benefits, which you acknowledge you would not
otherwise be entitled to receive, you hereby fully, forever, irrevocably and
unconditionally release, remise and discharge the Company, its officers,
directors, stockholders, corporate affiliates, subsidiaries, parent companies, successors
and assigns, agents and employees (each in their individual and corporate
capacities) (hereinafter, the “Released Parties”) from any and all claims,
charges, complaints, demands, actions, causes of action, suits, rights, debts,
sums of money, costs, accounts, reckonings, covenants, contracts, agreements,
promises, doings, omissions, damages, executions, obligations, liabilities, and
expenses (including attorneys’ fees and costs), of every kind and nature which
you ever had or now have against the Released Parties, including, but not
limited to, those claims arising out of your employment with and/or separation
from the Company, including, but not limited to, all claims under Title VII of
the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Age
Discrimination in Employment Act, 29 U.S.C. § 621 et seq., the Americans
With Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Family and
Medical Leave Act, 29 U.S.C. § 2601 et seq., the Worker Adjustment and
Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 et seq., Section
806 of the Corporate and Criminal Fraud Accountability Act of 2002, 18 U.S.C. §
1514(A), the Rehabilitation Act of 1973, 29 U.S.C. § 701 et seq.,
Executive Order 11246, Executive Order 11141, the Fair Credit Reporting Act, 15
U.S.C. § 1681 et seq., the Employee Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. § 1001 et seq., the Massachusetts Fair
Employment Practices Act., M.G.L. c. 151B, § 1 et seq., the
Massachusetts Civil Rights Act, M.G.L. c. 12, §§ 11H and 11I, the Massachusetts
Equal Rights Act, M.G.L. c. 93, § 102 and M.G.L. c. 214, § 1C, the
Massachusetts Labor and Industries Act, M.G.L. c. 149, § 1 et seq., the
Massachusetts Privacy Act, M.G.L. c. 214, § 1B, and the Massachusetts Maternity
Leave Act, M.G.L. c. 149, § 105D, all as amended; all common law claims
including, but not limited to, actions in tort, defamation and breach of
contract; all claims to any non-vested ownership interest in the Company,
contractual or otherwise, including, but not limited to, claims to stock or
stock options; and any claim or damage arising out of your employment with or

 

 

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

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

2.             Non-Disclosure, Non-Competition and
Non-Solicitation Obligations — You acknowledge and reaffirm your
obligation to keep confidential and not to disclose any and all non-public
information concerning the Company which you acquired during the course of your
employment with the Company, including, but not limited to, any non-public
information concerning the Company’s business affairs, business prospects and
financial condition, as is stated more fully in the [Name of the
Non-Disclosure Agreement] you executed at the inception of your
employment, which remains in full force and effect.  You further acknowledge and reaffirm your
obligations under the [Name of the
Non-Competition and/or Non-Solicitation Agreement(s)] you previously
executed for the benefit of the Company at the inception of your employment,
which also remain(s) in full force and effect.

3.             Return of Company Property - You
confirm that you have returned to the Company all keys, files, records (and
copies thereof), equipment (including, but not limited to, computer hardware,
software and printers, wireless handheld devices, cellular phones, pagers,
etc.), Company identification, Company vehicles and any other Company-owned
property in your possession or control and have left intact all electronic
Company documents, including but not limited to, those that you developed or
helped develop during your employment. 
You further confirm that you have cancelled all accounts for your
benefit, if any, in the Company’s name, including but not limited to, credit
cards, telephone charge cards, cellular phone and/or pager accounts and
computer accounts.

4.             Business
Expenses and Compensation - You acknowledge that you have been
reimbursed by the Company for all business expenses incurred in conjunction
with the performance of your employment and that no other reimbursements are
owed to you.  You further acknowledge
that you have received payment in full for all services rendered in conjunction
with your employment by the Company and that no other compensation is owed to
you except as provided herein.

 

 

5.             Non-Disparagement - You understand
and agree that, as a condition for payment to you of the consideration herein
described, you shall not make any false, disparaging or derogatory statements
to any media outlet, industry group, financial institution or current or former
employee, consultant, client or customer of the Company regarding the Company
or any of its directors, officers, employees, agents or representatives or
about the Company’s business affairs and financial condition; provided, however,
that nothing herein shall prevent you from making truthful disclosures to any
governmental entity or in any litigation or arbitration.

6.             Amendment - This agreement shall be
binding upon the parties and may not be modified in any manner, except by an
instrument in writing of concurrent or subsequent date signed by duly
authorized representatives of the parties hereto.  This agreement is binding upon and shall
inure to the benefit of the parties and their respective agents, assigns,
heirs, executors, successors and administrators.

7.             Waiver of Rights - No delay or
omission by the Company in exercising any right under this agreement shall
operate as a waiver of that or any other right. 
A waiver or consent given by the Company on any one occasion shall be
effective only in that instance and shall not be construed as a bar or waiver
of any right on any other occasion.

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

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

10.           Tax Provision — In connection with
the severance benefits provided to you pursuant to this agreement, the Company
shall withhold and remit to the tax authorities the amounts required under
applicable law, and you shall be responsible for all applicable taxes with
respect to such severance benefits under applicable law.  You acknowledge that you are not relying upon
advice or representation of the Company with respect to the tax treatment of
any of the severance benefits.

11.           Section 409A - No payments that may
be made pursuant to this agreement that constitute “nonqualified deferred
compensation” within the meaning of Section 409A of the Internal Revenue Code
and the guidance issued thereunder (“Section 409A”) may be accelerated or
deferred by the Company or by you. 
Notwithstanding anything else to the

 

 

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

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

13.           Acknowledgments - You acknowledge
that you have been given at least twenty-one (21) days to consider this
agreement and that the Company advised you to consult with an attorney of your
own choosing prior to signing this agreement. 
You understand that you may revoke this agreement for a period of seven
(7) days after you sign this agreement, and the agreement shall not be
effective or enforceable until the expiration of this seven (7) day revocation
period.  You
understand and agree that by entering into this agreement you are waiving any
and all rights or claims you might have under The Age Discrimination in
Employment Act, as amended by The Older Workers Benefit Protection Act, and
that you have received consideration beyond that to which you were previously
entitled.

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

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

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

 

 

	
   

  	
  SEPRACOR
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

I hereby agree to the
terms and conditions set forth above.  I
have been given at least twenty-one (21) days to consider this agreement and I
have chosen to execute this on the date below. 
I intend that this agreement become a binding agreement between me and
the Company if I do not revoke my acceptance in seven (7) days by notifying
                                              
in writing.

 

	
   

  	
   

  	
  Date

  	
   

  
	
  Employee Name:

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