Document:

Exhibit 10.17

 

SEPRACOR
INC.

 

Executive
Retention Agreement

 

THIS EXECUTIVE RETENTION
AGREEMENT by and between Sepracor Inc., a Delaware corporation (the “Company”),
and Adrian Adams (the “Executive”) is made as of March 1, 2007 (the “Effective
Date”).

 

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

 

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

 

NOW, THEREFORE, as an
inducement for and in consideration of the Executive remaining in its employ,
the Company agrees that the Executive shall receive the severance benefits set
forth in this Agreement (including a certain “gross up” payment originally
authorized by the Board on February 25, 1999 and set forth in Section 4.3
of this Agreement) upon the occurrence of a Change in Control (as defined in Section 1.1).

 

1.             Key
Definitions.

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

1.2           “Change in Control Date” means the
first date during the Term (as defined in Section 2) on which a Change in
Control occurs.  Anything in this
Agreement to the contrary notwithstanding, if (a) a Change in Control
occurs, (b)  the Executive’s employment with the

 

2

 

Company
is terminated prior to the date on which the Change in Control occurs, and (c) either
(i) such termination of employment (x) was at the request of a third
party who has taken steps reasonably calculated to effect a Change in Control
or (y) otherwise arose in connection with or in anticipation of a Change
in Control, or (ii) such termination of employment occurs following the
execution of a definitive agreement for such Change in Control, then for all
purposes of this Agreement the “Change in Control Date” shall mean the date
immediately prior to the date of such termination of employment.

 

2.             Term
of Agreement.  This Agreement, and
all rights and obligations of the parties hereunder, shall take effect upon the
Effective Date and shall expire upon the first to occur of (a) the
expiration of the Term (as defined below) if a Change in Control has not
occurred during the Term, (b) the termination of the Executive’s
employment with the Company prior to the Change in Control Date, or (c) if
a Change in Control has occurred during the Term, the fulfillment by the
Company of all of its obligations under Sections 4 and 5.2 and 5.3.  “Term” shall mean the period commencing as of
the Effective Date and continuing in effect through March 1, 2010; provided,
however, that commencing on March 1,
2010 and each March 1 thereafter, the Term shall be automatically extended
for one additional year unless, not later than 90 days prior to the scheduled
expiration of the Term (or any extension thereof), the Company shall have given
the Executive written notice that the Term will not be extended.

 

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

 

4.             Benefits
to Executive.

 

4.1           Stock Acceleration.  If
the Change in Control Date occurs during the Term, then, effective upon the
Change in Control Date, (a) each outstanding option to purchase shares of
Common Stock of the Company held by the Executive shall vest and become
immediately exercisable in full and shares of Common Stock of the Company
received upon exercise of any options will no longer be subject to a right of
repurchase by the Company, (b) each outstanding restricted stock award
shall be deemed to be fully vested and will no longer be subject to a right of
repurchase by the Company and (c) notwithstanding any provision in any
applicable option agreement to the contrary, if Executive’s employment is
terminated in connection with, in anticipation of, or within six months after a
Change in Control, each such option shall continue to be exercisable by the
Executive (to the extent such option was exercisable on the Change in Control
Date) for a period of six months following the date of termination of such
employment.

 

4.2           Compensation.  If
the Change in Control Date occurs during the Term:

 

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

 

3

 

(i)            the sum of (1) the Executive’s base
salary through the Change in Control Date, (2) the product of (A) the
annual bonus paid or payable (including any bonus or portion thereof which has
been earned but deferred) for the most recently completed fiscal year and (B) a
fraction, the numerator of which is the number of days in the current fiscal
year through the Change in Control Date, and the denominator of which is 365
and (3) the amount of any compensation previously deferred by the
Executive (together with any accrued interest or earnings thereon) and any
accrued vacation pay, in each case to the extent not previously paid (the sum
of the amounts described in clauses (1), (2), and (3) shall be hereinafter
referred to as the “Accrued Obligations”); and

 

(ii)           the amount equal to (1) three multiplied
by (2) the sum of (A) the Executive’s highest annual base salary
during the five-year period prior to the Change in Control Date and (B) the
Executive’s highest annual bonus during the five-year period prior to the
Change in Control Date.

 

(b)           for 24 months after the Change in Control
Date, or such longer period as may be provided by the terms of the appropriate
plan, program, practice or policy, the Company shall continue to provide
benefits to the Executive and the Executive’s family at least equal to those
provided to them immediately prior to the Change in Control Date, in accordance
with the applicable Benefit Plans in effect on the Measurement Date or, if more
favorable to the Executive and his family, in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies; provided, however, that if the Executive’s
employment is terminated during this period and the Executive becomes
reemployed with another employer and is eligible to receive a particular type
of benefits (e.g., health insurance benefits) from such employer on terms at
least as favorable to the Executive and his family as those being provided by
the Company, then the Company shall no longer be required to provide those
particular benefits to the Executive and his family; and

 

(c)           if the Executive’s employment is terminated
during the 24-month period following the Change in Control Date, to the extent
not previously paid or provided, the Company shall timely pay or provide to the
Executive any other amounts or benefits required to be paid or provided or
which the Executive is eligible to receive following the Executive’s
termination of employment under any plan, program, policy, practice, contract
or agreement of the Company and its affiliated companies (such other amounts
and benefits shall be hereinafter referred to as the “Other Benefits”).

 

4.3           Taxes.

 

(a)           In the event that the Company undergoes
a  “Change in Ownership or Control” (as
defined below), the Company shall, within 30 days after each date on which the
Executive becomes entitled to receive (whether or not then due) a Contingent
Compensation Payment (as defined below) relating to such Change in Ownership or
Control, determine and notify the Executive (with reasonable detail regarding
the basis for its determinations) (i) which of the payments or benefits
due to the Executive (under this Agreement or otherwise) following such Change
in Ownership or Control constitute Contingent Compensation Payments, (ii) the
amount, if any, of the excise tax (the “Excise Tax”) payable pursuant to Section 4999
of the Internal Revenue Code of 1986, as amended (the “Code”), by the Executive
with respect to such

 

4

 

Contingent
Compensation Payment and (iii) the amount of the Gross-Up Payment (as
defined below) due to the Executive with respect to such Contingent
Compensation Payment.  Within 30 days
after delivery of such notice to the Executive, the Executive shall deliver a
response to the Company (the “Executive Response”) stating either (A) that
he agrees with the Company’s determination pursuant to the preceding sentence
or (B) that he disagrees with such determination, in which case he shall
indicate which payment and/or benefits should be characterized as a Contingent
Compensation Payment, the amount of the Excise Tax with respect to such
Contingent Compensation Payment and the amount of the Gross-Up Payment due to
the Executive with respect to such Contingent Compensation Payment.  The amount and characterization of any item
in the Executive Response shall be final; provided, however, that in the event
that the Executive fails to deliver an Executive Response on or before the
required date, the Company’s initial determination shall be final.  Within 90 days after the due date of each
Contingent Compensation Payment to the Executive, the Company shall pay to the
Executive, in cash, the Gross-Up Payment with respect to such Contingent
Compensation Payment, in the amount determined pursuant to this Section 4.3(a).

 

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

 

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

 

(ii)           “Contingent Compensation Payment” shall mean
any payment (or benefit) in the nature of compensation that is made or made
available (under this Agreement or otherwise) to a “disqualified individual”
(as defined in Section 280G(c) of the Code) and that is contingent
(within the meaning of Section 280G(b)(2)(A)(i) of the Code) on a
Change in Ownership or Control of the Company.

 

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

 

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

 

4.5           Outplacement Services.  In
the event of the termination of the Executive’s employment in connection with,
in anticipation of, or within six months after a Change in Control, the Company
shall provide outplacement services through one or more outside firms of

 

5

 

the
Executive’s choosing up to an aggregate amount equal to 15 percent of the
Executive’s annual base salary, with such services to extend until the earlier
of (i) 12 months following the termination of Executive’s employment or (ii) the
date the Executive secures full time employment.

 

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

 

5.             Disputes.

 

5.1           Settlement
of Disputes; Arbitration.  All claims by the Executive for benefits
under this Agreement shall be directed to and determined by the Board of
Directors of the Company and shall be in writing.  Any denial by the Board of Directors of a
claim for benefits under this Agreement shall be delivered to the Executive in
writing and shall set forth the specific reasons for the denial and the
specific provisions of this Agreement relied upon.  The Board of Directors shall afford a
reasonable opportunity to the Executive for a review of the decision denying a
claim.  Any further dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in Boston, Massachusetts, in accordance with the rules of
the American Arbitration Association then in effect.  Judgment may be entered on the arbitrator’s
award in any court having jurisdiction.

 

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

 

5.3           Compensation
During a Dispute.  If the Change in Control Date occurs during
the Term and the Executive’s employment with the Company terminates within 24
months following the Change in Control Date, and the right of the Executive to
receive benefits under Section 4 (or the amount or nature of the benefits
to which he is entitled to receive) are the

 

6

 

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

 

6.             Successors.

 

6.1           Successor to Company.  The
Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Company expressly to assume and agree to perform this
Agreement to the same extent that the Company would be required to perform it
if no such succession had taken place. 
Failure of the Company to obtain an assumption of this Agreement at or
prior to the effectiveness of any succession shall be a breach of this
Agreement.  As used in this Agreement, “Company”
shall mean the Company as defined above and any successor to its business or
assets as aforesaid which assumes and agrees to perform this Agreement, by
operation of law or otherwise.

 

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

 

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

 

7

 

deemed to have been duly
delivered unless and until it actually is received by the party for whom it is
intended.

 

8.             Miscellaneous.

 

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

 

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

 

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

 

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

 

8.5           Waivers.  No waiver by the Executive at
any time of any breach of, or compliance with, any provision of this Agreement
to be performed by the Company shall be deemed a waiver of that or any other
provision at any subsequent time.

 

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

 

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

 

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

 

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

 

8

 

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

 

9

 

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

 

	
  

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Barberich

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Chairman and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Adrian Adams

  
	
   

  	
  Adrian Adams

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
				

 

10

 

 

SEPRACOR INC.

 

December 23,
2008

 

Adrian Adams

322 Winfield Road

Devon, Pennsylvania 
19333

 

Dear Adrian:

 

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

 

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

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy J. Barberich

  
	
   

  	
   

  	
   

  	
  Name: Timothy J. Barberich

  
	
   

  	
   

  	
   

  	
  Title: Chairman of the Board

  
	
   

  	
   

  
	
  Acknowledged and agreed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Adrian Adams

  	
   

  	
   

  
	
  Adrian Adams

  	
   

  
					

 

 

Exhibit A

 

Retention Agreement

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

Exhibit B

 

Employment Agreement

 

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

 

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

 

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

 

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

 

“In addition, provided the Executive executes the Separation Agreement
and any applicable revocation period with respect to the Separation Agreement
has expired on or before the 60th day following the date of Executive’s
termination of employment (the “Payment Commencement Date”), the Company shall (1) continue
to pay the Executive the Base Salary for twenty four (24) months in accordance
with the Company’s regular payroll practices, commencing on the Payment Commencement
Date (provided, however, that if the Separation Agreement has
been signed, and any applicable revocation period has expired, on or before the
30th day
following the date of the Executive’s termination of employment, then the
payments may commence on such 30th day, unless the Payment Commencement Date
occurs in the calendar year following the year in which the Executive’s
employment is terminated, in which case the payments shall commence no earlier
than January 1 of such subsequent year); (2) pay the Executive a Pro
Rata Bonus; (3) pay the Executive, in bi-weekly installments, over a
twenty four month period, commencing on the Payment Commencement Date (provided,
however, that if the Separation Agreement has been signed, and any
applicable revocation period has expired, on or before the 30th day following the date of the
Executive’s termination of employment, then the payments may commence on such
30th day,
unless the Payment Commencement Date occurs in the calendar year following the
year in which the Executive’s employment is terminated, in which case the
payments shall commence no earlier than January 1 of such subsequent
year), an amount equal in the aggregate to two (2) times the average
Annual Bonus earned for the two years prior to the date of his termination (in
the event Executive has not been employed for a sufficient period to earn two
such bonuses, such calculation shall be made assuming Executive earned a bonus
for any such year at a target level of performance (taking into account any minimum
bonus amount)); (4) provide to the Executive for two (2) years
following the date of his termination payment of COBRA premiums for medical,
dental, and vision benefits pursuant to plans maintained by the Company under
which Executive and/or Executive’s family is eligible to receive benefits; provided,
however, that, notwithstanding the foregoing, the benefits described in
this subsection may be discontinued prior the end of the period, but only to
the extent, that Executive receives substantially similar benefits from a
subsequent employer; and (5) permit Executive to exercise the stock option
portion of the Initial Grant for a period of no less than six months after the
date of termination but not later than the expiration date of such option.”Exhibit 10.18

 

AMENDED
AND RESTATED

EMPLOYMENT
AGREEMENT

 

THIS AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), made this 6th day of November 2008 (the “Effective Date”),
is entered into by Sepracor Inc., a Delaware corporation with its principal
place of business at 84 Waterford Drive, Marlborough, Massachusetts
01752-7231(the “Company”), and Mark H. N. Corrigan, residing at 389 Marlborough
Street, Boston, MA 02115 (the “Executive”).

 

WHEREAS, on May 14,
2008, the Company and the Executive entered into an Employment Agreement (the “Original
Agreement”); and

 

WHEREAS, the
Company and the Executive wish to amend and restate the Original Agreement as
provided for herein.

 

NOW THEREFORE, in
consideration of the mutual covenants and promises contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties hereto, the parties agree that the Original
Agreement is amended and restated in its entirety as follows:

 

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

 

 

2.                                       Title
and Capacity.  The Executive shall
serve as Executive Vice-President, Research and Development of the
Company.  Executive shall report directly
to the Chief Executive Officer of the Company and shall, except as permitted
hereby, devote all of his business time and services to the business and
affairs of the Company.  Executive shall
also perform such other duties consistent with his position as Executive
Vice-President, Research and Development as may be reasonably assigned by the
Chief Executive Officer and the Board of Directors of the Company (the “Board”)
from time to time.  The Executive agrees
to abide by the rules, regulations, instructions, personnel practices and
policies of the Company and any changes therein that may be adopted from time
to time by the Company.

 

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

 

3.                                       Compensation
and Benefits.

 

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

 

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

 

2

 

upon annual quantitative
and qualitative performance targets as established by the Board in its sole
discretion in accordance with the Company’s bonus plan; provided, that
the Executive’s annual bonus level target shall be set at fifty percent (50%)
or more of Base Salary.  The Annual Bonus
is not earned until the close of business on the last business day of the
Company’s fiscal year.  Any Annual Bonus
payable hereunder shall be payable, if at all, after the date of the delivery
of the audited financial statements for the applicable fiscal year.

 

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

 

3.4                                 Reimbursement
of Expenses.  The Company shall
reimburse the Executive for all reasonable travel (which shall be deemed to
include first class airfare), entertainment and other expenses incurred or paid
by the Executive in connection with, or related to, the performance of his
duties, responsibilities or services under this Agreement, upon presentation by
the Executive of documentation, expense statements, vouchers and/or such other
supporting information as the Company may request.

 

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

 

3

 

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

 

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

 

4.1                                 On
the expiration date of the Employment Period.

 

4.2                                 At
the election of the Company, for Cause (as defined below), immediately upon
written notice by the Company to the Executive, which notice shall identify the
Cause upon which termination is based. 
For the purposes of this Section 4.2, Cause for termination shall
mean:  (a) the Executive’s willful
and continued failure to substantially perform his reasonable assigned duties
(other than any such failure resulting from incapacity due to physical or
mental illness or any failure after the Executive gives notice of termination
for Good Reason and Good Reason exists), which failure is not cured within 30
days after a written demand for substantial performance is received by the
Executive from the Board of Directors of the Company which specifically
identifies the manner in which the Board of Directors believes the Executive
has not substantially performed the Executive’s duties; (b) the Executive’s
willful engagement in illegal conduct or gross misconduct which is materially
and demonstrably injurious to the Company; or (c) a material breach of Section 6
or 7 of this Agreement by the Executive. 
For purposes of this Section 4.2, no act or failure to act by the
Executive shall be considered “willful” unless it is done, or omitted to be
done, in bad faith and without reasonable belief that the Executive’s action or
omission was in the best interests of the Company.

 

4.3                                 Upon
the death or disability of the Executive. 
As used in this Agreement, the term “disability” shall mean the
Executive’s absence from the full-time performance of the Executive’s duties
with the Company for one hundred eighty (180) consecutive calendar days as 

 

4

 

a result of incapacity
due to mental or physical illness which is determined to be total and permanent
by a physician selected by the Company or its insurers and acceptable to the
Executive or the Executive’s legal representative.

 

4.4                                 At
the election of the Executive for Good Reason as defined herein.  The Executive may terminate his employment
for Good Reason at any time, following 30-days prior written notice of such
termination to the Company. Such notice shall provide factual details of the
basis behind such termination and the Company shall have a thirty (30) day
period thereafter to cure such matter. 
As used herein, the term “Good Reason” shall mean:  (a) a material breach by the Company of
the terms of this Agreement, including the failure to pay Base Salary or any
Annual Bonus when due; or (b) any material adverse change by the Company
in Executive’s titles, authorities, duties, responsibilities or lines of reporting
inconsistent with the terms hereof or the assignment to Executive by the
Company of titles, authorities, duties, responsibilities or lines of reporting
inconsistent with the terms hereof, or (c) a relocation of the offices of
the Company where the Executive is working to an area more than forty (40)
miles from the location of such offices as of the date hereof.

 

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

 

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

 

5

 

4.7                                 At
the election of the Company or the Executive in connection with a Change in
Control, as set forth in the Executive Retention Agreement between the Company
and the Executive (the “ERA”), dated as of April 17, 2003.  “Change in Control” shall have the meaning
set forth in the ERA.

 

5.                                       Effect
of Termination.

 

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

 

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

 

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

 

6

 

Good Reason pursuant to Section 4.4
or by the Company without Cause pursuant to Section 4.6, the Company shall
pay to the Executive the compensation and benefits otherwise payable to him
under Section 3 through the last calendar day of his actual employment by
the Company.  In addition, provided the
Executive executes and does not revoke a Separation Agreement and Release of
Claims for the benefit of the Company substantially in the form set forth on
Schedule B hereto, the Company shall  (a) continue
to pay the Executive the Base Salary for twenty four (24) months in accordance
with the Company’s regular payroll practices; (b) pay the Executive a Pro
Rata Bonus; (c) pay the Executive, in bi-weekly installments, over a
twenty four-month period, an amount equal in the aggregate to 1.5 times
the average Annual Bonus earned for the two years prior to the date of his
termination; and (d) for 24 months following the date of his termination,
allow the Executive to participate in the Company’s executive retiree health
benefit program based on the same cost sharing arrangement that applied
immediately prior to the date of his termination.

 

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

 

5.5                                 Participation
in Executive Retirement Health Benefit Program.  Following the date of the Executive’s
termination and, if applicable, the twenty-four (24) month period referred to
in Section 5.3(d) or the period referred to in Section 4.2(a)(ii) of
the ERA, in the event the Executive elects to participate in the Company’s
executive retiree health benefit program set forth on Exhibit A
hereto (the “Program”), he will reimburse the Company with respect to his
participation in the Program at the lesser of (a) the actual cost to the
Company of 

 

7

 

the employee’s
participation and (b) the rate applicable to former employees of the
Company to elect COBRA health coverage.

 

5.6                                 Payments
Subject to Section 409A.

 

(a)                                  Subject
to this Section 5.6,
payments or benefits under Section 5 
shall begin only upon the date of a “separation from service” of the
Executive (determined as set forth below) which occurs on or after the
termination of the Executive’s employment. 
The following rules shall apply with respect to distribution of the
payments and benefits, if any, to be provided to the Executive under Section 5,
as applicable:

 

(i)                                     It
is intended that each installment of the payments and benefits provided under Section 5  shall be treated as a separate “payment” for
purposes of Section 409A of the Code and the guidance issued thereunder (“Section 409A”).  Neither the Company nor the Executive shall
have the right to accelerate or defer the delivery of any such payments or
benefits except to the extent specifically permitted or required by Section 409A.

 

(ii)                                  If,
as of the date of the “separation from service” of the Executive from the
Company, the Executive is not a “specified employee” (within the meaning of Section 409A),
then each installment of the payments and benefits shall be made on the dates
and terms set forth in Section 5.

 

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

 

(1)                                  Each
installment of the payments and benefits due under Section 5 that, in
accordance with the dates and terms set forth herein, will in all
circumstances, regardless of when the separation from service occurs, be paid
within the Short-

 

8

 

Term
Deferral Period (as hereinafter defined) shall be treated as a short-term
deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to
the maximum extent permissible under Section 409A.  For purposes of this Agreement, the “Short-Term
Deferral Period” means the period ending on the later of the 15th day of the third month following the end of
the Executive’s tax year in which the separation from service occurs and the 15th day of the third month following the end of
the Company’s tax year in which the separation from service occurs; and

 

(2)                                  Each
installment of the payments and benefits due under Section 5 that is not
described in Section 5.6 (a)(iii)(1) and that would,
absent this subsection, be paid within the six-month period following the “separation
from service” of the Executive from the Company shall not be paid until the
date that is six months and one day after such separation from service (or, if
earlier, the Executive’s death), with any such installments that are required
to be delayed being accumulated during the six-month period and paid in a lump
sum on the date that is six months and one day following the Executive’s
separation from service and any subsequent installments, if any, being paid in
accordance with the dates and terms set forth herein; provided, however,
that the preceding provisions of this sentence shall not apply to any
installment of payments and benefits if and to the maximum extent that that
such installment is deemed to be paid under a separation pay plan that does not
provide for a deferral of compensation by reason of the application of Treasury
Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an
involuntary separation from service). 
Any installments that qualify for the exception under Treasury
Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the
last day of the Executive’s second taxable year following his taxable year in
which the separation from service occurs.

 

9

 

 

(b)                                 The
determination of whether and when a separation from service of the Executive
from the Company has occurred shall be made and in a manner consistent with,
and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h).  Solely for purposes of this Section 5.6
(b), “Company” shall include all persons with whom the Company would be
considered a single employer under Section 414(b) and 414(c) of
the Code.

 

(c)                                  All
reimbursements and in-kind benefits provided under the Agreement shall be made
or provided in accordance with the requirements of Section 409A to the
extent that such reimbursements or in-kind benefits are subject to Section 409A.

 

6.                                       Non-Competition
and Non-Solicitation.

 

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

 

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

 

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

 

10

 

(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.

 

11

 

(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, 

 

12

 

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”).

 

13

 

(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 

 

14

 

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 

 

15

 

agreement to refrain from
soliciting employees, customers or suppliers of any former employer or others.

 

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

 

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

 

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

 

11.                                 Compliance
with Code Section 409A.  This
Agreement is intended to comply with the provisions of Section 409A and
the Agreement shall, to the extent practicable, be construed in accordance
therewith.  The Company makes no
representation or warranty and shall have no liability to the Executive or any
other person if any provisions of this Agreement are determined to constitute
deferred compensation subject to Section 409A and do not satisfy an
exemption from, or the conditions of, Section 409A.

 

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

 

16

 

13.                                 Entire
Agreement.  This Agreement, together
with the ERA, constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, whether written or oral,
relating to the subject matter of this Agreement, including, without
limitation, the letter agreement between the Company and the Executive dated March 11,
2003 and the Original Agreement.

 

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

 

15.                                 Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts (without reference to the conflict of laws provisions
thereof).  Any action, suit or other
legal proceeding arising under or relating to any provision of this Agreement
shall be commenced only in a court of the Commonwealth of Massachusetts (or, if
appropriate, a federal court located within the Commonwealth of Massachusetts),
and the Company and the Executive each consents to the jurisdiction of such a
court.  The Company and the Executive
each hereby irrevocably waive any right to a trial by jury in any action, suit
or other legal proceeding arising under or relating to any provision of this
Agreement or any other dealing between them relating to the subject matter of
this transaction and the relationship that is being established.

 

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

 

17

 

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

 

18.                                 Miscellaneous.

 

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

 

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

 

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

 

18

 

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

 

	
   

  	
  Sepracor
  Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Adrian Adams

  
	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Mark H. N. Corrigan

  
	
   

  	
  Mark
  H. N. Corrigan

  

 

19

 

Exhibit A

 

Program Terms

 

The Executive
shall be entitled to continued access to health benefits under, at the
Executive’s election, the Company’s Blue Cross Blue Shield PPO Policy or
BlueChoice Policy (the “Policies”), following the Executive’s retirement from
the Company, for so long as (A) the Company continues to offer such Policy
and (B) the Policy allows for such continued access; and, to the extent
the Company no longer maintains at least one of the Policies, or access is no
longer allowed under either of the Policies, the Company shall allow the
Executive continued access to health benefits under a successor policy, or
otherwise, for so long as it offers health benefits to its employees.

 

 

SCHEDULE A

 

VACATION POLICY

 

SEE
ATTACHED POLICY

 

 

	
  Sepracor Companies

  	
   

  	
  Human Resource Policy

  

 

	
  Division:

  

  All

  	
   

  	
  Effective Date:

  

  January 1, 2005

  	
   

  	
  Index No.:

  

  3-60

  	
   

  	
  Page No:

  

  1 of 2

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  

  Accrued Vacation Policy

  Director Level and Above

  	
   

  	
  Supersedes:

  

  All

  	
   

  	
  Approved By:

  

  Signature on File

  	
   

  	
   

  

 

1.             Introduction

 

1.1                                      The
purpose of the Accrued Vacation Policy is to provide paid time off for
employees to cover vacations and personal time.

 

2.             Accrual rate for
employees at Director level and above

 

2.1                                 Employees
accrue vacation hours monthly that may be used for paid time off to cover
vacations and personal time. Regular full-time employees, Director level or
above, will accrue vacation time at a rate of ten (10) hours per month
during the first year of employment, for a total of fifteen (15) days per year,
equal to one hundred twenty (120) hours. 
Additional time begins to accrue in the month of the employee’s
anniversary date, up to a maximum of twenty-three (23) days per year, equal to
one hundred eighty-four (184) hours. Please see schedule below for details on
total hours accrued monthly:

 

	
  Years of

  Service

  	
   

  	
  Director

  and Above

  Total Days

  	
   

  	
  Monthly

  Accrual

  (Hours)

  
	
  0-1

  	
   

  	
  15

  	
   

  	
  10.00

  
	
  1-2

  	
   

  	
  16

  	
   

  	
  10.67

  
	
  2-3

  	
   

  	
  17

  	
   

  	
  11.33

  
	
  3-4

  	
   

  	
  18

  	
   

  	
  12.00

  
	
  4-5

  	
   

  	
  19

  	
   

  	
  12.67

  
	
  5-10

  	
   

  	
  20

  	
   

  	
  13.33

  
	
  10-13

  	
   

  	
  20

  	
   

  	
  13.33

  
	
  13-15

  	
   

  	
  20

  	
   

  	
  13.33

  
	
  15-17

  	
   

  	
  20

  	
   

  	
  13.33

  
	
  17-19

  	
   

  	
  21

  	
   

  	
  14.00

  
	
  19-20

  	
   

  	
  22

  	
   

  	
  14.67

  
	
  20+

  	
   

  	
  23

  	
   

  	
  15.33

  

 

3.             Administration

 

3.1           Accrual of vacation
time is pro-rated for employees who are regularly scheduled to work less than
forty (40) hours but work at least twenty (20) hours per week.  For example, an employee with a weekly
schedule of twenty (20) hours will accrue five (5) hours per month, and a
thirty (30) hour employee will accrue seven and a half (7.5) hours of vacation
time per month.

 

 

Accrued Vacation Policy: Director Level and
Above

 

3.                                                                                      Administration
(Continued)

 

3.2                                              The
current month’s accrual is accrued on the 15th of
every month.  An employee must be
employed on the 15th in order to receive that monthly accrual.  For example, if an employee is hired on or
before the 15th, they will
receive that month’s accrual, and if they are hired after the 15th, they will not.  Also, if an employee terminates employment
before the 15th they will not be paid for that month’s
accrual, but if they terminate after the 15th they will.

 

3.3                                              Employees
may carry over a maximum of forty (40) accrued vacation hours into the next
calendar year.  The carryover vacation
hours must be used by July 31st of the new calendar year.  Any carried over vacation hours not used by
this date will be forfeited.*

 

3.3.1                        *In
accordance with state law, California residents will not have a limit on
carryover time into the next calendar year. 
Once an employee accrues twenty-three (23) days of vacation, equal to
one hundred eighty-four (184) hours, the employee will cease to accrue any
additional vacation time until the vacation balance falls below that
level.  Please refer to Sepracor Human
Resources for more information.

 

3.4                                              It
is your responsibility to request and schedule the use of accrued vacation time
with your manager.  Approval of vacation
time will depend on the business needs of the organization.  It is your responsibility to accurately track
your use of accrued vacation time through the iTime Tracking system.

 

3.5                                              At
the minimum, vacation time for full time employees should be taken in four (4) hour
increments, with the norm being eight (8) hour increments. For those with
schedules of 20-39 hours, increments of time used would be pro-rated according
to hours worked.  For example, if you
were regularly scheduled to work six (6) hours, then you would be paid a
six (6) hour vacation day.

 

3.6                                              Your
manager may approve the borrowing of vacation time, up to a maximum of forty
(40) hours for regular full-time employees and pro-rated accordingly for
regular part-time employees.  Employees
with a negative vacation balance may not borrow additional vacation time until
the existing vacation time balance has been satisfied and then upon approval
from your manager.  Under no circumstances
may an employee borrow vacation time from a future calendar year.

 

3.7                                              If it has
been verified by Payroll and the manager that an employee has a balance of
accrued and unused vacation time left at the end of employment, the balance
will be converted to cash and included in his/her final paycheck.  In the event an employee ends his/her
employment before having enough accrued time to cover any borrowed vacation
time, the employee’s final paycheck will reflect a deduction equal to the cash
value of the borrowed vacation time.

 

 

SCHEDULE
B

 

FORM OF
SEPARATION AGREEMENT AND RELEASE OF CLAIMS

 

In connection with your separation from Sepracor Inc. (the “Company”) on
[            ], and in order to receive
the benefits as set forth in the Employment Agreement (the “Agreement”) between
you and the Company dated [            ],
2008, this agreement must become binding between you and the Company. By
signing and returning this agreement, you will be entering into a binding
agreement with the Company and will be agreeing to the terms and conditions set
forth in the numbered paragraphs below, including the release of claims set
forth in paragraph 1. Therefore, you are advised to consult with an
attorney before signing this agreement and you have been given more than
twenty-one (21) days to do so. If you sign this agreement, you may change
your mind and revoke your agreement during the seven (7) day period after
you have signed it. If you do not so revoke, this agreement will become a
binding agreement between you and the Company upon the expiration of the seven (7) day
revocation period.

 

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

 

1.             Release—In
consideration of the payment of the severance benefits, which you acknowledge
you would not otherwise be entitled to receive, you hereby fully, forever,
irrevocably and unconditionally release, remise and discharge the Company, its
officers, directors, stockholders, corporate affiliates, subsidiaries, parent
companies, successors and assigns, agents and employees (each in their
individual and corporate capacities) (hereinafter, the “Released Parties”) from
any and all claims, charges, complaints, demands, actions, causes of action,
suits, rights, debts, sums of money, costs, accounts, reckonings, covenants,
contracts, agreements, promises, doings, omissions, damages, executions,
obligations, liabilities, and expenses (including attorneys’ fees and costs),
of every kind and nature which you ever had or now have against the Released
Parties, including, but not limited to, those claims arising out of your
employment with and/or separation from the Company, including, but not limited
to, all claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C.
§ 2000e et seq., the Age
Discrimination in Employment Act, 29 U.S.C. § 621 et seq., the Americans With Disabilities
Act of 1990, 42 U.S.C. § 12101 et seq.,
the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., the Worker Adjustment and
Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 et seq., Section 806 of the Corporate
and Criminal Fraud Accountability Act of 2002, 18 U.S.C. § 1514(A), the
Rehabilitation Act of 1973, 29 U.S.C. § 701 et seq., Executive Order 11246, Executive Order 11141, the
Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1001 et seq.,
the Massachusetts Fair Employment Practices Act., M.G.L. c. 151B, § 1
et seq., the Massachusetts Civil
Rights Act, M.G.L. c. 12, §§ 11H and 11I, the Massachusetts Equal
Rights Act, M.G.L. c. 93, § 102 and M.G.L. c. 214, § 1C,
the Massachusetts Labor and Industries Act, M.G.L. c. 149, § 1 et seq., the Massachusetts Privacy Act,
M.G.L. c. 214, § 1B, and the Massachusetts Maternity Leave Act,
M.G.L. c. 149, § 105D, all as amended; all common law claims
including, but not limited to, actions in tort, defamation and breach of contract;
all claims to any non-vested ownership interest in the Company, contractual or
otherwise, including, but not limited to, claims to stock or stock options; and
any claim or damage arising out of your employment with or separation from the
Company (including a claim for retaliation) under any common law theory or any
federal, state or local statute or ordinance not expressly referenced above.
Notwithstanding the foregoing, the release set forth in this Section 1
shall not apply to (a) your rights under the Agreement, (b) any
vested equity interest in the Company, including vested stock options or (c) the
rights you have to be indemnified and defended by the Company pursuant to the
terms of the Company’s Restated Certificate of Incorporation, as amended, or
other organizing documents, and the rights that you have under, or with respect
to, the Company’s Directors and Officers liability insurance policies with
respect to conduct or events occurring during, or relating to, your employment
by, or while serving as an officer or director of, the Company, Without
limiting the generality of the foregoing, the Company shall continue to cover
you under its Directors and Officers liability insurance policies following the

 

1

 

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

 

2.             On-Going
Obligations—You acknowledge and reaffirm your obligation to keep
confidential and not to disclose any and all non-public information concerning
the Company which you acquired during the course of your employment with the
Company, including, but not limited to, any non-public information concerning
the Company’s business affairs, business prospects and financial condition, as
is stated more fully in the Non-Disclosure and Invention Agreement, which you
executed during or prior to your employment with the Company (the
“Non-Disclosure Agreement”). You further acknowledge and reaffirm your
obligations under the Agreement for the benefit of the Company.

 

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

 

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

 

5.             Non-Disparagement—You
understand and agree that, as a condition for payment to you of the
consideration herein described and described in the Agreement, you shall not
make any false, disparaging or derogatory statements to any media outlet,
industry group, financial institution or current or former employee,
consultant, client or customer of the Company regarding the Company or any of
its directors, officers, employees, agents or representatives or about the
Company’s business affairs and financial condition; provided, however,
that nothing herein shall prevent you from making truthful disclosures to any
governmental entity or in any litigation or arbitration. The Company agrees not
to make any false, disparaging or derogatory statements about you to any media
outlet, industry group, financial institution, or current or former employee,
consultant, client, or customer; provided,
however, that nothing herein
shall prevent the Company from making truthful disclosures to any governmental
entity or in any litigation or arbitration. In the event that any inquiries are
directed to the Company’s Human Resources Office regarding you from prospective
employers, the Company will explain its neutral reference policy, confirm only
the fact of your former employment with the Company, starting and ending dates,
and your job title in the last position held.

 

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

 

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

 

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

 

2

 

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

 

10.           Nature of
Agreement—You understand and agree that this agreement, together
with the Agreement, is a severance agreement and does not constitute an
admission of liability or wrongdoing on the part of the Company.

 

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

 

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

 

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

 

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

 

	
   

  	
  Sepracor Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

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

 

	
   

  	
   

  	
  Date

  	
   

  
	
  Name

  	
   

  	
   

  

 

3

 

SEPRACOR INC.

 

 

December 23,
2008

 

Mark H. N. Corrigan

389 Marlborough Street

Boston, MA 
02115

 

Dear Mark

 

In
order to ensure compliance with Section 409A of the Internal Revenue Code
of 1986, as amended, Sepracor Inc., a Delaware corporation (the “Company”), and
you hereby agree to amend the Executive Retention Agreement dated as of April 17,
2003 by and between the Company and you (the “Retention Agreement”), as set
forth on Exhibit A hereto, and to further amend the Amended and
Restated Employment Agreement dated as of November 6, 2008 by and between
the Company and you (the “Employment Agreement”), as set forth on Exhibit B
hereto.

 

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

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SEPRACOR INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
  Adrian Adams

  
	
   

  	
   

  	
   

  	
  Name:
  Adrian Adams

  
	
   

  	
   

  	
   

  	
  Title:
  President and Chief Executive Officer

  

Acknowledged and agreed:

	
  /s/ Mark H.N. Corrigan

  	
   

  	
   

  
	
  Mark H.N. Corrigan

  	
   

  	
   

  

 

 

Exhibit A

 

Retention Agreement

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

5.               The following new Section 4.6 be and
hereby is added to the Retention Agreement:

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

8.               Section 8.10 of the Retention Agreement
be and hereby is amended by deleting “Hale and Dorr LLP” and replacing it with “Wilmer
Cutler Pickering Hale and Dorr LLP”.

 

 

Exhibit B

 

Employment Agreement

 

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

 

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

 

“In addition, provided the Executive executes a Separation Agreement
and Release of Claims for the benefit of the Company substantially in the form
set forth on Schedule B hereto (the “Release”) and any applicable revocation
period with respect to the Release has expired on or before the 60th day
following the date of Executive’s termination of employment (the “Payment
Commencement Date”), the Company shall (a) continue to pay the Executive
the Base Salary for twenty four (24) months in accordance with the Company’s
regular payroll practices, commencing on the Payment Commencement Date (provided,
however, that if the Release has been signed, and any applicable
revocation period has expired, on or before the 30th day following the date of the Executive’s
termination of employment, then the payments may commence on such 30th day, unless the Payment
Commencement Date occurs in the calendar year following the year in which the
Executive’s employment is terminated, in which case the payments shall commence
no earlier than January 1 of such subsequent year); (b) pay the
Executive a Pro Rata Bonus; (c) pay the Executive, in bi-weekly
installments, over a twenty four-month period, commencing on the Payment
Commencement Date (provided, however, that if the Release has
been signed, and any applicable revocation period has expired, on or before the
30th day
following the date of the Executive’s termination of employment, then the
payments may commence on such 30th day, unless the Payment Commencement Date
occurs in the calendar year following the year in which the Executive’s
employment is terminated, in which case the payments shall commence no earlier
than January 1 of such subsequent year), an amount equal in the aggregate
to 1.5 times the average Annual Bonus earned for the two years prior to
the date of his termination; and (d) for twenty four (24) months following
the date of his termination, allow the Executive to participate in the Company’s
executive retiree health benefit program based on the same cost sharing
arrangement that applied immediately prior to the date of his termination.”

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00154-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00154-of-00352.parquet"}]]