Exhibit 10.13
EXECUTION COPY
AMENDED AND RESTATED EMPLOYMENT AGREEMENT FOR CHIEF EXECUTIVE
THIS AGREEMENT is dated as of March 12, 2004 and amends and restates the
employment agreement dated as of June 12, 2003 between Shire Executive Services
Inc., a Delaware corporation having its registered offices at 1209 Orange
Street, Wilmington, Delaware (the "COMPANY"), and Matthew Emmens (the
"EXECUTIVE").
The Company and the Executive agree that the Company shall employ the Executive
and the Executive shall serve the Company as Chairman of the Board of Directors
and Chief Executive Officer and shall serve Shire Pharmaceuticals Group plc
("SHIRE GROUP") as Chief Executive Officer and Shire US Inc. (an affiliate of
the Company) as Chairman of its Board of Directors, in each case on the
following terms and subject to the following conditions:
1. COMMENCEMENT AND TERM
1.1 The Executive's employment with the Company commenced on March 12, 2003
("COMMENCEMENT DATE").
1.2 The term of this Agreement shall continue, without further action by the
Company or the Executive unless either party shall have given written
notice to the other party, in the manner set forth in this Agreement.
2. OBLIGATIONS DURING EMPLOYMENT
2.1 The Executive shall during the continuance of his employment:
(a) serve as the Chief Executive Officer of Shire Group, as Chairman
of the Board of Directors of Shire US Inc., and as Chairman of the
Board of Directors and Chief Executive Officer of the Company,
with all of the authority, duties and responsibilities
commensurate with such positions and such other duties
commensurate with his positions as are assigned to the Executive
from time to time by the Board of Directors of Shire Group (the
"BOARD"). The Executive shall report to the Board.
(b) for no additional compensation, serve as the Chairman and/or Chief
Executive Officer of any Affiliated Company, as that term is
defined in Clause 14.1 herein if and so long as the Board so
directs, perform and exercise the said duties and powers on behalf
of any Affiliated Company and act as a director or other officer
of any Affiliated Company; provided, in each case, that in
connection with such position the Executive is provided with
indemnification protection and Directors and Officers liability
insurance coverage in accordance with Clause 4.1(j) hereof.
(c) promptly give to the Board (in writing if so requested) all such
information, explanations and assistance as it may reasonably
require in connection with the business and affairs of Shire
Group, the Company and any Affiliated Company for which he is
required to perform duties;
(d) devote his working time, attention, skill and efforts to the
business and affairs of the Company, Shire US Inc., Shire Group
and any Affiliated Company referred to in Clause 2.1(b), and shall
not commence employment with, or serve as a consultant to, any
other company (other than an Affiliated Company); provided,
however, the foregoing shall not preclude the Executive from
managing the Executive's investments and personal affairs and,
with the consent of the Chairman of the Board, engaging in
charitable and civic activities (including serving on the boards
of directors of not-for-profit organizations) and serving on the
boards of directors of for-profit entities, so long as such
activities do not interfere with the Executive's performance of
his duties hereunder;
(e) work principally at the Company's offices in North Carolina until
such time as the Executive and the Company mutually agree on a
different United States location, but will also conduct such
business travel as is reasonably required to perform his duties
and obligations under this Agreement;
(f) comply with Shire Group's written Code of Ethics Policy as in
effect from time to time;
(g) protect, promote, develop and extend the business interests and
reputation of Shire Group; and
(h) use all reasonable business efforts to comply with the lawful and
reasonable written directions of the Board.
3. FURTHER OBLIGATIONS OF THE EXECUTIVE
3.1 During the continuance of his employment the Executive shall not directly
or indirectly carry on or be engaged, concerned or interested in any
other business, trade or occupation otherwise than as a holder directly
or through nominees (including for the purposes hereof through any trust
whether established by the Executive or otherwise and whether
discretionary or otherwise of which the Executive is a beneficiary) of
more than three per cent (3%) in aggregate of any class of shares,
debentures or other securities in issue from time to time of any company
(or, if different, amounting to more than three per cent (3%) in terms of
the economic value of all such shares and securities (whether by way of
dividend or upon any return in capital) and/or voting or other rights
attaching thereto in respect of any matters) which are for the time being
quoted or dealt with on any recognized investment exchange (as defined by
section 285(1)(a) of the UK Financial Services and Markets Act 2000),
provided that nothing in this Clause 3.1
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shall prevent the Executive from continuing to hold his current portfolio
of investments in securities or from engaging in any of the activities
set forth in Clause 2.1(d) hereof.
3.2 During the continuance of his employment the Executive shall in relation
to any dealings in securities of Shire Group comply with applicable law
and the regulations of any relevant stock exchanges affecting dealings in
such securities.
4. REMUNERATION AND BENEFITS
4.1 For all services rendered by the Executive in any capacity during the
term of this Agreement to Shire Group and its Affiliated Companies,
including as Chief Executive Officer of Shire Group and as Chairman of
the Board of Directors and Chief Executive Officer of the Company and any
Affiliated Company, and for his undertakings with respect to Intellectual
Property, Restrictive Covenants and Confidential Information set forth in
this Agreement, the Executive shall be entitled to the following during
the continuance of his employment pursuant to this Agreement:
(a) The Company shall pay the Executive a salary at the rate of
$935,018 per year, which shall accrue from day to day, payable in
regular installments in accordance with the normal payroll
practices of the Company, but no less frequently than monthly. The
salary shall be subject to review for increases by the
Remuneration Committee of the Board of Shire Group (the
"COMMITTEE") not less than annually with effect from 1 January in
each year (although such salary shall not necessarily be increased
each year). The Executive's annual salary, as increased from time
to time during the term of this Agreement, being hereafter
referred to as the "BASE SALARY";
(b) Subject as stated below the Executive shall be entitled to receive
a bonus from the Company in accordance with the rules and terms of
Shire Group's bonus scheme in force from time to time, based on
the achievement of performance goals determined in advance
following discussion with the Executive. Such bonus, if any, shall
be subject to a target bonus of fifty-five per cent (55%) of the
Base Salary (such bonus, the "TARGET BONUS"), and a maximum bonus
of one hundred per cent (100%) of Base Salary (such bonus, the
"MAXIMUM BONUS"). Shire Group reserves the right to change any
bonus terms from year to year consistent with this Clause 4.1(b).
(c) Eligibility for participation in Shire Group's Executive Share
Option Scheme as from time to time in effect, subject to the terms
and conditions of such scheme. If the Executive is at any time
granted options pursuant to a share option scheme of Shire Group,
those options shall be subject to the rules of that scheme as in
force from time to time, which rules shall not
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form part of this Agreement. Upon the Executive's termination by
the Company without Cause or his resignation for Good Reason, any
options previously granted to the Executive by the Company or any
of the Affiliated Companies shall vest in full and remain
exercisable for at least three years (but in no event beyond the
original option term) following the later of such employment
termination or vesting; provided, however, that to the extent the
vesting of any such options is subject to the attainment of
performance criteria, any such options that are unvested at the
time of employment termination shall vest only when and if such
criteria are satisfied (as if the Executive's employment had not
terminated). The Executive shall receive annual grants of Shire
Group share options that have a value upon grant at least equal to
three times his Base Salary and of Shire Group long term
performance options that have a value upon grant at least equal to
his Base Salary.
(d) The Company shall pay the Executive a cash benefit of $30,000 per
annum, representing the cash alternative to providing the
Executive with a company car. This sum shall be payable in regular
installments in accordance with the Company's normal payroll
cycle. In addition to the cash benefit described above, the
Company shall reimburse the Executive for fees reasonably incurred
for ground transportation in connection with the performance of
his duties hereunder in accordance with Clause 4.1(i).
(e) Participation in all health, welfare, savings and other Executive
benefit and fringe benefit plans (including but not limited to
health insurance, short term disability, long term disability, and
dental insurance plans) in which other senior U.S.-based employees
of Shire US Inc. participate during the term of this Agreement,
subject in all events to the terms and conditions of such plans as
in effect from time to time, including the right of Shire US Inc.
to modify, terminate or amend any such plan. Life insurance shall
be provided as discussed in Clause 4.1(f) below.
(f) Life insurance, which in the event of his death during the
continuance of his employment shall pay to his eligible dependents
(subject only to the discretion of the trustees of the appropriate
policy) a lump sum equal to a minimum of four (4) times his then
Base Salary. If such lump sum exceeds the aggregate amount
permitted under the policies otherwise applicable to the
Executive, an additional policy shall be purchased for the
Executive to make up for such shortfall. The Executive will
co-operate with the Company in any way reasonably necessary in
order for the Company or an Affiliated Company to procure such
life insurance, including but not limited to, submitting himself
for such medical examination as may reasonably be required of him
in connection therewith from time to time.
(g) Participation in Shire US Inc.'s 401(k) Savings Plan and
Supplemental Executive Retirement Plan (SERP) or similar plans.
The Company shall
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contribute each year a total amount equal to thirty per cent (30%)
of the Executive's Base Salary to one or more of a combination of
retirement plans (including, without limitation, those set forth
in the preceding sentence). Such contributions shall be in
addition to the Executive's Base Salary. The contributions and
timing of contributions shall be made in accordance with the
applicable plan document provisions and applicable Internal
Revenue Service limitations. Nothing in this Clause 4.1(g) shall
preclude the Company from amending or terminating any such plan at
any time.
(h) Thirty (30) working days paid vacation in each calendar year (in
addition to the usual public holidays), or such greater number as
may be available in accordance with Shire Group's policy from time
to time to be taken at a time or times as shall be reasonably
convenient to Shire Group. The Executive shall not be entitled to
carry forward any annual holiday entitlement not taken by him for
any reason from one holiday year to the next without the prior
written consent of the Chairman of the Board (such consent not to
be unreasonably withheld). Upon the termination of his employment,
the Executive's entitlement to accrued holiday pay shall be
calculated on a pro rata basis in respect of each completed month
of service in the holiday year in which his employment terminates
and the appropriate amount shall be paid to the Executive in
addition to payment in lieu of any holidays not taken in previous
holiday years.
(i) Reimbursement of all reasonable business expenses properly
incurred by the Executive in the performance of the Executive's
duties hereunder, in accordance with usual and customary Shire
Group policies. In addition, the Company will pay (i) all
reasonable out-of-pocket attorneys' fees and financial advisory
fees incurred by the Executive in connection with the evaluation
and negotiation of this Agreement, and (ii) to the extent, if any,
such payment would be taxable to the Executive, an additional
amount to the Executive to place him in the same after-tax
position he would have occupied had the Company not paid such
fees. It is specifically agreed that the Executive shall be
reimbursed for non-commercial flight expenses he reasonably incurs
for travel in connection with the performance of his duties
hereunder in an amount equal to the price prevailing on the date
of travel for a first class ticket on a major carrier on the same
route.
(j) The Company shall, and shall cause Shire US Inc., Shire Group, and
each Affiliated Company for which the Executive serves as an
officer or director, to indemnify the Executive and hold him
harmless to the fullest extent permitted by laws applicable to
such entity and such entity's organizational documents in respect
to any and all actions, suits, proceedings, claims, demands,
judgments, losses, damages and reasonable out-of-pocket costs and
expenses (including reasonable out-of-pocket attorney's fees and
expenses) resulting from the Executive's good faith
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performance of his duties and obligations with such entity or as
the fiduciary of any benefit plan of such entity. To the extent
permitted by applicable laws and the applicable organizational
documents of any such entity, the Company shall, and shall cause
such entity, within 30 days of presentation of invoices, to
reimburse the Executive for all reasonable out-of-pocket legal
fees and disbursements reasonably incurred by the Executive in
connection with any such indemnifiable matter. Directors' and
Officers' insurance coverage for the benefit of the Executive, to
the extent provided for the other officers and directors of Shire
Group, shall cover the Executive in respect of acts or omissions
committed during his employment hereunder, whether claims are made
during or within the period of seven years after the termination
of the employment hereunder.
(k) At all events, the Executive shall be entitled to participate in
or receive benefits under each benefit plan or arrangement made
available to the most senior executives of Shire Group or
U.S.-based Affiliated Companies (including, without limitation,
those relating to group medical, dental, long-term disability and
life insurance) on terms no less favorable in the aggregate
(without respect to the tax treatment of such benefits) than those
applicable to any other such executive of Shire Group or any
U.S.-based Affiliated Company, subject to and on a basis
consistent with the terms, conditions and overall administration
of such plans and to the extent legally permissible in light of
the Executive's status as a director of a UK company, provided
that nothing contained herein shall restrict Shire Group's (and
such Affiliated Company's) right to modify, amend or terminate any
such plan or arrangement.
5. INTELLECTUAL PROPERTY
5.1 For the purposes of this Clause 5, the term "IPRS" means any and all
patents, trade and service marks, unregistered design rights, registered
design rights, trade and business names, copyrights (including copyright
in software), database rights, topography rights and all other
intellectual property rights (whether or not any of these is registered
and including applications for registration of any such thing) and all
rights or forms of protection of a similar nature or having equivalent or
similar effect to any of these which may subsist anywhere in the world.
5.2 If the Executive creates, makes, authors, originates, conceives or writes
(either alone or with others) any works, designs, innovations,
inventions, improvements, processes, get-ups or trade marks in the course
of his employment with the Company ("WORKS"):
(a) the Executive will promptly disclose to Shire Group and the
Company full details of any such inventions, processes,
improvements or other Works;
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(b) all IPRs in and to such Works owned by the Executive shall solely
legally and beneficially vest in Shire Group immediately upon
their creation without any payment to the Executive;
(c) the Executive hereby irrevocably and unconditionally waives, in
favor of Shire Group, its licensees and successors-in-title any
and all moral rights conferred on the Executive in relation to the
Works (existing or future); and
(d) the Executive shall not knowingly do anything, or omit to do
anything, to imperil the validity of any patent or protection, or
any application therefore, relating to any of the Works.
5.3 To the extent such rights and IPRs do not so vest in Shire Group, the
Executive hereby (i) assigns to Shire Group all future copyright,
database rights and unregistered design rights in the Works and (ii) in
respect of all other rights and IPRs agrees to assign to Shire Group all
of the Executive's right, title and interest (including without
limitation all IPRs) in the Works.
5.4 The Executive hereby irrevocably authorizes Shire Group to be his
attorney, and to make use of his name and to sign and execute any
documents and/or perform any act on his behalf, for the purpose of giving
to Shire Group the full benefit of the provisions of this Clause 5 and,
where permissible, to obtain patent or other protection in respect of any
of the Works in the name of Shire Group or Shire Group's nominee.
5.5 The Executive shall from time to time, both during his employment under
this Agreement and thereafter, at the request and expense of Shire Group,
promptly do all things and execute all documents reasonably necessary to
give effect to the provisions of this Clause 5 including, without
limitation, all things reasonably necessary to obtain and/or maintain
patent or other protection in respect of any Works in any part of the
world and to vest such rights (including, without limitation, all IPRs)
in and to the Works in Shire Group or Shire Group's nominee.
5.6 For the avoidance of doubt, the provisions of this Clause 5 shall apply
to any rights (including, without limitation, any IPRs) in the Works
arising in any jurisdiction, and the provisions of this Clause 5 shall
apply in respect of any jurisdiction to the extent permitted by the
directives, statutes, regulations and other laws of any such
jurisdiction.
6. CONFIDENTIALITY
6.1 The Executive shall not (other than in the good faith performance of his
duties or with the prior written consent of the Board or unless ordered
by a court of competent jurisdiction) at any time either during the
continuance of his
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employment hereunder or after its termination knowingly disclose or
communicate to any person or use for his own benefit or the benefit of
any person other than Shire Group, the Company or any Affiliated Company
any confidential information which may come to his knowledge in the
course of his employment hereunder concerning the business or finances of
Shire Group or any of its Affiliated Companies including the Company or
of any of its suppliers, agents, distributors or customers, and the
Executive shall, during the continuance of his employment hereunder, use
his best endeavors (and following any termination thereof his reasonable
endeavors) to prevent the unauthorized publication or misuse of any
confidential information provided that such restrictions shall cease to
apply to any confidential information which may enter the public domain
other than through the default of the Executive or under applicable law
or the action of any court. Notwithstanding the foregoing, the Executive,
Shire Group and the Affiliated Companies (and each employee,
representative, or other agent of any party to this Agreement) may
disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the transactions contemplated by this
Agreement, and all materials of any kind (including opinions or other tax
analyses) related to such tax treatment and tax structure; provided that
this sentence shall not permit any person to disclose the name of, or
other information that would identify, any party to such transactions or
to disclose confidential commercial information regarding such
transactions.
6.2 All notes and memoranda of any trade secret or confidential information
concerning the business of Shire Group, the Company or the Affiliated
Companies or any of its or their suppliers, agents, distributors,
customers or others which shall have been acquired, received or made by
the Executive during the course of his employment shall be the property
of Shire Group and shall be surrendered by the Executive to someone duly
authorized in that capacity at the termination of his employment or at
the request of the Board at any time during the course of his employment.
6.3 Without prejudice to the generality of Clause 6.1 the following is, for
the avoidance of doubt, a non-exhaustive list of matters which in
relation to Shire Group and its Affiliated Companies are considered
confidential and must be treated as such by the Executive (for the
purposes of this Agreement):
(a) any trade secrets of Shire Group, the Company or any Affiliated
Company;
(b) any information in respect of which Shire Group, the Company or
any Affiliated Company is bound by an obligation of confidence to
any third party;
(c) customer lists and details of contacts with or requirements of
customers; and
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(d) any invention, technical data, know-how, instruction or operations
manual or other manufacturing or trade secrets of the Group and
their clients/customers.
6.4 The Executive shall comply with any reasonable written policy produced by
Shire Group concerning the Executive's ability to either directly or
indirectly publish any opinion, fact or material or deliver any lecture
or address or participate in the making of any film, radio broadcast or
television transmission or communicate with any representative of the
media or any third party relating to the business or affairs of Shire
Group, the Company or any Affiliated Company or to any of its or their
officers, employees, customers/clients, suppliers, distributors, agents
or shareholders or to the development or exploitation of Works or IPRs
(as defined in Clauses 5.1 and 5.2). For the purpose of this Clause,
"media" shall include television (terrestrial, satellite and cable)
radio, newspapers and other journalistic publications.
7. TERMINATION OF EMPLOYMENT
7.1 The employment of the Executive shall be terminable by either the
Executive or the Company, acting in accordance with the directions of the
Board, giving to the other notice of termination in writing commencing at
any time; provided, however, that a notice period of six months shall
apply to any termination by the Executive without Good Reason.
7.2 Death or Disability. The Executive's employment hereunder shall terminate
automatically upon the Executive's death and may be terminated by the
Company, acting in accordance with the directions of the Board, due to
the Executive's Disability; provided that prior to such Disability
termination the Executive shall receive his full compensation and
benefits hereunder. For purposes of this Agreement, "DISABILITY" shall
mean the Executive's failure to perform his duties for Shire Group or the
Company on a full-time basis for 180 days within any 270-day period by
reason of mental or physical incapacity or illness. A termination for
Disability shall be effective following 30 days' written notice by the
Company to the Executive of termination due to Disability, provided that
such notice is provided to the Executive at a time when he has satisfied
the aforesaid criteria and continues to suffer from such Disability. In
the case of the Executive's death or Disability, the Company shall pay to
the Executive's beneficiaries or estate, as appropriate, (i) his then
current accrued and unpaid Base Salary through the date of such event, as
well as one hundred per cent (100%) of any accrued and unpaid bonus for
any complete fiscal years preceding the year of termination, (ii) a pro
rata portion of the Executive's bonus for the performance year in which
the Executive's termination occurs (determined by multiplying the amount
the Executive would have received had employment continued through the
end of the performance year, as determined by the Committee in good
faith, by a fraction, the numerator of which is the number of days during
the performance year of termination that the Executive is employed by the
Company
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and the denominator of which is 365) (the "PRO RATA BONUS"), and (iii)
other benefits and payments to which the Executive is then entitled at
law or under any benefit program, including accrued but unpaid vacation
or holiday pay, if any, and unreimbursed expenses.
7.3 Cause. The Executive may be terminated for Cause by the Company, acting
in accordance with the directions of the Board, pursuant to this Clause
7.3. For purposes of this Agreement, the Executive shall be subject to a
termination for Cause only if he:
(a) willfully and intentionally commits any serious breach or, to the
extent warned at least 30 days in advance by the Board in writing
of the same, any persistent breach, of any of the material terms
or conditions contained in this Agreement, but only if such breach
has a material adverse impact on Shire Group economically or
reputationally;
(b) is guilty of any willful gross misconduct in connection with the
performance of his duties or the business or affairs of Shire
Group, the Company or any Affiliated Company for which he is
required to perform duties, which misconduct has a material
adverse impact on Shire Group economically or reputationally; or
(c) is convicted of a felony (other than a traffic violation or by
reason of vicarious liability) that impairs his ability
substantially to perform his duties with Shire Group.
For purposes of this Agreement, no act, or failure to act, on the
Executive's part shall be considered "willful" or done "willfully" unless
done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the Executive's action or omission was in
the best interest of Shire Group, the Company or any of the Affiliated
Companies. The Executive shall not be deemed to have been terminated for
Cause unless notice thereof is given in advance and until there shall
have been delivered to the Executive a copy of a resolution duly adopted
by the affirmative vote of not less than a majority of the entire
membership of the Board at a meeting of the Board called and held for the
purpose of making a determination of whether Cause for termination exists
(after a reasonable opportunity for the Executive to be heard before the
Board) finding that, in the good faith opinion of the Board, Cause as set
forth above exists, and accompanied by a specification of the particulars
thereof. Any termination of the Executive by the Company prior to the
completion of the foregoing procedures shall be deemed to be a
termination without Cause.
In the case of the Executive's termination for Cause, the Company shall
pay to the Executive (i) his then current accrued and unpaid Base Salary
through the effective date of his termination as well as one hundred per
cent (100%) of any accrued and unpaid bonus for any years preceding the
year of termination (it
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being expressly agreed that the Executive shall have no rights to receive
a bonus in respect of the year in which termination occurs), and (ii)
other benefits and payments to which the Executive is then entitled at
law or under any benefit program, including accrued but unpaid vacation
or holiday pay, if any, and unreimbursed expenses.
7.4 Without Cause; Good Reason. The Company, acting in accordance with the
directions of the Board, may terminate the Executive's services hereunder
without Cause, and the Executive may terminate his services hereunder for
Good Reason, in either case at any time following the required written
notice as set forth in Clause 7.1. "GOOD REASON" shall mean, without the
Executive's consent, the occurrence of any of the following circumstances
unless such circumstances are fully corrected prior to the expiration of
the thirty (30) calendar day period following receipt by the Company and
Shire Group of the Executive's notice (which notice shall be transmitted
to the Company and Shire Group in the same manner) of the existence of
circumstances that provide a basis for the Executive to terminate his
employment for Good Reason, describing such circumstances in reasonable
detail: (a) an adverse change in the Executive's title as Chief Executive
Officer of Shire Group, as Chairman of the Board of Directors and Chief
Executive Officer of the Company, or as Chairman of the Board of
Directors of Shire US Inc., the Executive's involuntary removal from the
Board of Directors of the Company, the Board, or Shire US Inc., or
failure of the Executive to be elected to the Board of Directors of the
Company, the Board or Shire US Inc., or the assignment to the Executive
of duties, responsibilities or authority materially inconsistent
therewith (in the case of any of the foregoing, other than by reason of
the Executive's termination by the Company for Cause), (b) a substantial
diminution in the Executive's duties, responsibilities or authority,
taken as a whole (except during periods when the Executive is unable to
perform all or substantially all of the Executive's duties or
responsibilities as a result of the Executive's physical or mental
incapacity), (c) a change in location of the Executive's office to a
location more than 35 miles from its current location, or (d) a material
breach of this Agreement or the Ratification and Guaranty, which breach
remains uncured for 30 calendar days after written notice thereof by the
Executive to the Company and to Shire Group. Notwithstanding the
foregoing, the following shall not constitute "Good Reason": a one-time
change in location of the Executive's office from North Carolina to
either the Cincinnati, Ohio metropolitan area or the Rockville, Maryland
metropolitan area, provided that in connection with such relocation the
Executive's moving, house-hunting and temporary housing costs are fully
covered by the Company at no after-tax cost to him, the Company protects
him against a loss on the equity value of his North Carolina home, and,
at the Executive's option, a third party relocation company (the
"Facilitator") purchases such home in accordance with common practice.
The equity loss protection described in the preceding sentence shall
apply solely with respect to a sale of the home (i) to the Facilitator or
(ii) to another party in a bona fide arm's length transaction, in either
case within one year of such relocation. In the event the Company
terminates the Executive's employment
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without Cause, or the Executive terminates his employment for Good
Reason, the Company shall pay or provide to the Executive (i) his then
current accrued and unpaid Base Salary through the effective date of his
termination as well as one hundred per cent (100%) of any accrued and
unpaid bonus for any completed fiscal years preceding the year of
termination, (ii) in a lump sum within 30 calendar days after such
termination, an additional amount equal to one year of Base Salary plus,
to be decided in the absolute discretion of the Committee, an amount in
lieu of annual bonus (which may be up to an amount equal to the Target
Bonus), (iii) the Pro Rata Bonus, (iv) an additional amount equal to
thirty per cent (30%) of his Base Salary in lieu of Company contributions
to the retirement plans in which the Executive participates pursuant to
Clause 4.1(g) of this Agreement, (v) payment of the premiums for the
Executive's continued medical and dental coverage under COBRA for one
year following termination, provided, however, that such payment shall
cease at such time as the Executive commences participation in a
subsequent employer's group health plan, (vi) $30,000 in lieu of the
Executive's car benefit pursuant to Clause 4.1(d) of this Agreement,
(vii) an amount equal to the actual amount incurred by the Executive in
premiums for the amount of life insurance coverage set out in Clause
4.1(f) of this Agreement for the one-year period following termination;
and (viii) other benefits and payments to which the Executive is then
entitled at law or under any benefit program, including accrued but
unpaid vacation or holiday pay, if any, and unreimbursed expenses.
7.5 Without Good Reason. The Executive may terminate his employment hereunder
without Good Reason in accordance with the notice provision set forth in
Clause 7.1. In the event the Executive terminates his employment without
Good Reason, the Company shall pay to the Executive (i) his current
accrued and unpaid Base Salary through the effective date of his
termination as well as one hundred per cent (100%) of any accrued and
unpaid bonus for any completed fiscal year preceding the year of
termination (it being expressly agreed that the Executive shall have no
rights to receive a bonus in respect of the year in which termination
occurs) and (ii) other benefits and payments to which the Executive is
then entitled at law or under any benefit program, including accrued but
unpaid vacation or holiday pay, if any, and unreimbursed expenses.
7.6 Upon the termination of the Executive's employment (for whatever reason
and howsoever arising):
(a) the Executive shall not take away, conceal or destroy, but shall
immediately deliver up to Shire Group, all documents (which
expression shall include but without limitation notes, memoranda,
correspondence, drawings, sketches, plans, designs and any other
material upon which data or information is recorded or stored)
relating to the business or affairs of Shire Group, the Company or
any Affiliated Company or any of their clients/customers,
shareholders, employees, officers, suppliers, distributors and
agents (and the Executive shall not be entitled to retain any
copies or
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reproductions of any such documents) together with any other
property belonging to Shire Group, the Company or any Affiliated
Company which may then be in his possession or under his control;
provided, however, that Shire Group shall thereafter make copies
of any such items available to him, if necessary, in defending any
claims as a result of his position as an officer and director of
Shire Group, the Company or any of the Affiliated Companies;
provided, further, that the Executive shall be permitted to retain
(i) his personal rolodex, address book, and other similar items of
a personal nature, and (ii) any materials provided to him in his
capacity as a director of the Board, the Board of Directors of the
Company, or the board of directors of any Affiliated Company, to
the extent that the foregoing would apply to non-employee
directors of such bodies if their service were to terminate at the
same time as the Executive's employment termination;
(b) the Executive shall, without prejudice to any rights of the
Executive arising as a result of the loss of his employment
hereunder, immediately resign without claim for compensation from
office as a director of Shire Group, the Company and any
Affiliated Company and from any other office held by him in Shire
Group, the Company or any Affiliated Company (but without
prejudice to any claim he may have for damages for breach of this
Agreement) and in the event of his failure to do so Shire Group is
hereby irrevocably authorized to appoint some person in his name
and on his behalf to sign and deliver such resignations to the
Board and/or to each such Affiliated Company; and
(c) For two years from and after the date of the Executive's
employment termination, neither the Executive, on the one hand,
nor the Company, Shire Group or any of the Affiliated Companies
formally, an officer or member of the Board of Directors of the
Company or an officer of Shire Group or member of the Board, on
the other hand, shall, directly or indirectly, issue or
communicate any public statement or statement likely to become
public that is damaging to the other. The foregoing shall not
prohibit any party (a) from disclosing that the Executive is no
longer employed by the Company, Shire Group or any of its
Affiliated Companies, (b) from responding truthfully to any
governmental investigation or inquiry related thereto, or any
other law, subpoena, court order or other compulsory legal process
or disclosure requirement, or (c), in the case of the Executive,
from making traditional competitive statements in the course of
promoting a competing business, so long as any such statements
made by the Executive are not based on confidential information
obtained during the course of the Executive's employment with the
Company.
8. EXECUTIVE'S COVENANTS
8.1 Noncompetition. In further consideration of the compensation to be paid
to the Executive hereunder, the Executive acknowledges that during the
course of his
13
employment with the Company and the positions he holds with Shire Group,
Shire US Inc. and any of the Affiliated Companies, he has and shall
continue to become familiar, with such entity's trade secrets and with
other confidential information concerning Shire Group, the Company and
any of the Affiliated Companies and that his services have been and shall
be of special, unique and extraordinary value to Shire Group, the Company
and any of the Affiliated Companies.
8.2 The Executive agrees that, during the Restricted Period (as defined in
Clause 8.9), the Executive shall not, directly or indirectly, own any
interest in, manage, control, participate in, consult with, render
services for, or in any manner engage in any business which has a product
(or which, within the following two years, is expected to have a product)
that materially competes with the products of Shire Group as conducted or
as proposed to be conducted (within the following two years) on the date
on which the Executive's employment hereunder terminates and which
generates (or is expected to generate within the following two years) at
least ten per cent (10%) of Shire Group's annual revenues (any portion of
an entity that so competes being referred to as a "COMPETITIVE
BUSINESS"). In the event that any determination as to whether a business
is a Competitive Business is unclear, the Executive and the Chairman
shall discuss it in good faith.
8.3 Nothing contained in this Clause 8 shall prohibit the Executive from (i)
providing services to any portion of an entity that is not a Competitive
Business (unless such entity's Competitive Businesses account for forty
per cent (40%) or more of the entity's overall annual revenues), or (ii)
being a passive owner of not more than three per cent (3%) of the
outstanding stock of any class of a corporation that is publicly traded,
so long as the Executive has no active participation in the business of
such corporation. In the event that any determination under (i) of the
preceding sentence is unclear, the Executive and the Chairman shall
discuss it in good faith.
8.4 Nonsolicitation. In further consideration of the compensation to be paid
to the Executive hereunder, during the Restricted Period, the Executive
shall not directly or indirectly, through another person or entity (other
than, solely during the continuance of his employment hereunder, in
connection with the Executive's performance of his duties to Shire Group,
the Company and any of the Affiliated Companies (as such duties relate to
the termination of employees that the Executive, in good faith,
reasonably believes to be in the best interests of Shire Group, the
Company and any of the Affiliated Companies)), induce or attempt to
induce any employee of any such entity to leave the employ of such
entity, or in any way interfere with the relationship between Shire
Group, the Company and any of the Affiliated Companies and any employee
thereof. The provisions of this Clause 8.4 shall not be violated by the
Executive if the Executive acts as a reference for any such person or as
a result of general advertising by a future employer of the Executive.
14
8.5 In further consideration of the compensation to be paid to the Executive
hereunder, during the Restricted Period, the Executive shall not directly
or indirectly, through another person or entity, other than in connection
with the Executive's performance of his duties to Shire Group, the
Company and any of the Affiliated Companies, hire any person who was an
employee of Shire Group, the Company and any of the Affiliated Companies
at any time during the three (3) months prior to such hiring. The
provisions of this Clause 8.5 shall not be violated by the Executive if
the Executive acts as a reference for any such person or as a result of
general advertising by a future employer of the Executive.
8.6 In further consideration of the compensation to be paid to the Executive
hereunder, during the Restricted Period, the Executive shall not directly
or indirectly, through another person or entity (other than, solely
during the continuance of his employment hereunder, in connection with
the Executive's performance of his duties to Shire Group, the Company and
any of the Affiliated Companies (as such duties relate to actions that
the Executive, in good faith, reasonably believes to be in the best
interests of Shire Group, the Company and any of the Affiliated
Companies)), induce or attempt to induce any customer, supplier,
licensee, licensor, franchisee or other business relation of Shire Group,
the Company and any of the Affiliated Companies (such persons shall
collectively be referred to as the "RESTRICTED PERSONS") to cease doing
business with such entity, or in any way interfere with the relationship
between any such Restricted Persons and Shire Group, the Company and any
of the Affiliated Companies. The provisions of this Clause 8.6 shall not
be violated by the Executive if the Executive acts as a reference for any
such person or as a result of general advertising by a future employer of
the Executive.
8.7 The obligations imposed on the Executive by this Clause 8 extend to him
acting not only on his own account but also on behalf of any other firm,
company or other person and shall apply whether he acts directly or
indirectly.
8.8 It is agreed between the parties that whilst the restrictions set out in
this Clause 8 are considered fair and reasonable for the protection of
the Company's, Shire Group and its Affiliated Companies' business and
trade secrets, if it should be found that any of the restrictions be void
as going beyond what is fair and reasonable in all the circumstances and
if by deleting part of the wording or substituting a shorter period of
time or different geographical limit or a more restricted range of
activities for any of the periods of time, geographical limits or ranges
or activities set out in this Clause 8 it would not be void, then there
shall be substituted such next less extensive period and/or limit and/or
activity or such deletions shall be made as shall render this Clause 8
valid and enforceable.
8.9 The "RESTRICTED PERIOD" is the continuance of his employment hereunder
and for one year thereafter.
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9. CHANGE OF CONTROL
9.1 For the purposes of this Clause 9:
(a) "RELEVANT EVENT" means either:
(i) the termination by the Company in accordance with the
directions of the Board of the Executive's employment
(other than for Cause); or
(ii) the Executive's Good Reason termination,
in contemplation of, or within the period of 12 months following
the date of a Change of Control.
(b) "CHANGE OF CONTROL" means, where any person (other than any
Affiliated Company) either alone or together with any person
acting in concert with him obtains "control" of Shire Group as
defined in section 840 of the Income and Corporation Taxes Act
1988.
9.2 If a Relevant Event occurs the Company shall pay to the Executive within
14 (fourteen) days of that Relevant Event a lump sum equal to the
aggregate of:
(a) the value of his then current Base Salary for the period of one
year;
(b) an amount in lieu of annual bonus (which may be up to an amount
equal to the Maximum Bonus) to be decided in the absolute
discretion of the Committee;
(c) $30,000 in lieu of the Executive's car benefit pursuant to Clause
4.1(d) of this Agreement;
(d) payment of the premiums for the Executive's continued medical and
dental coverage under COBRA for one year following termination;
provided, however, that such payment shall cease at such time as
he commences participation in a subsequent employer's group health
plan;
(e) an amount equal to the actual amount incurred by the Executive in
premiums for the amount of life insurance coverage set out in
Clause 4.1(f) of this Agreement for the one year period following
termination;
(f) an amount equal to thirty per cent (30%) of the Executive's Base
Salary in lieu of the Company's contributions to the retirement
plans in which the Executive participates pursuant to Clause
4.1(g) of this Agreement; and
(g) the Pro Rata Bonus.
16
In addition, upon the occurrence of a Relevant Event and to the extent
permissible under the rules of the applicable equity scheme or
arrangement and applicable law, all options, restricted stock, and other
equity awards issued to the Executive relating to shares of the Company,
Shire Group, or any Affiliated Company shall vest in full and become
immediately exercisable, and shall remain exercisable by the Executive
through the remainder of the original term of such awards, subject to
earlier termination in accordance with the rules of the applicable scheme
(other than items relating to a termination of employment). Upon the
occurrence of a Relevant Event the Executive shall also receive any other
benefits and payments to which he is then entitled at law or under any
benefit program, including accrued but unpaid vacation or holiday pay, if
any, and unreimbursed expenses.
9.3 Exhibit A attached hereto shall apply to payments and benefits provided
to the Executive in accordance with its terms.
10. DIRECTORSHIP
The Executive shall not, save at the request or with the consent of the
Board, or in connection with a voluntary termination of employment:
(a) voluntarily resign as a director of Shire Group or the Company;
(b) willfully do or fail to do anything which causes him to be
prohibited by law from continuing to act as a director; or
(c) voluntarily and willfully do or refrain from doing any act whereby
his office as a director of Shire Group or the Company is or
becomes liable to be vacated;
in each case, provided that with respect to such directorship the
Executive has the indemnification protection and liability insurance
coverage set forth in Clause 4.1(j) hereof.
11. DATA PROTECTION
The Executive consents to Shire Group, the Company or any Affiliated
Company holding and processing both electronically and manually the data
it collects which relates to the Executive for the purposes of the
administration and management of its employees and its business and for
compliance with applicable laws and regulations. The Executive also
consents to the transfer of such personal information to other offices
the Company may have or to an Affiliated Company or to other third
parties whether or not outside the European Economic Area for
administration purposes and other purposes in connection with the
Executive's employment where it is necessary or desirable for the Company
to do so.
17
12. NOTICES
12.1 Any notice to be given under this Agreement shall be given in writing and
shall be deemed to be sufficiently served by one party on the other if it
is delivered personally, is sent by first class registered or recorded
delivery pre-paid post (air mail if overseas), is sent by internationally
recognized private express courier (such as DHL, FedEx, TNT or UPS), or
is transmitted by fax with the sender retaining a confirmatory receipt of
such transmission, addressed, as applicable, to the attention of (i) the
Company's Corporate Secretary, with a copy to the attention of the
General Counsel of Shire Group, at each such entity's registered office,
or (ii) the Executive at his address of record, as reported to the
Company's Human Resources Department from time to time.
12.2 Any notice sent by post shall be deemed (in the absence of evidence of
earlier receipt) to be received three (3) days after posting or sending
by express courier (six (6) days if sent by air mail and one (1) day if
transmitted by fax) and in proving the time such notice was sent it shall
be sufficient to show that the envelope containing it was properly
addressed, stamped and posted. Any notice delivered personally shall be
deemed to be received when delivered to the address provided for in
Clause 13.1.
13. MISCELLANEOUS
13.1 The Executive hereby warrants that by virtue of entering into this
Agreement he will not be in breach of any express or implied terms of any
contract or of any other obligations legally binding upon him. Shire
Group hereby warrants that the individuals signing this Agreement and the
attached Guaranty on behalf of Shire Group, the Company, and any
Affiliated Company are duly authorized to do so without any further
action required and that this Agreement (and Guaranty) shall be
enforceable upon execution.
13.2 This Agreement supersedes all previous agreements of a similar nature
between the parties or any Affiliated Company, including without
limitation, any term sheet prepared in connection with the Executive's
employment hereunder. This Agreement contains the entire understanding of
the parties and of the Executive and Shire Group and any other Affiliated
Companies with respect to employment of Executive by the Company. There
are no restrictions, agreements, promises, warranties, covenants or
undertakings between the parties and between the Executive and Shire
Group and any other Affiliated Companies with respect to the subject
matter herein other than those expressly set forth herein. This Agreement
may not be altered, modified, or amended except by written instrument
signed by the parties hereto and specifically approved by the Committee.
13.3 Any benefits provided by the Company to the Executive or his family which
are not expressly referred to in this Agreement shall be regarded as ex
gratia benefits
18
provided at the entire discretion of the Company and shall not form part
of the Executive's contract of employment.
13.4 In the event that one or more of the provisions of this Agreement shall
be or become invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not be affected thereby.
13.5 Except where prohibited by law, all amounts payable to the Executive
hereunder shall be subject to required tax withholding but shall
otherwise not be subject to offset.
13.6 This Agreement may be signed in counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto
were upon the same instrument.
13.7 The Company will provide the Executive with paid financial and tax
counseling in an amount equal to the actual costs incurred but (subject
to the next sentence) not to exceed $30,000 per year, plus an additional
amount to place the Executive in the same after-tax position he would
have occupied had he not received such amount. Such financial and tax
counseling benefits will be no less favorable than those provided to
other senior executives of Shire Group.
13.8 Unless otherwise indicated, all amounts referred to in this Agreement are
denominated in United States dollars.
14. DEFINITIONS AND INTERPRETATION
14.1 In this Agreement, a reference to "AFFILIATED COMPANY" means Shire
Pharmaceuticals Group plc and any entity that is from time to time a
direct or indirect subsidiary (as "subsidiary" is defined in Section 424
of the Internal Revenue Code of 1986, as amended) of Shire
Pharmaceuticals Group plc, including the Company.
14.2 The headings in this Agreement are for convenience only and shall not
affect its construction or interpretation.
14.3 References in this Agreement to Clauses are references to clauses in this
Agreement.
14.4 Any reference in this Agreement to the employment of the Executive is a
reference to his employment by the Company, whether or not during the
currency of this Agreement.
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14.5 Any reference in this Agreement to a statutory provision shall be deemed
to include a reference to any statutory amendment, modification or
re-enactment of it.
14.6 Except in the instances where equitable relief is specifically authorized
hereunder, any dispute arising under or in connection with this Agreement
shall be resolved by binding arbitration conducted before one (1)
arbitrator sitting in New York, in accordance with the rules and
regulations of the American Arbitration Association. Judgment upon the
award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. In the event Executive shall be determined by the
arbitrator to have prevailed in such arbitration, the Company shall pay
the costs and legal fees and disbursements incurred by Executive in such
arbitration and preparation therefor. This Agreement is governed by and
shall be construed in accordance with the laws of the State of Delaware
and in enforcing the decision of any arbitration hereunder or in seeking
equitable relief the parties to this Agreement hereby submit to the
exclusive jurisdiction of the Federal and State Courts domiciled in the
State of New York.
14.7 Without effect as to the survival of any other provisions of this
Agreement intended to survive the termination or expiration of the
Executive's employment, the obligations contained in Clauses 4.1(c),
4.1(h), 4.1(j), 5, 6, 7, 8, 9, 11, 12, and 14 hereof shall survive the
termination or expiration of the Executive's employment with the Company.
20
EXECUTION COPY
IN WITNESS whereof this Agreement has been executed on the date first above
written.
SHIRE EXECUTIVE SERVICES INC. EXECUTIVE
Officer:
-------------------------- ---------------------------
Title: Mr. Matthew Emmens
--------------------------
EXHIBIT A
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that the Executive shall become entitled to
payments and/or benefits provided by this Agreement or any other amounts in the
"nature of compensation" (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company or any affiliate, any
person whose actions result in a change of ownership or effective control of the
Company covered by Section 280G(b)(2) of the Code or any person affiliated with
the Company or such person) as a result of such change in ownership or effective
control of the Company (each, a "PAYMENT") would be subject to the excise tax
imposed by Section 4999 of the code or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"EXCISE TAX"), then the Executive shall be entitled to receive an additional
payment (a "GROSS-UP PAYMENT") in an amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of paragraph (c), all determinations
required to be made under this Exhibit A, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by a nationally
recognized accounting firm (the "ACCOUNTING FIRM") which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a Payment,
or such earlier time as is requested by the Company. The Accounting Firm shall
be jointly selected by the Company and the Executive and shall not, during the
two years preceding the date of its selection, have acted in any way on behalf
of the Company or its affiliated companies. If the Company and the Executive
cannot agree on the firm to serve as the Accounting Firm, then the Company and
the Executive shall each select a nationally recognized accounting firm and
those two firms shall jointly select a nationally recognized accounting firm to
serve as the Accounting Firm. All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Exhibit A, shall be paid by the Company to the Executive within five days
of the receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written opinion that failure to report the Excise Tax on the
Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
a Gross-Up Payment which will not have been made by the Company should have been
made ("UNDERPAYMENT"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
paragraph (c) hereof and the Executive thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Company to or for the benefit of the Executive.
(c) The Executive shall notify the company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of a Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which he or she gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
(i) give the Company any information reasonably requested by the Company
relating to such claim,
(ii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to
contest such claim, and
(iv) permit the Company to participate in any proceedings relating to
such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax basis, for any Excise
Tax or income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this
paragraph (c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may,
at its sole option, either direct the Executive to pay the tax claimed
and sue for a refund or contest the claim in any permissible manner, and
the Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine; provided,
however, that if the Company directs the Executive to pay such claim and
sue for a refund, the Company shall advance the amount of such payment to
the Executive, on an interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or income
tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that the Executive shall
not be required by the Company to agree to any extension of the statute
of limitations relating to the payment of taxes for the taxable year of
the Executive with respect to which such contested amount is claimed to
be due unless such extension is limited solely to such contested amount.
Furthermore, the Company's
control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised
by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to paragraph (c) hereof, the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company's complying with the requirements of paragraph (c) hereof) promptly
pay to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to paragraph (c) hereof,
a determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.
(e) If, pursuant to regulations issued under Section 280G or 4999 of the
Code, the Company and the Executive were required to make a preliminary
determination of the amount of an excess parachute payment and thereafter a
redetermination of the Excise Tax is required under the applicable regulations,
the parties shall request the Accounting Firm to make such redetermination. If
as a result of such redetermination an additional Gross-Up Payment is required,
the amount thereof shall be paid by the Company to the Executive within five
days of the receipt of the Accounting Firm's determination. If the
redetermination of the Excise Tax results in a reduction of the Excise Tax, the
Executive shall take such steps as the Company may reasonably direct in order to
obtain a refund of the excess Excise Tax paid. If the Company determines that
any suit or proceeding is necessary or advisable in order to obtain such refund,
the provisions of paragraph (c) hereof relating to the contesting of a claim
shall apply to the claim for such refund, including, without limitation, the
provisions concerning legal representation, cooperation by the Executive,
participation by the Company in the proceedings and indemnification by the
Company. Upon receipt of any such refund, the Executive shall promptly pay the
amount of such refund to the Company. If the amount of the income taxes
otherwise payable by the Executive in respect of the year in which the Executive
makes such payment to the Company is reduced as a result of such payment, the
Executive shall, no later than the filing of his income tax return in respect of
such year, pay the amount of such tax benefit to the Company. In the event there
is a subsequent redetermination of the Executive's income taxes resulting in a
reduction of such tax benefit, the Company shall, promptly after receipt of
notice of such reduction, pay to the Executive the amount of such reduction. If
the Company objects to the calculation or recalculation of the tax benefit, as
described in the preceding two sentences, the Accounting Firm shall make the
final determination of the appropriate amount. The Executive shall not be
obligated to pay to the Company the amount of any further tax benefits that may
be realized by him or her as a result of paying to the Company the amount of the
initial tax benefit.
EXHIBIT B
RATIFICATION AND GUARANTY
Shire Pharmaceuticals Group plc and Shire US Inc. (each, a "GUARANTOR")
hereby confirm and ratify the Agreement and agree (i) to the provisions thereof
and (ii) to be bound by such provisions. For value received and to induce the
Executive to enter into the foregoing Agreement with the Company, each
Guarantor, jointly and severally, hereby irrevocably guarantees to the Executive
the prompt performance and payment of all obligations of the Company to the
Executive under the Agreement. This is a guarantee of performance and payment
and not of collection. The obligations of each Guarantor under this guarantee
shall not be affected or impaired by reason of the happening from time to time
of any of the following with respect to the Agreement: (i) the waiver by the
Executive or the Company of the performance or observance of any provision of
the Agreement; (ii) the modification or amendment (whether material or
otherwise) of any of the obligations of the Company or the Executive under the
Agreement; (iii) any failure, omission or delay on the part of the Executive to
enforce, assert or exercise any right conferred on the Executive in the
Agreement or otherwise; or (iv) any bankruptcy, insolvency or reorganization of,
any arrangement or assignment for benefit of creditors, by or any trusteeship
with respect to, to the Company or any of its assets. Each Guarantor
specifically agrees to be subject to the arbitration and dispute resolution
procedures set forth in Section 15.6 of the Agreement and to the jurisdiction of
the state and federal courts in the State of New York, agrees to be bound by an
arbitrator's determinations in any arbitration by the Company and the Executive,
agrees not to assert arguments of forum non conveniens and agrees that service
upon it may be made by registered mail, return receipt requested. Each Guarantor
shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all its business, assets or
stock to expressly assume this guarantee in a writing delivered to the Executive
and to fulfill the obligations hereunder as if no succession had taken place.
Notwithstanding anything herein to the contrary, the obligations of Shire
Pharmaceuticals Group plc under this Ratification and Guaranty shall not apply
to any extent satisfaction of such obligations would cause Sections 310 or 311
of the UK Companies Act of 1985 to be violated.
SHIRE PHARMACEUTICALS GROUP PLC
By:
------------------------------------
Name:
Title:
SHIRE US INC.
By:
------------------------------------
Name:
Title: