Exhibit 10.14
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of
November 1, 2002 (the "Effective Date") by and between NxStage Medical, Inc., a
Delaware corporation (the "Company" or "NxStage"), and Xxxxxxxxxxx Xxxxx, an
individual ("Xx. Xxxxx"), residing at Forest Road, Lincoln, MA.
W I T N E S S E T H
WHEREAS, the Company desires to employ Xx. Xxxxx to provide certain
services to the Company subject to the terms set forth herein; and
WHEREAS, Xx. Xxxxx desires to be employed by the Company in return for
certain compensation and benefits.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT BY THE COMPANY.
Subject to the terms and conditions set forth in this Agreement, the Company
agrees to employ Xx. Xxxxx to render full-time services to the Company as its
Vice President and Chief Financial Officer. Xx. Xxxxx shall perform the duties
and have the responsibilities and authorities that are customarily associated
with his then current title, and such other duties of an executive nature as may
be assigned from time to time by the President of the Company, consistent with
the Bylaws of the Company. As Chief Financial Officer, Xx. Xxxxx agrees to
devote his best efforts and substantially all of his business time and attention
(except for vacation periods as set forth herein and reasonable periods of
illness or other incapacities permitted by the Company's general employment
policies or, in the absence of such policies, consistent with the employment
policies common to the industry at large) to the business of the Company and to
use the highest degree of professionalism in performing services for the
Company.
2. COMPENSATION.
2.1 Salary. During the term of this Agreement, as compensation for the
proper and satisfactory performance of all duties to be performed and services
to be provided under this Agreement, the Company agrees to pay Xx. Xxxxx a base
salary ("Base Salary") in the amount of One Hundred Ninety Five Thousand Dollars
($195,000) per year of employment, payable on a semi-monthly basis and in
accordance with the Company's standard payroll practices, less required
deductions for state and federal withholding taxes, Social Security and all
other employee taxes and payroll deductions (the "Semi-Monthly Base Payment").
In addition beginning in calendar year 2003, Xx. Xxxxx shall be eligible to
receive bonus compensation in an amount up to 20% of his Base Salary at the
discretion of the Board, dependent upon Xx. Xxxxx' achievement of certain
objectives and the overall performance of the Company.
Xx. Xxxxx'x base salary shall be reviewed annually by the President and may be
increased or decreased in the sole discretion of the President; provided,
however, that if at any time during the Period of Employment Xx. Xxxxx'x Base
Salary is reduced by more than 15% from the previous fiscal year, except for
across-the-board salary reductions similarly affecting all or substantially all
management employees and reductions related to the his job performance, then Xx.
Xxxxx shall be entitled to terminate his employment with the Company and such
termination shall be considered a Company initiated termination without cause in
accordance with Section 6.
2.2 Equity.
(a) As of the Effective Date and subject to the terms of this
Agreement, the Company shall grant to Xx. Xxxxx an Incentive stock option,
exercisable at any time during the Period of Employment (as defined below) and
within ten (10) years after the grant of the option (the "Stock Option"), to
purchase an aggregate of ______________ shares of the Company's Common Stock at
a price of _____ per share (the "Shares"). Such number of shares of Common Stock
constitutes two and one-half percent (2.5%) of the fully-diluted shares of
capital stock of the Company as of the Effective Date.
(b) The terms of this Stock Option shall be governed by that certain
Incentive Stock Option Agreement executed by Xx. Xxxxx and the Company as of the
Effective Date (the "Option Agreement"), Exhibit B.
(c) In the event that Xx. Xxxxx exercises the Stock Option, then,
upon the death or complete and permanent disability of Xx. Xxxxx, or upon the
termination of Xx. Xxxxx'x employment for any reason, the Company shall have the
right but not the obligation to repurchase from Xx. Xxxxx all Shares subject to
such exercise that have not yet vested as of the date of such death, disability
or termination.
3. ADDITIONAL BENEFITS.
3.1 Standard Company Benefits. Xx. Xxxxx shall be entitled to all rights
and benefits for which he would be eligible under the terms and conditions of
the Company's standard benefits package in effect from time to time for its
executive employees, including by way of illustration only, long-term disability
insurance, family health care insurance, vacation and sick leave (the "Fringe
Benefits"). For the purpose of calculating vacation benefits, Xx. Xxxxx will be
recognized as having >_____ years of industry experience as of the Effective
Date. The Company reserves the right to change such Fringe Benefits from time to
time in its sole discretion.
3.2 Accumulation of Fringe Benefits. Xx. Xxxxx shall not earn or
accumulate unused vacation or sick leave, or other Fringe Benefits, in excess of
an unused amount equal to the amount of such benefit earned during a one (1)
year period. Furthermore, Xx. Xxxxx shall not be entitled to receive payments in
lieu of such unused Fringe Benefits, other than for unused vacation earned and
accumulated at the time the employment relationship terminates. All unused sick
leave and other Fringe Benefits earned during the twelve (12) month period
ending on each anniversary of the Commencement Date shall be forfeited if not
used within ninety (90) days
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following such anniversary date. Notwithstanding the foregoing, in the event
that the Company adopts a more favorable accumulation policy for its executive
officers, Xx. Xxxxx shall be entitled to the benefits of such more favorable
accumulation policy as of the adoption by the Company thereof.
4. OUTSIDE ACTIVITIES.
Xx. Xxxxx agrees that he will not, without first obtaining the President's prior
written approval, directly or indirectly engage or prepare to engage in any
activity in competition with the Company, provide services to, or establish a
business relationship with, a business or individual engaged in or preparing to
engage in competition with the Company, or accept a seat on the board of
directors or other managing committee or team for any other business entity,
except as otherwise provided herein. For purposes of this paragraph, the holding
of less than one percent (1%) of the outstanding voting securities of any firm,
business or organization in competition with the Company shall not constitute
activities or services precluded by this section.
5. PROPRIETARY AND CONFIDENTIAL INFORMATION OBLIGATIONS.
Xx. Xxxxx hereby agrees to execute and acknowledges his obligations pursuant to
the Employee Proprietary Information, Inventions and Noncompete Agreement
attached hereto as Exhibit A (the "Proprietary Information Agreement"),
including but not limited to, the obligation to refrain from using or disclosing
the proprietary and confidential information of the Company. Xx. Xxxxx further
acknowledges that these obligations shall survive the termination of Xx. Xxxxx'x
employment with the Company.
6. TERM AND TERMINATION OF EMPLOYMENT.
6.1 Period of Employment. Xx. Xxxxx'x period of employment by the Company
pursuant to this Agreement shall commence on __________, 2002 (the "Commencement
Date") and shall end upon the date that the employment relationship is
terminated pursuant to this Section 6 (the "Termination Date"). The period of
employment commencing on the Commencement Date and ending on the Termination
Date shall be known as the Period of Employment (the "Period of Employment").
6.2 Termination at Will. Although Xx. Xxxxx and the Company anticipate a
long and mutually rewarding employment relationship, Xx. Xxxxx and the Company
each acknowledge that either party has the right to terminate Xx. Xxxxx'x
employment with the Company at any time for any reason whatsoever, with or
without cause subject, however, to the terms of this Agreement. This at-will
employment relationship cannot be changed except in writing signed by a duly
authorized officer of the Company and Xx. Xxxxx.
6.3 Termination Without Cause or for Good Reason.
(a) The Company may terminate this employment relationship
immediately without Cause upon written notice to Xx. Xxxxx. Xx. Xxxxx may
terminate his employment for Good Reason (as defined in the Option Agreement) 30
days after the Company has been given
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written notice specifying the occurrence of an event in reasonable detail and
demanding its cure, and provided that the Company has not cured such event
within the 30 day period, or, if it is not possible to cure such event within 30
days, if the Company has not taken appropriate steps to begin to cure such event
within such 30 day period. In the event such a termination occurs for either
Good Reason or without Cause as defined by the Option Agreement, and provided
that Xx. Xxxxx has executed a release of liability in favor of the Company in a
form reasonably acceptable to the Company, Xx. Xxxxx shall receive a lump sum
payment equivalent to his then accumulated but unused vacation time through the
date of termination and, as severance, continued payment of his Semi-Monthly
Base Payment and Consolidated Omnibus Budget Reconciliation Act (COBRA) payments
for a period of time not to exceed six (6) months after the Termination Date, or
until Xx. Xxxxx has secured full-time employment or consulting assignment(s),
which ever first occurs (the "Severance Period"). No other employee benefits
will be continued during this Severance Period.
i. In the event that, during the Severance Period, Xx. Xxxxx
secures full-time employment in which he is paid less per semi-monthly period
than the amount of the Semi-Monthly Base Payment to be received as severance
hereunder, then Xx. Xxxxx shall be entitled to be paid reduced severance
payments by the Company equal to the difference between the amount of the
Semi-Monthly Base Payment and the semi-monthly compensation to be paid to Xx.
Xxxxx pursuant to such full-time employment or consulting assignment(s).
ii. During this Severance Period and provided Xx. Xxxxx does
not secure full time employment or consulting assignment(s), Xx. Xxxxx'x options
shall continue to vest according to the vesting schedule outlined in the Option
Agreement. In no event shall Xx. Xxxxx'x cumulative vested options at the end of
this period be less than 25% of those granted.
iii. IN THE EVENT THAT XX. XXXXX ELECTS TO AND DOES RECEIVE
ANY OF THE BENEFITS PROVIDED UNDER THIS SUBSECTION 6.3, XX. XXXXX AGREES THAT
SUCH PAYMENTS SHALL CONSTITUTE HIS SOLE AND EXCLUSIVE RIGHTS AND ENTITLEMENTS IN
CONNECTION WITH HIS EMPLOYMENT BY THE COMPANY, THE TERMINATION OF SUCH
EMPLOYMENT AND ANY AND ALL MATTERS RELATING TO OR ARISING IN CONNECTION WITH
SUCH EMPLOYMENT, AND AGREES THAT HIS ACCEPTANCE OF ANY SUCH PAYMENTS SHALL
RELEASE THE COMPANY AND ANY AND ALL AFFILIATED PERSONS AND ENTITIES (INCLUDING
ALL DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS) FROM ANY CLAIMS THAT XX. XXXXX
MAY OTHERWISE HAVE OR ASSERT IN CONNECTION WITH SUCH MATTERS. IF XX. XXXXX
DESIRES TO PURSUE OR ENFORCE ANY RIGHTS, ENTITLEMENTS OR REMEDIES THAT WOULD
OTHERWISE BE WAIVED OR RELEASED, THEN HE SHALL REFUSE ANY PAYMENTS PROVIDED FOR
IN THIS SUBSECTION 6.3. IF XX. XXXXX ACCEPTS ANY SUCH SEVERANCE PAYMENT OR
PAYMENTS, HE SHALL BE DEEMED TO HAVE AGREED TO THE FOREGOING EXCLUSIVITY OF
RIGHTS AND WAIVER OF CLAIMS.
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(b) The Company may immediately terminate this employment
relationship for Cause upon written notice to Xx. Xxxxx. In the event Xx.
Xxxxx'x employment is terminated at any time with Cause, all of Xx. Xxxxx'x
compensation and benefits will cease immediately, and Xx. Xxxxx shall not be
entitled to any compensation, severance, acceleration of vesting or other
benefits as of the date of such termination. For purposes of this Agreement,
"for Cause" shall be as that term is defined in the Option Agreement.
(c) Except as expressly provided herein, Xx. Xxxxx will not be
entitled to any other compensation, severance, pay-in-lieu of notice or any
other such compensation upon the termination of his employment by the Company.
This severance provision does not affect the "at will" nature of Xx. Xxxxx'x
employment.
6.4 Xx. Xxxxx Initiated Termination. Xx. Xxxxx may voluntarily terminate
his employment with the Company at any time by giving the Board thirty (30) days
written notice. In the event Xx. Xxxxx voluntarily terminates his employment
with the Company for other than Good Reason, all of Xx. Xxxxx'x compensation and
benefits will cease as of the termination date. Xx. Xxxxx acknowledges that he
will not receive any severance pay or other benefits upon such voluntary
termination, other than a lump sum payment equivalent to his then accumulated
but unused vacation time together with any unpaid benefits and compensation
through the date of termination.
6.5 Exclusive Remedy. The parties agree that the payments and/or benefits
described in subsection 6.3 shall be Xx. Xxxxx'x sole and exclusive remedy in
the event the Company terminates Xx. Xxxxx'x employment, and Xx. Xxxxx shall be
entitled to no further compensation for any damage or injury arising out of the
termination of his employment by the Company; provided, however, that nothing
contained in this paragraph shall limit Xx. Xxxxx'x right to be indemnified by
the Company for his actions as its officer or employee.
6.6 Obligations Upon Termination.
(a) The obligations of the parties under Sections 5 through 9 shall
survive the termination of this Agreement.
(b) Upon the end of the Period of Employment, Xx. Xxxxx shall
promptly deliver to the Company all materials, property, documents, data and
other information belonging to the Company or containing the Company's trade
secrets or other Proprietary Information, as such term is defined in the
Proprietary Information Agreement attached hereto as Exhibit A. Xx. Xxxxx shall
not take any materials, property, documents or other information, or any
reproduction or excerpt thereof, belonging to the Company or containing any of
the Company's Proprietary Information.
(c) Upon termination of the Period of Employment, Xx. Xxxxx shall be
deemed to have resigned from any and all offices then held with the Company.
7. NOTICES.
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All notices, requests, consents and other communications required or permitted
to be given hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or delivered by registered or certified mail
(return receipt requested), or private overnight mail (delivery confirmed by
such service) to the address listed below, or to such other address as either
party shall designate by notice in writing to the other in accordance with the
terms hereof:
If to the Company:
NxSTAGE Medical, Inc.
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: President, with a copy to General Counsel
If to Xx. Xxxxx:
Xx. Xxxxx
0 Xxxxxx Xxxx
Xxxxxxx, XX 00000
8. ARBITRATION/ATTORNEYS' FEES.
To ensure rapid and economical resolution of any and all disputes directly or
indirectly arising out of or in any way connected or related to Xx. Xxxxx'x
employment with the Company or the termination of that employment, with the sole
exception of disputes which arise under Xx. Xxxxx'x Proprietary Information
Agreement (collectively, the "Arbitrable Claims"), the Company and Xx. Xxxxx
each agree that any and all such disputes, whether of law or fact of any nature
whatsoever, shall, if such dispute cannot be resolved within thirty (30) days
despite good faith negotiation, be resolved by final and binding arbitration by
Judicial Arbitration and Mediation Services, Inc. ("JAMS") in Boston,
Massachusetts. The Arbitrable Claims include, but are not limited to: any and
all such claims related to salary, bonuses, commissions, stock, stock options,
or any other ownership interests in the Company, vacation pay, fringe benefits,
expense reimbursements, severance benefits, or any other form of compensation;
claims pursuant to any federal, state or local law or cause of action including,
but not limited to, the federal Civil Rights Act of 1964, as amended; the
federal Age Discrimination in Employment Act of 1967, as amended; the federal
Americans with Disabilities Act of 1990; tort law; contract law; wrongful
discharge; discrimination; fraud; defamation; emotional distress; and breach of
the implied covenant of good faith and fair dealing. Xx. Xxxxx and the Company
acknowledge and agree that any and all rights he may otherwise have to resolve
such Arbitrable Claims by jury trial, by a court, or in any forum other than the
JAMS, are hereby expressly waived. If any party to this Agreement brings an
action under this Agreement, the prevailing party will be entitled to recover
his or its attorneys' fees and costs, as well as any other relief to which that
party may be entitled.
9. GENERAL.
9.1 Without in any way limiting the foregoing, this Agreement does not
supersede the terms of Xx. Xxxxx'x Option Agreement.
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9.2 Entire Agreement. This Agreement, and Exhibit A and B is the complete,
final and exclusive embodiment of the entire agreement between Xx. Xxxxx and the
Company with respect to the subject matter hereof. This Agreement is entered
into without reliance upon any promise, warranty or representation, written or
oral, other than those expressly contained herein, and it supersedes, replaces
and substitutes for all prior negotiations, representations, promises,
warranties, or agreements made between Xx. Xxxxx and the Company, whether
written or oral, concerning the terms and conditions of Xx. Xxxxx'x employment
or the termination of such employment.
9.3 Severability. If a court of competent jurisdiction determines that any
term or provision of this Agreement is invalid or unenforceable, then the
remaining terms and provisions shall be unimpaired. Such court shall have the
authority to modify or replace the invalid or unenforceable term or provision
with a valid and enforceable term or provision which most accurately represents
the parties' intention with respect to the invalid or unenforceable term or
provision.
9.4 Successors and Assigns. This Agreement shall bind the heirs, personal
representatives, successors, assigns, executors and administrators of each
party, and inure to the benefit of each party, its heirs, successors and
assigns. However, because of the unique and personal nature of Xx. Xxxxx'x
duties under this Agreement, Xx. Xxxxx agrees that he shall not be entitled to
delegate the performance of his duties or assign any of his rights or
obligations under this Agreement.
9.5 Applicable Law. This Agreement shall be deemed to have been entered
into and shall be construed and enforced in accordance with the laws of the
Commonwealth of Massachusetts as applied to contracts made and to be performed
entirely within Massachusetts. ll shall have exclusive jurisdiction over each of
the parties and such proceedings.
9.6 Headings. The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
9.7 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, all of which together shall constitute one
and the same instrument.
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IN WITNESS WHEREOF, the parties have duly authorized and caused this
Agreement to be executed as follows:
Xx. Xxxxx, NxSTAGE MEDICAL, INC.
an individual a Delaware corporation
/s/ Xxxxxxxxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx
--------------------- -----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President & CEO
Date: 9/20/02 Date: 11/05/02
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