Exhibit 10.3
June 14, 2005
Peter C. Sutcliffe
317 Tamarac Lane
Abington, MA 02351
Dear Peter:
We are pleased to offer you
continued employment with BioSphere Medical, Inc. (the
“Company”) under the following terms and
conditions. As consideration for your execution of this
letter agreement, the Company will grant you a stock option to
purchase 150,000 shares of the Company’s Common Stock, $.01
par value per share (“Common Stock”), as described
below in paragraph 3. This agreement will supercede the terms
of any prior agreements purporting to set forth the terms and
conditions of your employment.
1.
Employment; Location;
Duties .
You will continue to be employed to
serve on a full-time basis as Vice President, Operations, and will
continue to be based at the Company’s headquarters. You
will continue to be subject to the supervision of, and shall have
such authority as is delegated to you by, the Chief Executive
Officer of the Company.
By entering into this letter
agreement with the Company, you will be agreeing to undertake the
duties and responsibilities inherent in such position and such
other duties and responsibilities as the Chief Executive Officer
shall from time to time reasonably assign to you. You agree
to devote your entire business time, attention and energies to the
business and interests of the Company during your continued
employment. You also agree to abide by the rules,
regulations, instructions, personnel practices and policies of the
Company and any changes therein which may be adopted from time to
time by the Company.
2.
Compensation
.
2.1
Base
Salary . Your annualized base
salary will continue to be $189,960, less applicable taxes and
withholdings, paid semi-monthly in accordance with the
Company’s payroll practices (“Base
Salary”). Such salary and pay schedule may be
adjusted from time to time, in accordance with normal business
practice and in the sole discretion of the Company’s Board of
Directors.
2.2
Bonus . You will be eligible
to receive an annual bonus in an amount equal to up to 30% of your
then current Base Salary, to be paid based upon the Company’s
evaluation of your achievement of milestones and objectives to be
mutually agreed upon annually by you and the Compensation Committee
of the Board of Directors, provided that you remain an employee of
the Company at the time such bonuses are customarily
paid.
2.3
Other
Benefits . You shall continue to be
eligible to participate in all benefit programs that the Company
establishes and generally makes available to its employees, if any,
to the extent that your position, tenure, salary, age, health and
other qualifications make you eligible to participate, including
but not limited to the Company’s health insurance plan,
401(k) plan, and policies governing paid time off. In
addition, you shall continue to be entitled to three (3) weeks
paid vacation per year, subject to the Company’s policies and
procedures, to be taken at such times as may be approved by the
Company’s Chief Executive Officer or his designee. The
Company reserves the right to amend and/or terminate any plan,
benefit, or program at any time with or without notice or
publication.
2.4
Reimbursement
of Expenses . The Company shall
reimburse you for all reasonable travel, entertainment and other
expenses incurred or paid by you in connection with, or related to,
the performance of your duties, responsibilities or services as an
employee of the Company, in accordance with policies and
procedures, and subject to limitations, adopted by the Company from
time to time.
3.
Consideration
.
If you enter into this letter
agreement with the Company, you will be granted, pursuant to the
Company’s 1997 Stock Incentive Plan (the “Plan”)
(a) an option to purchase 100,000 shares of Common Stock of
the Company pursuant to the terms and conditions of the Plan and a
stock option agreement issued thereunder, such option to be
exercisable at a price per share equal to the closing price of the
Company’s Common Stock on the NASDAQ Stock Market on date of
grant, such option to vest and become exercisable, subject to your
continued employment, at a rate of 20% of the total shares
underlying the option on the first anniversary of the date of grant
and as to an additional 20% at the end of each full year thereafter
and (b) an option, to purchase 50,000 shares of the
Company’s Common Stock pursuant to the terms and conditions
of the Plan and a stock option agreement issued thereunder, such
option to be exercisable at a price per share equal to the closing
price of the Company’s Common Stock on the date of grant,
such option to vest and become exercisable, subject to your
continued employment, at a rate of 33.3333% of the total shares
underlying the option on the first anniversary of the date on which
the Company books revenue from the commercial sale of its products
in excess of $25.0 million (as reflected on the Company’s
financial statements prepared in accordance with generally accepted
accounting principles in the United States) in any continuous
12-month period and as to an additional 33.3333% at the end of each
full year thereafter; provided that such option shall vest, in any
event, on the end of the seventh year after the date of
grant.
4.
Termination Upon or in
Anticipation of a Change in Control .
4.1
In the event your
at-will employment is terminated by the Company without Cause (as
defined below) in anticipation of, or within twelve months after, a
Change in Control (as defined below), the Company shall continue to
pay to you your salary as in effect on the date of termination and
the amount of the annual bonus paid to you for the fiscal year
immediately preceding the date of termination (payable in
annualized monthly installments) and shall, provided you elect to
receive group medical insurance pursuant to the federal
“COBRA”
law, 29 U.S.C.
§ 1161 et seq ., provide to you
reimbursement for the share of the premium for group medical and
dental that is paid by the Company for active and
similarly-situated employees who receive the same type of coverage,
until the date 12 months after the date of termination, provided,
however, that the Company’s obligation to make the aforesaid
payments or provide the aforesaid benefits shall immediately
terminate in the event that you violate the provisions of
Section 5 or Section 6 of this letter agreement during
such 12 month period. The payment to you of the amounts
payable under this Section 4.1 shall be contingent upon your
execution of a release in a form reasonably acceptable to and
prepared by the Company and (ii) shall constitute your sole
remedy in the event of a termination of your employment in the
circumstances set forth in this Section 4.1.
4.2
“
Cause ” shall, for the purposes of Section 4.1,
mean (a) a finding by the Company of failure by you to perform
your assigned duties for the Company, dishonesty, gross negligence,
misconduct, or any act or omission by you that may have an adverse
effect on the Company’s business or on your ability to
perform services for the Company; or (b) your conviction or
the entry of a pleading of guilty or nolo contendere to any crime
involving moral turpitude or any felony.
4.3
“ 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) 50% 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 4.3; 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
letter 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
|
