Exhibit 10.3

 

January 15, 2008

 

Jane Kramer

30 Baskin Road

Lexington, MA 02421

 

Dear Jane:

 

The purpose of this Retention and Separation Agreement (“Agreement”) is to
confirm the terms of your retention by NitroMed, Inc. (“NitroMed” or “the
Company”), and your ultimate separation of employment from NitroMed.(1)  The
date of your actual separation shall be deemed to be the “Separation Date”.  The
economic benefits to be provided to you under this Agreement are contingent on
your agreement to and compliance with the provisions of this Agreement,
including your signing of this Agreement, and your written re-affirmation (by
execution of the document attached hereto as Exhibit E) of the release of claims
at the time of your termination of employment from NitroMed.

 

1.             Separation.  Your employment with NitroMed will separate on
April 15, 2008 (the “Separation Date”).  You acknowledge that from and after the
Separation Date you shall have no authority to represent yourself as an employee
or agent of NitroMed, and you agree not to represent yourself in the future as
an employee or agent of NitroMed.

 

2.             Prior Agreements.  The parties acknowledge that: (i) you are a
participant in the NitroMed, Inc. Executive Severance Benefit Plan, as amended,
(the “Executive Severance Plan”) the terms of which are set out in related
Summary Plan Description, a copy of which is provided to you concurrently with
this Agreement; and (ii) that you are party to a Change of Control Agreement
(the “Change of Control Agreement”), a copy of which is provided to you
concurrently with this Agreement, the terms of both agreements being
incorporated herein by reference.  The parties acknowledge that if there is a
Change of Control event, your entitlement to the benefits under the Change of
Control agreement would be your sole entitlement to any form of severance or
other economic benefits, (2) and that in such circumstance, you will have no
entitlement at all to the severance or other economic benefits set forth in the
Executive Severance Plan.  You acknowledge and agree that should you voluntarily
terminate your employment (except for a “Good Reason” termination as that term
is defined in the Change of Control Agreement) prior to the designated
Separation Date, or should you be terminated from employment for “cause” as that
term is defined in

 

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(1)           Except for the obligations set forth in Section 2 which shall be
solely the obligations of NitroMed, Inc.., whenever the term NitroMed is
otherwise used in this Agreement (including, without limitation, Section 7), it
shall be deemed to include NitroMed, Inc. and any and all of its divisions,
affiliates and subsidiaries and all related entities, and its and their
directors, officers, employees, agents, successors and assigns.

 

(2)           The parties acknowledge and agree that the other economic benefits
under the Change of Control Agreement in Section 4.2(a)(ii) are limited to the
group medical and dental insurance benefits provided by NitroMed to employees
and employees’ families.

 

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either the Executive Severance Benefit Plan or the Change of Control Agreement,
as applicable, then you shall not be entitled to any of the severance or other
economic benefits provided for in such agreements, nor shall you otherwise have
any entitlement to any form of severance pay or other economic benefits.

 

3.             Retention Benefits.  In addition to the economic benefits that
you are eligible to receive under either the Executive Severance Benefit Plan or
the Change of Control Agreement, as applicable, and as an additional incentive
for you to remain employed by NitroMed until the earlier of (i) the Separation
Date or (ii) termination under the Change of Control Agreement (including,
without limitation, a “Good Reason” termination pursuant to Section 1.4
thereof), NitroMed also is offering to provide you with the following Retention
Benefits:

 

A.            A payment equal to fifty percent (50%) of your annualized base
salary for a three-month period.

 

B.            A payment equal to one hundred percent (100%) of your target 2008
bonus, pro-rated for three (3) months.

 

Such sums shall be paid in a lump-sum (less applicable state and federal taxes)
within ten (10) days of the earlier of any of the events identified above.  In
order to receive the Retention Benefits set forth in this Section, you must
remain employed by NitroMed as set forth in this Section, and you further must
at that time execute an agreement which will contain, among other provisions, a
complete release of all claims against NitroMed.

 

4.             Acknowledgements.  You acknowledge and agree that this Agreement
and the Transition Pay and Benefits to be provided to you are not intended to,
and shall not constitute, a severance plan and shall confer no benefit on anyone
other than NitroMed and you.  You acknowledge and agree that any  Transition Pay
and Benefits provided for herein are contingent on your execution and compliance
with this Separation Agreement.  You further acknowledge that except for:
(i) any earned and unpaid regular salary for services performed through the
Separation Date, (ii) 2007 bonus in an amount to be determined solely by
NitroMed, (iii) the Retention Benefits provided for in Section 3 above, and
(iv) accrued and unused vacation pay earned through the Separation Date which
shall be paid on or about the Separation Date, you have been paid and provided
all wages, vacation pay, holiday pay and any other form of compensation or
benefit that may be due to you now or which would have become due in the future
in connection with your employment or separation of employment with NitroMed.

 

5.             Unemployment Benefits.  If you remain unemployed at the
conclusion of the Transition Period, you may seek unemployment benefits (from
the applicable state depending on your location) as a result of the termination
of your employment from NitroMed.  Decisions regarding eligibility for and
amounts of unemployment benefits are made by the applicable state unemployment
agency, not by NitroMed.  NitroMed agrees to provide any and all requested or
necessary documents to enable you to seek unemployment benefits, and further
agrees that it will not take a position that would interfere with your ability
to obtain unemployment benefits as a result of the cessation of your employment
with NitroMed.

 

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6.             Stock.  Your entitlement, if any, to exercise stock options
and/or to shares of stock are governed solely and exclusively by the NitroMed’s
Amended and Restated 2003 Stock Incentive Plan and related stock option and
restricted stock agreements, and any agreements signed by you in connection with
the same.  Except as may be provided therein, you acknowledge and agree that you
do not now have, and will not in the future have, rights to vest in any other
stock options under any stock option plan (of whatever name or kind) or to
acquire and/or purchase any NitroMed stock pursuant to any plans or agreements
that you participated in or were eligible to participate in during your
employment with NitroMed.

 

7.             Other Agreements By You.

 

(i)            At the Separation Date, you will promptly return to NitroMed all
property and documents of NitroMed in your custody and possession.  You hereby
reaffirm your obligations set forth in the NitroMed, Inc. Inventions and
Non-Disclosure Agreement previously executed between NitroMed and you (a copy of
such agreement is being provided to you concurrently with this Agreement, which
agreement is incorporated herein by reference.  You further agree to abide by
any and all common law and/or statutory obligations relating to the protection
and non-disclosure of NitroMed’s trade secrets and/or confidential and
proprietary documents and information.

 

(ii)           You agree that from and after the Separation Date, you will make
yourself available to NitroMed, upon reasonable notice, either by telephone or,
if NitroMed believes necessary, in person to assist NitroMed in any matter
relating to the services performed by you during your employment with NitroMed
including, but not limited to, transitioning your duties.  You further agree
that you will cooperate fully with NitroMed in the defense or prosecution of any
claims or actions now in existence or which may be brought or threatened in the
future against or on behalf of NitroMed, including any claim or action against
its directors, officers and employees.  Your cooperation in connection with such
claims or actions shall include, without limitation, your being available to
meet with NitroMed to prepare for any proceeding, to provide truthful
affidavits, to assist with any audit, inspection, proceeding or other inquiry,
and to act as a witness in connection with any litigation or other legal
proceeding affecting NitroMed.  NitroMed will reimburse you for all reasonable,
documented, out-of-pocket expenses incurred by you in cooperating with NitroMed
pursuant to this Section 7. You further agree that should an individual
representing a party adverse to the business interests of NitroMed (including,
without limitation, anyone threatening any form of legal action against
NitroMed) contact you (directly or indirectly), you will promptly (within 48
hours) inform Matthew Ebert of NitroMed, of that fact.

 

(iii)          You agree  that except for your obligations under this Section 7,
all information relating in any way to the subject matter of this Agreement,
including the existence and provisions of this Agreement, will be held
confidential by you and will not be publicized or disclosed to any person (other
than an immediate member of your family or your legal counsel, accountant or
financial advisor, provided that any such individual to whom disclosure is made
shall be bound by these confidentiality obligations), other than a state or
federal tax authority or government agency to which disclosure is mandated by
applicable state or federal law.  You further agree that you will not make any
statements that are disparaging about or adverse to the business

 

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interests of NitroMed (including its directors, officers, and employees) or
which are intended to harm the reputation of NitroMed including, but not limited
to, any statements that disparage any product, service, finances, capability or
any other aspect of the business of NitroMed.

 

Your breach of any obligation contained in this Section 7 will constitute a
material breach of this Agreement and, in addition to any other legal or
equitable remedy available to NitroMed, will entitle NitroMed to recover any
monies paid to you under Section 3 of this Agreement.

 

8.             Release of Claims.  You acknowledge and agree that, but for
providing this waiver and release, you would not be receiving the Transition Pay
and Benefits.  You further hereby acknowledge and agree that by signing this
Agreement and accepting the Transition Pay and Benefits, you are waiving your
right to assert any form of legal claim against NitroMed (as defined in footnote
no. 1 to this Agreement) of any kind whatsoever from the beginning of time
through and including the Separation Date or the Effective Date, whichever is
later.  Your waiver and release is intended to bar any form of legal claim,
charge, complaint or any other form of action (jointly referred to as “Claims”)
against NitroMed seeking any form of relief including, without limitation,
equitable relief (whether declaratory, injunctive or otherwise), the recovery of
any damages or any other form of monetary recovery whatsoever (including,
without limitation, back pay, front pay, compensatory damages, emotional
distress damages, punitive damages, attorneys’ fees and any other costs) against
NitroMed up through and including the Separation Date or the Effective Date,
whichever is later.  You understand that there could be unknown or unanticipated
Claims resulting from your employment with NitroMed and the termination thereof
and agree that such Claims are intended to be, and are, included in this waiver
and release.

 

Without limiting the foregoing general waiver and release, you specifically
waive and release NitroMed from any Claims arising from or related to your
employment relationship with NitroMed or the termination thereof, including
without limitation: (i) Claims under any state (including, without limitation,
Massachusetts or any other state where you worked for NitroMed) or federal
discrimination statute (including but not limited to the Age Discrimination in
Employment Act, the Americans With Disabilities Act, Title VII of the Civil
Rights Act of 1964), fair employment practices or other employment related
statute, regulation or executive order, as each may have been amended through
the date on which you sign this letter agreement); (ii) Claims under any other
state (including, without limitation, Massachusetts or any other state where you
worked for NitroMed) or federal employment related statute (including but not
limited to the Worker Adjustment and Retraining Notification [WARN] Act),
regulation or executive order (as they may have been amended through the date on
which you sign this letter agreement) relating to wages, hours or any other
terms and conditions of employment; (iii) Claims under any state (including,
without limitation, Massachusetts or any other state where you worked for
NitroMed) or federal common law theory; and (iv) any other Claim arising under
other state or federal law.

 

Notwithstanding the foregoing, this Section 8 will not release NitroMed from any
obligation expressly set forth in this Agreement or with respect to
distributions not yet made to you under the terms of NitroMed’s 401(k) Savings
Plan.

 

It is NitroMed’s desire and intent to make certain that you fully understand the
provisions and

 

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effects of this Agreement. To that end, you have been encouraged and given the
opportunity to consult with legal counsel for the purpose of reviewing the terms
of this Agreement.  Because you are over 40 years of age, you are granted
specific rights under the Older Workers Benefit Protection Act (OWBPA), which
prohibits discrimination on the basis of age. The release set forth in this
Section 8 is intended to release any rights you may have against NitroMed
alleging discrimination on the basis of age.  Consistent with the provisions of
OWBPA, you are being provided with certain information, in the chart provided to
you concurrently with this Agreement, pertaining to the ages and job titles of
employees who are affected and who are not affected by the reduction in force. 
In addition, you will have 45 days (or until February 29, 2008) to consider and
accept the provisions of this Agreement.  In addition, you may rescind your
assent to this Agreement if, within seven days after the date you sign this
Agreement, you deliver a written notice of rescission to NitroMed.  To be
effective, such notice of rescission must be postmarked, and sent by certified
mail, return receipt requested, or delivered in-hand within the seven-day period
to Monica Weil  at NitroMed, 45 Hayden Avenue, Lexington, Massachusetts 02421. 
On the eighth day following your execution of this Agreement (the “Effective
Date”), it will become final and binding on all parties.

 

Also, consistent with federal discrimination laws, nothing in this release shall
be deemed to prohibit you from challenging the validity of this release under
federal discrimination laws or from filing a charge or complaint of age or other
employment related discrimination with the Equal Employment Opportunity
Commission (“EEOC”), or from participating in any investigation or proceeding
conducted by the EEOC.  Further, nothing in this release or Agreement shall be
deemed to limit NitroMed’s right to seek immediate dismissal of such charge or
complaint on the basis that your signing of this Agreement constitutes a full
release of any individual rights under federal discrimination laws, or
NitroMed’s right to seek restitution or other legal remedies to the extent
permitted by law of the economic benefits provided to you under this Agreement
in the event that you successfully challenge the validity of this release and
prevail in any claim under federal discrimination laws.

 

9.             Miscellaneous.  Except as expressly provided for herein, this
Agreement supersedes any and all prior oral and/or written agreements, and sets
forth the entire agreement between NitroMed and you in respect of your retention
by and separation from NitroMed.  No variations or modifications hereof shall be
deemed valid unless reduced to writing and signed by NitroMed and you.  This
Agreement shall be deemed to have been made in the Commonwealth of Massachusetts
and shall take effect as an instrument under seal within the Commonwealth of
Massachusetts.  The validity, interpretation and performance of this Agreement,
and any and all other matters relating to your employment and separation of
employment from NitroMed, shall be governed by, and construed in accordance
with, the internal laws of the Commonwealth of Massachusetts, without giving
effect to conflict of law principles.  Both parties agree that any action,
demand, claim or counterclaim relating to (i) your employment and separation of
your employment, and (ii) the terms and provisions of this Agreement or to its
breach, shall be commenced in the Commonwealth of Massachusetts in a court of
competent jurisdiction.  Both parties further agree that any such action,
demand, claim or counterclaim shall be tried by a judge alone, and both parties
hereby waive and forever renounce the right to a trial before a civil jury.  The
provisions of this Agreement are severable, and if for any reason any part
hereof shall be found to be unenforceable, the remaining provisions shall be
enforced in full.

 

By executing this Agreement, you are acknowledging that you have been afforded
sufficient time

 

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to understand the provisions and effects of this Agreement and to consult with
legal counsel, that your agreements and obligations under this Agreement are
made voluntarily, knowingly and without duress and that neither NitroMed nor its
agents or representatives have made any representations inconsistent with the
provisions of this Agreement.

 

If the foregoing correctly sets forth our arrangement, please sign, date and
return the enclosed copy of this Agreement to me.

 

NitroMed, Inc.

Sincerely,

 

 

/s/ Kenneth M. Bate

 

Kenneth M. Bate

By Its: President and Chief Executive Officer

 

Dated:

January 15, 2008

 

 

Signed and Agreed To:

 

 

/s/ Jane A. Kramer

 

 

Dated:

January 17, 2008

 

 

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EXHIBIT A

 

I hereby reaffirm in its entirety the provisions of the Agreement with
NitroMed, Inc. dated January     , 2008 signed by me including, without
limitation, the release of claims contained in Section 8 of the January     ,
2008 Agreement.

 

 

 

 

[Name of Employee]

 

 

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