Exhibit 10.2

 

T2 BIOSYSTEMS, INC.

 

Change of Control Severance Agreement

 

 

July 7, 2016

 

Joanne Spadoro

15 Stony Brook Road
Long Valley, NJ 07853

 

Dear Joanne,

 

This letter sets forth the agreement between you and T2 Biosystems, Inc. (the
“Company”) regarding certain terms and conditions of your employment. 

 

1.           Severance Compensation.  If your employment is terminated either by
you with Good Reason within 12 months following a Change of Control, or by the
Company without Cause within 3 months preceding or within 12 months following a
Change of Control, subject to your executing and delivering to the Company, and
not revoking, a release of claims in a form acceptable to the Company (the
“Release”) within the 30-day period following your termination of employment:

 

(a)         the Company will pay you severance in an amount equal to 12 months
of your then current annual base salary, payable in equal installments over a
period of 12 months (the “Severance Period”) in accordance with the Company’s
payroll practices, commencing on your termination of employment;

 

(b)         if you have been continuously employed by the Company for less than
one year as of the date your employment terminates, the vesting schedule of any
equity awards of the Company held by you shall automatically be amended to state
that all of the options subject to such equity award(s) scheduled to vest within
12 months of the date of your termination shall immediately accelerate and
become fully vested, provided that with respect to any such awards intended to
constitute “qualified performance based compensation” under Section 162(m) of
the Code, whether a Change of Control has occurred shall be determined without
regard to clause (iv) of the definition of Change of Control below;

 

(c)         if you have been continuously employed by the Company for at least
one year as of the date your employment terminates, all of the outstanding
unvested equity awards of the Company held by you shall become fully vested and,
if applicable, exercisable as of the date of your termination, provided that
with respect to any such awards intended to constitute “qualified performance
based compensation” under Section 162(m) of the Code, whether a Change of
Control has occurred shall be determined without regard to clause (iv) of the
definition of Change of Control below; and

 

 

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(d)         If you timely elect continued group medical and dental insurance
coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended (“COBRA”), the Company will reimburse you for a portion of the
applicable premiums, based on the then-current cost-sharing rates for active
employees, for you and your eligible dependents during the period commencing on
the date of your termination of employment and ending on the earliest to occur
of (a) the final day of the Severance Period, (b) the date you and/or your
eligible dependents are no longer eligible for COBRA, and (c) the date you
become eligible to receive medical insurance coverage from a subsequent employer
(and you agree to notify the Company of such eligibility).  Notwithstanding the
foregoing, if the Company determines that it cannot provide such reimbursement
of premiums to you without potentially violating applicable law, the Company
shall in lieu thereof provide to you a taxable monthly payment in an amount
equal to a portion of the applicable premiums, based on then-current
cost-sharing rates for active employees, which payment will be made regardless
of whether you elect COBRA continuation coverage and will commence in the month
following the month in which your termination of employment occurs and end on
the earliest to occur of (x) the final day of the Severance Period, (y) the date
you and/or your eligible dependents are no longer eligible for COBRA, and (z)
the date you become eligible to receive medical insurance coverage from a
subsequent employer (and you agree to notify the Company of such eligibility).

 

Notwithstanding anything herein to the contrary, in the event that any
compensation or benefit that constitutes “nonqualified deferred compensation”
within the meaning of Section 409A (as defined below) becomes payable upon the
occurrence of a Change of Control, such compensation or benefit shall not be
paid unless such Change of Control constitutes a “change in control event”
within the meaning of Section 409A.

 

2.           Definitions.  For purposes of this letter, the terms “Change of
Control,” “Cause,” and “Good Reason”  shall have the following meanings.

 

(a)         “Change of Control” means that any of the following events has
occurred:

 

(i)       Any person (as such term is used in Section 13(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”)), other than the Company, any employee
benefit plan of the Company, or any entity organized, appointed, or established
by the Company for or pursuant to the terms of any such plan, together with all
“affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the
Exchange Act) becomes the beneficial owner or owners (as defined in Rule 13d-3
and 13d-5 promulgated under the Exchange Act), directly or indirectly (the
“Control Group”), of more than 50% of the outstanding equity securities of the
Company, or otherwise becomes entitled, directly or indirectly, to vote more
than 50% of the voting power entitled to be cast at elections for directors
(“Voting Power”) of the Company, provided that a Change of Control will not have
occurred if such Control Group acquired securities or Voting Power solely by
purchasing securities from the Company, including, without limitation,
acquisition of securities by one or more third party investors;

 

(ii)      A consolidation or merger (in one transaction or a series of related
transactions) of the Company pursuant to which the holders of the Company’s
equity

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securities immediately prior to such transaction or series of related
transactions cease to be the holders, directly or indirectly, immediately after
such transaction or series of related transactions of more than 50% of the
Voting Power of the entity surviving such transaction or series of related
transactions;

 

(iii)     The sale, lease, exchange, or other transfer (in one transaction or
series of related transactions) of all or substantially all of the assets of the
Company; or

 

(iv)     The liquidation or dissolution of the Company or the Company ceasing to
do business.

 

(b)         “Cause” means:

 

(i)       Your conviction of a felony, either in connection with the performance
of your obligations to the Company or which otherwise materially and adversely
affects your ability to perform such obligations;

 

(ii)      Your willful disloyalty to the Company or deliberate material
dishonesty to the Company;

 

(iii)     The commission by you of an act of fraud or embezzlement against the
Company;

 

(iv)     Your willful, substantial failure to perform any of your duties
hereunder or your deliberate failure to follow reasonable, lawful directions of
the Company’s Board of Directors or your direct supervisor, which failure, if
capable of being cured, is not cured within 30 days after delivery to you by the
Company of written notice of such failure; or

 

(v)      A material breach by you of any material provision of this letter which
breach is not cured within 30 days after delivery to you by the Company of
written notice of such breach.

 

(c)         “Good Reason” means one or more of the following:

 

(i)       A material change in the principal location at which you provide
services to the Company, without your prior written consent;

 

(ii)      A material and continuing diminution by the Company in the duties,
authority or responsibilities of your position which causes such position to
become of less responsibility or authority than immediately prior to such
material and continuing diminution, provided that such change is not in
connection with a termination of your employment hereunder by the Company (for
purposes of clarity, if you are not the Chief Financial Officer of the combined
public company following the Change of Control, you shall be deemed to have a
material diminution of your duties);

 

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(iii)     A material reduction in your base salary or other benefits except if
such a reduction is in connection with a general reduction in compensation or
other benefits of all similarly situated employees of the Company;

 

(iv)     Failure by the Company to obtain the assumption of this Agreement by
any successor to the Company.

 

Notwithstanding the foregoing, Good Reason shall only exist if you have given
written notice to the Company within 90 days of the initial existence of the
Good Reason condition(s), and the Company has failed to cure such event(s)
within 30 days of its receipt of said notice.

 

3.           Section 409A.

 

(a)         Separation from Service.  Notwithstanding anything in this letter to
the contrary, any compensation or benefit payable under this letter that is
designated as payable upon your termination of employment shall be payable only
upon your “separation from service” with the Company (a “Separation from
Service”) within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended, and the regulations and guidance promulgated thereunder
(collectively, “Section 409A”), and except as provided below, any such
compensation or benefits shall not be paid, or, in the case of installments,
shall not commence payment, until the 30th day following your Separation from
Service.  Any installment payments that would have been made to you during the
30 day period immediately following your Separation from Service but for the
preceding sentence shall be paid to you on the 30th day following your
Separation from Service and the remaining payments shall be made as provided in
this letter.

 

(b)         Specified Employee.  Notwithstanding anything in this letter to the
contrary, if you are deemed by the Company at the time of your Separation from
Service to be a “specified employee” for purposes of Section 409A, to the extent
delayed commencement of any portion of the benefits to which you are entitled
under this letter is required in order to avoid a prohibited distribution under
Section 409A, such portion of your benefits shall not be provided to you prior
to the earlier of (i) the expiration of the six-month period measured from the
date of your Separation from Service with the Company or (ii) the date of your
death.  Upon the first business day following the expiration of the applicable
Section 409A period, all payments deferred pursuant to the preceding sentence
shall be paid in a lump-sum to you (or your estate or beneficiaries), and any
remaining payments due to you under this letter shall be paid as otherwise
provided herein.

 

(c)         Installments.  Your right to receive any installment payments under
this letter shall be treated as a right to receive a series of separate payments
and, accordingly, each such installment payment shall at all times be considered
a separate and distinct payment as permitted under Section 409A.  Except as
otherwise permitted under Section 409A, no payment hereunder shall be
accelerated or deferred unless such acceleration or deferral would not result in
additional tax or interest pursuant to Section 409A.

 

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4.           General

 

(a)         No provision of this letter shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed
by you and by an authorized officer of the Company (other than you).  No waiver
by either party of any breach of, or of compliance with, any condition or
provision of this letter by the other party shall be considered a waiver of any
other condition or provision or of the same condition or provision at another
time.    The validity, interpretation, construction and performance of this
letter shall be governed by the laws of the Commonwealth of Massachusetts
without regard to conflicts of law.    The invalidity or unenforceability of any
provision or provisions of this letter shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.    This letter may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the
same instrument.

 

(b)         This letter contains the entire and exclusive agreement between the
parties with respect to the subject matter hereof and is intended to supersede
and replace all previous agreements, negotiations, and representations between
the parties, whether written or oral, including any provision of the employment
offer letter agreement between you and the Company, dated as of April 15, 2016,
to the extent such letter addresses the subject matter hereof.

 

 

 

Sincerely,

 

 

 

T2 BIOSYSTEMS, INC.

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

Acknowledged and Agreed

 

 

 

Joanne Spadoro

 

 

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