EXHIBIT 10.38

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January 29, 2018

 

 

John Sprague

62 Washington Street

Wellesley, MA 02481

 

 

 

Dear John:

 

On behalf of T2 Biosystems, Inc., (the “Company”) I am delighted to make this
offer of employment to you to join us in the role of Chief Financial Officer for
the Company beginning January 30, 2018.

 

At T2 Biosystems, our mission is to fundamentally change the way that medicine
is practiced by transforming diagnostics for the tangible benefit of patients,
practitioners and healthcare institutions. We have developed a breakthrough and
innovative technology, T2MR, that has received the most prestigious industry
awards and is protected by almost 50 patents.  Our first products, T2Candida and
the T2Dx, are already in use in over 100 hospitals in the United States and
Europe. We are positively impacting the lives of patients and saving hospitals
millions of dollars each year. Our next product, T2Bacteria, is expected to be
FDA cleared this year and additional products are in development. There is a lot
of growth ahead and you are joining us at a very exciting time! 

 

John, we are thrilled to extend this offer of employment to you.  We think you
can help us fulfill our mission and we believe you’d be a great fit for our
team.  To kick things off, you will find all of the pertinent information
related to our offer of employment in the attached pages.  Please read the offer
carefully and, if it is acceptable, sign and return one copy to my attention
(PDF copy is fine).    

 

If you have any questions, please do not hesitate to contact me at (781)
457-1220 or email at jmcdonough@t2biosystems.com. We are looking forward to
having you on our team!

 

 

Sincerely,

 

/s/ John McDonough

 

John McDonough

President and Chief Executive Officer

 

 

 

 

 

 

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OFFER OF EMPLOYMENT

 

 

Date of employment:  Should you accept the terms of this offer, your employment
with the Company will commence on January 30, 2018.

 

Background check:  Your employment is contingent upon your successful completion
of a background check, which is required for all employees of the Company. The
Company will forward you the appropriate documents, and such documents shall be
required to be submitted to the Company by no later than one week prior to your
start date.

 

Position:  You have been offered the position of Chief Financial Officer. In
this capacity, you will report to John McDonough, Chief Executive Officer, or
his successor in such position. Your duties and responsibilities will include
all those customarily attendant to such a position, and any other such duties or
responsibilities that John McDonough or the Company may, from time to time,
assign to you.  You agree that you shall not enter into any employment endeavors
which may conflict with your ability to devote the necessary time and energies
to the Company’s business interest while engaged by the Company.  You further
agree to comply with all applicable laws and with all Company rules and policies
established by the Company from time to time.

 

Compensation and Tax Matters:  Your salary shall be $14,583.34 (the equivalent
of $350,000 when annualized), payable semi-monthly and subject to pro-ration for
any partial initial or terminal week during which you are employed, in
accordance with normal payroll practices and schedule of the Company. You will
be eligible for a salary increase during the 2018 calendar year, and the timing
of that adjustment will align with other members of the Company’s executive
management team.

 

You will be eligible to receive an annual bonus (the "Annual Bonus") based upon
the achievement of specific company and individual milestones as determined by
the Board of Directors (the “Board”).  The target amount of your Annual Bonus
will be 45% of your Base Salary, subject to adjustment by the Board. Payment of
the Annual Bonus will be pro-rated for 2018 and will in all events be subject to
your continued employment with the Company through the date of payment.  

 

All compensation amounts stated are before any deductions for FICA taxes, state
and federal withholding taxes and other payroll deductions required to be made
by the Company under applicable law.  

 

Stock Options:  Subject to the approval of the Board and your execution of a
Stock Option Agreement, you will be offered options to purchase 225,000 shares
of T2 Biosystems common stock under an Inducement Award Plan to be established
by the Company as soon as practicable following the date hereof (the “Inducement
Plan”).  Subject to the approval of the Inducement Plan by the Board, the
exercise price of the options will be equal to the fair market value of the
Company’s common stock on the grant date, which shall be first permissible date
under the Inducement Plan (determined in accordance with the terms of the
Inducement Plan). The options will have a 4-year vesting schedule with 25% of
the options vesting one year from the vesting commencement date (your start
date) and the remaining options vesting in equal monthly installments over the
following 36 months.  The terms and conditions of the options shall be more
fully described in the Inducement Plan and applicable Stock Option
Agreement.  In the event that the

Active: 2018

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Inducement Plan is not approved by the Board within thirty (30) days following
your start date, subject to Board approval, the Company shall make such grant
under its existing 2014 Incentive Award Plan.

 

Severance Compensation:  Subject to the approval of the Board and your execution
of the attached Change of Control Severance Agreement (the “Change in Control
Agreement”), you will be offered certain benefits in the event of a change in
control of the Company, as set forth in more detail and defined in the Change in
Control Agreement, including severance compensation and the acceleration of
certain stock options, each such benefit to be subject to the terms of the
Change in Control Agreement.

 

In the event your employment is terminated by the Company for reasons other than
Cause and unrelated to a Change in Control, both as defined in the Change in
Control Agreement (but for the avoidance doubt excluding a termination of your
employment (x) due to death, (y) due to your inability to perform your duties
for the Company on account of physical or mental illness for a period of three
consecutive full months or for a period of six full months during any 12-month
rolling period or (z) in circumstances that entitle you to severance payments or
benefits under the Change in Control Agreement), 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, you will be entitled to receive severance
benefits in the form of salary continuation and reimbursement for costs
associated with COBRA, for a period of six (6) months following the end of your
employment.  

 

Fringe Benefits: You will have the opportunity to participate in the Company’s
fringe benefits program.  Currently, these fringe benefits are as follows:

 

 

•

The Company currently provides contributions toward a medical and dental plan
for yourself and immediate family members

 

 

•

Three (3) weeks paid vacation, Company designated holidays, personal holidays
and sick days (see Benefits Summary for more information).

 

 

•

The Company provides 100% contribution towards Term Life Insurance, Accidental
Death and Dismemberment Insurance, and Short and Long-Term Disability Insurance;

 

 

•

The opportunity to enroll in the Company’s 401(k) Investment and Section 125
Plans based on plan eligibility requirements; and

 

 

•

Pay or reimburse you in accordance with the Company’s reimbursement policies
from time to time in connection with the performance of your duties for the
Company subject to your submission of satisfactory documentation with respect
thereto.

 

The Company reserves the right to amend, delete or change any of its employment
policies and/or benefits at any time in its sole discretion.

 

Non Competition/Non-Disclosure/Invention Assignment Agreement:  No later than on
the first day of your employment with the Company you will be required to sign
the enclosed Non-Competition/Non-Disclosure/Inventions Assignment Agreement
(“Obligations Agreement”) which includes nondisclosure, inventions ownership,
and other provisions that are necessary to protect the Company’s confidential
information, intellectual; property, trade secrets, and customer
relationships.  As you may be given access to such protectable interests, your
employment is contingent upon your signing the Obligations

Active: 2018

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Agreement.  The terms of the Obligations Agreement will survive termination, for
whatever reason, of the employment relationship.

 

Prior Agreements: You acknowledge and confirm that you have provided/disclosed
to the Company all restrictive covenants and agreements, including nondisclosure
and confidentiality agreements, to which you are a party.  You agree that you
shall not disclose to the Company or use while an employee of the Company any
confidential or trade secret information obtained by you from other persons or
employers and shall not bring any property upon the Company premises which has
been misappropriated by others.  You also acknowledge that the Company expects
you to honor any prior obligations to former employers to which you remain
bound.

Employment At Will:  Although you are being hired as an employee commencing on
January 30, 2018, your employment with the Company shall be at will.  This means
that your employment is not guaranteed for any definite period of time, and you
or the Company may terminate your employment relationship with or without notice
at any time and for any or no reason or cause.  The Company is not bound to
follow any policy, procedure, or process in connection with employee discipline,
employment termination or otherwise.  

Entire Agreement:  This letter (together with the attached Obligations Agreement
and Change in Control Agreement) sets forth the entire understanding between the
Company and yourself with respect to your employment by the Company.  All prior
discussions, negotiations, correspondence and other understandings between you
and the Company are superseded, and there are no representations, warranties or
undertakings by the Company or you with respect to your employment by the
Company, which are not set forth in this letter.  

Section 409A: 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.  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.  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.

Active: 2018

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If you agree with the terms of this offer, please acknowledge your understanding
and acceptance of this offer by signing where indicated below and return to me
along with a completed background check authorization form by 8:00 a.m. ET on
January 30, 2018. We look forward to working with you.

 

Sincerely,

 

T2 Biosystems, Inc.

 

 

By: ___/s/ John McDonough____________1/30/2018____________________________

John McDonoughDate

Chief Executive Officer

 

 

 

I have read agree with and accept the items contained in this letter.

 

 

By: _/s/ John Sprague_____1/30/2018____________________________

John SpragueDate

 

 

The Immigration Control and Reform Act of 1986 requires that all new employees
complete the I-9 form and submit proof of employment eligibility to work in the
United States within the first three days of their start date.  If accepting
employment the Company will provide you the I-9 form and requests that you
present appropriate documents when you report to the Company and a
representative of the Company will complete the I-9 form with you.  Accordingly,
you will have three days from your start date to submit proof of your
eligibility to work in the United States.

Active: 2018