Exhibit 10.1

 

 

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August 28, 2014

Stuart A. Randle

359 Pope Road

Concord, MA

 

  Re: Termination of Employment

Dear Stuart:

As we discussed, your employment with GI Dynamics, Inc. will end effective
September 18, 2014. Pursuant to your termination, please note the following
important information:

 

  •   You will be paid through your final day of work of September 18, 2014. On
your last day of work, you will be paid accrued but unused vacation, through
your final day of work.

 

  •   Also enclosed, please find a pamphlet published by the Massachusetts
Division of Unemployment Assistance, which provides information on applying for
unemployment compensation.

 

  •   Also enclosed, please find two copies of the Separation Agreement that we
have discussed. If you decide to execute the Agreement, please do so and return
one fully executed original to me within twenty one (21) days. After that time,
the offer will lapse.

 

  •   Under separate cover, we also will provide you with information and forms
relating to your ability to continue your medical benefits pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).

 

  •   I remind you that the obligations set forth in your Nondisclosure,
Non-Solicitation and Non-Compete Agreement remain in effect despite the
termination of your employment, and we trust that you will honor them. We also
ask that following the end of your consulting engagement you promptly return to
GI Dynamics all of its property presently in your possession (which may include
software, hardware, equipment, cell phones, documents, electronic data or files,
or any copies thereof).

I ask that you contact me if you have any questions or comments regarding this
process. We certainly wish you well in your future endeavors.

 

    Sincerely,     /s/ Jack Meyer     Jack Meyer, Chairman     GI Dynamics, Inc.
Enclosures    

25 Hartwell Avenue | Lexington, MA 02421| T 781.357.3300 | F 781.357.3301 |
www.gidynamics.com

 

 

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August 28, 2014

Stuart A. Randle

359 Pope Road

Concord, MA 01742

 

  Re: Separation Agreement

Dear Stuart:

The purpose of this letter agreement (the “Agreement”) is to set forth the terms
of your separation from GI Dynamics, Inc. (the “Company”). Payment of the
Separation Benefit described below is contingent on your agreement to and
compliance with the terms of this Agreement. This Agreement shall become
effective on the eighth (8th) day following your acceptance of it as provided
below (the “Effective Date”).

1. Separation of Employment. Your employment with the Company shall end on
September 18, 2014 (the “Separation Date”). From and after the Separation Date,
you shall have no authority to, and shall not, represent yourself as an employee
or agent of the Company.

2. Resignation from Board of Directors. You shall resign from your position as a
member of the Board of Directors of the Company (the “Board”) and any other
positions on which you served with respect to the Company and its subsidiaries
and affiliates on November 5, 2014 (the “Board Resignation Date”). Following the
Board Resignation Date, you shall not represent yourself or perform services as
a director of the Company or any such subsidiary or affiliate.

3. Consulting Arrangement.

(a) Consulting Term. You shall make yourself available to perform the Consulting
Services (as defined in Section 3(b) below) on the terms and conditions
described herein, from the Separation Date until the earlier of (i) the first
anniversary of the Separation Date, or (ii) the date on which either party
terminates the Consulting Services, with or without cause, upon five (5) days
advance written notice to the other, which termination shall be without any
further obligation other than as provided herein (such period referred to herein
as the “Consulting Term”).

(b) Consulting Services. During the Consulting Term you agree to personally
provide the consulting services described on Exhibit A hereto as reasonably
requested (the “Consulting Services”).

(c) Consulting Fee. The Company shall pay you a fee of $18,000.00 per month for
Consulting Services during the Consulting Term (the “Consulting Fee”); provided
that subject to the discretion of the CEO, you shall provide up to forty-eight
(48) days of Consulting Services during the Consulting Term. The Consulting Fee
shall be payable within fifteen (15) days following the conclusion of each month
in the Consulting Term. Upon termination of the Consulting Term, you shall be
entitled to no further payment or benefit other than the Consulting Fee that is
due but unpaid for Consulting Services prior to the conclusion of the Consulting
Term.

25 Hartwell Avenue | Lexington, MA 02421| T 781.357.3300 | F 781.357.3301 |
www.gidynamics.com

 

 

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(d) Reporting/Recording Requirements. You shall provide Consulting Services at
the reasonable request of the CEO or the Board upon reasonable prior notice, and
you shall communicate with the CEO and/or Board via telephone or email regarding
the status of the Consulting Services upon request.

(e) Independent Contractor Status. You shall act solely as an independent
contractor hereunder and conduct your operations as an independent contractor,
and nothing in this Agreement shall be construed to render you as an employee of
the Company. You shall not be considered an employee for purposes of any Company
employment policy or any employment benefit plan, and shall not be entitled to
any benefits under any such policy or benefit plan. The Company has no right to
control or direct the details, manner or means by which you perform the
Consulting Services. You understand and recognize that you shall not be an agent
of the Company or have authority to bind, represent or speak for the Company for
any purpose. The Company shall record payments to you on, and provide to you, an
IRS Form 1099, and the Company shall not withhold any federal, state or local
employment taxes on your behalf. You agree to pay all such taxes in a timely
manner and as prescribed by law, and accept exclusive liability for complying
with all applicable state and federal laws governing self-employed individuals,
including obligations such as payment of taxes, social security, disability and
other contributions based on the Consulting Fee paid to you hereunder. The
Company shall reimburse you for business related expenses incurred by you in
providing the Consulting Services, pursuant to the terms and conditions of
applicable Company policy.

(f) Other Work by You. You shall be free to provide professional consulting
services to entities or individuals other than the Company, provided that you
meet your service obligations to the Company as described herein, and further
provided that you may not render services in a manner that violates your
Nondisclosure, Non-Solicitation and Non-Compete Agreement, which shall survive
the signing of this Agreement and remain in effect pursuant to its terms.

4. Separation Benefit. In exchange for the mutual covenants set forth in this
agreement, the Company agrees to provide you with the following (the “Separation
Benefit”):

(a) Payment of severance in an amount equal to the last twelve (12) months of
your gross monthly base salary (i.e., $446,465.75), less all applicable federal,
state, local and other employment-related deductions, such payments to be made
in approximately equal installments on the Company’s regularly scheduled paydays
beginning on the first such payday following the Effective Date.

(b) In the event that you choose to exercise your right under COBRA1/ to
continue your participation in the Company’s health insurance plan (which you
may do, to the extent permitted by COBRA, regardless of whether you accept this
Agreement), the Company shall pay its normal share of the costs for such
coverage for a period of twelve (12) months beginning on the Separation Date to
the same extent that such insurance is provided to persons then currently
employed by the Company.

 

1/ 

“COBRA” is the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.

 

25 Hartwell Avenue | Lexington, MA 02421| T 781.357.3300 | F 781.357.3301 |
www.gidynamics.com

 

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Your co-pay, if any, shall be deducted from your severance payments described in
Section 2(a) above or, if no such payments remain to be paid, shall be paid by
you directly to the Company pursuant to the terms of the COBRA notice provided
to you on your last day of employment. Notwithstanding any other provision of
this Agreement, this obligation shall cease on the date you become eligible to
receive health insurance benefits through any other employer, and you agree to
provide the Company with written notice immediately upon becoming eligible for
such benefits. Your acceptance of any payment on your behalf or coverage
provided hereunder shall be an express representation to the Company that you
have no such eligibility.

You acknowledge and agree that except for the Separation Benefit, your final
wages, and any accrued but unused vacation, which shall be paid to you in
accordance with the Company’s regular payroll practices and applicable law, you
are not now and shall not in the future be entitled to any other compensation
from the Company including, without limitation, other wages, commissions,
bonuses, vacation pay, holiday pay, paid time off or any other form of
compensation or benefit.

5. Equity. The terms and conditions of the Company’s 2003 Omnibus Stock Plan and
2011 Employee, Director and Consultant Equity Incentive Plan (the “Stock
Plans”), any option agreements executed by you pursuant thereto (the “Option
Agreements”), and any restricted stock unit agreements executed by you pursuant
thereto (the “RSU Agreements”) are incorporated herein by reference and shall
survive the signing of this Agreement. Attached as Exhibit B is a true and
accurate description of the status of your stock option grants and restricted
stock unit grants under the Stock Plans, Option Agreements and RSU Agreements as
of the date hereof. Pursuant to the Stock Plans, Option Agreements and RSU
Agreements, the Company agrees to the following, and each Option Agreement and
RSU Agreement is hereby amended as necessary and appropriate effective as of the
Effective Date (and without any further action by the Company, the Board, the
Company’s stockholders, or you) to effectuate the following:

(a) You request, and the Company agrees to take such action as shall cause, each
stock option issued to you under either Stock Plan that is designated as an
“incentive stock option” (each an “ISO”), except with respect to any part of
such ISO that is or has been exercised in accordance with applicable law and the
terms of the applicable Stock Plan and Option Agreement, to be converted into a
non-qualified option pursuant to the provisions of the applicable Stock Plan
(each a “Converted Option”); provided, however, that each such Converted Option
shall continue to vest and be exercisable in accordance with their terms only
for so long as you continue to provide services as an employee, director or
consultant to the Company and any post-termination period (60 or 90 days)
permitted pursuant to the applicable Stock Plan and Option Agreement; provided,
that in the event of a termination of the Consulting Term by the Company, you
shall be entitled to exercise all vested options at least through September 18,
2015.

(b) The options and restricted stock units underlying each of the Option
Agreements and RSU Agreements shall continue to vest or issue during the
Consulting Term on the same schedule as they vested or issued during the period
of your employment with the Company; provided that following the Consulting Term
(regardless of when or how terminated) you shall not have any right to vest in
or be issued any stock, stock options or restricted stock units under the Stock
Plans, Option Agreements, RSU Agreements or any other Company stock, stock
option, restricted stock unit, or other equity plan (of whatever name or kind)
that you may have participated in or were eligible to participate in during your
employment.

 

25 Hartwell Avenue | Lexington, MA 02421| T 781.357.3300 | F 781.357.3301 |
www.gidynamics.com

 

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Notwithstanding your separation, you shall remain subject to the Company’s
insider trading rules and United States federal and state and Australian
securities laws, including but not limited to restrictions regarding trading
securities while in possession of material non-public information regarding the
Company.

6. Your Confidentiality, Non-Disparagement and Related Obligations. You
expressly acknowledge and agree to the following:

(a) You shall adhere to the terms of your Nondisclosure, Non-Solicitation and
Non-Compete Agreement with the Company, which is expressly incorporated herein
and survives the signing of this Agreement.

(b) Following the expiration or termination of the Consulting Term, you promptly
shall return to the Company all Company documents, files and property (and any
copies or electronic representations thereof), and shall otherwise abide by any
and all common law and/or statutory obligations relating to protection of the
Company’s trade secrets and/or confidential and proprietary information.

(c) All information relating in any way to the negotiation of this Agreement,
including the terms and amount of financial consideration provided for in this
Agreement, shall be held confidential by you and shall not be publicized or
disclosed to any person (other than an immediate family member, legal counsel or
financial advisor, provided that any such individual to whom disclosure is made
agrees to be bound by these confidentiality obligations), business entity or
government agency (except as mandated by state or federal law), except that
nothing in this section shall prohibit you from participating in an
investigation with a state or federal agency if requested by the agency to do
so.

(d) You shall not make any statements that are professionally or personally
disparaging about, or adverse to, the interests of the Company (including its
officers, directors, employees and consultants) including, but not limited to,
any statements that disparage any person, product, service, finances, financial
condition, capability or any other aspect of the business of the Company, and
you shall not engage in any conduct which could reasonably be expected to harm
professionally or personally the reputation of the Company (including its
officers, directors, employees and consultants).

(e) A breach of this section shall constitute a material breach of this
Agreement and, in addition to any other legal or equitable remedy available to
the Company, shall entitle the Company to recover any Separation Benefit paid to
you under this Agreement.

7. Cooperation. You agree that during the twelve (12) month period following the
Separation Date, you shall cooperate fully with the Company in connection with
any matter or event relating to your employment or events that occurred during
your employment, including, without

 

25 Hartwell Avenue | Lexington, MA 02421| T 781.357.3300 | F 781.357.3301 |
www.gidynamics.com

 

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limitation: (a) cooperating 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 the Company (including any claims or actions against its
affiliates and its and their officers and employees); (b) being available, upon
reasonable notice, to meet with the Company regarding matters in which you have
been involved (including but not limited to contract matters and audits);
(c) preparing for, attending and participating in any legal proceeding
(including but not limited to depositions, consultation, discovery, trial,
acting as a witness, and providing affidavits); (d) assisting with any audit,
inspection, proceeding or other inquiry; and (e) transferring your work
knowledge to the Company (including but not limited to providing a description
of your job functions and any information required to perform the same, such as
contact information, passwords, scheduling requirements, deadlines and the
like). You further agree that should you be contacted (directly or indirectly)
by any person or entity adverse to the Company, you shall promptly notify the
Chairman of the Board at the Company, or solely following the Separation Date,
the CEO. You shall be reimbursed for any reasonable out-of pocket costs approved
in advance by the Company and incurred in connection with providing such
cooperation under this section.

8. Your Release of Claims.

(a) Release. Without limiting the generality of the foregoing, you specifically
waive and release the Company from any waivable claim arising from or related to
your employment relationship with the Company up through the Effective Date
including, without limitation: (i) claims under any Massachusetts (or any other
state) or federal discrimination, fair employment practices, or other employment
related statute, regulation or executive order (as they may have been amended
through the Effective Date), including but not limited to the Age Discrimination
in Employment Act, the Older Workers Benefit Protection Act, the Civil Rights
Acts of 1866 and 1871, Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, the Equal Pay Act, the Americans With Disabilities Act, the
Massachusetts Fair Employment Practices Statute, and any similar Massachusetts
or other state or federal statute; (ii) claims under any other Massachusetts (or
any other state) or federal employment related statute, regulation or executive
order (as they may have been amended through the Effective Date) relating to
wages, hours or any other terms and conditions of employment, including but not
limited to the National Labor Relations Act, the Family and Medical Leave Act,
the Employee Retirement Income Security Act of 1974, COBRA, the Massachusetts
Wage Act, and any similar Massachusetts or other state or federal statute;
(iii) claims under any Massachusetts (or any other state) or federal common law
theory, including, without limitation, wrongful discharge, breach of express or
implied contract, promissory estoppel, unjust enrichment, breach of a covenant
of good faith and fair dealing, violation of public policy, defamation,
interference with contractual relations, intentional or negligent infliction of
emotional distress, invasion of privacy, misrepresentation, deceit, fraud or
negligence or any claim to attorneys’ fees under any applicable statute or
common law theory of recovery; and (iv) any other claim arising under other
state or federal law.

(b) Release Limitations; Participation in Agency Proceedings. Notwithstanding
the foregoing, this section does not: (i) release the Company from any
obligation expressly set forth in this Agreement; (ii) waive or release any
legal Claims which you may not waive or release by law, including without
limitation obligations under workers compensation laws; or (iii) prohibit you
from

 

25 Hartwell Avenue | Lexington, MA 02421| T 781.357.3300 | F 781.357.3301 |
www.gidynamics.com

 

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challenging the validity of this release under federal law, from filing a charge
or complaint of employment related discrimination with the Equal Employment
Opportunity Commission (“EEOC”) or similar state agency, or from participating
in any investigation or proceeding conducted by the EEOC or similar state
agency. Your waiver and release, however, are intended to be a complete bar to
any recovery or personal benefit by or to you with respect to any Claim (except
those which cannot be released under law), including those raised through a
charge with the EEOC. Accordingly, nothing in this section shall be deemed to
limit the Company’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 the federal discrimination laws, or to
seek restitution to the extent permitted by law of the economic benefits
provided to you under this Agreement in the event you successfully challenge the
validity of this release and prevail in any Claim under the federal
discrimination laws.

(c) Acknowledgement. You acknowledge and agree that, but for providing the
waiver and release in this section, you would not be receiving the economic
benefits being provided to you under the terms of this Agreement.

9. ADEA/OWBPA Review and Revocation Period. You and the Company acknowledge that
you are over the age of 40 and that you, therefore, have specific rights under
the Age Discrimination in Employment Act (“ADEA”) and the Older Workers Benefit
Protection Act (the “OWBPA”), which prohibit discrimination on the basis of age.
It is the Company’s desire and intent to make certain that you fully understand
the provisions and effects of this Agreement, which includes a release of claims
under the ADEA and OWBPA. 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. In addition, consistent with the provisions of the ADEA and
OWBPA, the Company also is providing you with twenty one (21) days in which to
consider and accept the terms of this Agreement by signing below and returning
it to Joan Resnicow, GI Dynamics, Inc., 25 Hartwell Avenue Lexington, MA 02421.
Additionally, you may rescind your assent to this Agreement if, within seven
(7) days after you sign this Agreement, you deliver by hand or send by mail
(certified, return receipt and postmarked within such 7 day period) a notice of
rescission to Joan Resnicow at the above-referenced address.

10. Waiver of Employment. You hereby waive and release forever any right or
rights you may have to employment with the Company and any affiliate thereof at
any time in the future and agree not to seek or make application for employment
with the Company or any affiliate thereof.

11. Taxes. The Company does not guarantee the tax treatment or tax consequences
associated with any payment or benefit arising under this Agreement, including
but not limited to consequences related to Section 409A of the Internal Revenue
Code of 1986, as amended (“Code Section 409A”).

12. Entire Agreement; Modification; Waiver; Choice of Law; Enforceability;
Assignment. You acknowledge and agree that, other than the agreements expressly
incorporated herein and stated as surviving this Agreement, this Agreement
supersedes any and all prior or contemporaneous oral and/or written agreements
between you and the Company, and sets forth the

 

25 Hartwell Avenue | Lexington, MA 02421| T 781.357.3300 | F 781.357.3301 |
www.gidynamics.com

 

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entire agreement between you and the Company. No variations or modifications
hereof shall be deemed valid unless reduced to writing and signed by the parties
hereto. The failure of the Company to seek enforcement of any provision of this
Agreement in any instance or for any period of time shall not be construed as a
waiver of such provision or of the Company’s right to seek enforcement of such
provision in the future. This Agreement shall be deemed to have been made in
Massachusetts, shall take effect as an instrument under seal within
Massachusetts, and shall be governed by and construed in accordance with the
laws of Massachusetts, without giving effect to conflict of law principles. You
agree that any action, demand, claim or counterclaim relating to the terms and
provisions of this Agreement, or to its breach, shall be commenced in
Massachusetts in a court of competent jurisdiction, and you further acknowledge
that venue for such actions shall lie exclusively in Massachusetts and that
material witnesses and documents would be located in Massachusetts. Both parties
hereby waive and renounce in advance any right to a trial by jury in connection
with such legal action. 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. This Agreement is binding upon, and shall
inure to the benefit of, the parties and their respective heirs, executors,
administrators, successors and assigns, provided that you may not assign your
rights and obligations hereunder without the prior written consent of the
Company.

13. Knowing and Voluntary Agreement. By executing this Agreement, you are
acknowledging that you have been afforded sufficient time to understand the
terms and effects of this Agreement, that your agreements and obligations
hereunder are made voluntarily, knowingly and without duress, and that neither
the Company nor its agents or representatives have made any representations
inconsistent with the provisions of this Agreement.

[Signature Page Follows]

 

25 Hartwell Avenue | Lexington, MA 02421| T 781.357.3300 | F 781.357.3301 |
www.gidynamics.com

 

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This Agreement may be signed on one or more copies, each of which when signed
shall be deemed to be an original, and all of which together shall constitute
one and the same Agreement. If the foregoing correctly sets forth our
understanding, please sign, date and return the enclosed copy of this Agreement
to Joan Resnicow within twenty one (21) days. If we do not receive your
acceptance on or before this date, the Agreement shall terminate and be of no
further force or effect.

 

Sincerely, GI Dynamics, Inc. By:  

/s/ Jack Meyer

Date:  

August 28, 2014

 

Acknowledged and Agreed:

/s/ Stuart Randle

Signed Name

Stuart Randle

Printed Name

August 28, 2014

Date

 

25 Hartwell Avenue | Lexington, MA 02421| T 781.357.3300 | F 781.357.3301 |
www.gidynamics.com

 

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EXHIBIT A

Consulting Services

 

  •   Assistance and cooperation with the efficient transfer to the Company of
all goodwill related to the Company’s business;

 

  •   Assistance and cooperation with the efficient transfer to the Company and
its ongoing management team of your institutional knowledge and understanding,
(including without limitation in the areas of regulatory strategy and marketing
plans) and relationships with former, current and prospective employees,
suppliers, customers, consultants, physicians, and investors; and

 

  •   Such other matters as shall be reasonably requested upon reasonable prior
notice.

 

25 Hartwell Avenue | Lexington, MA 02421| T 781.357.3300 | F 781.357.3301 |
www.gidynamics.com

 

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EXHIBIT B

 

25 Hartwell Avenue | Lexington, MA 02421| T 781.357.3300 | F 781.357.3301 |
www.gidynamics.com

 

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