Exhibit
10.2


NITROMED, INC.

EXECUTIVE SEVERANCE BENEFIT PLAN and

SUMMARY PLAN DESCRIPTION


Section I:                                            Establishment
and Purpose of Plan


The NitroMed, Inc. (the “Company”) Executive Severance
Benefit Plan (“Plan”) is hereby established to provide severance benefits to
those categories of Company executives designated as Participants under the
Plan by the Company’s Board of Directors (the “Board”) or the Compensation
Committee thereof (the “Participants”), who are terminated on or after March
30, 2006 and prior to the termination of this Plan (“Covered Period”) and
entitled to benefits as provided herein. 
The Plan is intended to be a welfare benefit plan within the meaning of
Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”).


Section II:                                        Eligibility
for Severance


A Participant who is terminated during the Covered
Period without Cause (as defined below) is eligible to receive severance
benefits as described in Section III below (the “Severance Benefits”), except
as otherwise provided below.  A
Participant shall not be eligible to receive the Severance Payment if
he/she:  (1) voluntarily terminates
his/her employment; (2) refuses to accept other “Suitable Employment” (as
defined below) that is offered by the Company; (3) is terminated for “Cause”
(as defined below); (4) is eligible to receive severance pursuant to a
severance provision contained in an individual offer letter (and has not agreed
that the terms of this Plan shall supercede any such provision); or (5) is
terminated under circumstances governed by his/her individual written
change-of-control agreement.  This Plan
is not intended to, nor shall it, provide for any benefits in the event of
termination of employment in anticipation of, in connection with, or following
a Change in Control (as defined in the Company’s standard Change in Control
Agreement, which shall be the only source of such severance benefits).


For the purpose of this Plan:


“Cause” is determined by the Company in its sole
discretion, and can include, but is not limited to, (i) any act or omission by
the employee that may have an adverse effect on the Company’s business or on
the employee’s ability to perform services for the Company, including, without
limitation, the commission of any crime (other than ordinary traffic
violations); or (ii) any misconduct or neglect of duties by the employee in
connection with the business or affairs of the Company, including, but not
limited to, misappropriation of Company assets, or failure to perform
reasonable assigned duties. Nothing
in this Plan shall be construed to provide any employee with a guarantee of
employment and this Plan does not supersede the Company’s policy of at will
employment.


“Suitable Employment” means any position of a
comparable or higher base salary that
is located within 50 miles of the facility where the Participant performed
his/her principal duties for the Company immediately prior to termination.









 



 


Section III:                                    Severance
Benefits


Subject to the condition of execution of a Severance
Agreement described in Section IV below, the Severance Benefits provided to
eligible Participants who are terminated by the Company without Cause shall
consist of, for the period of time and as otherwise set forth on Schedule A:


1.                                       salary
continuation at the Participant’s base rate of pay (as in effect immediately
prior to termination, exclusive of any bonuses, commissions, overtime pay, or
other extra forms of compensation and less applicable taxes and withholdings)
(the “Severance Pay”); provided that the timing (although not the
aggregate amount) of such salary continuation payments shall be adjusted by the
Company to the extent necessary so that all payments shall be completed no
later than the fifteenth (15th) day of the third (3rd) month of the calendar
year following the calendar year in which termination of employment occurred;
and provided further that, if the Company determines it necessary in
order to ensure compliance with Section 409A, the Severance Pay may be paid in
a lump sum; and


2.                                       contributions to
the cost of COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage on
the same basis as the Company’s contribution to Company-provided health and
dental insurance coverage immediately before the Participant’s termination,
except that if the employee secures new employment, the Company’s continued
contributions toward health and dental coverage shall end when the new
employment begins.  Participants will be
provided additional information regarding COBRA continuation costs and coverage
following termination.


The Severance Benefits shall commence within seven (7)
business days of the date on which by its terms the Severance Agreement becomes
a binding agreement between the Company and the Participant.  However, notwithstanding any provision of
this Plan to the contrary, if, at the time a Participant’s employment is
terminated, the Participant is a “specified employee” within the meaning of
Section 409A(a)(2)(B)(ii) of the Code and the regulations thereunder and the
Plan, then any payments under this Plan to the Participant that constitute “nonqualified
deferred compensation” within the meaning of Section 409A of the Code shall be
delayed by a period of six (6) months and (i) all payments that would have been
made to the Participant during such six (6) month period shall be made in a
lump sum in the seventh (7th) month following the date of termination and (ii)
all remaining payments shall commence in the seventh (7th) month following the
date of termination.


Section IV:                                   Severance
Agreement and Release


As a condition of receipt of a Severance Payment under
the Plan, a Participant shall be required to timely sign and return a severance
agreement and release in a form prepared by and satisfactory to, the Company
(the “Severance Agreement”) and to abide by the provisions of the Severance
Agreement.  Among other things, the
Severance Agreement shall contain a release and waiver of any claims the
employee or his/her representatives may have against the Company, its successors,
affiliates and/or representatives, and shall release those entities and persons
from any liability for such claims including, but not limited to, all
employment 









 



discrimination claims. 
Participants are entitled and advised to consult an attorney of their
own choosing prior to signing the Severance Agreement.


The Severance Agreement must be signed and returned to
the Company within seven (7) days from the date it is received (at which time
it shall become a binding and irrevocable agreement between the Participant and
the Company), except as otherwise provided below.  Exceptions to this requirement are:


A.                                   Participants
40 or older on the date they receive the Severance Agreement and who are
terminated pursuant to a group layoff shall have forty-five (45) days to
review, sign and return the Severance Agreement.


B.                                     Participants
40 or older on the date they receive the Severance Agreement and who are not
terminated pursuant to a group layoff shall have twenty-one (21) days to
review, sign and return the Severance Agreement.


C.                                     In
addition, all Participants 40 or older on the date they receive the Severance
Agreement shall have seven (7) days to revoke the Severance Agreement after
they sign it.  If the Participant does
not revoke the Severance Agreement within seven (7) days of signing it, the Severance
Agreement shall become a binding and irrevocable agreement between the
Participant and the Company.  Revocations
must be in writing and delivered to the Plan Administrator at:


NitroMed, Inc.

125 Spring Street

Lexington, Massachusetts 02421


Section V:                                       Income
Tax Withholding, Payroll Taxes, and Other Deductions


The Company may withhold from any payment under the
Plan: (1) any federal, state, or local income or payroll taxes required by law
to be withheld with respect to such payment; (2) such sum as the Company may
reasonably estimate is necessary to cover any taxes for which the Company may
be liable and which may be assessed with regard to such payment; and (3) such
other amounts as appropriately may be withheld under the Company’s payroll
policies and procedures from time to time in effect (including, where
applicable, the Participant’s contributions to the cost of COBRA continuation
coverage pursuant to Section III (2) above).


Section VI:                                   Section
409A


All payments and benefits provided under this Plan are
intended to either comply with or be exempt from Section 409A of the Code and
this Plan shall be administered and construed accordingly.  The Company makes no representations or
warranty and shall have no liability to any Participant or any other person if
any provisions of this Plan are determined to constitute deferred compensation
subject to Section 409A but not to satisfy the conditions of that section.









 



 


Section VII:                               Plan
Administration


1.          Plan
Administrator.  The Plan shall be
administered by the Board.  To the extent
permitted by applicable law, the Board may delegate any or all of its powers
under the Plan to one or more committees or subcommittees of the Board (a “Committee”).  All references in the Plan to the “Board”
shall mean the Board or a Committee of the Board to the extent that the Board’s
powers or authority under the Plan have been delegated to such Committee.  The Board shall serve as the Plan
Administrator.  The general
administration of the Plan and the responsibility for carrying out its
provisions shall be vested in the Plan Administrator.  The Plan Administrator shall be the “administrator”
within the meaning of Section 3(16) of ERISA and shall have all the
responsibilities and duties contained therein.


The Plan Administrator can
be contacted at the following address:


c/o Secretary

NitroMed, Inc.

125 Spring Street

Lexington, Massachusetts 02421


2.          Decisions,
Powers and Duties.  The Plan
Administrator’s decisions and determinations (including determinations of the
meaning and reference of terms used in the Plan) shall be binding on all
persons.  The Plan Administrator shall be
the Named Fiduciary for purposes of ERISA.


The Plan Administrator shall have such powers and
discretion as are necessary to discharge its duties, including, but not limited
to, interpretation and construction of the Plan, the determination of all
questions of eligibility, participation and benefits and all other related or
incidental matters, and such duties and powers of plan administration which are
not assumed from time to time by any other appropriate entity, individual or
institution.  The Plan Administrator
shall decide all such questions in its sole discretion and in accordance with
the terms of the controlling legal documents and applicable law, and its
decision will be final and binding on the Participant, the Participant’s spouse
or other dependent or beneficiary and all other interested parties.


The Plan Administrator may adopt rules and regulations
of uniform applicability in its interpretation and implementation of the Plan.


3.          Proof
of Information.  The Plan
Administrator may require that each Participant or other person submit, in such
form as it shall deem reasonable and acceptable, proof of any information which
the Plan Administrator finds necessary or desirable for the proper
administration of the Plan.


4.          Records
and Disclosures.  The Plan
Administrator shall maintain such records as are necessary to carry out the
provisions of the Plan.  The Plan
Administrator also shall make, or shall appoint one or more individuals
employed by the Company to make, all disclosures which are required by ERISA
and any subsequent amendments thereto.









 



 


5.          Mistakes.  If there has been a mistake in the amount of
a Participant’s benefits paid under the Plan, the mistake may be corrected by
the Plan Administrator or its designee when the mistake is discovered.  The mistake may be corrected in any
reasonable manner authorized by the Plan Administrator (e.g., by offset
against payments remaining to be paid or by payments between the Participant
and the Company).  In appropriate
circumstances (as determined in the Plan Administrator’s sole discretion), the
Plan Administrator may waive the making of any correction.


6.          Expenses.  All costs and expenses incurred by the Board
in administering the Plan.


7.          No
Liability.   No director shall be
liable for any action or determination relating to or under the Plan made in
good faith.


8.          Integration
with Statutory Pay or Benefits Requirements.  To the extent that any federal, state or
local law, including, without limitation, so-called “plant closing” laws,
requires the Company to give advance notice or make a payment of any kind to an
employee because of that employee’s involuntary termination due to a layoff,
reduction in force, plant or facility closing, sale of business, or similar
event, the benefits provided under this Plan or the other arrangement shall
either be reduced or eliminated to avoid any duplication of payment.  The Company intends for the benefits provided
under this Plan to satisfy any and all statutory obligations which may arise
out of an employee’s involuntary termination for the foregoing reasons and the
Plan Administrator shall so construe and implement the terms of the Plan.  The Plan Administrator will determine how to
apply this provision, and may override other provisions of this Plan in doing
so.


9.          Plan
Name and Type.  The name of the
severance program is the NitroMed, Inc. Executive Severance Benefit Plan.  The program is intended to constitute an “Employee
Welfare Benefits Plan” under Department of Labor Regulation Section 2510.3-2(b)
and other applicable regulations and statutes. 
Accordingly, benefits hereunder shall not be contingent on retirement,
shall not exceed twice the annual compensation of the employee participating in
the Plan, and shall be completed within twenty-four (24) months of termination
of employment.  The program shall be
construed and interpreted in a manner consistent with the foregoing intent.


10.    Funding.  Benefits shall be paid from the general
assets of the Company and shall not be funded by trust or otherwise.  Nothing herein shall be deemed to create a
trust of any kind.


11.    Duration of
Plan.  The Plan shall continue in
force until all benefits are paid.


12.    Name and
Address of Employer.  The Plan is
sponsored by:


NitroMed, Inc.

125 Spring Street

Lexington, Massachusetts 02421


13.         Claims
Procedure.  Any Participant who
believes he or she is entitled to severance benefits under the Plan which are
not being paid may submit a written claim for payment to the Plan 









 



                        Administrator,
care of the Company’s Vice President of Human Resources. Any Participant
otherwise entitled to benefits under this Plan must make such claim within
sixty (60) days of termination of employment in order to be eligible for
benefits. Any claim for benefits shall be in writing, addressed to the Plan
Administrator and must be sufficient to notify the Plan Administrator of the
benefit claimed.  If the claim of a
Participant is denied, the Plan Administrator shall within a reasonable period
of time provide a written notice of denial to the Participant.  The notice will include the specific reasons
for denial, the provisions of the Plan on which the denial is based, and the
procedure for a review of the denied claim. 
Where appropriate, it will also include a description of any additional
material or information necessary to complete or perfect the claim and an
explanation of why that material or information is necessary.  The Participant may request in writing a review
of a claim denied by the Plan Administrator and may review pertinent documents
and submit issues and comments in writing to the Administrator, care of the
Company’s Vice President of Human Resources. 
The Plan Administrator shall provide to the Participant a written
decision upon such request for review of a denied claim.  The decision of the Plan Administrator upon
such review shall be final.


14.         Drafting
Errors.  If, due to errors in
drafting, any Plan provision does not accurately reflect its intended meaning,
as demonstrated by consistent interpretations or other evidence of intent, or
as determined by the Plan Administrator in its sole and exclusive judgment, the
provision shall be considered ambiguous and shall be interpreted by the Plan
Administrator and all Plan fiduciaries in a fashion consistent with its intent,
as determined in the sole and exclusive judgment of the Plan
Administrator.  The Plan Administrator
shall amend the Plan retroactively to cure any such ambiguity.


Section VIII:                           Statement
of ERISA Rights


The following statement is required by federal law and
regulations.  ERISA provides that all
program participants shall be entitled to:


1.                                       Examine,
without charge at the Plan Administrator’s office and at other specified
locations, such as work sites, all program documents, and copies of all
documents filed by the program with the U.S. Department of Labor, such as
detailed annual reports and program descriptions.


2.                                       Obtain
copies of all Plan documents and the Plan information upon written request to
the Plan Administrator.  The Plan
Administrator may make a reasonable charge for copies.


3.                                       Receive
a copy of a summary of the program’s annual financial report.  The Plan Administrator is required by law to
furnish each participant with a copy of this Summary Annual Report.


4.                                       Obtain
a statement advising the employee whether he or she has a right to receive
benefits under the program and what benefits the employee may receive.  This statement must be requested in writing
and is not required to be given more than once a year.  The Plan Administrator must provide the
statement free of charge.









 



 


5.                                       In
addition to creating rights for Plan participants, ERISA imposes duties upon
the people who are responsible for the operation of the employee benefit
plan.  The people who operate the Plan,
called “fiduciaries” of the program, have a duty to do so prudently and in the
interest of program participants and beneficiaries.  Employers nor any other person may fire an
employee or otherwise discriminate against an employee in any way to prevent an
employee from obtaining a benefit under the Plan or exercising the employee’s
rights under ERISA.


6.                                       If
an employee’s claim for a benefit is denied in whole or in part, the employee
must receive a written explanation of the reason for the denial.  The employee has the right to have the Plan
Administrator review and reconsider the employee’s claim.  Under ERISA, there are steps an employee can
take to enforce the above rights.  For
instance, if the employee requests materials from the Plan Administrator and
does not receive them within thirty (30) days, the employee may file suit in a
federal court.  In such a case, the court
may require the Plan Administrator to provide the materials and pay the
employee up to $110 per day until you receive the materials, unless the
materials were not sent because of reasons beyond the control of the Plan
Administrator.


7.                                       If
an employee’s claim for benefits is denied or ignored, in whole or in part, the
employee may file suit in a state or federal court.  If the program fiduciaries misuse the program’s
funds, or if an employee is discriminated against for asserting his or her
rights, the employee may seek assistance from the U.S. Department of Labor, or
may file suit in a federal court.  The
court will decide who should pay court costs and legal fees.


8.                                       If
an employee is successful, the court may order the person sued to pay costs and
fees.  If the employee loses, the court
may order the employee to pay these fees (for example, if the claim is
frivolous).  Employees should contact the
Plan Administrator concerning questions about the program.  Employees who have any questions about this
statement or rights under ERISA should contact the nearest area office of the
Pension and Welfare Benefits Administration, U.S. Department of Labor listed in
your telephone directory or the Division of Technical Assistance and Inquiries,
Pension and Welfare Benefits Administration, U.S. Department of Labor, 200
Constitution Avenue, N.W., Washington, D.C. 20210.


Section IX:                                   Miscellaneous
Provisions


1.               No
Employment Rights.  Nothing in this
Plan shall be construed to provide any employee with a guarantee of employment
and does not supersede the Company’s policy of at will employment.


2.               Governing
Law.  The Plan and the rights of all
persons under the Plan shall be construed in accordance with and under
applicable provisions of ERISA, and the regulations thereunder, and the laws of
the Commonwealth of Massachusetts (without regard to conflict of laws provisions)
to the extent not preempted by federal law.









 



 


3.               No
Limitation Upon Rights of Company. 
The Plan shall not affect in any way the right or power of the Company
to make adjustments, reclassifications or changes of its capital or business
structure; to merge or consolidate; to dissolve or liquidate; or to sell or
transfer all or any part of its business or assets.


4.               Entire
Agreement.  This Plan is a
consolidation, amendment, and restatement of, and supersedes any and all
severance plans or separation policies applying to employees which may have
been in effect throughout the Company prior to the effective date of this Plan,
with the exception of individual written change in control agreements
applicable to individual executives.


5.               Severability.  In case any one or more of the provisions of
this Plan (or part thereof) shall be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the other provisions hereof, and this Plan shall be construed
as if such invalid, illegal or unenforceable provisions (or part thereof) never
had been contained herein.


6.               Non-Assignability.  No right or interest of any Participant shall
be assignable or transferable in whole or in part either directly or by operation
of law or otherwise, including, but not limited to, execution, levy,
garnishment, attachment, pledge or bankruptcy, provided, however, that this
provision shall not be applicable in the case of obligations of a Participant
to the Company.


7.               Amendment
or Termination.  The Company reserves
the right to modify, amend or terminate the Plan in whole or in part at any
time.  Such amendment, modification or
termination shall be effected by a written instrument executed by an authorized
officer of the Company.  However, in no
event shall such amendment, modification or termination reduce or diminish any
severance benefits owing under the Plan for terminations of employment prior to
the date of such amendment or termination without the consent of the Participant
to whom the benefits are owed.









 



 


SCHEDULE
A


Severance benefits shall be provided to Participants
as described in the NitroMed Executive Severance Benefit Plan (the “Plan”) and
Summary Plan Description, as follows:


1.             Executives who have been designated at the level of
Senior Vice President or higher by the NitroMed Board of Directors or its
Compensation Committee shall be provided salary continuation and contributions
to the cost of COBRA coverage pursuant to Section III of the Plan, and subject
to the terms the Plan, for a period of twelve (12) months from a covered
termination of employment.


2.             Executives who have been designated at the level of Vice
President or higher by the NitroMed Board of Directors or its Compensation
Committee shall be provided salary continuation and contributions to the cost
of COBRA coverage pursuant to Section III of the Plan, and subject to the terms
the Plan, for a period of six (6) months from a covered termination of
employment.