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


 






(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.


 

















 


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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