EX-10.3



 Exhibit 10.3 
  





 
 As of July 11, 2011 

Mr. Stuart A. Randle 
 359 Pope Road 

Concord, MA 01742 
  

	 	Re:	Amended and Restated Offer Letter 

 Dear Stuart: 

As you know, you and GI Dynamics, Inc. (the “Company”) previously entered into an offer letter dated January 1, 2004. Both you
and the Company desire to amend and restate the terms and conditions of your employment with the Company by executing this amended and restated offer letter (herein, the “Offer Letter”), which, upon execution, shall supersede your prior
offer letter and govern your employment with the Company. 
 Accordingly, on behalf of the Company, I am pleased to offer you employment
with the Company on the terms and conditions set forth below. 
  

	 	1.	Start Date; Term. Your employment commenced on January 1, 2004 (the “Start Date”) and, subject to Section 7 below, it will continue thereafter until terminated by you or the Company on ninety
(90) days’ prior written notice of termination (the “Term”). The ninetieth day following your receipt of the written notice of termination shall be the effective date of termination, provided that the Company may pay you
for such 90-day period in lieu of employing you during such time. 

  

	 	2.	Title. During the Term, you will serve as the President and Chief Executive Officer of the Company, reporting to the Board of Directors of the Company. During the Term, you will also continue to serve as a
director of the Company for so long as you are duly elected, and not removed, by the stockholders of the Company. You will perform such executive, managerial, administrative and professional duties as are normally associated with those positions and
customarily performed by those holding such offices at businesses similar to the Company. You will devote your full time and best efforts to the business of the Company. Notwithstanding the foregoing, provided that you comply with your
obligations in this Offer Letter, your Nondisclosure, Nonsolicitation and Noncompete Agreement (as described in Section 6), and applicable Company policy: (a) you may continue in your role as, and you may become, a member of the board of
directors of any non-profit entity or organization, and (b) you may continue in your role as, and upon approval from the Compensation Committee of the Board of Directors of the Company you may become, a member of the board of directors of any
other for-profit entity or organization. 

  

  
 



 









	 	3.	Base Compensation. Your base salary will be paid at the rate of $365,000 per year, and you will not be entitled to compensation as a director of the Company. Your total compensation will be reviewed at least
annually by the Compensation Committee of the Board of Directors and may be increased, but not decreased, by the Compensation Committee. 

  

	 	4.	Bonus. You will be eligible for an annual bonus in addition to your base compensation if approved in the sole discretion of the Board of Directors. The amount, if any, of such bonus shall be paid to you within
forty five (45) days following the close of the fiscal year to which it relates, and in no event later than March 15th of the calendar year immediately following the calendar year in
which it was earned. 

  

	 	5.	Equity Incentives. 

  

	 	(a)	You and the Company acknowledge that you have been granted the following equity in the Company, of which, some options have been exercised: 


 

	 	•	 	A non-qualified stock option to purchase 40,000 shares of the Company’s common stock (purchase price of $0.10 per share), pursuant to a Non-Qualified Stock Option Agreement between you and the Company dated
July 15, 2003, as amended. 

  

	 	•	 	An incentive stock option to purchase 610,000 shares of the Company’s common stock (purchase price $0.10 per share), pursuant to an Incentive Stock Option Agreement between you and the Company dated
February 10, 2004. 

  

	 	•	 	An incentive stock option to purchase 550,000 shares of the Company’s common stock (purchase price $0.15 per share), pursuant to an Incentive Stock Option Agreement between you and the Company dated June 10,
2004. 

  

	 	•	 	An incentive stock option to purchase 117,000 shares of the Company’s common stock (purchase price $0.20 per share), pursuant to an Incentive Stock Option Agreement between you and the Company dated
October 21, 2005. 

  

	 	•	 	An incentive stock option to purchase 335,000 shares of the Company’s common stock (purchase price $0.39 per share), pursuant to an Incentive Stock Option Agreement between you and the Company dated July 18,
2006. 


  
 



 









	 	•	 	An incentive stock option to purchase 275,000 shares of the Company’s common stock (purchase price $0.39 per share), pursuant to an Incentive Stock Option Agreement between you and the Company dated
February 14, 2007. 

  

	 	•	 	An incentive stock option to purchase 425,000 shares of the Company’s common stock (purchase price $0.43 per share), pursuant to an Incentive Stock Option Grant and Incentive Stock Option Agreement between you and
the Company dated August 6, 2009. 

  

	 	•	 	An incentive stock option to purchase 282,240 shares of the Company’s common stock (purchase price $0.59 per share), pursuant to an Incentive Stock Option Grant and Incentive Stock Option Agreement between you and
the Company dated December 7, 2010. 

 You agree that the parties’ rights and obligations with respect to the equity
grants described above shall remain subject to the terms and conditions of each such grant’s respective option agreements and/or grant documents, and the Company’s 2003 Omnibus Stock Plan or such other stock plan as may be in effect from
time to time. 
  

	 	(b)	Notwithstanding the foregoing, the parties acknowledge and agree that if there is a Change of Control (as defined below) involving the Company, then 100% of all of your unvested options of all types shall vest and
become immediately exercisable as of the consummation of the Change of Control. For the purposes of this Offer Letter, the term “Change of Control” shall mean the sale of all or substantially all of the assets or stock of the Company or a
merger, consolidation or similar transaction in which the persons entitled to elect a majority of the members of the Board of Directors of the Company immediately before the transaction are unable to do so following the transaction. The parties
acknowledge and agree that to the extent that this Section 4(b) conflicts with any term of an option agreement and/or grant document listed in Section 4(a) (including, but not limited to, any term of such option agreement or grant document
that permits or requires that a termination without “Cause” or as a result of a “Constructive Termination” occur following a Change of Control in order for unvested options to become vested and fully exercisable) then the terms
of this Section 4(b) shall govern. 

  

	 	(c)	You will be eligible to receive additional equity incentives at the discretion of the Board of Directors pursuant to the Company’s 2003 Omnibus Stock Plan or such other incentive stock plan as may be in effect from
time to time, on conditions and terms no less favorable to you than other executive officers of the Company. 

  

	 	6.	 Fringe Benefits. You will be entitled to the employee benefits generally provided to other executive officers of the Company. You will also be
entitled to 



  
 



 









	 	
reimbursement for ordinary and necessary business expenses incurred by you in the performance of your duties for the Company in accordance with standard company practices, including the
substantiation of any expenses incurred. You will be entitled to four weeks of vacation annually. 

  

	 	7.	Non-Competition; Confidentiality. You and the Company acknowledge and agree that you have executed and delivered to the Company the Company’s standard Nondisclosure, Nonsolicitation and Noncompete Agreement.
By signing this Offer Letter and accepting the consideration provided for herein, you expressly reaffirm your obligations under such Agreement. 

  

	 	8.	Termination. Your employment will continue until terminated in accordance with Section 1 unless earlier terminated in accordance with this Section 7. The Company shall be entitled to terminate your
employment for “Cause”, as defined below (without prior notice) and you shall be entitled to terminate your employment with the Company in the event of a “Constructive Termination”, as defined below (subject to the terms of
Section 7(c)(ii)). 

  

	 	(a)	Without Cause or Constructive Termination. If your employment with the Company is terminated by the Company without Cause or if you terminate your employment as the result of a Constructive Termination, the
obligations of the Company to you will be as follows: 

  

	 	(i)	Severance Payment. For the twelve (12) month period following the effective date of termination of your employment (the “Severance Period”), you will be entitled to receive as severance an
amount equal to your prior 12 months total cash compensation, and to the extent permitted by law and the Company’s ERISA Plans, the Company’s ERISA contribution made on your behalf at the rate that was in effect immediately prior to your
termination, paid periodically in accordance with the Company’s standard compensation schedule. If your employment terminates as a result of your death or disability (defined as a physical or mental impairment which renders you unable to
fulfill all of the essential functions of your job for 180 consecutive days in any calendar year), such termination shall be considered a termination without Cause under this Offer Letter. In the event of a disability, the payments due to you by the
Company during the Severance Period will be reduced by any payments made to you during the Severance Period under any Company-paid disability insurance policy. 

  

	 	(ii)	Benefits. During the Severance Period, the Company will continue to provide to you or on your behalf all of the other fringe benefits which you enjoyed immediately preceding your termination. 


  
 



 









	 	(b)	Termination for Cause or Not Constituting a Constructive Termination. If your employment with the Company is terminated by the Company for Cause or by you without constituting a Constructive Termination, the
obligations of the Company to you will be as follows: 

  

	 	(i)	Compensation. You will be entitled to receive your base salary through the date of termination, including any accrued vacation to that date. 


 

	 	(ii)	Benefits. Your entitlement to benefits will cease, except as otherwise required by the Company’s ERISA plans or by COBRA or any similar law or regulation then in effect. 


 

	 	(iii)	Vesting of Stock. There will be no further vesting of any shares of any class of stock of the Company that you hold as of the termination. 


 

	 	(c)	Certain Definitions. As used in this Section 7, the following terms have the definitions indicated: 

  

	 	(i)	Cause means the termination of your employment as the result of your conviction of a crime involving moral turpitude, any material act of dishonesty by you involving the Company or any of its affiliates or a
breach by you of the terms of any noncompetition, nonsolicitation or nondisclosure obligation you have to the Company. 

  

	 	(ii)	Constructive Termination means a material diminution in your title, job responsibilities or duties, a material breach of this Offer Letter by the Company, a material reduction in your compensation or the
relocation of the Company’s principal office beyond a radius of 25 miles from its current location, in any case unless otherwise approved by you. “Constructive Termination” shall not be deemed to have occurred unless: (A) you
provide the Company with written notice that you intend to terminate your employment hereunder for one of the grounds set forth above within sixty (60) days of such ground occurring, (B) if such ground is capable of being cured, the
Company has failed to cure such ground within a period of thirty (30) days from the date of such written notice, and (C) you terminate your employment within one hundred eighty (180) days from the date that a ground for Constructive
Termination first occurs. For purposes of clarification, the above-listed conditions shall apply separately to each occurrence of Constructive Termination, and failure to adhere to such conditions in the event of Constructive Termination shall not
disqualify you from asserting Constructive Termination for any subsequent occurrence of Constructive Termination. 


  
 



 









	 	9.	Key Man Insurance. The parties acknowledge and agree that the Company has obtained a key man insurance policy of not less than $2,000,000 on your life, of which the Company is the beneficiary. 


 

	 	10.	Compliance with Section 409A. 

  

	 	(a)	If any payments or benefits set forth in herein constitute “non-qualified deferred compensation” subject to Section 409A of the Internal Revenue Code and the rules and regulations thereunder
(“Section 409A”), then the following conditions apply to the payment of such payments or benefits: (i) any termination of your employment triggering payment of such payments or benefits must constitute a “separation from
service” under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits can commence. To the extent that the termination of your employment does not constitute a separation of service
under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by you to the Company at the time your employment terminates), any such payments or
benefits that constitute non-qualified deferred compensation under Section 409A shall be delayed until after the date of a subsequent event constituting a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg.
§1.409A-1(h). For purposes of clarification, this section shall not cause any forfeiture of benefits on your part, but shall only act as a delay until such time as a “separation from service” occurs; (ii) if you are a
“specified employee” (as that term is used in Section 409A on the date your separation from service becomes effective, any payments or benefits that constitute non-qualified deferred compensation subject to Section 409A shall be
delayed until the earlier of: (A) the business day following the six-month anniversary of the date your separation from service becomes effective, or (B) the date of your death, but only to the extent necessary to avoid the adverse tax
consequences and penalties under Section 409A. On the earlier of: (A) the business day following the six-month anniversary of the date your separation from service becomes effective, or (B) your death, the Company shall pay you in a
lump sum the aggregate value of the non-qualified deferred compensation that the Company otherwise would have paid you prior to that date; (iii) it is intended that each installment of the payments and benefits provided hereunder shall be
treated as a separate “payment” for purposes of Section 409A; and (iv) neither the Company nor you shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically
permitted or required by Section 409A. 

  

	 	(b)	Notwithstanding any other provision herein to the contrary, in the event of any ambiguity in the terms of this offer letter, such term(s) shall be interpreted and at all times administered in a manner that avoids the
inclusion of compensation in income under Section 409A, or the payment of increased taxes, excise taxes or other penalties under Section 409A. 


  
 



 









	 	(c)	The parties intend all payments and benefits hereunder to be in compliance with Section 409A. You acknowledge and agree that the Company does not guarantee the tax treatment or tax consequences associated with any
payment or benefit arising under this Offer Letter, including but not limited to consequences related to Section 409A. 

  

	 	(d)	All reimbursements provided under this Offer Letter will be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that: (i) any reimbursement is for
expenses incurred during your lifetime (or during a shorter period of time specified in this Offer Letter); (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in
any other calendar year; (iii) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred; and (iv) the right to reimbursement or in kind
benefits is not subject to liquidation or exchange for another benefit. 

  

	 	11.	Choice of Law; Venue. This Offer Letter shall be deemed to have been made in Massachusetts and shall take effect as an instrument under seal in Massachusetts, and its validity, interpretation and performance
shall be governed by the internal law of Massachusetts, without giving effect to conflict of law principles. Both you and the Company agree that any action or claim related to this Offer Letter or its breach shall be commenced in Massachusetts in a
court of competent jurisdiction. 

  

	 	12.	Entire Agreement. This Offer Letter, together with the other agreements specifically referenced herein, embodies the entire agreement and understanding between the parties hereto with respect to the subject
matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof (including but not limited to your January 1, 2004 offer letter with the Company). No statement, representation,
warranty, covenant or agreement of any kind not expressly set forth in this Offer Letter will affect, or be used to interpret, change or restrict, the express terms and provisions of this Offer Letter. 


[Signature Page to Follow] 

  
 



 








 If the foregoing correctly sets forth our agreement and understanding, please indicate your
acceptance of this offer by signing and returning to me a copy of this Offer Letter. 
  

			
	Very truly yours,
	
	GI DYNAMICS, INC.
		
	By:	 	 /s/ Robert Crane

		
	Title:	 	 CFO



 I accept the offer of employment of GI DYNAMICS, INC. outlined above. 

 

	
	 /s/ Stuart A. Randle

	Stuart A. Randle

  

					
	Date:	 	 7/11/11
	 	, 2011