Exhibit
10.1


 


NITROMED, INC.

AMENDED AND RESTATED


EXECUTIVE
SEVERANCE BENEFIT PLAN and

SUMMARY PLAN DESCRIPTION


 


Section I:                                            Establishment
and Purpose of Plan


 


The
NitroMed, Inc. (the “Company”) Amended and Restated 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”).  The Plan has been amended and restated as of December 26,
2008 to incorporate the changes made pursuant to Amendment No. 1 of the
Plan, and to reflect certain developments in the tax law.


 


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”); 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 90 days following the date of
termination, provided if the Severance Agreement has been executed and any
applicable revocation period has expired prior to the 90th day
following the date of termination, then the Severance Benefits may commence
within 7 days after the Severance Agreement has become a binding
agreement.  Notwithstanding the foregoing, if the 90th day
following the date of termination occurs in the calendar year following the
termination, then the payments shall commence no earlier than January 1 of
such subsequent calendar year.


 


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 such Severance Agreement has become binding on or before the 90th
day after the date of termination 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.


45 Hayden Avenue, Suite 3000

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:                                   Payments
Subject to Section 409A


 


Subject to the provisions in
this Section, any severance payments
or benefits under the Plan shall
begin only upon the date of Participant’s “separation from service”
(determined as set forth below) which occurs on or after the date of termination of Participant’s employment.  The following rules shall apply with
respect to distribution of the payments and benefits, if any, to be provided to Participant under the Plan:


 


1.                                       It
is intended that each installment of the severance payments and benefits
provided under the Plan shall be treated as a separate “payment” for purposes
of Section 409A of the Internal Revenue Code and the guidance issued
thereunder (“Section 409A”). 
Neither the Company nor Participant 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.


 

















 


2.                                       If,
as of the date of Participant’s “separation from service” from the Company,
Participant is not a “specified employee” (within the meaning of Section 409A),
then each installment of the severance payments and benefits shall be made on
the dates and terms set forth in the Plan.


 


3.                                       If,
as of the date of Participant’s “separation from service” from the Company,
Participant is a “specified employee” (within the meaning of Section 409A),
then:


 


(a)                                  Each
installment of the severance payments and benefits due under the Plan that, in
accordance with the dates and terms set forth herein, will in all
circumstances, regardless of when the separation from service occurs, be paid
within the short-term deferral period (as defined in Section 409A) shall
be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to
the maximum extent permissible under Section 409A; and


 


(b)                                 Each
installment of the severance payments and benefits due under the Plan that is
not described in paragraph (a) above and that would, absent this
subsection, be paid within the six-month period following Participant’s “separation
from service” from the Company shall not be paid until the date that is six
months and one day after such separation from service (or, if earlier,
Participant’s death), with any such installments that are required to be
delayed being accumulated during the six-month period and paid in a lump sum on
the date that is six months and one day following Participant’s separation from
service and any subsequent installments, if any, being paid in accordance with
the dates and terms set forth herein; provided, however, that the
preceding provisions of this sentence shall not apply to any installment of
severance payments and benefits if and to the maximum extent that that such
installment is deemed to be paid under a separation pay plan that does not
provide for a deferral of compensation by reason of the application of Treasury
Regulation Section 1.409A-1(b)(9)(iii) (relating to separation pay
upon an involuntary separation from service). 
Any installments that qualify for the exception under Treasury
Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the
last day of Participant’s second taxable year following Participant’s taxable
year in which the separation from service occurs.


 


4.                                     The
determination of whether and when Participant’s
separation from service from the Company has occurred shall be made and in a
manner consistent with, and based on the presumptions set forth in, Treasury
Regulation Section 1.409A-1(h). 
Solely for purposes of this paragraph
4, “Company” shall include all persons with whom the Company would be
considered a single employer under Sections 414(b) and 414(c) of the
Code.


 


5.                                     All
reimbursements and in-kind benefits provided under the Plan shall be made or provided in accordance with the
requirements of Section 409A to the extent that such reimbursements or
in-kind benefits are subject to Section 409A, including, 


 

















 


where applicable, the
requirement that (i) any reimbursement is for expenses incurred during
Participant’s lifetime (or during a shorter period of time specified in this
Plan), (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 on or before the last day of the calendar year following the year in
which the expense is incurred and (iv) the right to reimbursement is not
subject to set off or liquidation or exchange for any other benefit.


 


6.                                      The
Company may withhold (or cause to be withheld) from any payments made under
this Plan, all federal, state, city or other taxes as shall be required to be
withheld pursuant to any law or governmental regulation or ruling.


 


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.


45 Hayden Avenue, Suite 3000

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.  Any such correction shall
only be made in a manner that complies with Section 409A of the Code.


 


6.          Expenses.  All costs and expenses incurred by the Board
in administering the Plan shall be paid by the Company.


 


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.


45 Hayden Avenue, Suite 3000

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:


 

















 


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.


 


1.                                       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.


 


2.                                       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.


 


3.                                       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.


 


4.                                       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.


 


5.                                       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.


 


6.                                       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.


 


7.                                       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. 
If such an executive remains unemployed throughout and at the conclusion
of the initial six month period referenced in the preceding sentence, such executive
shall be provided with salary continuation and contributions to the cost of
COBRA coverage pursuant to Section III of the Plan, and subject to the
terms of the Plan, for up to an additional six (6) months; provided,
however, that if any time during such additional six month period such
executive becomes reemployed with another employer in a comparable position,
the benefits provided pursuant to this paragraph shall terminate immediately.