Exhibit 10.2


 


SECOND ACKNOWLEDGEMENT AND AMENDMENT AGREEMENT


 


This Second Acknowledgement and
Amendment Agreement (the “Acknowledgement”) is dated December 23,
2008, and is entered into by and between Peter C. Sutcliffe (the “Employee”),
and BioSphere Medical, Inc., a Delaware corporation (the “Company”).


 


WHEREAS, the Employee and the
Company have entered into a certain letter agreement dated June 14, 2005,
as modified by an Acknowledgement and Amendment Agreement dated October 10,
2007, regarding the Employee’s employment with the Company (the “Letter
Agreement”); and


 


WHEREAS, the parties desire to
modify the provisions of the Letter Agreement.


 


NOW, THEREFORE, in
consideration of the mutual covenants contained herein and for other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
undersigned hereby agree as follows:


 


1.                                      The
Letter Agreement is hereby amended as follows:


 


(a)                                  Section 4.1 is
hereby deleted in its entirety and replaced with the following new Section 4.1:


 


“4.1                           In the
event your at-will employment is terminated by the Company without Cause (as
defined below) in anticipation of, or within twelve months after, a Change in
Control (as defined below), the Company shall continue to pay to you your
salary as in effect on the date of termination and the amount of the annual
bonus paid to you for the fiscal year immediately preceding the date of
termination (payable in annualized monthly installments) and shall, provided
you elect to receive group medical insurance pursuant to the federal “COBRA”
law,  29 U.S.C. § 1161 et seq.,
provide to you (so long as you are entitled to COBRA coverage) reimbursement
for the share of the premium for group medical and dental that is paid by the
Company for active and similarly-situated employees who receive the same type
of coverage for a period of 12 months, provided, however, that the Company’s
obligation to make the aforesaid payments or provide the aforesaid benefits
shall immediately terminate in the event that you violate the provisions of Section 5
or Section 6 during such 12 month period. 
The payment to you of the amounts payable under this Section 4.1
shall be contingent upon your execution and non-revocation of a release in a
form reasonably acceptable to the Company within 30 days of the date of
termination and (ii) shall constitute your sole remedy in the event of a
termination of your employment in the circumstances set forth in this Section 4.1.  The payments and benefits shall commence 60
days following the date of termination, provided that the release has been
properly executed and not revoked as of such date, or, if the release has been
executed and any applicable revocation period has expired prior to the 60th day following the
date of termination, then the payments and benefits may commence prior to the
60th day but no sooner than the 30th day following 


 

















 


the date of termination.  Notwithstanding the foregoing, if the 60th 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.


 


Payments to
the Employee under this Section 4.1 shall be bifurcated into two portions,
consisting of a portion that does not constitute “nonqualified deferred compensation”
within the meaning of Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”) and a portion that does constitute nonqualified
deferred compensation.  Payments
hereunder shall first be made from the portion that does not consist of
nonqualified deferred compensation until it is exhausted and then shall be made
from the portion that does constitute nonqualified deferred compensation.  Notwithstanding the foregoing, because the
Employee is a “specified employee” as defined in Section 409A (a)(3)(B)(i) of
the Code, the commencement of the delivery of any such payments that constitute
nonqualified deferred compensation will be delayed to the date that is 6 months
and one day after the Employee’s termination of employment (the “Earliest
Payment Date”) unless payable upon the Employee’s death.  Any payments that are delayed pursuant to the
preceding sentence shall be paid on the Earliest Payment Date.  The determination of whether, and the extent
to which, any of the payments to be made to the Employee hereunder are
nonqualified deferred compensation shall be made after the application of all
applicable exclusions under Treasury Reg. § 1.409A-1(b)(9).  Any payments that are intended to qualify for
the exclusion for separation pay due to involuntary separation from service set
forth in Reg. § 1.409A-1(b)(9)(iii) must be paid no later than the last
day of the second taxable year of the Employee following the taxable year of
the Employee in which the Employee’s termination of employment occurs.”


 


(b)                                 Section 15 is
hereby deleted in its entirety and replaced with the following new Section 15:


 


“15.                           Section 409A.


 


Notwithstanding anything else
to the contrary in this agreement, to the extent that any of the payments that
may be made hereunder constitute “nonqualified deferred compensation”, within
the meaning of Section 409A and the Employee is a “ specified employee”
upon his separation (as defined under Section 409A), the timing of any
such payment following the separation date shall be modified if, absent such
modification, such payment would otherwise be subject to penalty under Section 409A.  In any event, the Company makes no
representation or warranty and shall have no liability to the Employee or to
any other person if any provisions of this agreement are determined to
constitute “nonqualified deferred compensation” subject to Section 409A
but do not satisfy the requirements of that section.


 


It is intended that each
installment of the severance payments and benefits provided hereunder shall be
treated as a separate “payment” for purposes of Section 409A.  Neither the Company nor the Employee 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.”


 


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2.                                       The
parties acknowledge and agree that all other provisions of the Letter Agreement
shall remain in full force and effect.


 


3.                                       This
Acknowledgement shall be governed by and construed and interpreted in
accordance with the substantive laws of the Commonwealth of Massachusetts
without regard to its principles of conflicts of law.


 


4.                                       This
Acknowledgement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.


 


[Remainder
of Page Intentionally Left Blank]


 


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IN WITNESS WHEREOF, the Parties
have executed this Second Acknowledgement and Amendment Agreement as of the
date first above written.


 


 


	
   

  	
  BIOSPHERE MEDICAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard J. Faleschini

  
	
   

  	
  Richard J. Faleschini

  
	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Peter C. Sutcliffe

  
	
   

  	
  Peter C. Sutcliffe

  
	
   

  	
  Vice President of Manufacturing

  



 


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