EX-10.1 - Director Compensation Policy



 





Exhibit
10.1




Director Compensation Policy




This policy is only intended to cover compensation for Directors of NxStage Medical, Inc. (the
“Corporation”) who are not employees of the Corporation or have not been employees of the
Corporation within the preceding 12 months (“Non-Employee Directors”). Directors who are not
Non-Employee Directors shall not receive compensation from the Corporation for their services as
Directors. All Directors shall receive reimbursement for reasonable travel expenses incurred to
attend Board and committee meetings.



Non-Employee Directors shall receive a $15,000 annual retainer, to be paid quarterly, in four equal
installments, in advance. In addition, the Chairperson of the Audit Committee of the Board shall
receive an additional $10,000 annual retainer, each member of the Audit Committee, other than the
Chairperson, shall receive an additional $6,000 annual retainer, and each member of any other
committee of the Board shall receive an additional $4,000 annual retainer for each committee (other
than the Audit Committee) served on. Each such retainer shall be paid quarterly, in four equal
installments, in advance.



Each Non-Employee Director will also receive a fee for attending each Board meeting, as recorded in
the minutes of such meeting. For each meeting attended in person, each Non-Employee Director will
receive $2,500. For each meeting of the Board attended telephonically or by videoconference, each
Non-Employee Director will receive $1,000. For each committee meeting attended, in person or by
telephone or videoconference on a day other than a date on which a Board meeting is held, each
Non-Employee Director will receive $1,000. Fees are payable on, or immediately after, the date of
the meeting.



Each Non-Employee Director shall also receive, (a) at the first meeting of the Board of Directors
following the closing of the Corporation’s IPO, an option to purchase 12,000 shares of
Corporation’s Common Stock, or in the case of the Audit Committee Chair, 15,000 shares of the
Corporation’s Common Stock, and (b) on the date of each annual meeting of the Corporation’s
stockholders at which such Non-Employee Director is elected, an option to purchase 20,000 shares of
the Corporation’s Common Stock. Each such option shall be granted under, and be subject to, the
Corporation’s 2005 Stock Incentive Plan or any successor plan (the “Plan”) and shall (i) be fully
vested, (ii) have an exercise price equal to the closing sale price (for the primary trading
session) of the Common Stock on the Nasdaq Stock Market or the national securities exchange on
which the Common Stock is then traded on the date of grant (and if the Common Stock is not then
traded on a national securities exchange, the fair market value of the Common Stock on such date as
determined by the Board), (iii) expire on the earlier to occur of five years after the date of
grant or three months following a Non-Employee Director’s cessation of service on the Board, and
(iv) contain such other terms and conditions as the Board shall determine.



For each Non-Employee Director initially elected at any time (a) after the closing of the
Corporation’s IPO and (b) other than at an annual meeting of the Corporation’s stockholders, such
Non-Employee Director shall receive on the date of his or her election to the Board, an option, on
the same terms as set forth above, to purchase that number of shares of the Corporation’s Common
Stock equal to 20,000 shares pro-rated for the period between the date he or she is first elected
to the Board and the following May 31st.



 









 





Such share amounts shall be automatically adjusted in the event of any stock split, reverse stock
split (other than the 1-for-1.3676 reverse stock split to be effected prior to the IPO), stock
dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other
similar change in capitalization or event effecting the Corporation’s Common Stock, or any
distribution to holders of Common Stock other than an ordinary cash dividend.



In no event will any Director receive in aggregate more than $50,000 cash (exclusive of travel
reimbursement) in Board fees in any calendar year without the express approval of the Compensation
Committee of the Board.



Approved by the Board — December 8, 2005