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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): March 5, 2010 (March 3, 2010)
NxSTAGE MEDICAL, INC.
(Exact name of registrant as specified in its charter)
         
Delaware
(State or other jurisdiction of
incorporation or organization) 		  000-51567
(Commission File Number) 		  04-3454702
(I.R.S. Employer
Identification No.)
     
439 S. Union St, 5th Floor, Lawrence, MA
(Address of principal executive offices) 		  01843
(Zip Code)
(978) 687-4700
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Named Executive Officer Compensation — 2009 Bonus Awards, 2009 Performance Share Awards, 2010 Base Salary, 2010 Target Bonus Awards, 2010 Stock Option Awards and 2010 Target Performance Share Awards
     On March 3, 2010, the Compensation Committee of the Board of Directors of NxStage Medical, Inc. (the “Company”) took the following actions regarding the executive compensation of the Company’s “named executive officers” (as used in Instruction 4 to Item 5.02 of Form 8-K):
  •   Approved awards under the Company’s 2009 Corporate Bonus Plan (“2009 Bonus Awards”), authorized the implementation of a 2010 Bonus Plan and set threshold and maximum bonus awards for the 2010 fiscal year under the 2010 Bonus Plan (“2010 Target Bonus Awards”)
 
  •   Approved awards under the Company’s 2009 Performance Share Plan (“2009 Performance Share Awards”), authorized the implementation of a 2010 Performance Share Plan and set threshold and maximum stock awards for the 2010 fiscal year under the 2010 Performance Share Plan (“2010 Performance Share Awards”);
 
  •   Approved adjustments to base salary for 2010, to become effective as of April 16, 2010;
 
  •   Approved options awards for 2010 under the Company’s 2005 Stock Incentive Plan (“2010 Option Awards”); and
 
  •   Approved a special recognition award of restricted stock to three named executives under the Company’s 2005 Stock Incentive Plan (“2010 Special Restricted Stock Award”).
     The following table sets forth information regarding each of named executive officer’s (i) 2009 base salary (for comparison purposes only), (ii) 2010 base salary, effective as of April 16, 2010, (iii) 2009 Bonus Award, (iv) 2009 Performance Share Award, (v) 2010 Option Award, (vi) 2010 Target Bonus Award, as a percentage of 2010 base salary, (vii) 2010 Special Restricted Stock Award, as applicable, and (viii) 2010 target and maximum Performance Share Award:

 

 

                                                                             
                                                2010        
                2010 Base                     Bonus        
                Salary   2009                   Awards (as        
                (after   Bonus                   a % of        
                April 16,   Award                   2010 Base        
                2010;   Paid in   2009           Salary)        
                unchanged   Shares   Performance   2010   (Threshold        
                from 2009   of   Share Award   Annual   to   2010 Special    
Named               prior to   Common   Vesting Over   Stock   Maximum   Restricted   2010 Performance Share
Executive       2009 Base   that date)   Stock   Three Years   Option   Award   Stock   Award (6)
Officer   Title   Salary   (1)   (2)   (3)   Award (4)   Levels   Award (5)   Threshold   Maximum
Jeffrey H. Burbank
   President & Chief Executive Officer   $ 330,000     $ 396,000       20,116       199,828       123,900     18.75%-150%, target of 75%       30,120       30,450       121,800  
Robert S. Brown
   Senior Vice President & Chief Financial Officer   $ 250,000     $ 268,000       10,667       66,938       44,400     10% - 80%, target of 40%       15,060       10,200       40,800  
Joseph E. Turk, Jr.
   Senior Vice President, Commercial Operations   $ 260,000     $ 268,000       14,264       66,938       44,400     12.5% - 100%, target of 50%       10,040       10,200       40,800  
Winifred L. Swan
   Senior Vice President and General Counsel   $ 260,000     $ 268,000       11,094       66,938       44,400     8.75% - 70%, target of 35%       —       10,200       40,800  
Michael J. Webb
   Senior Vice President, Quality Assurance/Regulatory Affairs   $ 220,000     $ 235,000       6,705       52,172       34,200     6.25% - 50%, target of 25%       —       7,950       31,800  
 
(1)   Base salary for executives shall remain unchanged from 2009 levels until April 16, 2010. After April 16, 2010, named executive officer base salaries shall be adjusted to the levels indicated.
 
(2)   In March 2009, the Compensation Committee established the 2009 Corporate Bonus Plan with the amount of awards to be determined based upon the satisfaction of 2009 revenue and cash consumption targets. On March 3, 2010, the Compensation Committee awarded the bonus awards set forth in the table above based on its evaluation of the achievement of the performance criteria established for the 2009 Corporate Bonus Plan. 2009 Bonus Awards reflect the Company’s achievement of 101.8% of stretch goals under the 2009 Corporate Bonus Plan. Stretch goals were between threshold and maximum goal levels under the Plan. 2009 Bonus Awards were awarded in the form of Company common stock to executives.
 
(3)   In March 2009, the Compensation Committee established the 2009 Performance Share Plan with the amount of awards to be determined based upon the satisfaction of 2009 revenue and cash consumption targets. On March 3, 2010, the Compensation Committee awarded the performance shares set forth in the table above based on its evaluation of the achievement of the performance criteria established for the 2009 Performance Share Plan. 2009 Performance Share Awards reflect the Company’s achievement of 98.4% of stretch goals under the 2009 Performance Share Plan. Stretch goals were between the target and maximum goal levels under the Plan. 2009 Performance Share Awards vest 33 1/3rd% on the date of award on March 3, 2010, with the balance vesting in two equal installments on December 31, 2010 and December 31, 2011.
 
(4)   Annual stock option awards have a term of seven years and vest over four years in equal monthly installments. The exercise price of the awards is equal to $9.96, which was the closing price of the Company’s common stock on the date the option grant was approved by the Compensation Committee.
 
(5)   On March 3, 2010, the Compensation Committee awarded Special Restricted Stock Awards to Messrs. Burbank, Brown and Turk in recognition of their contribution to the Company’s performance in 2009. Grants of restricted stock vest over three years in equal annual installments, with the first installment vesting on March 3, 2011.
 
(6)   Sets forth the threshold and maximum number of shares of restricted stock that the named executive officer is eligible to receive under the 2010 Performance Share Plan (subject to adjustment in the event of a stock split or

 

 

    similar event affecting the common stock). The threshold assumes the achievement of established minimum revenue and cash consumption objectives under the 2010 Performance Share Plan, and the maximum assumes the achievement of such objectives at levels significantly above the threshold levels.
     Description of 2010 Bonus Plan
     The individual payouts under the 2010 Bonus Plan will be based on corporate and individual performance. The Chief Executive Officer will propose to the Compensation Committee the bonus payouts for each other named executive officer. The Compensation Committee will propose and determine the payout for the CEO, and will determine the final payout for the other named executive officers. Payouts under the 2010 Bonus Plan are conditioned upon the Company’s achievement of revenue and cash consumption targets. Any awards will range from a threshold award level to a maximum award level, depending upon whether established threshold, target, stretch or outstanding performance levels have been achieved with respect to revenue and cash consumption. If threshold performance levels are not achieved under the 2010 Bonus Plan, no award will be made. Awards under the Plan may be paid in either cash or common stock of the Company, at the discretion of the Compensation Committee.
     Description of 2010 Performance Share Plan
     Pursuant to the 2010 Performance Share Plan, each of the Company’s executive officers is eligible to receive an award in the form of shares of restricted stock under the Company’s 2005 Stock Incentive Plan based upon the achievement of corporate objectives for 2010 that have been specified in writing by the Compensation Committee. Awards under the 2010 Performance Share Plan are conditioned upon the Company’s achievement of revenue and cash consumption targets. Any awards will range from the threshold to the maximum share numbers, depending upon whether established threshold, target, stretch or outstanding performance levels have been achieved with respect to revenues and cash consumption. If threshold performance levels are not achieved under the 2010 Performance Share Plan, no award will be made. Any awards made will vest over three years in equal installments, with the first vesting to be made as of the date of any award.

 

 

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed by the undersigned hereunto duly authorized.
         
  NxStage Medical, Inc.
 		  
Date: March 5, 2010  By:   /s/ Robert S. Brown    
    Robert S. Brown   
    Senior Vice President and Chief Financial Officer