1.
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Names
of Reporting Persons
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David
S. Utterberg
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2.
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Check
the Appropriate Box if a Member of a Group (See
Instructions)
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(a)
o
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(b)
o
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3.
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SEC
Use Only
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4.
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Source
of Funds (See
Instructions)
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OO
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5.
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Check
if Disclosure of Legal Proceedings Is Required Pursuant to Items
2(d) or
2(e)
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o
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6.
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Citizenship
or Place of Organization
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United
States
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Number
of
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7.
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Sole
Voting Power
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8,521,315*
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Shares
Bene-
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ficially
Owned
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8.
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Shared
Voting Power
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0
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By
Each
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Reporting
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9.
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Sole
Dispositive Power
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8,521,315*
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Person
With
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10.
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Shared
Dispositive Power
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0
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11.
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Aggregate
Amount Beneficially Owned by Each Reporting Person
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8,521,315*
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12.
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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o
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13.
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Percent
of Class Represented by Amount in Row (11)
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23.3%*
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14.
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Type
of Reporting Person (See
Instructions)
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IN
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*
Includes (i) an option to purchase 1,497 shares of Common Stock at an exercise
price of $0.34 per share, which option is immediately exercisable as of the
date
hereof and expires on November 1, 2008 (the “2008
Option”),
(ii)
an option to purchase 12,000 shares of Common Stock at an exercise price
of
$12.59 per share, which option is immediately exercisable as of the date
hereof
and expires on December 7, 2010 (the “2010
Option”),
(iii)
and option to purchase 14,000 shares of Common Stock at an exercise price
of
$10.83 per share, which option is immediately exercisable as of the date
hereof
and expires May 29, 2011 (the “2011
Option”),
and
(iv) an option to purchase 14,000 shares of Common Stock at an exercise price
of
$12.20 per share, which option is immediately exercisable as of the date
hereof
and expires May 29, 2012 (the “2012
Option,”
collectively with the 2008 Option, the 2010 Option and the 2011 Option, the
“Options”).
Item
1. Security and Issuer
This
statement on Schedule 13D (this “Statement”)
relates to the common stock, par value $0.001 per share (the “Common
Stock”),
of
NxStage Medical, Inc. (the “Company”).
The
principal executive offices of the Company are located at 439 South Union
Street, 5th
Floor,
Lawrence, Massachusetts 01843.
Item
2.
Identity and Background
(a) This
Statement is filed by David S. Utterberg.
(b) The
business address of Mr. Utterberg is 701 Pike Street, #1625, Seattle, Washington
98101.
(c) Mr.
Utterberg’s present principal occupation is President of DSU Medical
Corporation. The principal business of DSU Medical Corporation is patent
development and licensing. The present address of DSU Medical Corporation
is 101
Convention Center Drive, Suite 850, Las Vegas, Nevada 89109.
(d)-(e) During
the last five years, Mr. Utterberg has neither been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) nor been
a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding
any
violation with respect to such laws.
(f) Mr.
Utterberg is a citizen of the United States.
Item
3. |
Source
and Amount of Funds or Other
Consideration
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As
more
fully described under Item 4 below, on October 1, 2007 pursuant to the Stock
Purchase Agreement (as defined below), the Company acquired from Mr. Utterberg
(x) all of the issued and outstanding shares of each of Medisystems Services
Corporation and Medisystems Corporation, (y) 90% of the issued and outstanding
shares of Medisystems Europe S.p.A. (the remaining equity of which is held
by
Medisystems Corporation) and (z) 0.273% of the issued and outstanding equity
participation of Medimexico s. de R.L. de C.V. (the remaining equity of which
is
held by Medisystems Corporation), and Mr. Utterberg acquired 6,500,000 shares
of
Common Stock (the “Purchased
Shares”).
In
addition, as more fully described under Item 4 below, on September 28, 2007
pursuant to the Company’s non-employee director compensation policy (the
“Director
Compensation Policy”),
Mr.
Utterberg received 500 shares of Common Stock as director compensation in
lieu
of cash compensation payable to non-employee directors of the Company. Mr.
Utterberg is a non-employee member of the board of directors of the Company,
and
pursuant to the Director Compensation Policy, non-employee directors are
entitled to certain cash compensation and may elect to receive shares of
Common
Stock in lieu of cash compensation payable pursuant to the Director Compensation
Policy. Payments of Common Stock in lieu of cash compensation are made quarterly
in the amount of the total cash compensation earned by a non-employee director
during such quarter divided
by
the
closing price of the Common Stock on the last day of the quarter. The closing
price of a share of Common Stock on September 28, 2007, the last trading
day of
the quarter, was $14.49.
Item
4. |
Purpose
of Transaction
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Stock
Purchase Agreement
Mr.
Utterberg and the Company are parties to a Stock Purchase Agreement dated
as of
June 4, 2007 between the Company and Mr. Utterberg, which was amended by
an
Amendment No. 1 to the Stock Purchase Agreement, dated as of August 27, 2007,
by
the Company and Mr. Utterberg (such agreement, as so amended, the “Stock
Purchase Agreement”).
On
October 1, 2007 pursuant to the Stock Purchase Agreement, Mr. Utterberg acquired
the Purchased Shares in consideration for the Company’s acquisition of Mr.
Utterberg’s interest in Medisystems Services Corporation, Medisystems
Corporation, Medisystems Europe S.p.A, and Medimexico s. de R.L. de C.V.
The
Stock
Purchase Agreement includes certain agreements between Mr. Utterberg and
the
Company with respect to the Purchased Shares as described below.
Restriction
on Resale
Mr.
Utterberg has agreed in the Stock Purchase Agreement to certain resale
restrictions on the Purchased Shares. Notably, he may not sell or otherwise
dispose of any Purchased Shares in short sales or in trades to a single party
exceeding 250,000 Purchased Shares, without the Company’s prior written consent.
These restrictions will apply to the Purchased Shares until the earlier of
(x) a
change in control of the Company and (y) October 1, 2009.
Registration
Rights
Pursuant
to the Stock Purchase Agreement, Mr. Utterberg has “piggyback” registration
rights if the Company proposes to register shares of its Common Stock under
the
Securities Act of 1933, as amended (the “Securities
Act”).
The
Company will provide Mr. Utterberg with notice of a registration of its shares
and provide Mr. Utterberg with the opportunity to include the Purchased Shares
in the registration, subject to certain cut back and lock-up restrictions.
In
addition, the Company has agreed in the Stock Purchase Agreement to register
for
resale the Purchased Shares in the event that Mr. Utterberg ceases to be
an
affiliate of the Company prior to the time the holding period under Rule
144(k)
under the Securities Act lapses as to the Purchased Shares; provided,
however,
the
Company shall not be required to file any registration statement for this
purpose prior to October 1, 2008, which is the first anniversary of the closing
date of the acquisition of the Purchased Shares pursuant to the Stock Purchase
Agreement.
Standstill
and Voting Agreement
Pursuant
to the Stock Purchase Agreement, Mr. Utterberg agreed that from October 1,
2007
and until the earlier of (x) October 1, 2009 and (y) a change in control
of the
Company, except with the prior consent of the Company’s board of directors, he
will not, and will not permit any entity owned or controlled directly or
indirectly by him, to:
(i)
acquire
or agree or offer to acquire any shares of Common Stock, or any other securities
convertible into, or any options, warrants or rights to acquire any shares
of
Common Stock or any assets of the Company (other than property acquired in
the
ordinary course of business) from the Company or any other person or entity;
(ii)
“solicit”
or propose to “solicit” or participate in any “solicitation” of any, “proxy” (as
such term is defined in Regulation 14A under the Securities Exchange Act
of
1934, as amended (the “Exchange
Act”))
from
any holder of shares of Common Stock, become a “participant” in a “solicitation”
in opposition to any matter that has been recommended by a majority of the
members of the Company’s board of directors, propose or otherwise solicit
stockholders of the Company for approval of any stockholder proposal or
otherwise seek to influence or control the management or policies of the
Company
in his capacity as a stockholder of the Company;
(iii) nominate
for election as a director of the Company, or vote his Purchased Shares for
election as a director of the Company, any person who is not nominated by
the
then incumbent directors of the Company;
(iv)
vote
his
Purchased Shares against any proposal or matter recommended by a majority
of the
members of the Company’s board of directors for approval by the stockholders of
the Company;
(v)
take
any
action to form, join in or in any way participate in any partnership, limited
partnership or other Group (as such term is defined under the Exchange Act)
with
respect to shares of Common Stock; or
(vi)
assist
or
announce his intention to assist any other person or entity in doing any
of the
foregoing.
Nomination
of Director of the Company
Pursuant
to the Stock Purchase Agreement, if Mr. Utterberg ceases to serve as a director
to the Company, he may nominate an individual for election as a director
of the
Company, and the Company has agreed that the Company’s board of directors will
nominate Mr. Utterberg’s nominee for election and recommend that Mr. Utterberg’s
nominee be elected if certain conditions are met. This provision of the Stock
Purchase Agreement shall terminate upon a change in control of the
Company.
Indemnification
under the Stock Purchase Agreement and the Consulting
Agreement
The
Stock
Purchase Agreement and the Consulting Agreement dated as of October 1, 2007
(the
“Consulting
Agreement”)
among
the Company, DSU Medical Corporation and Mr. Utterberg require Mr. Utterberg
and
the Company to indemnify each other in the event of certain breaches and
failures under such agreements. Subject to certain limited exceptions, each
party’s aggregate indemnification liability under the Stock Purchase Agreement
is limited to a maximum amount equal to 50% of the Closing Value of the
Purchased Shares (as defined in the Stock Purchase Agreement), minus $1,250,000.
Under the Consulting Agreement, each of the Company’s and Mr. Utterberg’s
aggregate indemnification liability is limited to the total amount of the
consulting fees payable by the Company pursuant to the Consulting Agreement,
subject to certain exceptions. The Stock Purchase Agreement and the Consulting
Agreement further provide that any amounts payable by either party in connection
with any such indemnification claim be paid by delivery of additional shares
of
Common Stock, valued at the time of payment pursuant to the Stock Purchase
Agreement. However, the Company will not be required to issue shares for
indemnification purposes that in the aggregate would exceed 20% of the then
outstanding shares of Common Stock without stockholder approval. Any shares
issued by the Company for indemnification purposes will not be registered
under
the Securities Act.
Escrow
Agreement
In
connection with, and as a condition to, the closing of the transactions
contemplated by the Stock Purchase Agreement, on October 1, 2007, the Company,
Mr. Utterberg and Computershare Services, Inc. (the “Escrow
Agent”)
executed and delivered an Escrow Agreement dated as of October 1, 2007 (the
“Escrow
Agreement”)
among
the Company, Mr. Utterberg and the Escrow Agent, and 1,000,000 of the Purchased
Shares were placed into escrow (the “Escrow
Fund”)
pursuant to the Escrow Agreement to cover potential indemnification claims
the
Company may have against Mr. Utterberg under the Stock Purchase Agreement
and to
satisfy any purchase price adjustments following the closing of the purchase
of
the Purchased Shares. The Escrow Fund will have a duration of two years
following the closing date of the purchase of the Purchased Shares pursuant
to
the Stock Purchase Agreement, with 500,000 of the escrowed Purchased Shares
to
be released after the first year less any escrowed shares previously released
to
the Company pursuant to Section 1(a), 1(b) or 1(c) of the Escrow Agreement
and
any Initial Retained Shares (as defined in the Escrow Agreement).
Director
Compensation Policy
Under
the
Director Compensation Policy, the Company’s non-employee directors receive:
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a
$15,000 annual retainer for their service as directors, to be
paid
quarterly in advance;
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$2,500
for each board meeting attended by the director in person, $1,000
for each
board meeting attended by telephone and $1,000 for each committee
meeting
attended where the committee meeting is scheduled on a date other
than a
board meeting;
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if
he or she is a member of the Company’s Audit Committee, an additional
annual retainer of $6,000 (or $10,000 for the Audit Committee
Chairperson), paid quarterly in advance;
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· |
if
he or she is a member of any committee other than the Company’s Audit
Committee, an additional annual retainer of $4,000 for each other
committee, paid quarterly in advance;
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expense
reimbursement for attending board of directors and committee meetings;
and
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on
the date of the Company’s annual meeting of stockholders at which such
non-employee director is elected, a fully vested stock option to
purchase
14,000 shares of Common Stock with an exercise price equal to the
then
fair market value of the Common Stock, as determined by the closing
price
of Common Stock on the date of the grant. For a director elected
or
otherwise appointed to the Company’s board of directors on a date other
than the date of an annual meeting of stockholders, such director
will
receive a fully vested stock option to purchase 14,000 shares of
Common
Stock pro-rated for the period between the date he or she is first
elected
to the Company’s board of directors and the following May 31.
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No
director shall receive more than $50,000 in any calendar year for board fees,
without the prior approval of the Compensation Committee of the Company’s board
of directors.
The
Director Compensation Policy further provides that non-employee directors
may
elect to receive shares of Common Stock in lieu of the cash compensation
described above. A director must make his election to receive equity in lieu
of
cash compensation on the date of the annual meeting of stockholders at which
such director is elected. A director’s election to receive equity in lieu of
cash compensation will apply to all compensation to be paid after the date
of
election and will remain in effect until the next annual meeting of
stockholders. If a non-employee director elects to receive equity in lieu
of
cash, the Company will issue the director shares of Common Stock on the last
business day of each calendar quarter in an amount equal to the quotient
of the
total cash consideration due as of the last business day of each calendar
quarter and the closing price of Common Stock on the last trading day of
that
quarter.
Mr.
Utterberg is a non-employee member of the board of directors of the Company,
and
he has elected to receive shares of Common Stock in lieu of cash compensation
for his service on the Company’s board of directors.
The
preceding description of each of the provisions of the Stock Purchase Agreement,
the Consulting Agreement, the Escrow Agreement and the Director Compensation
Policy is a summary only and is qualified in its entirety by reference to
the
summaries and descriptions thereof contained in the Company’s Proxy Statement
dated September 11, 2007 on Schedule 14A filed with the Securities and Exchange
Commission (the “SEC”)
on
September 12, 2007 and the Company’s Current Report on Form 8-K filed with the
SEC on October 4, 2007 and the copies of the Stock Purchase Agreement, the
Escrow Agreement and the Director Compensation Policy filed as exhibits to
this
Statement and incorporated herein by this reference.
Mr.
Utterberg acquired the securities of the Company described in this Item 4
for
investment purposes. Mr. Utterberg reserves the right to purchase or otherwise
acquire additional shares of Common Stock and other securities of the Company,
including, without limitation, pursuant to his indemnification rights under
the
Stock Purchase Agreement and the Consulting Agreement and pursuant to the
Director Compensation Policy, either separately or together with other persons,
to sell all or some of the shares of Common Stock and other securities of
the
Company beneficially owned by him, or to otherwise trade in the shares of
Common
Stock and other securities of the Company, in open market or private
transactions.
Except
as
described above, Mr. Utterberg does not have any current plans or proposals
which relate to or would result in:
(a) the
acquisition by any person of additional securities of the Company, or the
disposition of securities of the Company;
(b) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries;
(c) a
sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries;
(d) any
change in the board of directors or management of the Company, including
any
plans or proposals to change the number or term of directors or to fill any
existing vacancies on the board;
(e) any
material change in the present capitalization or dividend policy of the
Company;
(f) any
other
material change in the Company’s business or corporate structure;
(g) changes
in the Company’s charter, bylaws or instruments corresponding thereto or other
actions which may impede the acquisition of control of the Company by any
person;
(h) causing
a
class of securities of the Company to be delisted from a national securities
exchange or cease to be authorized to be quoted in an inter-dealer quotation
system of registered national securities association;
(i) a
class
of equity securities of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act; or
(j) any
action similar to those numerated in clauses (a)-(i) above.
Item
5. |
Interest
in Securities of the
Issuer
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(a) Mr.
Utterberg may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be
the
beneficial owner of 8,521,315 shares of Common Stock (which includes 41,497
shares of Common Stock issuable upon exercise by Mr. Utterberg of the Options),
which constitute approximately 23.3% of the issued and outstanding shares
of
Common Stock.*
*The
number of shares of Common Stock beneficially owned by, and the percentage
of
outstanding shares of Common Stock represented thereby for, Mr. Utterberg
have
been computed in accordance with Rule 13d-3 under the Exchange Act. The
percentage of ownership described above is based on an aggregate of 36,583,630
shares of Common Stock, which consists of (i) 30,041,633 shares of Common
Stock
issued and outstanding as of September 10, 2007, as reported in the Company’s
Proxy Statement dated September 11, 2007 on Schedule 14A filed with the SEC
on
September 12, 2007, (ii) 6,500,000 Purchased Shares issued and sold by the
Company to Mr. Utterberg on October 1, 2007 pursuant to the Stock Purchase
Agreement, (iii) 500 shares of Common Stock issued to Mr. Utterberg on September
28, 2007 pursuant to the Director Compensation Policy and (iv) 41,497 shares
of
Common Stock issuable upon exercise of the Options.
(b) Mr.
Utterberg has the sole power to dispose of or direct the disposition of,
and the
sole power to vote or direct the vote of, 8,521,315 shares of Common Stock,
when, as and if Mr. Utterberg exercises all the Options.
(c) Except
as
described in this Statement, Mr. Utterberg did not engage in any transactions
in
shares of Common Stock during the past 60 days.
(d) Pursuant
to the Escrow Agreement, 1,000,000 of the Purchased Shares were placed into
escrow on October 1, 2007 to cover potential indemnification claims the Company
may have against Mr. Utterberg under the Stock Purchase Agreement and to
satisfy
any purchase price adjustments following the closing of the purchase of the
Purchased Shares. The Escrow Fund will have a duration of two years following
the closing date of the purchase of the Purchased Shares pursuant to the
Stock
Purchase Agreement, with 500,000 of the escrowed Purchased Shares to be released
after the first year less any escrowed shares previously released to the
Company
pursuant to Section 1(a), 1(b) or 1(c) of the Escrow Agreement and any Initial
Retained Shares (as defined in the Escrow Agreement).
Thus,
if
the Company has an indemnifiable claim, or is entitled to purchase price
adjustments, under the Stock Purchase Agreement and the Escrow Agreement
prior
to October 1, 2009, the Company may have the right to receive or the power
to
direct the receipt of dividends from, or the proceeds from the sale of, all
(or
a portion of) the Purchased Shares subject to the Escrow Agreement.
Except
as
set forth in this Item 5(d), no other person has the right to receive or
the
power to direct the receipt of dividends from, or the proceeds from the sale
of,
any shares of Common Stock deemed to be beneficially owned by Mr.
Utterberg.
(e) Not
applicable.
Item
6. |
Contracts,
Arrangements, Understandings or Relationships with Respect to Securities
of the Issuer
|
The
information provided in response to Item 4 above is incorporated herein by
reference.
Item
7. |
Material
to be Filed as Exhibits
|
The
exhibits listed on the Index of Exhibits of this Statement are filed herewith
or
incorporated by reference to a previously filed document.
SIGNATURE
After
reasonable inquiry and to the best of the undersigned’s knowledge and belief,
the undersigned certify that the information set forth in this statement
is
true, complete and correct.
Dated:
October 11, 2007
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/s/
David S. Utterberg
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David
S. Utterberg
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INDEX
OF EXHIBITS
Exhibit
No.
|
Description
|
|
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1
|
Stock
Purchase Agreement dated as of June 4, 2007 between NxStage Medical,
Inc.
(the “Company”)
and David S. Utterberg (the “Stock
Purchase Agreement”)
(previously filed as Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q filed with the SEC on August 9, 2007).
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2
|
Amendment
No. 1 to the Stock Purchase Agreement, dated as of August 27,
2007, by the
Company and David S. Utterberg (included as part of Annex
A
to
the Company’s Proxy Statement dated September 11, 2007 on
Schedule 14A filed with the SEC on September 12, 2007).
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3
|
Escrow
Agreement, dated
as of October 1, 2007 among the Company, David S. Utterberg and
Computershare Services, Inc., as escrow agent (previously filed
as Exhibit
10.1 to the Company’s Current Report on Form 8-K filed with the SEC on
October 4, 2007).
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4
|
The
Company’s Director Compensation Policy (previously filed as Exhibit 10.2
to the Company’s Quarterly Report on Form 10-Q filed
with the SEC on May 5, 2006).
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