EXHIBIT 10.28
EMPLOYMENT AGREEMENT
PARTIES
This Employment Agreement (this "Agreement") is entered into by and
between PolyMedica Corporation, a Massachusetts corporation having its principal
place of business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 or any of its
subsidiaries or affiliates (collectively, the "Company") and Xxxx X. Xxxxxxxxx,
III, an individual with an address at 0 Xxxxxxxxx Xxxxx, Xxxxxx, Xxx Xxxxxxxxx
00000 (the "Executive").
TERMS OF AGREEMENT
In consideration of this Agreement and the employment and/or continued
employment of the Executive by the Company, the parties agree as follows:
1. Employment. The Company hereby employs Executive, on a
full-time basis, to act as an executive of the Company and to perform such acts
and duties and furnish such services to the Company as the Company's Chief
Executive Officer or Board of Directors (the "Board") shall from time to time
reasonably direct. Executive hereby accepts said employment. Executive shall use
his best and most diligent efforts to promote the interests of the Company;
shall discharge his duties in a highly competent manner; and shall devote his
full business time and his best business judgment, skill and knowledge to the
performance of his duties and responsibilities hereunder. Executive shall report
directly to the Chief Executive Officer of the Company or such officer of the
Company as may be designated by the Chief Executive Officer or the Board.
Nothing contained herein shall preclude Executive from devoting incidental and
insubstantial amounts of time to activities other than the business of the
Company and which are not inconsistent with the best interests of the Company.
2. Terms of Employment. The Company agrees to employ the
Executive for a twelve (12) month period commencing September 1, 2003 (the
"Employment Period"). Notwithstanding the foregoing, both Executive and the
Company shall have the right to terminate the Executive's employment under this
Agreement upon thirty (30) days' written notice to the other party, subject to
the Company's obligation to pay severance benefits under certain circumstances
as provided in Section 3.6. If Executive shall remain in the employ of the
Company beyond the Employment Period, in the absence of any other express
agreement between the parties, this Agreement shall be deemed to continue on a
month-to-month basis (the "Extended Employment Period").
3. Compensation and Benefits; Disability.
3.1. Salary. During Executive's employment, the Company
shall pay Executive an annualized base salary of $225,000 ("Base Salary")
payable in equal installments pursuant to the Company's customary payroll
policies in force at the time of payment (but in no event less frequently than
monthly), less required payroll deductions and state and federal withholdings.
Executive's Base Salary may be adjusted from time to time in the sole discretion
of the Board or the Compensation Committee of the Board (the "Compensation
Committee") and shall be reviewed annually by the Compensation Committee.
3.2. Bonus Payment. During Executive's employment,
Executive will also be eligible, in the sole discretion of the Compensation
Committee, to receive an annual bonus equal to 50% of his base salary, pro rated
from his date of employment through March 31, 2004.
3.3. Executive Benefits. During Executive's employment,
Executive shall be entitled to participate in all benefit programs that the
Company establishes and makes available to its other executives and employees,
if any, in accordance with the relevant plan documents and requirements,
including but not limited to the following benefits:
(a) Health Insurance. Health and dental insurance; and
(b) Life Insurance. Life insurance on the life of
Executive with an Executive-directed beneficiary in the amount of 150% of
Executive's Base Salary.
(c) Stock Based Compensation. Executives will be eligible
to participate in the Company's Employee Stock Purchase Plan and to be
considered by the Compensation Committee for grants or awards of stock options
or other stock-based compensation under the Company's Stock Incentive Plan or
similar plans from time to time in effect. All such grants or awards shall be
governed by the governing Plan and shall be evidenced by the Company's then
standard form of stock option, restricted stock or other applicable agreement.
3.4. Vacation. Executive may take four (4) weeks of paid
vacation during each year at such times as shall be consistent with the
Company's vacation policies and (in the Company's judgment) with the Company's
vacation schedule for executives and other employees.
3.5. Disability. If during the Employment Period Executive
shall become ill, disabled or otherwise incapacitated so as to be unable to
perform the essential functions of his position with or without reasonable
accommodation, as may be required by state law, (a) for a period in excess of
ninety (90) consecutive days or (b) for more than one hundred-twenty (120) days
in any twelve (12) month period, then the Company shall have the right to
terminate this Agreement, in accordance with applicable laws, on thirty (30)
days' notice to Executive. A determination of disability shall be made by a
physician satisfactory to both the Executive and the Company, provided that if
the Executive and the Company do not agree on a physician, the Executive and the
Company shall each select a physician and these two together shall select a
third physician, whose determination shall be binding on all parties.
3.6. Severance Pay. In the event that the Company
terminates this Agreement without cause (i.e., other than pursuant to Section
3.5 or Section 4 hereof) at any time (including during the Extended Employment
Period), and subject to the Executive's execution and non-revocation of a
severance agreement and release drafted by and satisfactory to counsel for the
Company, the Company shall continue to pay Executive at his then current Base
Salary for the remainder of the Employment Period or for one year, whichever is
longer (the "Severance Period"). Neither party shall be entitled to any
compensation or claim for good will or other loss suffered by reason of
termination of this Agreement.
3.7 Benefits During Severance Period. Except as otherwise
required by law, the Executive shall not be entitled to any employee benefits
provided under Section 3.3 after termination of Executive's employment whether
or not severance pay is being provided, except that if severance pay is being
provided (i) the Company shall continue in full force and effect, at its
expense, the life insurance provided for in Section 3.3(b) for a period of one
(1) year after termination of Executive's employment hereunder or until
Executive becomes employed, whichever first occurs, and (ii) the Company shall
offer, at its expense, continued health and dental insurance as required under
the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") or other
law for a period of one (1) year after termination of Executive's employment
hereunder or until Executive becomes employed, whichever first occurs. If
Executive elects not to maintain health insurance pursuant to COBRA or other
law, the Company is under no obligation to reimburse Executive for his otherwise
elected coverage. Executive shall be obligated to give the Company prompt notice
of his subsequent employment.
4. Discharge for Cause. The Company may discharge Executive and
terminate his employment under this Agreement for cause without further
liability to the Company. As used in this Section 4, "cause" shall mean any or
all of the following:
(a) a good faith finding by the Company of failure of the
Executive to perform his assigned duties for the Company, including but not
limited to dishonesty, gross negligence, misconduct, theft or embezzlement from
the Company, the intentional provision of services to competitors of the
Company, or improper disclosure of proprietary information.
(b) indictment, conviction (or the entry of a pleading of
guilty or nolo contendere by Executive) of a fraud or felony or any criminal
offense involving dishonesty, breach of trust or moral turpitude during
Executive's
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employment;
(c) Executive's breach of any of the agreements executed in
connection herewith as enumerated in Section 10.1.
In the event the Company exercises its right to terminate Executive's
employment under this Section 4, Executive shall not be entitled to receive any
severance pay or other termination benefits.
5. Termination Without Cause. The Company may terminate this
Agreement without cause without further liability to the Company except as set
forth in Section 3.6 and 3.7.
6. Expenses. Pursuant to the Company's customary policies in
force at the time of payment, Executive shall be promptly reimbursed.
7. Agreement Not to Compete and Non-Disclosure Agreement.
Executive acknowledges and reaffirms his obligations under his Non-Competition
and Non-Solicitation Agreement dated May 19, 2003 and his Invention and
Non-Disclosure Agreement dated May 19, 2003, (or under any similar later
agreements) with the Company (the "Additional Agreements"), which shall survive
the termination of this Agreement.
8. Arbitration. The Executive agrees that any dispute or
controversy arising out of or relating in any way to the Executive's employment
with and/or termination from the Company (including, but not limited to, all
claims, demands or actions under any federal, state or local statute or
regulation regarding employment discrimination, and/or all claims, demands or
actions concerning the interpretation, construction, performance or breach of
this Employment Agreement) shall be settled by arbitration held in Boston,
Massachusetts in accordance with the Rules of the American Arbitration
Association, before an arbitrator who shall have experience in the area of the
matter in dispute. (Each party shall bear its own costs and attorneys' fees in
connection with any arbitration pursuant to this paragraph.) Provided, however,
that this paragraph shall not apply to any dispute or controversy arising out of
or relating in any way to the interpretation, construction, performance or
breach of the Additional Agreements referenced in paragraph 7 herein, and no
such dispute or controversy shall be deemed to be arbitrable in the absence of
the Corporation's written agreement.
9. Notices. Any notice or communication given by any party hereto
to the other party or parties shall be in writing and personally delivered or
mailed by certified mail, return receipt requested, postage prepaid, to the
addresses provided above. All notices shall be deemed given when actually
received. Any person entitled to receive notice (or a copy thereof) may
designate in writing, by notice to the others, another address to which notices
to such person shall thereafter be sent.
10. Miscellaneous.
10.1. Entire Agreement. This Agreement contains the entire
understanding of the parties in respect of its subject matter and supersedes all
prior agreements and understandings between the parties with respect to such
subject matter; provided that nothing in this Agreement shall affect Executive's
or the Company's obligations under the Additional Agreements.
10.2 Amendment; Waiver. This Agreement may not be amended,
supplemented, cancelled or discharged, except by written instrument executed by
the party affected thereby. No failure to exercise, and no delay in exercising,
any right, power or privilege hereunder shall operate as a waiver thereof. No
waiver of any breach of any provision of this Agreement shall be deemed to be a
waiver of any preceding or succeeding breach of the same or any other provision.
10.3. Binding Effect; Assignment. The rights and
obligations of this Agreement shall bind and inure to the benefit of any
successor of the Company by reorganization, merger or consolidation, or any
assignee of all or substantially all of the Company's business and properties.
Executive's rights or obligations under this Agreement may not be assigned by
Executive; except that Executive's right to compensation to the earlier of date
of death or termination of actual employment shall pass to Executive's executor
or administrator.
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10.4. Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
10.5. Applicable Law. This Agreement shall be interpreted
and construed by the laws of the Commonwealth of Massachusetts, without regard
to conflict of laws provisions. Executive hereby irrevocably submits and
acknowledges and recognizes the jurisdiction of the courts of the Commonwealth
of Massachusetts, or if appropriate, a federal court located in Massachusetts
(which courts, for purposes of this Agreement, are the only courts of competent
jurisdiction), over any suit, action or other proceeding arising out of, under
or in connection with this letter agreement or the subject matter hereof.
10.6 Other Agreements. Executive hereby represents that he
is not bound by the terms of any agreement with any previous employer or other
party to refrain from using or disclosing any trade secret or confidential or
proprietary information in the course of his employment with the Company, or to
refrain from competing, directly or indirectly, with the business of such
previous employer or any other party. Executive further represents that his
performance of all the terms of this Agreement and as an employee of the Company
does not and will not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by him in confidence or trust prior to
his employment with the Company.
10.7. Further Assurances. Each of the parties agrees to
execute, acknowledge, deliver and perform, or cause to be executed,
acknowledged, delivered or performed, at any time, or from time to time, as the
case may be, all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney and assurances as may be necessary or proper to carry out the
provisions or intent of this Agreement.
10.8. Severability. If any one or more of the terms,
provisions, covenants or restrictions of this Agreement shall be determined by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated. If, moreover, any one or more of the provisions contained in
this Agreement shall for any reason be determined by a court of competent
jurisdiction to be excessively broad as to duration, geographical scope,
activity or subject, it shall be construed by limiting or reducing it so as to
be enforceable to the extent compatible with then applicable law.
EXECUTION
The parties hereby execute this Agreement as a sealed instrument,
whereupon it becomes binding in accordance with its terms.
POLYMEDICA CORPORATION
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Senior Vice President and Chief Financial Officer
AGREED TO AND ACCEPTED:
/s/ Xxxx X. Xxxxxxxxx, III
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Xxxx X. Xxxxxxxxx, III
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