EXHIBIT 10.12
EMPLOYMENT AGREEMENT
PARTIES
On September 1, 2000, PolyMedica Corporation, a Massachusetts
corporation having its principal place of business at 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (the "Company") and Xxxxxx X. Xxxxxxxxx, Ph.D., an
individual with an address at 0000 Xxxx Xxxxx Xxx, Xxxxxxx, Xxxxxxx 00000
("Employee"), entered into an Executive Employment Agreement. The Employment
Agreement was thereafter amended by the Company and Employee on April 1, 2001
and thereafter amended again on June 8, 2001, May 31, 2002, and July 15, 2002
(hereafter jointly referred to as the Amended Executive Employment Agreement").
The Company and Employee now both desire to plan for the retirement of Employee
and the transition of his duties upon his retirement. As such, the Company and
Employee hereby replace the Amended Executive Employment Agreement with this new
Employment Agreement (this "Agreement") that will become effective and supersede
the Amended Executive Employment Agreement on November 5, 2003.
TERMS OF AGREEMENT
In consideration of this Agreement and the employment and/or continued
employment of the Employee by the Company, the parties agree as follows:
1. Employment. The Company hereby employs Employee to act as a
Senior Advisor 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. Employee
hereby accepts said employment. Employee 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 best business judgment, skill and
knowledge to the performance of his duties and responsibilities hereunder.
Employee 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. It is expected that Employee shall discharge substantially all of
his duties from Florida. Nothing contained herein shall preclude Employee from
devoting time to activities other than the business of the Company which are not
inconsistent with the terms and conditions of this Agreement and the best
interests of the Company.
2. Term of Employment. The Company agrees to employ the Employee
through March 31, 2004 (the "Employment Period") subject to the provisions of
Section 4 of this Agreement. Employee agrees to execute and deliver to the
Company a letter of resignation as an employee of the Company on or before March
31, 2004, in the
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form appended hereto as Exhibit A. Such resignation is to be effective the close
of business on March 31, 2004, so long as the Company has discharged its
obligations under this Employment Agreement.
3. Compensation and Benefits; Death of Employee.
3.1. Salary. During the Employment Period, the Company
shall pay Employee Thirty-four Thousand Seven Hundred and Fifty Dollars
($34,750.00) per month ("Base Salary") pursuant to the Company's customary
payroll policies in force at the time of payment (but in no event less
frequently than monthly), less all required and authorized payroll deductions
and state and federal withholdings.
3.2. Bonus Payment. Employee shall receive a guaranteed
bonus payment for his work during FY 2004 in the amount of Six Hundred Thousand
Dollars ($600,000.00) payable as follows: Three Hundred Thousand Dollars
($300,00.00) on the effective date of this Agreement; One Hundred Fifty Thousand
Dollars ($150,000.00) on or before December 31, 2003; and One Hundred Fifty
Thousand Dollars ($150,000.00) on or before April 1, 2004.
3.3. Benefits. During the Employment Period, Employee
shall be entitled to participate in all benefit programs that the Company
establishes and makes available to its other 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.
(b) Life Insurance. Life insurance on the life of
Employee in the amount of Six Hundred Twenty-Five Thousand and Five Hundred
Dollars ($625,500.00).
(c) Stock Based Compensation. Employee will be eligible
to participate in the Company's Employee Stock Purchase Plan.
(d) Automobile. The Company shall continue to provide
Employee with the automobile he is currently using until the earlier of the end
of the vehicle lease or March 31, 2004.
3.5. Death of Employee. The salary and bonus described in
paragraphs 3.1 and 3.2 shall immediately become due if Employee dies before
March 31, 2004, and shall be paid to his estate.
3.6. Change of Control. If at any time prior to March 31,
2004, there is a "Change of Control" as defined in the Executive Retention
Agreement dated September 1, 2000, between the Employee and the Company
("Executive Retention Agreement"), and if by operation of the Executive
Retention Agreement, Employee becomes entitled to compensation as set forth in
paragraph 4.2(a) thereof, then the Employee's employment with the Company
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shall be governed by the terms and conditions of the Executive Retention
Agreement, and Employee shall not be entitled to the compensation and benefits
provided for in this Section 3.
3.7 Severance Pay and Benefits. The parties have entered
into a Severance Agreement, a copy of which is appended hereto as Exhibit B. The
parties intend for the Severance Agreement to take effect at the conclusion of
the Employment Period so long as Employee executes and delivers, and does not
timely revoke, the General Release of Claims appended to the Severance Agreement
at Exhibit 1. Notwithstanding the foregoing, the Company's obligations under
this Section 3.7 shall cease immediately upon the payment to the Employee of the
lump-sum payment described in Section 4.2(a)(i) of the Executive Retention
Agreement.
3.8 Consulting Agreement. The Company desires that
Employee provide valuable services to the Company from time to time after his
employment with the Company ends, and Employee has agreed to provide such
services. The parties have therefore agreed that on April 5, 2004, they will
enter into the Consulting Agreement appended hereto as Exhibit C.
4. Discharge for Cause. The Company may discharge Employee 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) Indictment or conviction (or the entry of a pleading of
guilty or nolo contendere by Employee) of a fraud or felony or any criminal
offense involving dishonesty, breach of trust or moral turpitude during
Employee's employment. If Employee is indicted for an offense listed in the
preceding sentence which is alleged to have occurred during Employee's
employment, the Company shall have the right to withhold any further salary or
bonus payments to Employee otherwise required under this Agreement. However, if
Employee is not convicted or does not plead guilty or nolo contendere to such an
indictment, the Company shall forthwith pay him all salary and bonus so
withheld, together with interest at the rate of five percent (5%) per annum.
(b) Employee's breach of his Agreement Not to Compete and/or
his Confidentiality and Proprietary Information Agreement, each dated May 16,
1990 (or under any similar later agreements with the Company); provided,
however, that if the Company reasonably believes that Employee may have breached
either of such agreements, it shall so inform Employee in writing, providing the
factual basis for that belief, and give him twenty-one (21) days to cure his
alleged breach. If Employee contests the Company's assertion, or if he shall
seek to cure his alleged breach, no final determination shall be made except by
the Company's Board of Directors after Employee shall have had an opportunity
orally and in writing to present his position to the Board.
(c) In the event the Company exercises its right to terminate
Employee's employment under this Section 4, Employee shall not be entitled to
receive any salary or bonus not already paid to him and he shall not be entitled
to any compensation or benefits under the Executive Retention Agreement or the
Consulting Agreement;
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provided, however, that if the last sentence of Section 4(a) of this Agreement
shall apply, he shall be entitled to salary and bonus (with interest) as
described in that sentence and he shall be entitled to compensation and
benefits, if any, to which he otherwise would have been entitled under the
Executive Retention Agreement.
5. Expenses. Pursuant to the Company's customary policies in
force at the time of payment, Employee shall be promptly reimbursed for business
related expenses.
6. Announcement of Employee's Retirement. The Company and
Employee shall jointly draft a statement announcing Employee's retirement from
the Company effective April 1, 2004, which announcement shall be publicly
released at a mutually agreeable time and will describe Employee's role as a
Senior Advisor to the Company during the Employment Period.
7. Agreement Not to Compete. Employee acknowledges and reaffirms
his obligations under the Agreement Not to Compete and the Confidentiality and
Proprietary Information Agreement, which he executed on dated May 16, 1990 (or
under any similar later agreements) with the Company (the "Additional
Agreements"), which shall survive the termination of this Agreement.
8. Arbitration. The Employee agrees that any dispute or
controversy arising out of or relating in any way to the Employee'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 at 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. Attorneys' Fees. The Company agrees to reimburse Employee for
the attorneys' fees and expenses incurred by him in connection with the
preparation of this Agreement, including the exhibits hereto, up to a maximum of
Twenty Thousand Dollars ($20,000.00), within 30 days after presentation to the
Company of invoices
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reflecting such fees and expenses. The Company further agrees that any
reasonable attorneys' fees and expenses incurred by Employee in connection with
a dispute regarding this Agreement, or any agreements executed simultaneously
herewith, shall be reimbursed to the extent and only in proportion to the
claim(s) on which the Employee prevails in the dispute.
11. Miscellaneous.
11.1. 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 Employee's
or the Company's obligations under the Additional Agreements.
11.2 Amendment; Waiver. This Agreement may not be amended,
supplemented, cancelled or discharged, except by written instrument executed by
the parties. 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.
11.3. 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.
Employee's rights or obligations under this Agreement may not be assigned by
Employee, except that Employee's right to compensation to the earlier of date of
death or termination of actual employment shall pass to Employee's executor or
administrator.
11.4. Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
11.5. Applicable Law. This Agreement shall be interpreted
and construed according to the laws of the Commonwealth of Massachusetts,
without regard to conflict of laws provisions. Employee 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 Agreement or the subject matter hereof.
11.6 Other Agreements. Employee 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. Employee further
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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.
11.7. 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.
11.8. 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 executed this Agreement as a sealed instrument as of the
date first above written, whereupon it becomes binding in accordance with its
terms.
POLYMEDICA CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Title: Lead Director and Interim CEO
Date: November 5, 2003
AGREED TO AND ACCEPTED:
/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
November 5, 2003
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Date
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