Exhibit 10.1

**EMPLOYMENT AGREEMENT**

**                EMPLOYMENT AGREEMENT**dated as of June 1, 2001 by and between **PACE MEDICAL, INC.**, a Massachusettscorporation with a usual place of business at 391 Totten Pond Road, Waltham,Massachusetts (the "Company"), and **RALPH E.  HANSON** of Arlington, Massachusetts (the"Employee").

**                WHEREAS,**the Companywishes to assure itself of the Employee's services in the capacity and duringthe periods specified herein; and

**                WHEREAS,**theEmployee wishes to enter into an Employment Agreement with the Company upon theterms and conditions set forth herein;

**                NOW THEREFORE,**inconsideration of the mutual covenants and agreements hereinafter set forth, theparties hereto do hereby mutually agree as follows:

**                1.**  The Company hereby employs the Employee andthe Employee hereby accepts employment by the Company for the period June 1,2001 through May 31, 2004, subject to the terms and conditions hereinafter setforth.

**                2.** The Employee will serve the Company as itsPresident and Chief Executive Officer.  Nothing contained herein shall limit the right of the Employee toengage in personal investments and other activities to the extent they do notinterfere with the Employee's performance under this Agreement.  The Company shall have no interest in any ofthe benefits generated by any of said investments or other activities.

**                3.** For the services to be rendered by theEmployee under this Agreement, the Company shall pay to the Employee such rateof salary as shall be fixed, from time to time, by the Board of Directors ofthe Company, but in no event less than One Hundred Thirty-nine Thousand Dollars($139,000.00) per year payable in equal installments, such installments to bepaid monthly or more frequently.  TheEmployee shall be entitled to such fringe benefits as are generally madeavailable to employees of the Company and shall be entitled to reimbursement ofall reasonable out-of-pocket expenses actually incurred by him on behalf of theCompany.

**                4.**  During the Employee's period of employment,or at any time thereafter, he will not reveal to any person unless authorizedin writing by the Company, or use against the best interests of the Company anyinformation concerning the Company's inventions, trade secrets, processes andin general any of its business affairs of a confidential nature.****                5.**  The Employee will disclose to the Companyall inventions, discoveries, and improvements which he may make during hisemployment by the Company, whether during working hours or at any other time,and he will, on demand, assign to the Company all of his interests and do anyacts which the Company may consider necessary to secure to it or to itssuccessors or assigns any and all rights relating to such inventions,discoveries, and improvements, including patents in the United States andforeign countries.

**                6.** The Employee agrees that so long as he isemployed by the Company and for a period of six months thereafter, he will notin the United States or Canada, engage in any competitive activities (ashereafter defined) with the Company, or any successor or assign of the Company,nor will he own or control an interest (other than as a holder of anon-controlling investment in a company whose securities are listed on anational stock exchange or quoted in the Nasdaq National Market) in any entitywhich engages or will engage in such competitive activities.  As used herein, "competitiveactivities" shall mean the manufacturer, sale or service of (a) cardiacpacers or (b) any other product or product line manufactured by the Company,sales from which other product or product line constitute 25% or more of thegross revenues of the Company during its current or any of its preceding twofiscal years.  It is expresslycovenanted and agreed that in the event of breach by the Employee of any of thecovenants herein contained damage suffered by the Company will be extremelydifficult to ascertain and the remedy at law for any breach or threatenedbreach will be by its nature inadequate; therefore, in the event of breach, inaddition to such other remedies which may be provided by law, the Company (orany successor to the Company) shall be entitled to injunctive and otherappropriate equitable relief and shall be entitled to the same in any court ofcompetent jurisdiction.

**                7.** This Agreement shall be binding upon andinure to the benefit of the parties hereto, their heirs, successors and assignsincluding without limitation any successor who acquires all or substantiallyall of the assets of the Company.

 

**                IN WITNESS WHEREOF,**the parties hereto have signed this Agreement as of the day and year firstabove written.

 
 **PACE MEDICAL, INC.**     By: /s/  Drusilla F. Hays Drusilla F.  Hays, Vice President     /s/ Ralph E.  Hanson Ralph E.  Hanson - Employee
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