EX-10.1 EMPLOYMENT AGREEMENT DATED SEPT 27, 2004



 





Exhibit 10.1



EXECUTIVE EMPLOYMENT AGREEMENT




PARTIES




     This Employment Agreement (this “Agreement”) is entered into between
PolyMedica Corporation, a Massachusetts corporation having its principal place
of business at 11 State Street, Woburn, Massachusetts 01801 (the “Company”
(which term shall include the Company’s subsidiaries and affiliated entities))
and Patrick T. Ryan, an individual with an address at 686 Hale Street, Beverly
Farms, MA 01915 (the “Executive”).



TERMS OF AGREEMENT




     In consideration of this Agreement and the employment of the Executive by
the Company, the parties agree as follows:



     1. Employment.



          1.1 The Company hereby employs Executive, on a full-time basis, as
President and Chief Executive Officer of the Company. Executive’s principal
office will be located in eastern Massachusetts, unless Executive agrees to
relocate to another location. 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 Board of Directors (the “Board”) of the
Company.



          1.2 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.



          1.3 Executive may serve on the Boards of Directors of other entities,
provided that such service does not interfere with the performance of his
duties on behalf of the Company under this Agreement and Executive obtains
prior approval from the Company’s Board of Directors.



     2. Term of Employment. The Company agrees to employ the Executive for a
twelve (12) month period commencing on the Employment Date (the “Employment
Period”). Notwithstanding the foregoing, the Company shall have the right to
terminate the Executive’s employment under this Agreement upon sixty (60) days’
written notice to Executive, subject to the Company’s obligation to pay
severance benefits as provided in Section 3.7 and the Executive shall have the
right to terminate his employment under this Agreement upon one-hundred and
eighty (180) days’ written notice to the Company. 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 continue on a
month-to-month basis (the “Extended Employment Period”).



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     3. Compensation and Benefits; Disability.



          3.1 Stock Option. On the Employment Date, the Company shall grant to
Executive a stock option for 450,000 shares of the Company’s Common Stock, at
the closing price of such stock on the date of grant as reported by the NASDAQ
National Market. Such option shall “vest” and become exercisable as to 25% of
the original number of shares subject to such option on the 1st anniversary of
the grant date, with the remaining option shares becoming exercisable at the
rate of 6.25% of the original number of shares subject to such option on each
December 31st, March 31st, June 30th, and September 30th thereafter until such
option is fully vested and shall have such other terms as are in the Company’s
standard form of Stock Option Agreement.



          3.2 Salary.



               (a) During the Employment Period, the Company shall pay Executive an
annualized base salary of $650,000 (“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 all
required and authorized payroll deductions and state and federal withholdings.
Executive’s Base Salary shall be reviewed annually.



          3.3 Bonus Payment. During the Employment Period, Executive may receive,
in the sole discretion of the Compensation Committee, an annual bonus payment,
if any, to be determined by the Compensation Committee.



          3.4 Executive Benefits. During the Employment Period, 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; and



               (c) Stock Based Compensation. Executive will be eligible to participate
in the Company’s Employee Stock Purchase Plan as set forth in said plan and,
for the period after April 1, 2005, 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.



          3.5 Vacation. During the Employment Period, Executive may take six 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.



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          3.6 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 or federal 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 Executive’s Employment under 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 Employee 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.



          3.7 Severance Pay. In the event that the Company terminates Executive’s
Employment under this Agreement without cause (i.e. other than pursuant to
Section 3.6 or Section 4 hereof) at any time (including during the Extended
Employment Period) or does not renew or extend the Executive’s Employment under
this Agreement without cause (i.e. other than consistent with Section 3.6 or
Section 4 hereof), 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 twenty-four (24)
months, 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. Notwithstanding the foregoing, the
Company’s obligations under this Section 3.7 shall cease immediately upon the
payment by the Company to the Executive of the lump sum payment described in
Section 4.2(a)(i) of the Executive Retention Agreement, dated as of the date
hereof by and between the Company and the Executive.



          3.8 Benefits During Severance Period. Except as otherwise required by
law, the Executive shall not be entitled to any employee benefits provided
under Section 3.4 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 3.4(b) for a period of twenty-four (24)
months 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 eighteen (18) months 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 and at that time, the Company’s
obligations pursuant to this Section 3.8, if any, shall cease.



     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:



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               (a) a good faith finding by the Board of Directors of any of the
following: failure of the Executive to perform his assigned duties for the
Company, 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) a good faith finding by the Board of Directors of a breach of any
material provision of the Company’s Code of Conduct or other policies and
procedures; provided that the breach is not cured within 10 days after a
written demand for cure is received by the Executive from the Board of
Directors of the Company which specifically identifies the manner in which the
Board of Directors believes the Executive has breached a material provision of
the Company’s Code of Conduct or other policies and procedures; or



               (c) 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 employment;.



     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.



     In the event that the Company terminates Executive’s employment without
cause but the Board of Directors determines subsequently that the Company had
the right to terminate his employment pursuant to this Section 4, the Company
may terminate the payment of all amounts to Executive pursuant to Sections 3.7
and 3.8, Executive shall return all previous payments made to him pursuant to
such Sections and any options held by him but not yet exercised shall cease to
be exercisable.



     5. Termination Without Cause. The Company may terminate Executive’s
Employment under this Agreement without cause without further liability to the
Company except as set forth in Section 3.7 and 3.8.



     6. Expenses. Pursuant to the Company’s customary policies in force at the
time of payment, Executive shall be promptly reimbursed for business related
expenses.



     7. Agreement Not to Compete and Invention and Non-Disclosure Agreement.
Executive acknowledges that he has executed contemporaneously with this
Agreement a Non-Competition and Non-Solicitation Agreement and an Invention and
Non-Disclosure Agreement with the Company (the “Additional Agreements”).
Executive acknowledges that the Additional Agreements, once executed, will
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
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



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any arbitration pursuant to this paragraph; provided that Executive will
be reimbursed for his attorneys’ fees if he prevails. Further 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, and no such dispute or
controversy shall be deemed to be arbitrable in the absence of the Company’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.



          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 Agreement or the subject matter hereof.



          10.6 Other Agreements. Executive has provided the Company with a copy of
any and all restrictive covenants and agreements that he is bound by with any
previous employer or other party to refrain from using or disclosing any trade
secret or confidential or proprietary



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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 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 hereof execute this Agreement as a sealed instrument,
whereupon it becomes binding in accordance with its terms.



	 	 	 	 	 
	 	 	POLYMEDICA CORPORATION
	 
	 	 	 	 
	 	 	/s/ Samuel L. Shanaman



By: Samuel L. Shanaman
	 	 	Title: Chairman
	 
	 	 	 	 
	

	 	Date:
	 	September 27, 2004
	

	 	 	 	
 







	 	 	 
	AGREED TO AND ACCEPTED:
	 
	 	 
	/s/ Patrick T. Ryan



Patrick T. Ryan
	 
	 	 
	Date:

	 	September 27, 2004
	

	 	
 








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