Document:

EX-10.2 RETENTION AGREEMENT DATED SEPT 27, 2004

 

Exhibit 10.2

PolyMedica Corporation

Executive Retention Agreement

     THIS EXECUTIVE RETENTION AGREEMENT by and between PolyMedica Corporation,
a Massachusetts corporation (the “Company”), and Patrick T. Ryan (the
“Executive”) is made as of September 27, 2004 (the “Effective Date”).

     WHEREAS, the Company recognizes that, as is the case with many
publicly-held corporations, the possibility of a change in control of the
Company exists and that such possibility, and the uncertainty and questions
which it may raise among key personnel, may result in the departure or
distraction of key personnel to the detriment of the Company and its
stockholders, and

     WHEREAS, the Board of Directors of the Company (the “Board”) has
determined that appropriate steps should be taken to reinforce and encourage
the continued employment and dedication of the Company’s key personnel without
distraction from the possibility of a change in control of the Company and
related events and circumstances.

     NOW, THEREFORE, as an inducement for and in consideration of the Executive
remaining in its employ, the Company agrees that the Executive shall receive
the severance benefits set forth in this Agreement in the event the Executive’s
employment with the Company is terminated under the circumstances described
below subsequent to a Change in Control (as defined in Section 1.1).

     1. Key Definitions.

     As used herein, the following terms shall have the following respective
meanings:

          1.1 “Change in Control” means an event or occurrence set forth in any one
or more of subsections (a) through (d) below (including an event or occurrence
that constitutes a Change in Control under one of such subsections but is
specifically exempted from another such subsection):

               (a) the acquisition by an individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”) of beneficial ownership of any
capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) in excess of 50% of either (i) the then-outstanding shares of
common stock of the Company (the “Outstanding Company Common Stock”) or (ii)
the combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change in
Control: (i) any acquisition directly from the Company (excluding an
acquisition pursuant to the exercise, conversion or exchange of any security
exercisable for, convertible into or exchangeable for common stock or voting
securities of the Company, unless the Person

-1-

 

exercising, converting or exchanging such security acquired such security
directly from the Company or an underwriter or agent of the Company), (ii) any
acquisition by the Company, (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company, or (iv) any acquisition by any corporation pursuant
to a transaction which complies with clauses (i) and (ii) of subsection (c) of
this Section 1.1; or

               (b) such time as the Continuing Directors (as defined below) do not
constitute a majority of the Board (or, if applicable, the Board of Directors
of a successor corporation to the Company), where the term “Continuing
Director” means at any date a member of the Board (i) who was a member of the
Board on the date of the execution of this Agreement or (ii) who was nominated
or elected subsequent to such date by at least a majority of the directors who
were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from this clause (ii)
any individual whose initial assumption of office occurred as a result of an
actual or threatened election contest with respect to the election or removal
of directors or other actual or threatened solicitation of proxies or consents,
by or on behalf of a person other than the Board; or

               (c) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving the Company or a sale or
other disposition of all or substantially all of the assets of the Company in
one or a series of transactions (a “Business Combination”), unless, immediately
following such Business Combination, each of the following two conditions is
satisfied: (i) all or substantially all of the individuals and entities who
were the beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such
Business Combination (which shall include, without limitation, a corporation
which as a result of such transaction owns the Company or substantially all of
the Company’s assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively; and (ii)
no Person (excluding the Acquiring Corporation or any employee benefit plan (or
related trust) maintained or sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly, 20 % or more of the
then outstanding shares of common stock of the Acquiring Corporation, or of the
combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent
that such ownership existed prior to the Business Combination); or

               (d) approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company, other than in a bankruptcy proceeding.

-2-

 

          1.2 “Change in Control Date” means the first date during the Term (as
defined in Section 2) on which a Change in Control occurs. Anything in this
Agreement to the contrary notwithstanding, if (a) a Change in Control occurs,
(b) the Executive’s employment with the Company is terminated prior to the
date on which the Change in Control occurs, and (c) it is reasonably
demonstrated by the Executive that such termination of employment (i) was at
the request of a third party who has taken steps reasonably calculated to
effect a Change in Control or (ii) otherwise arose in connection with or in
anticipation of a Change in Control, then for all purposes of this Agreement
the “Change in Control Date” shall mean the date immediately prior to the date
of such termination of employment.

          1.3 “Cause” means:

               (a) the Executive’s willful and continued failure to substantially perform
his reasonable assigned duties as an officer of the Company (other than any
such failure resulting from incapacity due to physical or mental illness or any
failure after the Executive gives notice of termination for Good Reason), which
failure is not cured within 30 days after a written demand for substantial
performance 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 not substantially performed the
Executive’s duties; or

               (b) the Executive’s willful engagement in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company.

     For purposes of this Section 1.3, no act or failure to act by the
Executive shall be considered “willful” unless it is done, or omitted to be
done, in bad faith and without reasonable belief that the Executive’s action or
omission was in the best interests of the Company.

          1.4 “Good Reason” means the occurrence, without the Executive’s written
consent, of any of the events or circumstances set forth in clauses (a) through
(g) below. Notwithstanding the occurrence of any such event or circumstance,
such occurrence shall not be deemed to constitute Good Reason if, prior to the
Date of Termination specified in the Notice of Termination (each as defined in
Section 3.2(a)) given by the Executive in respect thereof, such event or
circumstance has been fully corrected and the Executive has been reasonably
compensated for any losses or damages resulting therefrom (provided that such
right of correction by the Company shall only apply to the first Notice of
Termination for Good Reason given by the Executive).

               (a) the assignment to the Executive of duties inconsistent in any material
respect with the Executive’s position (including status, offices, titles and
reporting requirements), authority or responsibilities in effect immediately
prior to the earliest to occur of (i) the Change in Control Date, (ii) the date
of the execution by the Company of the initial written agreement or instrument
providing for the Change in Control or (iii) the date of the adoption by the
Board of Directors of a resolution providing for the Change in Control (with
the earliest to occur of such dates referred to herein as the “Measurement
Date”), or any other action or omission by the Company which results in a
material diminution in such position, authority or responsibilities;

-3-

 

               (b) a reduction in the Executive’s annual base salary as in effect on the
Measurement Date or as the same was or may be increased thereafter from time to
time;

               (c) the failure by the Company to (i) continue in effect any material
compensation or benefit plan or program (including without limitation any life
insurance, medical, health and accident or disability plan and any vacation or
automobile program or policy) (a “Benefit Plan”) in which the Executive
participates or which is applicable to the Executive immediately prior to the
Measurement Date, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan or
program, (ii) continue the Executive’s participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable, both
in terms of the amount of benefits provided and the level of the Executive’s
participation relative to other participants, than the basis existing
immediately prior to the Measurement Date or (iii) award cash bonuses to the
Executive in amounts and in a manner substantially consistent with past
practice in light of the Company’s financial performance;

               (d) a change by the Company in the location at which the Executive
performs his principal duties for the Company to a new location that is both
(i) outside a radius of 35 miles from the Executive’s principal residence
immediately prior to the Measurement Date and (ii) more than 20 miles from the
location at which the Executive performed his principal duties for the Company
immediately prior to the Measurement Date; or a requirement by the Company that
the Executive travel on Company business to a substantially greater extent than
required immediately prior to the Measurement Date;

               (e) the failure of the Company to obtain the agreement from any successor
to the Company to assume and agree to perform this Agreement, as required by
Section 6.1;

               (f) a purported termination of the Executive’s employment which is not
effected pursuant to a Notice of Termination satisfying the requirements of
Section 3.2(a); or

               (g) any failure of the Company to pay or provide to the Executive any
portion of the Executive’s compensation or benefits due under any Benefit Plan
within seven days of the date such compensation or benefits are due, or any
material breach by the Company of this Agreement or any employment agreement
with the Executive.

     The Executive’s right to terminate his employment for Good Reason shall
not be affected by his incapacity due to physical or mental illness.

          1.5 “Disability” means the Executive’s absence from the full-time
performance of the Executive’s duties with the Company for 180 consecutive
calendar days as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the Company
or its insurers and acceptable to the Executive or the Executive’s legal
representative.

     2. Term of Agreement. This Agreement, and all rights and obligations of
the parties hereunder, shall take effect upon the Effective Date and shall
expire upon the first to occur of (a) the expiration of the Term (as defined
below) if a Change in Control has not occurred during the

-4-

 

Term, (b) the date 24 months after the Change in Control Date, if the
Executive is still employed by the Company as of such later date, or (c) the
fulfillment by the Company of all of its obligations under Sections 4 and 5.2
if the Executive’s employment with the Company terminates within 24 months
following the Change in Control Date. “Term” shall mean the period commencing
as of the Effective Date and continuing through the second anniversary thereof;
provided, however, that commencing on the date prior to the second anniversary
of the Effective Date and each date prior to all subsequent anniversaries of
the Effective Date hereafter, the Term shall be automatically extended for one
additional year unless, not later than 90 days prior to the scheduled
expiration of the Term (or any extension thereof), the Company shall have given
the Executive written notice that the Term will not be extended.

     3. Employment Status; Termination Following Change in Control.

          3.1 Not an Employment Contract. The Executive acknowledges that this
Agreement does not constitute a contract of employment or impose on the Company
any obligation to retain the Executive as an employee and that this Agreement
does not prevent the Executive from terminating employment at any time. If the
Executive’s employment with the Company terminates for any reason and
subsequently a Change in Control shall occur, the Executive shall not be
entitled to any benefits hereunder except as otherwise provided pursuant to
Section 1.2.

          3.2 Termination of Employment.

               (a) If the Change in Control Date occurs during the Term, any termination
of the Executive’s employment by the Company or by the Executive within 24
months following the Change in Control Date shall be communicated by a written
notice to the other party hereto (the “Notice of Termination”), given in
accordance with Section 7. Any Notice of Termination shall: (i) indicate the
specific termination provision (if any) of this Agreement relied upon by the
party giving such notice, (ii) to the extent applicable, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated and
(iii) specify the Date of Termination (as defined below). The effective date
of an employment termination (the “Date of Termination”) shall be the close of
business on the date specified in the Notice of Termination (which date may not
be less than 15 days or more than 120 days after the date of delivery of such
Notice of Termination), in the case of a termination other than one due to the
Executive’s death, or the date of the Executive’s death, as the case may be.
In the event the Company fails to satisfy the requirements of Section 3.2(a)
regarding a Notice of Termination, the purported termination of the Executive’s
employment pursuant to such Notice of Termination shall not be effective for
purposes of this Agreement.

               (b) The failure by the Executive or the Company to set forth in the Notice
of Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting any such fact or circumstance in enforcing the Executive’s or
the Company’s rights hereunder.

-5-

 

               (c) Any Notice of Termination for Cause given by the Company must be given
within 90 days of the occurrence of the event(s) or circumstance(s) which
constitute(s) Cause. Prior to any Notice of Termination for Cause being given
(and prior to any termination for Cause being effective), the Executive shall
be entitled to a hearing before the Board of Directors of the Company at which
he may, at his election, be represented by counsel and at which he shall have a
reasonable opportunity to be heard. Such hearing shall be held on not less
than 15 days prior written notice to the Executive stating the Board of
Directors’ intention to terminate the Executive for Cause and stating in detail
the particular event(s) or circumstance(s) which the Board of Directors
believes constitutes Cause for termination. Any such Notice of Termination for
Cause must be approved by an affirmative vote of two-thirds of the members of
the Board of Directors.

               (d) Any Notice of Termination for Good Reason given by the Executive must
be given within 90 days of the occurrence of the events(s) or circumstance(s)
which constitute(s) Good Reason.

     4. Benefits to Executive.

          4.1 Stock Acceleration. If the Change in Control Date occurs prior to
April 1, 2005, then, effective upon the Change in Control Date, (a) the first
300,000 outstanding option shares to purchase Common Stock of the Company held
by the Executive shall become immediately exercisable in full and will no
longer be subject to a right of repurchase by the Company, (b) each outstanding
restricted stock award shall be deemed to be fully vested and will no longer be
subject to a right of repurchase by the Company. If the Change in control Date
occurs on or after April 1, 2005, then, effective upon the Change in Control
Date, (a) each outstanding option to purchase shares of Common Stock of the
Company held by the Executive shall become immediately exercisable in full and
will no longer be subject to a right of repurchase by the Company, (b) each
outstanding restricted stock award shall be deemed to be fully vested and will
no longer be subject to a right of repurchase by the Company.

          4.2 Compensation. If the Change in Control Date occurs during the Term
and the Executive’s employment with the Company terminates within 24 months
following the Change in Control Date, the Executive shall be entitled to the
following benefits:

               (a) Termination Without Cause or for Good Reason. If the Executive’s
employment with the Company is terminated by the Company (other than for Cause
or Disability) or by the Executive for Good Reason within 24 months following
the Change in Control Date, then the Executive shall be entitled to the
following benefits:

                    (i) the Company shall pay to the Executive in a lump sum in cash within 30
days after the Date of Termination the aggregate of the following amounts:

                         (1) the sum of (A) the Executive’s base salary through the Date of
Termination, (B) the product of (x) the annual bonus paid or payable (including
any bonus or portion thereof which has been earned but deferred) for the most
recently completed fiscal year and (y) a fraction, the numerator of which is
the number of days in the current fiscal year through the Date of Termination,
and the denominator of which is 365 and (C) the amount

-6-

 

of any compensation previously deferred by the Executive (together with
any accrued interest or earnings thereon) and any accrued vacation pay, in each
case to the extent not previously paid (the sum of the amounts described in
clauses (A), (B), and (C) shall be hereinafter referred to as the “Accrued
Obligations”); and

                         (2) the amount equal to (A) 2.99 multiplied by (B) the sum of (x) the
Executive’s highest annual base salary during the three-year period prior to
the Change in Control Date and (y) the Executive’s average bonus payment over
the three-year period prior to the Change in Control Date.

                    (ii) for 12 months after the Date of Termination, or such longer period as
may be provided by the terms of the appropriate plan, program, practice or
policy, the Company shall continue to provide benefits to the Executive and the
Executive’s family at least equal to those which would have been provided to
them if the Executive’s employment had not been terminated, in accordance with
the applicable Benefit Plans in effect on the Measurement Date or, if more
favorable to the Executive and his family, in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies; provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive a particular type
of benefits (e.g., health insurance benefits) from such employer on terms at
least as favorable to the Executive and his family as those being provided by
the Company, then the Company shall no longer be required to provide those
particular benefits to the Executive and his family;

                    (iii) to the extent not previously paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits required
to be paid or provided or which the Executive is eligible to receive following
the Executive’s termination of employment under any plan, program, policy,
practice, contract or agreement of the Company and its affiliated companies
(such other amounts and benefits shall be hereinafter referred to as the “Other
Benefits”); and

                    (iv) for purposes of determining eligibility (but not the time of
commencement of benefits) of the Executive for retiree benefits to which the
Executive is entitled, the Executive shall be considered to have remained
employed by the Company until 12 months after the Date of Termination.

               (b) Resignation without Good Reason; Termination for Disability. If the
Executive voluntarily terminates his employment with the Company within 24
months following the Change in Control Date, excluding a termination for Good
Reason, or if the Executive’s employment with the Company is terminated by
reason of the Executive’s Disability within 24 months following the Change in
Control Date, then the Company shall (i) pay the Executive (or his estate, if
applicable), in a lump sum in cash within 30 days after the Date of
Termination, the Accrued Obligations and (ii) timely pay or provide to the
Executive the Other Benefits.

               (c) Termination for Cause. If the Company terminates the Executive’s
employment with the Company for Cause within 24 months following the Change in
Control Date, then the Company shall (i) pay the Executive, in a lump sum in
cash within 30 days after

-7-

 

the Date of Termination, the sum of (A) the Executive’s annual base salary
through the Date of Termination and (B) the amount of any compensation
previously deferred by the Executive, in each case to the extent not previously
paid, and (ii) timely pay or provide to the Executive the Other Benefits.

          4.3 Taxes.

               (a) Notwithstanding any other provision of this Agreement, in the event
that the Company undergoes a Change in Ownership or Control (as defined below),
the Company shall not be obligated to provide to the Executive a portion of any
“Contingent Compensation Payments” (as defined below) that the Executive would
otherwise be entitled to receive to the extent necessary to eliminate any
“excess parachute payments” (as defined in Section 280G(b)(1) of the Internal
Revenue Code of 1986, as amended (the “Code”)) for the Executive. For purposes
of this Section 4.3, the Contingent Compensation Payments so eliminated shall
be referred to as the “Eliminated Payments” and the aggregate amount
(determined in accordance with Proposed Treasury Regulation Section 1.280G-1,
Q/A-30 or any successor provision) of the Contingent Compensation Payments so
eliminated shall be referred to as the “Eliminated Amount.”

               (b) For purposes of this Section 4.3, the following terms shall have the
following respective meanings:

                    (i) “Change in Ownership or Control” shall mean a change in the ownership
or effective control of the Company or in the ownership of a substantial
portion of the assets of the Company determined in accordance with Section
280G(b)(2) of the Code.

                    (ii) “Contingent Compensation Payment” shall mean any payment (or benefit)
in the nature of compensation that is made or made available (under this
Agreement or otherwise) to a “disqualified individual” (as defined in Section
280G(c) of the Code) and that is contingent (within the meaning of Section
280G(b)(2)(A)(i) of the Code) on a Change in Ownership or Control of the
Company.

               (c) Any payments or other benefits otherwise due to the Executive
following a Change in Ownership or Control that could reasonably be
characterized (as determined by the Company) as Contingent Compensation
Payments shall not be made until the determination, pursuant to this Section
4.3(c), of which Contingent Compensation Payments shall be treated as
Eliminated Payments. Within 30 days after each date on which the Executive
first becomes entitled to receive (whether or not then due) a Contingent
Compensation Payment relating to such Change in Ownership or Control, the
Company shall determine and notify the Executive (with reasonable detail
regarding the basis for its determinations) (i) which of such payments and
benefits constitute Contingent Compensation Payments and (ii) the Eliminated
Amount. Within 30 days after delivery of such notice to the Executive, the
Executive shall notify the Company which Contingent Compensation Payments, or
portions thereof (the aggregate amount of which, determined in accordance with
Proposed Treasury Regulation Section 1.280G-1, Q/A-30 or any successor
provision, shall be equal to the Eliminated Amount), shall be treated as
Eliminated Payments. In the event that the Executive fails to notify the
Company pursuant to the preceding sentence on or before the required date, the
Contingent

-8-

 

Compensation Payments (or portions thereof) that shall be treated as
Eliminated Payments shall be determined by the Company in its absolute
discretion. In no event shall the Company be liable to the Executive as a
result of any factual or legal determination made by it pursuant to this
subsection (c) or for any information supplied by it to the Executive or his
advisors.

               (d) The provisions of this Section 4.3 are intended to apply to any and
all payments or benefits available to the Executive under this Agreement or any
other agreement or plan of the Company under which the Executive receives
Contingent Compensation Payments.

          4.4 Mitigation. The Executive shall not be required to mitigate the
amount of any payment or benefits provided for in this Section 4 by seeking
other employment or otherwise. Further, except as provided in Section
4.2(a)(ii), the amount of any payment or benefits provided for in this Section
4 shall not be reduced by any compensation earned by the Executive as a result
of employment by another employer, by retirement benefits, by offset against
any amount claimed to be owed by the Executive to the Company or otherwise.

          4.5 Outplacement Services. In the event the Executive is terminated by
the Company (other than for Cause, Disability or Death), or the Executive
terminates employment for Good Reason, within 24 months following the Change in
Control Date, the Company shall provide outplacement services through one or
more outside firms of the Executive’s choosing up to an aggregate amount to be
negotiated by the Executive and the Company, with such services to extend until
the earlier of (i) 12 months following the termination of Executive’s
employment or (ii) the date the Executive secures full time employment.

     5. Disputes.

          5.1 Settlement of Disputes; Arbitration. All claims by the Executive for
benefits under this Agreement shall be directed to and determined by the Board
of Directors of the Company and shall be in writing. Any denial by the Board
of Directors of a claim for benefits under this Agreement shall be delivered to
the Executive in writing and shall set forth the specific reasons for the
denial and the specific provisions of this Agreement relied upon. The Board of
Directors shall afford a reasonable opportunity to the Executive for a review
of the decision denying a claim. Any further dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by
arbitration in Boston, Massachusetts, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on
the arbitrator’s award in any court having jurisdiction.

          5.2 Expenses. The Company agrees to pay as incurred, to the full extent
permitted by law, all legal, accounting and other fees and expenses which the
Executive may reasonably incur as a result of any claim or contest (regardless
of the outcome thereof) by the Company, the Executive or others regarding the
validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive regarding the amount of any payment or benefits
pursuant to this Agreement), plus in each case interest on any delayed payment
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Code.

-9-

 

     6. Successors.

          6.1 Successor to Company. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business or assets of the Company expressly
to assume and agree to perform this Agreement to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain an assumption of this Agreement at or prior to
the effectiveness of any succession shall be a breach of this Agreement and
shall constitute Good Reason if the Executive elects to terminate employment,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination. As
used in this Agreement, “Company” shall mean the Company as defined above and
any successor to its business or assets as aforesaid which assumes and agrees
to perform this Agreement, by operation of law or otherwise.

          6.2 Successor to Executive. This Agreement shall inure to the benefit of
and be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amount would still be payable
to the Executive or his family hereunder if the Executive had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive’s estate.

     7. Notice. All notices, instructions and other communications given
hereunder or in connection herewith shall be in writing. Any such notice,
instruction or communication shall be sent either (i) by registered or
certified mail, return receipt requested, postage prepaid, or (ii) prepaid via
a reputable nationwide overnight courier service, in each case addressed to the
Company, at 11 State St., Woburn, MA 01801, and to the Executive at 686 Hale
Street Beverly Farms, MA 01915 (or to such other address as either the Company
or the Executive may have furnished to the other in writing in accordance
herewith). Any such notice, instruction or communication shall be deemed to
have been delivered five business days after it is sent by registered or
certified mail, return receipt requested, postage prepaid, or one business day
after it is sent via a reputable nationwide overnight courier service. Either
party may give any notice, instruction or other communication hereunder using
any other means, but no such notice, instruction or other communication shall
be deemed to have been duly delivered unless and until it actually is received
by the party for whom it is intended.

     8. Miscellaneous.

          8.1 Employment by Subsidiary. For purposes of this Agreement, the
Executive’s employment with the Company shall not be deemed to have terminated
solely as a result of the Executive continuing to be employed by a wholly-owned
subsidiary of the Company.

          8.2 Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

-10-

 

          8.3 Injunctive Relief. The Company and the Executive agree that any
breach of this Agreement by the Company is likely to cause the Executive
substantial and irrevocable damage and therefore, in the event of any such
breach, in addition to such other remedies which may be available, the
Executive shall have the right to specific performance and injunctive relief.

          8.4 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflicts of law principles.

          8.5 Waivers. No waiver by the Executive at any time of any breach of, or
compliance with, any provision of this Agreement to be performed by the Company
shall be deemed a waiver of that or any other provision at any subsequent time.

          8.6 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original but both of which together shall
constitute one and the same instrument.

          8.7 Tax Withholding. Any payments provided for hereunder shall be paid
net of any applicable tax withholding required under federal, state or local
law.

          8.8 Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto in respect of the
subject matter contained herein; and any prior agreement of the parties hereto
in respect of the subject matter contained herein is hereby terminated and
cancelled. Notwithstanding the foregoing, the effectiveness of the Employment
Agreement, dated as of the date hereof, between the Company and the Executive
(the “Prior Agreement”) shall be suspended during the 24 months following the
Change in Control Date (the “Protected Period”), except as specifically set
forth herein; provided that if the Executive’s employment is not terminated on
or before the last day of the Protected Period, then the Prior Agreement shall
be effective during the period, if any, from the end of the Protected Period
through the end of the Employment Period (as defined in the Prior Agreement)

          8.9 Amendments. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Executive.

-11-

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.

	 	 	 	 	 
	 	POLYMEDICA CORPORATION

 	 
	 	By:  	/s/ Samuel L. Shanaman
 	 
	 	 	Title: Chairman 	 
	 	 	 	 
	 
	 	 	 
	 	                                   /s/ Patrick T. Ryan
 	 
	 	Patrick T. Ryan 	 
	 	 	 
	 

-12-<PAGE>
                                                                               .
                                                                               .
                                                                               .
<Table>
<S>                                      <C>                                                                       <C>
(NUMBER BBW)

(GRAPHIC)                                                                                                          (SHARES GRAPHIC)

                                                            BUILD A BEAR

                                                           (BEAR GRAPHIC)

                                                              WORKSHOP

                                                     WHERE BEST FRIENDS ARE MADE

                                                                                                           COMMON
                                                                                                       PAR VALUE $.01

                                                                                           THIS CERTIFICATE IS TRANSFERABLE IN THE
                                                                                            CITIES OF RIDGEFIELD PARK, NEW JERSEY
                                                                                                    AND NEW YORK, NEW YORK

                                                                                                   SEE REVERSE FOR CERTAIN
                                                                                                 DEFINITIONS AND RESTRICTIONS
                                                                                                    CUSIP 120076   10   4

                                         INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

                                                     BUILD-A-BEAR WORKSHOP, INC.

THIS CERTIFIES THAT:

IS THE RECORD HOLDER OF

                                       FULLY-PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF

     BUILD-A-BEAR WORKSHOP, INC. TRANSFERABLE ON THE SHARE REGISTER OF THE CORPORATION BY THE HOLDER HEREOF IN PERSON OR BY DULY
                              AUTHORIZED ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED.

               THIS CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE TRANSFER AGENT AND REGISTERED BY THE REGISTRAR.

                       WITNESS THE SEAL OF THE CORPORATION AND THE SIGNATURES OF ITS DULY AUTHORIZED OFFICERS.

COUNTERSIGNED AND REGISTERED:          DATED:

    MELLON INVESTOR SERVICES LLC

       TRANSFER AGENT AND REGISTRAR

BY                                     /s/ TINA L. KLORKE                                 /s/ MAXINE CLARK

(SEAL)    AUTHORIZED SIGNATURE         CHIEF FINANCIAL BEAR, SECRETARY AND TREASURER    CHIEF EXECUTIVE BEAR, CHAIRMAN OF THE BOARD
</Table>

<PAGE>

                          BUILD-A-BEAR WORKSHOP, INC.

The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>       <C>                                   <C>
TEN COM   as tenants in common                  UNIF GIFT MIN ACT _______________________ Custodian ________________________
TEN ENT   as tenants by the entireties                                     (Cust)                           (Minor)
JT TEN    as joint tenants with right                             under Uniform Gifts to Minors
          of survivorship and not as                              Act ______________________________________________________
          tenants in common
                                                                                           (State)

                                                UNIF TRF MIN ACT  ______________________ Custodian (until age _____________)
                                                                           (Cust)

                                                                  __________________________________under Uniform Transfers
                                                                             (Minor)
                                                                  to Minors Act ___________________________________________
                                                                                                (State)
</TABLE>

     Additional abbreviations may also be used though not in the above list.

For Value received, ________________________________________________ hereby
sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASSIGNEE

_____________________________________

________________________________________________________________________________
   PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE
________________________________________________________________________________

________________________________________________________________________________

_________________________________________________________________________ Shares

of the Common Stock represented by the within Certificate, and do(es) hereby
irrevocably constitute and appoint

________________________________________________________________________Attorney

to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.

Dated____________________         X __________________________________________

                                  X __________________________________________

                             NOTICE:THE SIGNATURE(S) TO THIS ASSIGNMENT MUST
                                    CORRESPOND WITH THE NAME(S) AS WRITTEN
                                    UPON THE FACE OF THE CERTIFICATE IN EVERY
                                    PARTICULAR WITHOUT ALTERATION OR
                                    ENLARGEMENT OR ANY CHANGE WHATEVER.

SIGNATURES GUARANTEED:

By______________________________________________________________________________
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE
17Ad-15.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}]]