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 Keith W. Jones, an
individual with an address at 2 Rachel Drive, Chester Springs, PA
19425 (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 .
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. Term of Employment .
The Company agrees to employ the Executive for a period commencing
on February 9, 2005 through and including August 31, 2006
(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 3.9 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 be deemed to continue on
a month-to-month basis (the “Extended Employment
Period”).
1
3. Compensation and
Benefits; Disability .
3.1
Signing Bonus . On the commencement of the Employment
Period, the Company shall pay a signing bonus of $100,000 to
Executive.
3.2
Stock Option . On the commencement of the Employment Period,
the Company shall grant to Executive a non-qualified stock option
for 300,000 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 have a term of ten
(10) years and shall “vest” and become exercisable
as to 25% of the original number of shares subject to such option
on the 1 st anniversary of
the Employment 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 March 31 st ,
June 30th, September 30th and December 31
st
thereafter until such option is fully vested.
3.3
Salary .
(a) During
the Employment Period, the Company shall pay Executive an
annualized base salary of $325,000 (“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 may be adjusted from time to time in
the sole discretion of the Company’s Board of Directors (the
“Board”) or the Compensation Committee of the Board
(the “Compensation Committee”) and shall be reviewed
annually by the Compensation Committee.
3.4
Bonus Payment . During Executive’s employment,
Executive may receive, in the sole discretion of the Compensation
Committee, an annual bonus in an amount, if any, to be determined
by the Compensation Committee.
3.5
Relocation Expenses . The Company shall reimburse Executive
for reasonable and ordinary moving and travel expenses actually
incurred by Executive in relocating himself and his immediate
family from Chester Springs, PA to the Boston metropolitan area in
connection with Executive’s employment with the Company. For
purposes of this Agreement, these reimbursable expenses shall
include the cost of packing and shipping personal and family items,
move-related insurance and real estate commissions to be incurred
by Executive as seller in the sale of his Chester Springs, PA
residence.
3.6
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
2
(c)
Stock Based Compensation . Executive 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.
3.7
Vacation . During the Employment Period, Executive may take
four 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.
3.8
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 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.
3.9
Severance Pay . In the event that the Company terminates
this Agreement without cause (i.e. other than pursuant to
Section 3.8 or Section 4 hereof) at any time (including
during the Extended Employment Period) or does not renew or extend
this Agreement without cause (i.e. other than consistent with
Section 3.8 or Section 4 hereof), and subject to the
Executive’s execution and non-revocation of a sev
| 
