EXHIBIT 10.63
AGREEMENT made this 14th day of March 2003, between PolyMedica
Corporation, a Massachusetts corporation (the "Company"), and Xxxxxx X. Xxxxxxxx
(the "Participant").
For valuable consideration, receipt of which is acknowledged, the
parties hereto agree as follows:
1. Purchase of Shares.
The Company shall issue and sell to the Participant, and the
Participant shall purchase from the Company, subject to the terms and conditions
set forth in this Agreement and in the Company's 2000 Stock Incentive Plan (the
"Plan"), 3,600 shares (the "Shares") of common stock, $0.01 par value, of the
Company ("Common Stock"), at a purchase price of $0.01 per share. The aggregate
purchase price for the Shares shall be paid by the Participant by check payable
to the order of the Company or such other method as may be acceptable to the
Company. Upon receipt by the Company of payment for the Shares, the Company
shall issue to the Participant one or more certificates in the name of the
Participant for that number of Shares purchased by the Participant. The
Participant agrees that certain of the Shares shall be subject to the purchase
options set forth in Section 2 of this Agreement and the restrictions on
transfer set forth in Section 4 of this Agreement.
2. Purchase Option.
Upon the termination of the employment agreement dated as of the date
hereof by and between the Company and the Participant (the "Employment
Agreement"), for any reason or no reason, with or without cause, prior to July
31, 2003, the Company shall have the right and option (the "Purchase Option") to
purchase from the Participant, for a sum of $0.01 per share (the "Option
Price"), some or all of the Unvested Shares (as defined below).
"Unvested Shares" means the total number of Shares less the total
number of Vested Shares (as defined herein) at the time the Purchase Option
becomes exercisable by the Company. Of the Shares, 1,039 shall be "Vested
Shares" on the date hereof and the remaining 2,561 Shares shall vest on the 30th
day of each month that the Employment Agreement is in effect, beginning March
30, 2003, in an amount determined by multiplying 67 Shares by the number of days
actually worked by the Participant during the period from the last vesting date
to and including the current vesting date. The calculation of Vested Shares to
be made on March 30, 2003 shall be made for the period beginning March 15, 2003.
3. Exercise of Purchase Option and Closing.
a. The Company may exercise the Purchase Option by
delivering or mailing to the Participant (or his estate), within 60 days after
the termination of the Employment Agreement, a written notice of exercise of the
Purchase Option. Such notice shall specify the number of Shares to be purchased.
If and to the extent the Purchase Option is not so exercised by the giving of
such a notice within such 60-day period, the Purchase Option shall automatically
expire and terminate effective upon the expiration of such 60-day period.
b. Within 10 days after delivery to the Participant of
the Company's notice of the exercise of the Purchase Option pursuant to
subsection (a) above, the Participant (or his estate) shall, pursuant to the
provisions of the Joint Escrow Instructions referred to in Section 5 below,
tender to the Company at its principal offices the certificate or certificates
representing the Shares which the Company has elected to purchase in accordance
with the terms of this Agreement, duly endorsed in blank or with duly endorsed
stock powers attached thereto, all in form suitable for the transfer of such
Shares to the Company. Promptly following its receipt of such certificate or
certificates, the Company shall pay to the Participant the aggregate Option
Price for such Shares (provided that any delay in making such payment shall not
invalidate the Company's exercise of the Purchase Option with respect to such
Shares).
c. After the time at which any Shares are required to be
delivered to the Company for transfer to the Company pursuant to subsection (b)
above, the Company shall not pay any dividend to the Participant on account of
such Shares or permit the Participant to exercise any of the privileges or
rights of a stockholder with respect to such Shares, but shall, in so far as
permitted by law, treat the Company as the owner of such Shares.
d. The Option Price may be payable, at the option of the
Company, in cancellation of all or a portion of any outstanding indebtedness of
the Participant to the Company or in cash (by check) or both.
e. The Company shall not purchase any fraction of a
Share upon exercise of the Purchase Option, and any fraction of a Share
resulting from a computation made pursuant to Section 2 of this Agreement shall
be rounded to the nearest whole
Share (with any one-half Share being rounded upward).
f. The Company may assign its Purchase Option to one or
more persons or entities.
4. Restrictions on Transfer.
a. The Participant shall not sell, assign, transfer,
pledge, hypothecate or otherwise dispose of, by operation of law or otherwise
(collectively "transfer") any Shares, or any interest therein, that are subject
to the Purchase Option, except that the Participant may transfer such Shares (i)
to or for the benefit of any spouse, children, parents, uncles, aunts, siblings,
grandchildren and any other relatives approved by the Board of Directors
(collectively, "Approved Relatives") or to a trust established solely for the
benefit of the Participant and/or Approved Relatives, provided that such Shares
shall remain subject to this Agreement (including without limitation the
restrictions on transfer set forth in this Section 4 and the Purchase Option)
and such permitted transferee shall, as a condition to such transfer, deliver to
the Company a written instrument confirming that such transferee shall be bound
by all of the terms and conditions of this Agreement or (ii) as part of the sale
of all or substantially all of the shares of capital stock of the Company
(including pursuant to a merger or consolidation), provided that, in accordance
with the Plan, the securities or other property received by the Participant in
connection with such transaction shall remain subject to this Agreement.
b. The Participant shall have the right, at any time and
from time to time, to pledge or hypothecate the Shares to a commercial bank or
financial institution (the "Bank") as security for a loan from such Bank. During
the term of the pledge or hypothecation agreement, the Company may not exercise
the Purchase Option with respect to the Shares that are subject to the pledge
(the "Pledged Shares"), and if the Participant defaults on such loan, then the
Bank may take possession of the Pledged Shares provided that such Pledged Shares
shall remain subject to this Agreement, other than the Purchase Option which
shall terminate with respect to the Pledged Shares and such permitted transferee
shall, as a condition to such transfer, deliver to the Company a written
instrument confirming that such transferee shall be bound by all of the other
terms and conditions of this Agreement.
5. Escrow.
a. The Participant shall, upon the execution of this
Agreement, execute Joint Escrow Instructions in the form attached to this
Agreement as Exhibit A. The Joint Escrow Instructions shall be delivered to the
Chief Financial Officer of the Company, as escrow agent thereunder. The
Participant shall deliver to such escrow agent a stock assignment duly endorsed
in blank, in the form attached to this Agreement as Exhibit B, and hereby
instructs the Company to deliver to such escrow agent, on behalf of the
Participant, the certificate(s) evidencing the Shares issued hereunder. Such
materials shall be held by such escrow agent pursuant to the terms of such Joint
Escrow Instructions.
6. Restrictive Legends.
a. All certificates representing Shares shall have
affixed thereto legends in substantially the following form, in addition to any
other legends that may be required under federal or state securities laws:
"The shares of stock represented by this certificate are
subject to restrictions on transfer and an option to purchase set forth in a
certain Restricted Stock Agreement between the corporation and the registered
owner of these shares (or his predecessor in interest), and such Agreement is
available for inspection without charge at the office of the Chief Financial
Officer of the corporation."
7. Provisions of the Plan.
a. This Agreement is subject to the provisions of the
Plan, a copy of which is furnished to the Participant with this Agreement.
b. As provided in the Plan, upon the occurrence of an
Acquisition Event (as defined in the Plan), the repurchase and other rights of
the Company hereunder shall inure to the benefit of the Company's successor and
shall apply to the cash, securities or other property which the Shares were
converted into or exchanged for pursuant to such Acquisition Event in the same
manner and to the same extent as they applied to the Shares under this
Agreement. If, in connection with an Acquisition Event, a portion of the cash,
securities and/or other property received upon the conversion or exchange of the
Shares is to be placed into escrow to secure indemnification or similar
obligations, the mix between the vested and unvested portion of such cash,
securities and/or other property that is placed into escrow shall be the same as
the mix between the vested and unvested portion of such cash, securities and/or
other property that is not subject to escrow.
8. Withholding Taxes; Section 83(b) Election.
a. The Participant acknowledges and agrees that the
Company has the right to deduct from payments of any
kind otherwise due to the Participant any federal, state or local taxes of any
kind required by law to be withheld with respect to the purchase of the Shares
by the Participant or the lapse of the Purchase Option.
b. The Participant has reviewed with the Participant's
own tax advisors the federal, state, local and foreign tax consequences of this
investment and the transactions contemplated by this Agreement. The Participant
is relying solely on such advisors and not on any statements or representations
of the Company or any of its agents. The Participant understands that the
Participant (and not the Company) shall be responsible for the Participant's own
tax liability that may arise as a result of this investment or the transactions
contemplated by this Agreement. The Participant understands that it may be
beneficial in many circumstances to elect to be taxed at the time the Shares are
purchased rather than when and as the Company's Purchase Option expires by
filing an election under Section 83(b) of the Code with the I.R.S. within 30
days from the date of purchase.
THE PARTICIPANT ACKNOWLEDGES THAT IT IS THE PARTICIPANT'S SOLE
RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION
83(b), EVEN IF THE PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO
MAKE THIS FILING ON THE PARTICIPANT'S BEHALF.
9. Miscellaneous.
a. No Rights to Employment. The Participant acknowledges
and agrees that the vesting of the Shares pursuant to Section 2 hereof is earned
only by continuing service pursuant to the Employment Agreement (not through the
act of being hired or purchasing shares hereunder). The Participant further
acknowledges and agrees that the transactions contemplated hereunder and the
vesting schedule set forth herein do not constitute an express or implied
promise of continued engagement as an employee or consultant for the vesting
period, for any period, or at all.
b. 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, and each other provision of this
Agreement shall be severable and enforceable to the extent permitted by law.
c. Waiver. Any provision for the benefit of the Company
contained in this Agreement may be waived, either generally or in any particular
instance, by the Board of Directors of the Company.
d. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the Company and the Participant and their respective
heirs, executors, administrators, legal representatives, successors and assigns,
subject to the restrictions on transfer set forth in Section 4 of this
Agreement.
e. Notice. All notices required or permitted hereunder
shall be in writing and deemed effectively given upon personal delivery or five
days after deposit in the United States Post Office, by registered or certified
mail, postage prepaid, addressed to the other party hereto at the address shown
beneath his or its respective signature to this Agreement, or at such other
address or addresses as either party shall designate to the other in accordance
with this Section 9(e).
f. Pronouns. Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural, and vice versa.
g. Entire Agreement. This Agreement and the Plan
constitute the entire agreement between the parties, and supersede all prior
agreements and understandings, relating to the subject matter of this Agreement.
h. Amendment. This Agreement may be amended or modified
only by a written instrument executed by both the Company and the Participant.
i. Governing Law. This Agreement shall be construed,
interpreted and enforced in accordance with the internal laws of the
Commonwealth of Massachusetts without regard to any applicable conflicts of
laws.
j. Participant's Acknowledgments. The Participant
acknowledges that he or she: (i) has read this Agreement; (ii) has been
represented in the preparation, negotiation, and execution of this Agreement by
legal counsel of the Participant's own choice or has voluntarily declined to
seek such counsel; (iii) understands the terms and consequences of this
Agreement; (iv) is fully aware of the legal and binding effect of this
Agreement; and (v) understands that the law firm of Xxxx and Xxxx LLP, is acting
as counsel to the Company in connection with the transactions contemplated by
the Agreement, and is not acting as counsel for the Participant.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
POLYMEDICA CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
/s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Lead Director and Interim
Chief Executive Officer
