EMPLOYMENT AGREEMENT
Exhibit
10.1
This
AGREEMENT (this “Agreement”) is made effective as of July 20, 2007 (the
“Effective Date”), by
and between
Allion Healthcare, Inc., a corporation with its headquarters located at 0000
Xxxx Xxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (the “Employer”), and Xxxxxxx
X. Xxxxxx (the “Executive”).
WHEREAS,
the Employer and the Executive desire to enter into an agreement to reflect
the
Executive’s duties and responsibilities and to provide for the Executive’s
employment by the Employer upon the terms and conditions set forth herein;
and
WHEREAS,
the Executive has agreed to certain confidentiality, non-competition and
non-solicitation covenants contained hereunder, in consideration of the
additional benefits provided to the Executive under this Agreement;
NOW
THEREFORE, in consideration of the mutual covenants contained in this Agreement,
and intending to be legally bound, the Employer and the Executive agree as
follows:
1. Employment.
The Employer agrees to employ the Executive and the Executive agrees to be
employed by the Employer on the terms and conditions set forth in this
Agreement.
2. Capacity.
The Executive shall serve the Employer as its Director of Finance,
and as its Interim Chief Financial Officer until
such time as the Employer hires a permanent Chief Financial Officer. The
Executive shall also serve the Employer in such other or additional offices
as
the Executive may reasonably be requested to serve by the Board of Directors
of
the Employer (the “Board of Directors”). In such capacity or capacities,
the Executive shall perform such services and duties in connection with the
business, affairs and operations of the Employer, consistent with such
positions, as may be assigned or delegated to the Executive from time to time
by
or under the authority of the Board of Directors.
3. Term.
Subject to the provisions of Section 6, the term of employment pursuant to
this
Agreement (the “Term”) shall commence on the Effective Date and terminate
on the second anniversary of the Effective Date. Expiration of the Term shall
not constitute termination of Executive's employment during the Term for
purposes of termination benefits under Section 6 of this Agreement.
4. Compensation
and Benefits. The compensation and benefits payable to the Executive during
the Term shall be as follows:
(a) Salary.
For all services rendered by the Executive under this Agreement, the Employer
shall pay the Executive a salary (“Salary”) at the annual rate of one
hundred sixty thousand dollars ($160,000.00) per annum, less normal
withholdings, effective beginning July 20, 2007, and subject to increases from time
to
time in the sole discretion of the Compensation Committee of the Board of
Directors (the “Compensation Committee”). Salary
shall be payable in periodic installments in accordance with the Employer’s
usual practice for its senior executives.
(b) Bonus.
The Executive may be awarded performance bonuses on an annual basis, commencing
with a bonus that may be awarded for the 2007 calendar year, as determined
by
the Board of Directors or the Compensation Committee in the sole discretion
of
the Board of Directors or Compensation Committee, respectively; provided,
however, that the bonus for any such year shall not exceed forty percent (40%)
of Salary for such year. The performance
bonus, if any, shall be paid to the Executive within thirty (30) days after
the
Board of Directors or the Compensation Committee determines whether and to
what
extent performance goals were achieved, but no later than March 15 next
following the end of the calendar year for which the performance bonus, if
any,
was earned.
(c)
Stock
Options. The Executive has been issued options to purchase shares of common
stock of the Employer in accordance with the Employer’s stock option plan and
the Executive’s stock option agreement thereunder. All options issued to the
Executive, which have not been vested as of the time any Change in Control
(as
defined in Section 7(c)) occurs, shall automatically vest upon such
occurrence.
(d) Regular
Benefits. The Executive shall also be eligible to participate in any
employee benefit plans, medical insurance plans, life insurance plans,
disability income plans, retirement plans, vacation plans, expense reimbursement
plans and other benefit plans which the Employer may from time to time have
in
effect for all or most of its senior executives. Such participation shall be
subject to the terms of the applicable plan documents, generally applicable
policies of the Employer, applicable law and the discretion of the Board of
Directors, the Compensation Committee or any administrative or other committee
provided for in or contemplated by any such plan. Nothing contained in this
Agreement shall be construed to create any obligation on the part of the
Employer to establish any such plan or to maintain the effectiveness of any
such
plan which may be in effect from time to time.
(e) Taxation
of Payment and Benefits. The Employer shall undertake to make deductions,
withholdings and tax reports with respect to payments and benefits under this
Agreement to the extent that it reasonably and in good faith believes that
it is
required to make such deductions, withholdings and tax reports. Payments under
this Agreement shall be in amounts net of any such deductions or withholdings.
Nothing in this Agreement shall be construed to require the Employer to make
any
payments to compensate the Executive for any adverse tax effect associated
with
any payments or benefits or for any deduction or withholding from any payment
or
benefit.
(f) Exclusivity
of Salary and Benefits. The Executive shall not be entitled to any payments
or benefits other than those provided under this Agreement, unless otherwise
approved by the Board of Directors.
5. Extent
of Service. During the Term, the Executive shall, subject to the direction
and supervision of the Board of Directors, devote the Executive’s full business
time, best efforts and business judgment, skill and knowledge to the advancement
of the Employer’s interests and to the discharge of the Executive’s duties and
responsibilities under this Agreement. The Executive shall not engage in any
other business activity, except as may be approved by the Board of Directors;
provided that nothing in this Agreement shall be construed as preventing the
Executive from (a) investing the Executive’s assets in any company or other
entity in a manner not prohibited by Section 8(d), or (b) engaging in religious,
charitable or other community or non-profit activities that, in the case of
(a)
or (b) above, do not in any way impair the Executive’s ability to fulfill the
Executive’s duties and responsibilities under this Agreement.
6. Termination
and Termination Benefits. Notwithstanding any other provision of this
Agreement, (i) the Employer may terminate the Executive’s employment hereunder
at any time with or without Cause (as defined in Section 7(a)) at its election;
(ii) the Executive may terminate the Executive’s employment hereunder at any
time with or without Good Reason (as defined in Section 7(b)) at the Executive’s
election; (iii) Executive’s employment hereunder shall automatically terminate
upon the Executive’s death; and (iv) the Executive’s
employment
shall terminate upon the Executive’s disability as provided in Section 6(c). The
date of termination of the Executive’s employment hereunder, whether upon
scheduled termination of the Term, termination by either the Employer or the
Executive as provided in this Agreement, or by reason of the Executive’s death
or disability, is the “Termination Date.” Any termination of employment
hereunder shall be effective upon the date of scheduled termination of the
Term,
the date of receipt by the non-terminating party of a notice of termination
from
the terminating party with or without Cause (in the case of a termination by
the
Employer) or with or without Good Reason (in the case of a termination by the
Executive), the date of death, or after the onset of disability as provided
in
Section 6(c), as the case may be; provided that, in the case of a termination
by
the Employer, the Employer may specify in the notice of termination a later
termination date (which date shall be no later than thirty (30) days after
the
date of such notice of termination). The amounts payable to the Executive and
other benefits provided to the Executive under this Section 6 shall be referred
to as “Termination Benefits”. Payment of the Termination Benefits under
this Section 6 shall be subject to Section 20 of this Agreement.
(a) Termination
by the Employer for Cause, by the Executive without Good Reason or Death.
If, during the Term, (i) the Employer terminates the Executive’s employment for
Cause or (ii) the Executive terminates his employment with the Employer without
Good Reason, or upon the Executive’s death, the Executive shall be entitled
to:
(i) accrued
but unpaid Salary
through the Termination Date;
(ii) cash
in lieu of any accrued but unused vacation through the Termination Date;
and
(iii) any
benefits accrued or payable to the Executive under the Employer’s benefit plans
(in accordance with the terms of such benefit plans and subject to Section
20
hereof).
Upon
payment or provision of (i) through (iii) above (collectively, the “Accrued
Benefits”), the Employer shall have no further obligations to the Executive
under this Agreement.
(b) Termination
by the Executive for Good Reason or by the Employer Without Cause. If,
during the Term, (i) the Executive terminates his employment with the Employer
for Good Reason within a period of 90 days after the occurrence of an uncured
event of Good Reason, or (ii) the Employer terminates the Executive’s employment
with the Employer without Cause, then the Executive shall be entitled
to:
(i)
the Accrued Benefits;
(ii) continuation
of Salary, at the rate in effect on the Termination Date, that would have been
paid to the Executive as if there had been no termination described in this
Section 6(b), for a period of one (1) year after the Termination Date, including
termination within twelve (12) months following a Change in
Control. Such severance payments shall be payable according to the
normal payroll policies of the Employer for senior executives;
(iii) continuation
of group health plan benefits to the extent authorized by and consistent with
29
U.S.C. § 1161 et seq. (commonly known as “COBRA”),with the cost
of
the regular premium for such benefits shared in the same relative proportion
by
the Employer and the Executive as in effect on the Termination Date, provided
that the Executive’s entitlements under this clause (iii) shall terminate as of
the earlier of (x) one (1) year from the Termination Date or (y) the date of
commencement of eligibility for health insurance pursuant to other employment
or
self-employment; and
(iv) accelerated
vesting of all of the Executive’s options to purchase shares of common stock of
the Employer referred to in Section 4(c).
Notwithstanding
the foregoing, nothing in this Section 6(b) shall be construed to affect the
Executive’s right to receive COBRA continuation entirely at the Executive’s own
cost to the extent that the Executive may continue to be entitled to COBRA
continuation after the Executive’s right to cost sharing under Section 6(b)(iii)
ceases. The Executive shall be obligated to give prompt notice of the date
of
commencement of any employment or self-employment and shall respond promptly
to
any reasonable inquiries concerning any employment or self-employment in which
the Executive engages during the Termination Benefits Period.
(c) Disability.
If the Executive shall be physically or mentally disabled so as to be unable
to
perform substantially all of the essential functions of the Executive’s then
existing position or positions under this Agreement with or without reasonable
accommodation, the Board of Directors may remove the Executive from any
responsibilities and/or reassign the Executive to another position with the
Employer for the remainder of the Term or during the period of such disability.
Notwithstanding any such removal or reassignment, the Executive shall continue
to be employed by the Employer and continue to receive Salary (less any
disability pay or sick pay benefits to which the Executive may be entitled
under
the Employer’s plans and policies) and other compensation and benefits under
Section 4 of this Agreement (except to the extent that the Executive may be
ineligible for one or more such benefits under applicable plan terms) until
the
earlier of (i) the date that is six (6) months after the onset of the disability
and (ii) the termination of the Term, at which time this Agreement shall
terminate and the Executive shall be entitled only to the Accrued Benefits,
and
the Employer shall have no further obligations to the Executive under this
Agreement. If any question shall arise as to whether during any period the
Executive is disabled so as to be unable to perform substantially all of the
essential functions of the Executive’s then existing position or positions with
or without reasonable accommodation, the Executive may, and at the request
of
the Employer shall, submit to the Employer a certification in reasonable detail
by a physician selected by the Employer to whom the Executive or the Executive’s
guardian has no reasonable objection as to whether the Executive is so disabled
or how long such disability is expected to continue, and such certification
shall for the purposes of this Agreement be conclusive of the issue. The
Executive shall cooperate with any reasonable request of the physician in
connection with such certification. If such question shall arise and the
Executive shall fail to submit such certification, the Employer’s determination
of such issue shall be binding on the Executive. Nothing in this Section 6(c)
shall be construed to waive the Executive’s rights, if any, under existing law
including, without limitation, the Family and Medical Leave Act of 1993, 29
U.S.C. §2601 et seq. and the Americans with Xxxxxxxxxxxx Xxx, 00 X.X.X.
§00000 et seq.
7. Definitions.
For purposes of this Agreement, the following terms shall have the following
meanings:
(a) “Cause”
shall
mean (i)
the failure of the Executive to perform the Executive’s duties for the Employer
in accordance with Section 2 above, including without limitation, the Executive’s
failure to follow the directives of the Board of Directors, consistent with
Section 2, or any other material breach by the Executive of this Agreement,
provided that the Employer gives notice of such breach to the Executive in
writing and such breach remains uncured for thirty (30) days following the
date
such notice is given; (ii) the Executive’s breach of any obligation of the
Executive under Section 8; (iii) any act by the Executive of fraud or theft;
(iv) a conviction by a court of competent jurisdiction that the Executive is
guilty of a felony, or a misdemeanor involving moral turpitude, deceit,
dishonesty or fraud, or a plea of nolo contendere thereto; or (v) engaging
in
reckless behavior (the failure to use even the slightest amount of care) or
willful misconduct by the Executive with respect to the Employer or its business
or assets that has had or is reasonably likely to have a material adverse effect
on the Employer or its business or assets. No act or omission by the Executive
reasonably believed to be in or not adverse to the interests of the Employer
shall constitute Cause.
(b) “Good
Reason” shall mean, without Executive’s written consent:
(i) Any
material diminution in
the nature or scope of the authorities, responsibilities or duties of the
Executive, including a material diminution in his title or office; but excluding
any such loss of the authorities, responsibilities, duties or tile associated
with the role of interim chief financial officer;
(ii) Any
material reduction in
the amount of the Executive’s Salary;
(iii) Any
material breach by the Employer or its successors of any other provision of
this
Agreement, including without limitation the obligation to provide the
compensation and benefits as set forth in Section 4 of this Agreement;
or
(iv) A
material change in the geographic location of the Executive’s principal place of
employment with the Employer, and for purposes of this Agreement, a change
of 35
miles or more from the current location will be considered
material.
Notwithstanding
the foregoing, an event described in clauses (i) through (iv) above shall
constitute Good Reason only if (i) the Executive gives written notice thereof
to
the Employer within 30 days after such event occurs, and (ii) the Employer
fails
to cure such event within 30 days after receipt from the Executive of such
notice. If the Employer fails to cure such event of Good Reason, the
Executive must resign within 90 days of the occurrence of the Good Reason event
in order to be entitled to the Termination Benefits of Section 6(b) of this
Agreement.
(c) “Change
in Control” shall mean the occurrence of one or more of the following
events:
(i) any
“person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) becomes a
“beneficial owner” (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act) (other than the Employer, any trustee or other fiduciary holding
securities under an employee benefit plan of the Employer, or any corporation
owned, directly or indirectly, by the stockholders of the Employer, in
substantially the same proportions as their ownership of stock of the Employer),
directly or indirectly, of securities of the Employer, representing fifty
percent (50%) or more of the combined voting power of the Employer’s then
outstanding securities; or
(ii) persons
who, as of the Effective Date, constituted the Employer’s Board of Directors
(the “Incumbent Board”) cease for any reason including, without
limitation, as a result of a tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the Board of Directors,
provided that any person becoming a director of the Employer subsequent to
the
Effective Date whose election was approved by at least a majority of the
directors then comprising the Incumbent Board shall, for purposes of this
Section 7(c), be considered a member of the Incumbent Board; or
(iii) the
stockholders of
the Employer approve a merger or consolidation of the Employer with any other
corporation or other entity, other than (1) a merger or consolidation which
would result in the voting securities of the Employer outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than fifty
percent (50%) of the combined voting power of the voting securities of the
Employer or such surviving entity outstanding immediately after such merger
or
consolidation or (2) a merger or consolidation effected to implement a
recapitalization of the Employer (or similar transaction) in which no “person”
(as hereinabove defined) acquires more than fifty percent (50%) of the combined
voting power of the Employer’s then outstanding securities; or
(iv) the
stockholders of the
Employer approve a plan of complete liquidation of the Employer or an agreement
for the sale or disposition by the Employer of all or substantially all of
the
Employer’s assets.
8. Confidential
Information, Noncompetition and Cooperation.
(a) Confidential
Information. As used in this Agreement, “Confidential Information”
means nonpublic (not as a result of the Executive’s wrongful disclosure)
information belonging to the Employer which is of value to the Employer in
the
course of conducting its business and the disclosure of which could result
in a
competitive or other disadvantage to the Employer. Confidential Information
includes, without limitation, financial information, reports, and forecasts;
inventions, improvements and other intellectual property, trade secrets,
know-how, designs, processes or formulae, software, market or sales information
or plans, customer lists; and business plans, prospects, strategies and
opportunities (such as possible acquisitions or dispositions of businesses
or
facilities) which have been discussed or considered by the management of the
Employer. Confidential Information includes information developed by the
Executive in the course of the Executive’s employment by the Employer, as well
as other information to which the Executive may have access in connection with
the Executive’s employment. Confidential Information also includes the
confidential information of others with which the Employer has a business
relationship. Notwithstanding the foregoing, Confidential Information does
not
include information in the public domain, unless due to breach of the
Executive’s duties under Section 8(b).
(b) Confidentiality.
The Executive understands and agrees that the Executive’s employment creates a
relationship of confidence and trust between the Executive and the Employer
with
respect to all Confidential Information. At all times, both during the
Executive’s employment with the Employer and after its termination, the
Executive will keep in confidence and trust all such Confidential Information,
and will not use or disclose any such Confidential Information without the
prior
written consent of the Employer, except as may be necessary in the ordinary
course of performing the Executive’s duties to the Employer.
(c) Documents.
Records. etc. All documents, records, data, apparatus, equipment and other
physical property, whether or not pertaining to Confidential Information, which
are furnished to the Executive by the Employer or are produced by the Executive
in connection with the Executive’s employment will be and remain the sole
property of the Employer. The Executive will return to the Employer all such
materials and property as and when requested by the Employer. In any event,
the
Executive will return all such materials and property immediately upon
termination of the Executive’s employment for any reason. The Executive will not
retain with the Executive any such material or property or any copies thereof
after such termination.
(d) Noncompetition
and Nonsolicitation. During the Executive’s employment with the Employer
and for one (1) year thereafter, the Executive (i) will not, directly or
indirectly, whether as owner, partner, shareholder, consultant, agent, employee,
co-venturer or otherwise, engage, participate, assist or invest in any Competing
Business (as hereinafter defined), (ii) will refrain from directly or indirectly
employing, attempting to employ, recruiting or otherwise soliciting, inducing
or
influencing any person to leave employment with the Employer (other than
terminations of employment of subordinate employees undertaken in the course
of
the Executive’s employment with the Employer); and (iii) will refrain from
soliciting or encouraging any customer or supplier to terminate or otherwise
modify adversely its business relationship with the Employer. The Executive
understands that the restrictions set forth in this Section 8 are intended
to
protect the Employer’s interest in its Confidential Information and established
employee, customer and supplier relationships and goodwill, and agrees that
such
restrictions are reasonable and appropriate for this purpose. For purposes
of
this Agreement, the term “Competing Business” shall
mean a
business which consists of operating specialty HIV pharmacies anywhere within
the United States. Notwithstanding the foregoing, the Executive may own up
to
one percent (1%) of the outstanding stock of a publicly-held corporation which
constitutes or is affiliated with a Competing Business. The Employer may extend
the period of noncompetition and nonsolicitation for an additional period not
exceeding one (1) year, provided that it extends and pays Termination Benefits
to the Executive for the duration of the extension. Notwithstanding the
foregoing, the Executive’s obligations under Section 8(d)(i) shall terminate and
be of no further force or effect upon termination of the Executive’s Employment
under any of the circumstances described in Section 6(b).
(e) Third-Party
Agreements and Rights. The Executive hereby confirms that the Executive is
not bound by the terms of any agreement with any previous employer or other
party which restricts in any way the Executive’s use or disclosure of
information or the Executive’s engagement in any business. The Executive
represents to the Employer that the Executive’s execution of this Agreement, the
Executive’s employment with the Employer and the performance of the Executive’s
proposed duties for the Employer will not violate any obligations the Executive
may have to any such previous employer or other party. In the Executive’s work
for the Employer, the Executive will not disclose or make use of any information
in violation of any agreements with or rights of any such previous employer
or
other party, and the Executive will not bring to the premises of the Employer
any copies or other tangible embodiments of non-public information belonging
to
or obtained from any such previous employment or other party.
(f) Litigation
and Regulatory Cooperation. During and after the Executive’s employment,
the Executive shall cooperate fully with the Employer in the defense or
prosecution of any claims or actions now in existence or which may be brought
in
the future against or on behalf of the Employer which relate to events or
occurrences that transpired while the Executive was employed by the Employer.
The Executive’s full cooperation in connection with such claims or actions shall
include, but not be limited to, being available to meet with counsel to prepare
for discovery or trial and to act as a witness on behalf of the Employer at
mutually-convenient times. During and after the Executive’s employment,
the Executive
also
shall cooperate fully with the Employer in connection with any investigation
or
review of any federal, state or local regulatory authority as any such
investigation or review relates to events or occurrences that transpired while
the Executive was employed by the Employer. The Employer shall reimburse the
Executive for any reasonable out-of-pocket expenses incurred in connection
with
the Executive’s performance of obligations pursuant to this Section 8(f). If the Executive is
entitled to reimbursement of expenses hereunder, the amount reimbursable in
any
one calendar year shall not affect the amount reimbursable in any other calendar
year, and the reimbursement of an eligible expense must be made no later than
December 31 of the year after the year in which the expense was
incurred. The Executive’s rights and obligations pursuant to this
Section 8(f) shall expire at the end of six (6) years after the Effective Date
and shall not be subject to liquidation or exchange for another
benefit.
(g) Injunction.
The Executive agrees that it would be difficult to measure any damages caused
to
the Employer which might result from any breach by the Executive of the promises
set forth in this Section 8, and that in any event money damages would be an
inadequate remedy for any such breach. Accordingly, subject to Section 8 of
this
Agreement, the Executive agrees that if the Executive breaches, or threatens
to
breach, any portion of this Agreement, the Employer shall be entitled, in
addition to all other remedies that it may have, to an injunction or other
appropriate equitable relief to restrain any such breach without showing or
proving any actual damage to the Employer.
(h) Definition
of Employer. For purposes of this Section 8, “Employer” shall
include Allion Healthcare, Inc. and each of its subsidiaries.
9. Arbitration
of Disputes. Any controversy or claim arising out of or relating to this
Agreement or the breach thereof or otherwise arising out of the Executive’s
employment or the termination of that employment (including, without limitation,
any claims of unlawful employment discrimination whether based on age or
otherwise) shall, to the fullest extent permitted by law, be settled by
arbitration under the auspices of the American Arbitration Association
(“AAA”) in New York, New York, in accordance with the Employment
Arbitration and Mediation Procedures of the AAA, including, but not limited
to,
the rules and procedures applicable to the selection of arbitrators. In the
event that any person or entity other than the Executive or the Employer may
be
a party with regard to any such controversy or claim, such controversy or claim
shall be submitted to arbitration subject to such other person or entity’s
agreement. Judgment upon the award rendered by the arbitrator may be entered
in
any court having jurisdiction thereof. This Section 9 shall be specifically
enforceable. Notwithstanding the foregoing, this Section 9 shall not preclude
either party from pursuing a court action for the sole purpose of obtaining
a
temporary restraining order or a preliminary injunction in circumstances in
which such relief is appropriate; provided that any other relief shall be
pursued through an arbitration proceeding pursuant to this Section
9.
10. Integration.
This Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior agreements between the
parties with respect to any related subject matter.
11. Assignment;
Successors and Assigns; etc. Neither the Employer nor the Executive may make
any assignment of this Agreement or any interest herein, by operation of law
or
otherwise, without the prior written consent of the other party; provided that
the Employer may assign its rights under this Agreement without the consent
of
the Executive in the event that the
Employer shall effect a reorganization, consolidate with or merge into any
other
corporation, partnership, organization or other entity, or transfer all or
substantially all of its properties or assets to any other corporation,
partnership, organization or other entity. This Agreement shall inure to the
benefit of and be binding upon the Employer and the Executive, their respective
successors, executors, administrators, heirs and permitted
assigns.
12. Enforceability.
If any portion or provision of this Agreement (including, without limitation,
any portion or provision of any section of this Agreement) shall to any extent
be declared illegal or unenforceable by a court of competent jurisdiction,
then
the remainder of this Agreement, or the application of such portion or provision
in circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision
of
this Agreement shall be valid and enforceable to the fullest extent permitted
by
law.
13. Waiver.
No waiver of any provision hereof shall be effective unless made in writing
and
signed by the waiving party. The failure of any party to require the performance
of any term or obligation of this Agreement, or the waiver by any party of
any
breach of this Agreement, shall not prevent any subsequent enforcement of such
term or obligation or be deemed a waiver of any subsequent breach.
14. Notices.
Any notices, requests, demands and other communications provided for by this
Agreement shall be sufficient if in writing and delivered in person or sent
by a
nationally-recognized overnight courier service or by registered or certified
mail, postage prepaid, return receipt requested, to the Executive at the last
address the Executive has filed in writing with the Employer or, in the case
of
the Employer, at its main offices, attention of the Chairman of the Board of
Directors, and shall be effective on the date of delivery in person or by
courier or three (3) days after the date mailed.
15. Amendment.
This Agreement may be amended or modified only by a written instrument signed
by
the Executive and by a duly authorized representative of the
Employer.
16. Construction.
This Agreement has been drafted and reviewed jointly by the parties, and no
presumption of construction as to the drafting of this Agreement shall be
applied against or in favor of any party.
17. Governing
Law. This is a New York contract and shall be construed under and be
governed in all respects by the laws of the State of New York, without giving
effect to the conflict of laws principles of New York. With respect to any
disputes concerning federal law, such disputes shall be determined in accordance
with the law as it would be interpreted and applied by the United States Court
of Appeals for the Second Circuit.
18. Indemnification.
The provisions of Article VII (Indemnification) of the Third Amended and
Restated By Laws of the Employer as in effect on the date hereof are deemed
incorporated herein by reference and any amendment to such By Laws after the
date hereof shall not be incorporated by reference herein if the effect thereof
is to reduce the rights conferred on the Executive. To the extent the
Executive is covered by any Director’s and Officer’s insurance maintained by the
Employer for the period during which the Executive provides services hereunder,
the Employer will undertake reasonable efforts to make available to the
Executive the benefit of such insurance.
19. Counterparts.
This Agreement may be executed in any number of counterparts, each of which
when
so executed and delivered shall be taken to be an original; but such
counterparts shall together constitute one and the same document.
20. Code
Section 409A. Notwithstanding anything in this Agreement to the
contrary, if any amount or benefit that would constitute non-exempt “deferred
compensation” for purposes of Section 409A of the Code would otherwise be
payable or distributable under this Agreement by reason of the Executive’s
separation from service during a period in which he is a Specified Employee
(as
defined below), then, subject to any permissible acceleration of payment by
the
Employer under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations
order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of
employment taxes):
(a) if
the payment or distribution is payable in a lump sum, the Executive’s right to
receive payment or distribution of such non-exempt deferred
compensation will be delayed until the earlier of the Executive’s death or
the first day of the seventh month following the Executive’s separation from
service; and
(b) if
the payment or distribution is payable over time, the amount of such non-exempt
deferred compensation that would otherwise be payable during the six-month
period immediately following the Executive’s separation from service will be
accumulated and the Executive’s right to receive payment or distribution of such
accumulated amount will be delayed until the earlier of the Executive’s death or
the first day of the seventh month following the Executive’s separation from
service, whereupon the accumulated amount will be paid or distributed to the
Executive and the normal payment or distribution schedule for any remaining
payments or distributions will resume.
For
purposes of this Agreement, the term “Specified Employee” has the meaning given
such term in Code Section 409A and the final regulations thereunder,
provided, however, that, as permitted in such final regulations, the
Employer’s Specified Employees and its application of the six-month delay rule
of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules
adopted by the Board of Director or the Compensation Committee, which shall
be
applied consistently with respect to all nonqualified deferred compensation
arrangements of the Employer, including this Agreement.
[Signatures
on Following Page]
IN
WITNESS WHEREOF, this Agreement has been executed by the Employer, by its duly
authorized officer, and by the Executive, as of the Effective Date.
/s/
Xxxxxxx X. Xxxxxx
Xxxxxxx
X. Xxxxxx
ALLION
HEALTHCARE, INC.
By:
/s/ Xxxxxxx X.
Xxxxx
Name: Xxxxxxx
X. Xxxxx
Title: Chief
Executive Officer
