Exhibit
10.24
EMPLOYMENT
AND NON-COMPETITION AGREEMENT
THIS
EMPLOYMENT AND NON-COMPETITION AGREEMENT (this “Agreement”) is made and entered into
as of the 22nd day of September, 2003, by and between Aerocare Holdings, Inc., a Delaware Company (the “Company”),
and Xxxxxx X. Xxxxxxx (the “Executive”).
RECITALS
WHEREAS, the Executive desires
to serve as the Vice President of Finance and Chief Financial Officer of the Company and the Company desires the Executive to serve
in such capacities; and
WHEREAS,
the Board of Directors of the Company (the “Board of Directors”) desires to employ the Executive,
and the Executive desires to be employed by the Company, all on the terms and subject to the conditions set forth herein; and
WHEREAS, the Executive is
willing to enter into this Agreement in consideration of the benefits which the Executive will receive under the terms hereof.
AGREEMENTS
NOW, THEREFORE, in consideration
of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
1.1. Duties
and Status. The Company hereby engages and employs the Executive as Vice President of Finance and Chief Financial Officer
for the Employment Period, as defined in Section 3.1 hereof, and the Executive accepts such employment, on the terms and
subject to the conditions set forth in this Agreement. During the Employment Period, the Executive shall faithfully exercise such
authority and perform such duties on behalf of the Company as are normally associated with his title and position as Vice President
of Finance and Chief Financial Officer, as well as such other duties or positions as the Board of Directors shall determine. The
Executive shall also serve without additional compensation in such other offices of the Company or its subsidiaries to which the
Executive may be elected or appointed by the Board of Directors.
1.2. Time and Effort.
During the Employment Period, the Executive shall devote substantially all of his working time, energy, skill and best efforts
to the performance of his duties hereunder in a manner which will faithfully and diligently further the business and interests
of the Company. Notwithstanding the foregoing, the Executive may participate fully in social, charitable and civic activities and
such other personal affairs of the Executive as do not interfere with the performance of his duties hereunder.
1.3 No
Prior Agreements. The Executive hereby represents and warrants to the Company that the execution of this Agreement by the
Executive, his employment by the Company, and the performance of his duties hereunder will not violate or be a breach of any agreement
with a former employer, client or any other Person. Further, the Executive agrees to indemnify and hold harmless the Company and
its officers, directors and representatives for any claim, including, but not limited to, reasonable attorneys’ fees and
expenses of investigation, of any third party that such third party may now have or may hereafter come to have against the Company
or such other persons, based upon or arising out of any noncompetition agreement, invention, secrecy or other agreement between
the Executive and such third party that was in existence as of the effective date of this Agreement.
2. COMPENSATION
AND BENEFITS.
2.1. Annual
Base Salary. For all of the service rendered by the Executive to the Company, the Company shall pay the Executive an annual
base salary of $125,000 (less all applicable deductions) (the “Annual Base Salary”). The Executive’s
Annual Base Salary shall be payable in equal installments in accordance with the practice of the Company in effect from time to
time for the payment of salaries to officers of the Company. The Executive’s performance shall be reviewed at least annually.
2.2. Expenses.
The Company shall pay or reimburse the Executive for all reasonable expenses actually paid or incurred by the Executive during
the Employment Period in the performance of the Executive’s duties under this Agreement in accordance with the Company’s
employee business expense reimbursement policies in effect from time to time.
2.3. Bonuses,
Etc. The Executive shall be entitled to participate in such bonus, profit-sharing, stock option, incentive, and performance
award plans and programs, if any, as may from time to time be determined by the Board of Directors in its discretion (the “Bonus”).
It is the intent of the Company and the Company’s Board of Directors to create a reasonable bonus plan for the Executive
whereby the Executive would have an opportunity under such plan to earn a cash bonus of up to $30,000 per year.
2.4. Benefits.
The Executive shall be entitled to receive such employee benefits, including, without limitation, any and all pension, disability,
group life, sickness, and accident and health insurance plans and programs, as the Company may provide from time to time to its
salaried employees generally, and such other benefits as the Board of Directors may from time to time establish for the Company’s
executive officers, subject in all cases to any applicable eligibility requirements and any conditions or limitations of such plans
or programs. The Company shall provide the Executive with long term disability insurance providing for payments equal to 60% of
the Executive’s Annual Base Salary and through an insurance company acceptable to both the Company and the Executive.
2.5. Vacation.
The Executive shall be entitled to paid vacation of four (4) weeks per calendar year, together with leave of absence and leave
for illness or temporary disability in accordance with the policies of the Company in effect from time to time.
2.6
Options to Purchase Shares of Aerocare Stock. The
Company shall issue options to the Executive, pursuant to one or more of the existing forms of option agreements used by the
Company as determined by the Company’s Board of Directors, for the purchase of up to 500,000 shares of the Company at
an option price of $1.00 per share, with the option to purchase 100,000 shares vesting after one full year of employment
hereunder, the option to purchase an additional 100,000 shares vesting after two full years of employment hereunder, the
option to purchase an additional 100,000 shares vesting after three full years of employment hereunder, the option to
purchase an additional 100,000 shares vesting after four full years of employment hereunder and the option to purchase an
additional 100,000 shares vesting after five full years of employment hereunder.
3.1. Employment
Period. Subject to Section 3.2 hereof, the Executive’s employment (the “Employment
Period”) shall commence on the date of this Agreement and shall terminate on the earlier of: (a) the close of
business on September 22, 2005 (the “Term”); provided however, that such period and any
Renewal shall automatically renew for a subsequent 12-month period (the “Renewal”) unless either
party provides written notice of termination to the other party at least 60 days in advance of the date of such termination;
or (b) termination of this Agreement pursuant to Section 3.2 hereof. Termination by the Executive upon delivery of a
notice of termination to the Company as contemplated in subparagraph (a) above shall be referred to herein as an “Executive
Non-Renewal Election.” Termination by the Company upon delivery of a notice of termination to the Executive as
contemplated in subparagraph (a) above shall be referred to herein as a “Company Non-Renewal
Election.”
3.2. Termination
of Employment. Each party shall have the right to terminate the Executive’s employment hereunder before the Term
expires to the extent, and only to the extent, permitted by this Section 3.2.
(a) By
the Company for Cause. The Company shall have the right to terminate the Executive’s employment at any time upon
delivery of written notice of termination for Cause (as defined below) to the Executive (which notice shall specify in reasonable
detail the basis upon which such termination is made), such employment to terminate immediately upon delivery of such notice unless
otherwise specified by the Board of Directors, if the Board of Directors determines that the Executive: (i) has materially breached
any provision of this Agreement or any other material agreement entered into between the Company and the Executive after a demand
for substantial performance was delivered to the Executive by the Board of Directors (where such demand specifically identified
the manner in which the Board of Directors believed that the Executive had breached such agreement), and such breach was not cured
after a period of 30 days (or such longer period acceptable by the Board of Directors) after such demand, (ii) has engaged in
willful misconduct or committed gross negligence which is injurious to the Company, (iii) has engaged in conduct involving dishonesty
for personal gain, fraud or unlawful activity which is injurious to the Company, (iv) has been convicted of or entered a plea
of nolo contendere to a felony or any crime involving moral turpitude, or (v) has engaged in any willful, reckless or grossly
negligent act which may, in the reasonable opinion of the Board of Directors, after due investigation, impugn the good name and
reputation of the Company and which is injurious to the Company (collectively, “Cause”). In the
event that the Executive’s employment is terminated for Cause, the Executive shall be entitled to receive only the payments
referred to in Section 3.3(e) hereof.
(b) By
the Company Upon Total Disability. The Company shall have the right to terminate the Executive’s employment on
five days’ prior written notice to the Executive if the Board of Directors determines that the Executive is unable
to perform his duties by reason of Total Disability, but any termination of employment pursuant to this subsection (b) shall
obligate the Company to make the payments referred to in Section 3.3(b) hereof. As used herein, “Total
Disability” shall mean the inability of the Executive due to physical or mental illness or injury to perform
his duties hereunder for any period of 180 consecutive days and the return of the Executive to his duties for periods of
20 business days or less shall not interrupt such 180-day period.
(c) By
the Company Other Than for Cause or Upon Death or Total Disability. The Company shall have the right to terminate the
Executive’s employment, other than for Cause or upon the Executive’s death or Total Disability, on 30 days’
prior written notice to the Executive in the Board of Directors’ sole discretion, but any termination of employment pursuant
to this subsection (c) shall obligate the Company to make the payments referred to in Section 3.3(c) hereof.
(d) By
the Executive. The Executive shall have the right to terminate his employment hereunder (i) for Good Reason (as defined
below) or (ii) otherwise after 30 days’ prior written notice to the Company. In the event that the Executive elects to terminate
his employment pursuant to subsection (d)(ii), the Executive shall be entitled to receive only the payments referred to in Section
3.3(d) hereof. In the event the Executive elects to terminate his employment pursuant to subsection (d)(i), the Executive
shall be entitled to receive the payments referred to in Section 3.3(c) hereof. “Good Reason”
shall mean (A) any material breach by the Company of this Agreement or any option agreement or other material agreement entered
into with, or provided to, the Executive, if such breach shall not have been cured by the Company within 30 days after the Executive’s
delivery of written notice to the Company of such breach, (B) a material reduction in the Executive’s title, duties, responsibilities
or status, or (C) the assignment to the Executive of different or additional material duties that are significantly inconsistent
with the Executive’s position.
(e) Executive
Non-Renewal Election. Upon termination by an Executive Non-Renewal Election as contemplated under Section 3.1(a) hereof,
the Executive’s employment hereunder shall terminate upon the expiration of the Term or then-current Renewal thereof, as
applicable, and the Executive shall be entitled to receive the payments referred to in Section 3.3(g) hereof.
(f) Company
Non-Renewal Election. Upon termination by a Company Non-Renewal Election as contemplated under Section 3.1(a) hereof,
the Executive’s employment hereunder shall terminate upon the expiration of the Term or then-current Renewal thereof, as
applicable, and the Executive shall be entitled to receive the payments referred to in Section 3.3(f) hereof.
(g) Death
of the Executive. The Executive’s employment hereunder shall terminate upon the death of the Executive. In such an
event, the Executive’s estate shall be entitled to receive the payments referred to in Section 3.3(a) hereof.
3.3. Compensation
and Benefits Following Termination. Except as specifically provided in this Section 3.3, any and all obligations
of the Company to make payments to the Executive under this Agreement shall cease as of the date the Employment Period expires
under Section 3.1 or as of the date the Executive’s employment is terminated under Section 3.2, as the case
may be. The Executive shall be entitled to receive only the following compensation and benefits following the termination of his
employment hereunder:
(a) Upon
Death. In the event that the Employment Period terminates pursuant to Section 3.2(g) on account of the death of
the Executive, (i) the Company shall pay to the Executive’s surviving spouse or, if none, his estate, a lump-sum amount
equal to the sum of the Executive’s earned and unpaid salary through the date of his death, any Bonus definitively granted
to the Executive by the Company but not yet paid to the Executive, any unreimbursed business and entertainment expenses in accordance
with the Company’s policies, and any unreimbursed employee benefit expenses that are reimbursable in accordance with the
Company’s employee benefit plans through the date of termination (collectively, the “Standard Termination Payments”),
(ii) the Company shall pay to the Executive’s surviving spouse or, if none, his estate, a lump sum amount equal to six
(6) months of the Annual Base Salary (provided, however, that the Company shall not be obligated to pay such lump sum amount if
the Executive was not continuously employed by the Company for a period of at least six (6) full months), and (iii) death benefits,
if any, under the Company’s employee benefit plans shall be paid to the Executive’s beneficiaries as properly designated
in writing by the Executive.
(b) Upon
Termination for Total Disability. In the event that the Company elects to terminate the employment of the Executive pursuant
to Section 3.2(b) because of his Total Disability, (i) the Company shall pay to the Executive a lump-sum amount equal to
the Standard Termination Payments, (ii) the Company shall continue to pay the Annual Base Salary in accordance with Section
2.1 for a period of six (6) months following the Executive’s termination date (provided, however, that the Company shall
not be obligated to pay an additional six (6) months of Annual Base Salary if the Executive was not continuously employed by the
Company for a period of at least six (6) full months), and (iii) the Executive shall be entitled to such disability and other employee
benefits as may be provided under the terms of the Company’s employee benefit plans.
(c) Upon
Termination Other Than for Cause or Upon Death or Total Disability. In the event that the Company elects to
terminate the employment of the Executive pursuant to Section 3.2(c) or the Executive elects to terminate his
employment under Section 3.2(d)(i), (i) the Company shall pay to the Executive within 30 days of such termination, by
wire transfer of immediately available funds, a lump-sum amount equal to the Standard Termination Payments and (ii) the
Company shall continue to pay the Annual Base Salary in accordance with Section 2.1 for a period of six (6) months
following the Executive’s termination date (provided, however, that the Company shall not be obligated to pay an
additional six (6) months of Annual Base Salary if the Executive was not continuously employed by the Company for a period of
at least six (6) full months). The Company shall also be obligated to provide continued coverage, at the Company’s
expense, under the Company’s medical, dental, life insurance and total disability benefit plans or arrangements with
respect to the Executive for a period of six (6) months following the Executive’s termination date (provided, however,
that the Company shall not be obligated to provide such additional six (6) months of coverage if the Executive was not
continuously employed by the Company for a period of at least six (6) full months). From the date of such notice of
termination other than for Cause or upon death or Total Disability through the last date of the Executive’s
employment hereunder, the Executive shall continue to perform the normal duties of his employment hereunder (unless waived by
the Company), and shall be entitled to receive, when due, all compensation and benefits applicable to the Executive
hereunder.
(d) By
the Executive. In the event the Executive elects to terminate his employment pursuant to Section 3.2(d)(ii), (i)
the Company shall pay to the Executive a lump-sum amount equal to the Standard Termination Payments and (ii) the Executive shall
be entitled to such disability and other employee benefits as may be provided under the terms of the Company’s employee benefit
plans for the time period provided for in such plans.
(e) For
Cause. In the event that the Company terminates the employment of the Executive pursuant to Section 3.2(a) for
Cause, the Executive shall be entitled to receive an amount equal to the Standard Termination Payments.
(f) By
the Expiration of this Agreement upon Company Non-Renewal Election. In the event that the Company elects to provide notice
of termination of this Agreement pursuant to Section 3.1(a), (i) the Company shall pay to the Executive within 30 days of
expiration of this Agreement, by wire transfer of immediately available funds, a lump-sum amount equal to the Standard Termination
Payments and (ii) the Company shall continue to pay the Annual Base Salary in accordance with Section 2.1 for a period of
six (6) months following the Executive’s termination date (provided, however, that the Company shall not be obligated to
pay an additional six (6) months of Annual Base Salary if the Executive was not continuously employed by the Company for a period
of at least six (6) full months). The Company shall also be obligated to provide continued coverage, at the Company’s expense,
under the Company’s medical, dental, life insurance and total disability benefit plans or arrangements with respect to the
Executive for the Restricted Period (provided, however, that the Company shall not be obligated to provide such additional six
(6) months of coverage if the Executive was not continuously employed by the Company for a period of at least six (6) full months).
From the date of such notice of termination pursuant to Section 3.1(a) through the last date of the Executive’s employment
hereunder, the Executive shall continue to perform the normal duties of his employment hereunder (unless waived by the Company),
and shall be entitled to receive, when due, all compensation and benefits applicable to the Executive hereunder.
(g) By
the Expiration of this Agreement upon Executive Non-Renewal Election. In the event that the Executive elects to provide
notice of termination of this Agreement pursuant to Section 3.1(a), (i) the Company shall pay to the Executive within 30
days of expiration of this Agreement, by wire transfer of immediately available funds, a lump-sum amount equal to the Standard
Termination Payments and (ii) the Executive shall be entitled to such disability and other employee benefits as may be provided
under the terms of the Company’s employee benefit plans for the time period provided for in such plans. From the date of
such notice of termination pursuant to Section 3.1(a) through the last date of the Executive’s employment hereunder,
the Executive shall continue to perform the normal duties of his employment hereunder (unless waived by the Company), and shall
be entitled to receive, when due, all compensation and benefits applicable to the Executive hereunder.
3.4. All
Payments. All payments made to the Executive upon the termination of the Executive’s employment are in lieu of all
other termination or severance payments available at law or otherwise.
4.1. Definitions.
When used in this Section 4, the following terms shall have the meanings specified:
(a) “Company”
means Aerocare Holdings, Inc. and its subsidiaries.
(b) “Confidential
Information” means any data or information with respect to the business conducted by the Company, that is material
to the Company’s business operations and is not generally known by the public, including business and trade secrets. To the
extent consistent with the foregoing definition, Confidential Information includes, without limitation: (a) reports, pricing, sales
manuals and training manuals, selling, purchasing, and pricing procedures, and financing methods of the Company, together with
any specific and proprietary techniques utilized by the Company in designing, developing, testing or marketing its products, product
mix and supplier information or in performing services for clients, customers and accounts of the Company; (b) the business plans
and financial statements, reports and projections of the Company; (c) research or development projects or results; (d) identities
and addresses of consultants, customers, employees or clients or any other confidential information relating to or dealing with
the business operations or activities of the Company; (e) information concerning trade secrets of the Company; and (f) information
concerning existing or contemplated software, products, services, technology, designs, processes and research or product developments
of the Company, made known to the Executive or acquired by the Executive in the course of his employment at the Company. Confidential
Information further includes all of the foregoing information that the Executive has learned in the past or learns in the future
during the course of the Executive’s employment by the Company, whether or not such information is marked or otherwise designated
as confidential. Confidential Information does not include any information that (a) is or becomes part of the public domain or
is or becomes publicly available without breach of this Agreement by the Executive; (b) is lawfully acquired by the Executive from
a source not under any obligation regarding the disclosure of such information; (c) is disclosed to any third party by or with
the permission of the Company without confidentiality restrictions; or (d) is developed by an independent Person who has not received,
directly or indirectly, any Confidential Information from the Executive, the Company or otherwise.
(c) “Company
Business” means the business engaged in by the Company during the Executive’s employment, including marketing,
promoting, renting and selling the Company Products or providing related services.
(d) "Company
Products” means nebulizer, respiratory medication, oxygen delivery and related respiratory products and such other
products sold, leased, rented or otherwise provided by the Company to customers of the Company during the Executive’s employment,
or any such products for which, at the time of Executive’s termination, the Company has definite plans to sell, lease, rent
or otherwise provide to customers of the Company.
(e) “Company
Territory” means the 75 mile radius surrounding any of the Company’s operations in Florida, Nevada, Oklahoma,
Texas, Georgia, Missouri, Colorado, Pennsylvania, Virginia, Arkansas, Kentucky, Mississippi and all other states in the United
States in which the Company engages in the Company Business during Executive’s employment with the Company.
(f) “Person”
means an individual, firm, Company, partnership, limited liability company, joint venture, association, joint stock company, trust,
or unincorporated organization, or a federal, state, city, municipal, or foreign government or an agency or political subdivision
thereof, or any other type of entity or third party.
4.2. Recitals.
(a) The
Company has and will grant the Executive access to and knowledge of the Company’s Confidential Information during the course
of his employment with the Company. The Executive recognizes and acknowledges that the Confidential Information that he has and
will acquire in the course of his employment is and will be utilized by the Company in all geographic areas in which the Company
does business. Further, the Confidential Information will also be utilized in all geographic areas into which the Company expands
its business. Thus, the Executive acknowledges that he would be a formidable competitor in all areas where the Company conducts
business.
(b) The
Executive acknowledges that the Company Business is quite competitive and that it is difficult to establish relationships with
customers. The Company has spent many years and invested significant money and other resources to develop its customer relationships.
The Executive will have personal contact with the Company’s customers and develop personal knowledge of, and relationships
with, the Company’s customers. The Company has developed and continues to develop long term relationships with its customers.
(c) The
Executive acknowledges that the restrictive covenants in this Agreement serve to protect the Company’s investment in its Confidential
Information and in its relationship with its customers.
4.3. Agreement
Not-to-Compete. The Executive agrees that during the Restricted Period (as defined below), he shall not, directly or indirectly,
(a) engage, directly or indirectly, whether as owner, officer, agent, principal, partner, employee, consultant, investor, lender
or otherwise, in the Company Business in the Company Territory, either individually or in affiliation with any Person; or (b)
be the holder of any outstanding loans to, or be the record or beneficial owner, directly or indirectly, of any security interests
in or outstanding capital stock or voting securities (or obligations or securities convertible into capital stock or voting securities)
of any Person that is engaged, directly or indirectly, in the Company Business in the Company Territory or that is a direct or
indirect owner or affiliate of any other Person that is engaged, directly or indirectly, in the Company Business in the Company
Territory; provided, however, that this Section 4.3 shall not prohibit the Executive from making direct or indirect passive investments
in the capital stock of any publicly-traded company so long as such aggregate ownership interest does not exceed two percent (2%)
of the total outstanding shares of capital stock of any such company. For purposes hereof, “Restricted Period”
shall mean a period of 24 months following the termination of the Executive’s employment with the Company.
4.4. No
Hiring. Independent of the foregoing provisions, the Executive agrees that, during the Restricted Period, the Executive
will not in any manner hire, engage, retain or employ any person engaged or employed by the Company on the date of termination,
or engaged or employed by the Company within the twenty four-month period prior to the date of termination (whether part-time
or full-time and whether as an officer, employee, consultant (other than legal or accounting advisors), agent, adviser or independent
contractor) (a “Company Employee”) (whether or not for compensation) as an officer, employee, consultant,
agent, adviser or independent contractor for any Person other than the Company. Upon termination of this Agreement, the Company
shall prepare a schedule of the Company Employees.
4.5. Non-Solicitation
and Pirating of Customers.
(a) Independent
of the foregoing provisions, the Executive agrees that, during the Restricted Period, the Executive shall not, directly or indirectly,
solicit the purchase of products or services in competition with Company Products (or serve as a principal, partner, director,
officer, agent, employee, contractor, or consultant for a Prohibited Business which markets or solicits the sale of products or
services in competition with Company Products) from any Person who was a customer of the Company at the time of the termination
of this Agreement or at any time during the last three years of the Executive’s employment at the Company.
(b) Independent
of the foregoing provisions, the Executive agrees that, during the Restricted Period, the Executive shall not, directly or indirectly,
market, sell or offer to sell products or services in competition with Company Products (or serve as a principal, partner, director,
officer, agent, employee, contractor, or consultant for a Prohibited Business which markets, sells or offers to sell products or
services in competition with Company Products) to any Person who was a customer of the Company at the time of the termination of
this Agreement or at any time during the last three years of the Executive’s employment at the Company.
4.6. No
Interference with Suppliers. Independent of the foregoing provisions, the Executive agrees that, during the Restricted
Period, the Executive shall not, directly or indirectly, interfere with, or induce or cause the termination of, the business relationship
between the Company and any business which supplied goods or services to the Company at the time of the termination of this Agreement
or at any time during the Executive’s employment with the Company.
4.7. Confidential
Information. This covenant is independent of, and in addition to, those set forth above.
(a) Executive
covenants and agrees that he will not, directly or indirectly, use, divulge, disclose or make available or accessible any
Confidential Information to or for any Person other than the Company, unless at the specific direction of, and with the
knowledge and written consent of, another officer of the Company. Nothing in this Agreement, however, shall prohibit the
Executive from disclosing Confidential Information when required to do so pursuant to a valid subpoena. The Executive agrees
that in the event he, or any Person with whom the Executive is affiliated or employed as an officer, employee, owner,
consultant or agent of any kind, receives a subpoena that would require him to divulge, in whole or in part, Confidential
Information, he will immediately contact the Company in order to allow the Company the opportunity to intervene if necessary
to protect against the disclosure of Confidential Information.
(b) The
Executive acknowledges that all Confidential Information is and shall remain the sole, exclusive and valuable property of the Company
and that the Executive has and shall acquire no right, title or interest therein. Any and all printed, typed, written or other
material that the Executive may have or obtain with respect to Confidential Information (including, without limitation, all copyrights
therein) shall be and remain the exclusive property of the Company, and any and all material (including any copies) shall, upon
termination of the Executive’s employment for any reason or upon request of the Company, be promptly delivered by the Executive
to the Company. Any provision of this Agreement to the contrary notwithstanding, the Executive agrees that, following the termination
of his employment for any reason, the Company may withhold all post-termination compensation and benefits until Executive returns
to the Company any and all Company property or documents (originals and all copies), including but not limited to Confidential
Information.
4.8. Intellectual
Property Rights.
(a) The
Executive hereby assigns to the Company all right, title and interest in and to any ideas, inventions, original works or authorship,
developments, improvements or trade secrets which the Executive, solely or jointly, has conceived or reduced to practice, or conceives
or reduces to practice, or causes to be conceived or reduced to practice, during the period of, and in the course of, the Executive’s
employment with, the Company or which in any manner related to the business of the Company. All original works of authorship which
are made by the Executive (solely or jointly with others) within the scope of, or during the Executive’s employment with,
the Company and which are protectable by copyright are “works made for hire,” as that term is defined in the United
States Copyright Act.
(b) The
Executive hereby waives all moral rights in all the said original works in favor of Company, its successors and assigns.
4.9. Severability.
The restrictive covenants in the various provisions of this Section 4 are separate and independent contractual
provisions. The invalidity or unenforceability of any particular restrictive covenant or any other provision in this Agreement
shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted
4.10. Scope
and Reasonableness.
(a) The
parties agree that it is not their intention to violate any public policy, rule of public order or statutory or common law. The
parties intend that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is sought. If any provision of this Agreement is found by a court to be unenforceable,
the parties authorize the court to amend or modify the provision to make it enforceable in the most restrictive fashion permitted
by law.
(b) The
Executive acknowledges that the restrictions contained in the foregoing Sections 4.3, 4.4, 4.5, 4.6, 4.7 and 4.8,
in view of the nature of the business in which the Company is engaged, are reasonable and necessary in order to protect the
legitimate interests of the Company, and that any violation thereof would result in irreparable injuries to the Company, and
the Executive therefore acknowledges that, in the event of his violation of any of these restrictions, the Company shall be
entitled to obtain from a court of competent jurisdiction (as agreed to below) preliminary and permanent injunctive relief as
well as damages and an equitable accounting of all earnings, profits and other rights or remedies to which the Company may be
entitled. If the Executive violates any of the restrictions contained in the foregoing Sections 4.3, 4.4, 4.5, 4.6, 4.7
and 4.8, the restrictive period shall not run in favor of the Executive from the time of the commencement of any such
violation until such violation shall be cured by the Executive to the satisfaction of Company.
4.11. Survival
of Non-Competition and Confidentiality Agreements. Any provision of this Agreement to the contrary notwithstanding, if
this Agreement is terminated for any reason, the provisions and covenants of this Section 4 shall nevertheless remain in
full force and effect in accordance with their respective terms.
(a) In
the event that the Executive’s employment with the Company is terminated pursuant to Section 3.2(a), Section 3.2(b), Section
3.2(d)(ii), Section 3.2(e) or Section 3.2(g), the Company, or such other party as the Company may designate,
shall have the right (as described below) but not the obligation, to repurchase from the Executive any and all shares of Common
Stock then held by the Executive (the “Shares”).
(b) In
the event that the Executive’s employment with the Company is terminated pursuant to Section 3.2(c), Section
3.2(d)(i) or Section 3.2(f), the Company, or such other party as the Company may designate, shall have the right (as
described below), but not the obligation, to repurchase from the Executive the percentage of Shares then held by the Executive
as follows:
| | |
Percentage of Shares Held by Executive at | |
| Date of Termination of Employment | |
Time of Termination | |
| | |
| |
| on or before September 22, 2004 | |
| 100 | % |
| on or before September 22, 2005 | |
| 80 | % |
| on or before September 22, 2006 | |
| 60 | % |
| on or before September 22, 2007 | |
| 40 | % |
| on or before September 22, 2008 | |
| 20 | % |
| anytime after September 22, 2008 | |
| 0 | % |
(c) Upon
termination of the Executive’s employment with the Company for any reason whatsoever, the Company, or such other party as
the Company may designate, shall have the right (as described below), but not the obligation, to repurchase from the Executive
any and all shares of Common Stock issuable upon exercise of any “Pool-A” (time-vesting) options or “Pool -B”
(performance-vesting) options granted to the Executive pursuant to the Company’s Stock Option Plan and any other options
or rights to purchase Company Common Stock that may be owned by the Executive on the date of termination (collectively, the “Option
Shares”).
(d) This
repurchase right shall be exercisable by the Company, or such other party as the Company may designate, by delivery of a repurchase
notice to the Executive prior to the date which is, in the case of the Shares, no later than six months after the date of termination
of the Executive’s employment with the Company for any reason, and, in the case of the Option Shares, no later than the
later of (i) two months following exercise of the Option Shares and (ii) six months following the date of termination of employment.
The Company shall have the option at any time prior to closing to terminate the exercise of its repurchase right hereunder and
rescind its offer to purchase the Shares from the Executive contemplated by this Section 5.
(e) The
price payable to the Executive by the Company in connection with the Company’s purchase of any shares pursuant to this Section
5 shall be equal to the fair market value of such shares as mutually agreed in good faith by the Executive and the Company’s
Board of Directors; provided, however, that in the event the Executive and the Company’s Board of Directors are unable
to agree on a purchase price for the repurchase of such shares, they shall engage the services of a mutually agreed upon third
party independent appraiser to value such shares, and the determination of such appraiser shall be final and binding on the parties.
One-half of all fees and expenses of the third party appraiser shall be paid by the Executive and one-half of all fees and expenses
of the third party appraiser shall be paid by the Company.
(f) All
sales to the Company and or its designee pursuant to this Section 5 shall be consummated contemporaneously at the offices
of the Company on the later of (i) a mutually satisfactory business day within 60 days after the Company’s (or its designee’s)
delivery of a repurchase notice to the Executive or (ii) the fifth business day following the receipt of all regulatory approvals,
if any (including, without limitation, the expiration or termination of all waiting periods under the HSR), applicable to such
sales, or at such other time and/or place as the parties to such sales may agree. The delivery of certificates or other instruments
evidencing such shares duly endorsed for transfer and accompanied by stock powers shall be made on such date against payment of
the purchase price for such shares as provided in Section 5(g) below.
(g) All
shares to be purchased by the Company pursuant to Section 5(f) above may be paid for, at the Company’s option, by
the Company in any combination of the following payments: (i) in cash at the date of delivery of certificates or other instruments
evidencing the shares to be sold; (ii) by offsetting any amounts due to the Company from the Executive, or (iii) with a note bearing
a maturity of not longer than two years and bearing an interest rate equal to the rate on U.S. Government treasury notes of comparable
maturity on the date of issuance plus 100 basis points.
6.1. Applicable
Law and Choice of Venue. This Agreement shall be construed and interpreted according to the laws of the State of Delaware,
without regard to the conflicts of law rules thereof. Further, the parties hereby consent to the exclusive jurisdiction of the
Delaware Chancery Court for purposes of that court adjudicating any and all disputes involving the interpretation of this Agreement.
In the event such an action is brought, the Company shall accept service of process through its Registered Agent, and the Executive
shall accept service of process by a public or private process server, regardless of Executive’s location. Executive hereby
waives any objection to the initiation of such an action based on either the Delaware Chancery Court having a lack of jurisdiction
(personal or subject matter) or the ineffective service of process, as long as actual service on the Executive has been affected.
6.2. Headings.
The headings and captions set forth herein are for convenience of reference only and shall not affect the construction or interpretation
hereof.
6.3. Notices.
Any notice or other communication required, permitted, or desirable hereunder shall be hand delivered (including delivery by a
commercial courier service) or sent by United States registered or certified mail, postage prepaid, addressed as follows:
| If to Company: |
Aerocare Holdings, Inc. |
| |
0000 Xxxxxxxx Xxxxxxxxx |
| |
Xxxxxxx, XX 00000 |
| |
Attention: Board of Directors |
| |
Telephone: (000) 000-0000 |
| |
Fax: (000) 000-0000 |
| |
|
| |
with a copy to: |
| |
|
| |
Xxxxxx Xxxxxxx & Company, LLC |
| |
00 Xxxxxxxxx Xxxxxx |
| |
Xxxxxxxxx, XX 00000 |
| |
Attention: Xxxxxx X. Xxxxx |
| |
Telephone: (000) 000-0000 |
| |
Fax: (000) 000-0000 |
| |
|
| If to the Executive: |
Xxxxxx X. Xxxxxxx |
| |
000 Xxxx Xxxxxxxx Xxxxx |
| |
Xxxxxxxx, Xxxxxxx 00000 |
or such other addresses as shall be furnished in writing
by the parties. Any such notice or communication shall be deemed to have been given as of the date so delivered in person or three
business days after so mailed.
6.4. Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of successors and permitted assigns of the parties.
This Agreement may not be assigned, nor may performance of any duty hereunder be delegated, by either party without the prior written
consent of the other; provided, however, the Company may assign this Agreement to any successor to its business.
6.5. Entire
Agreement; Amendments. This Agreement sets forth the entire agreement and understanding of the parties with respect to
the subject matter hereof, and there are no other contemporaneous written or oral agreements, undertakings, promises, warranties,
or covenants not specifically referred to or contained herein. This Agreement specifically supersedes any and all prior agreements
and understandings of the parties with respect to the subject matter hereof, all of which prior agreements and understandings (if
any) are hereby terminated and of no further force and effect. This Agreement may be amended, modified, or terminated only by a
written instrument signed by the parties hereto.
6.6. Execution
of Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original
and all of which together shall constitute one and the same Agreement. This Agreement may be delivered by facsimile transmission
of an originally executed copy to be followed by immediate delivery of the original of such executed copy.
6.7. Severability.
If any provision, clause or part of this Agreement, or the applications thereof under certain circumstances, is held invalid or
unenforceable for any reason, the remainder of this Agreement, or the application of such provision, clause or part under other
circumstances, shall not be affected thereby.
6.8. Recitals.
The Recitals to this Agreement are an integral part of, and by this reference are hereby incorporated into, this Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties
have executed this Employment and Non-Competition Agreement as of the day and year first above written.
| |
AEROCARE HOLDINGS, INC. |
| |
|
|
| |
By: |
/s/ Xxxxxxx X.
Xxxxxx |
| |
|
Xxxxxxx X. Xxxxxx, Chairman, President and CEO |
| |
|
|
| |
EXECUTIVE |
| |
|
| |
/s/ Xxxxxx X. Xxxxxxx |
| |
Xxxxxx X. Xxxxxxx |
AMENDMENT TO EMPLOYMENT AND NON-COMPETITION
AGREEMENT
This
Amendment to Employment and Non-Competition Agreement is made and entered into as of the 31st day of May, 2010, by
and between AEROCARE HOLDINGS, INC., a Delaware corporation, hereinafter called
the “Company”, and XXXXXX X. XXXXXXX, hereinafter called the “Executive”.
WITNESSETH:
WHEREAS, the
Company and Executive entered into that certain Employment and Non-Competition Agreement dated as of September 22, 2003 (the “Agreement”),
and desire to amend the Agreement as herein provided;
NOW, THEREFORE, in
consideration of the mutual promises and conditions herein contained, the parties hereto agree as follows:
1. Subsection
(c) of Section 3.3 of the Agreement is hereby amended by restating such Subsection in its entirety as follows:
“3.3 Compensation and Benefits Following Termination.
********
“(c)
Upon Termination Other Than for Cause or Upon Death or Total Disability. In the
event that the Company elects to terminate the employment of the Executive pursuant to Section 3.2(c) or the Executive
elects to terminate his employment under Section 3.2(d)(i), (i) the Company shall pay to the Executive within 30 days
of such termination, by wire transfer of immediately available funds, a lump-sum amount equal to the Standard Termination Payments
and (ii) the Company shall continue to pay the Annual Base Salary in accordance with Section 2.1 for a period of twelve
(12) months following the Executive’s termination date. The Company shall also be obligated to provide continued coverage,
at the Company's expense, under the Company’s medical, dental, life insurance and total disability benefit plans or arrangements
with respect to the Executive for a period of twelve (12) months following the Executive’s termination date. From the date
of such notice of termination other than for Cause or upon death or Total Disability through the last date of the Executive’s
employment hereunder, the Executive shall continue to perform the normal duties of his employment hereunder (unless waived by
the Company), and shall be entitled to receive, when due, all compensation and benefits applicable to the Executive hereunder.”
2. Other
than as amended above, the terms and conditions of the Agreement are hereby confirmed in their entirety.
3. This
Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute but one and the same instrument. Facsimile signatures may be deemed binding for this Amendment, or any
modification or amendment hereto, or any documents contemplated hereby.
IN WITNESS WHEREOF, the
undersigned have hereunto executed this Amendment on the date set forth above.
| Signed, sealed and delivered |
|
AEROCARE HOLDINGS, INC., |
| in the presence of: |
|
a Delaware corporation |
| |
|
|
|
| |
|
By: |
/s/ Xxxxxxx X.
Xxxxxx |
| |
|
|
Xxxxxxx X. Xxxxxx, Chairman, |
| |
|
|
President and CEO |
| |
|
|
|
| |
|
|
“Company” |
| |
|
|
|
| |
|
/s/ Xxxxxx X. Xxxxxxx |
| |
|
XXXXXX X. XXXXXXX |
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|
|
| |
|
|
|
| |
|
|
“Executive” |
