Exhibit 10.15
EMPLOYMENT AGREEMENT
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(Xxxxxx X. Xxxxxx)
THIS AGREEMENT, made as of December 30, 1996, by and between
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RESPIRONICS, INC., a Delaware corporation (the "Company"), and XXXXXX X. XXXXXX,
of Pittsburgh, Pennsylvania ("Executive").
W I T N E S S E T H:
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WHEREAS, the Company is engaged in the business of the design,
development, manufacture, marketing and sale principally of respiratory and
other medical equipment;
WHEREAS, Executive possesses valuable knowledge and skills that have
contributed to and will continue to contribute to the successful operation of
the Company's business;
WHEREAS, the Company and Executive have agreed to execute and deliver
this Agreement in consideration, among other things, of (i) the access Executive
has had and will continue to have to confidential or proprietary information of
the Company, (ii) the access Executive will have to confidential or proprietary
information to be acquired hereafter by the Company, (iii) the willingness of
the Company to make valuable benefits available hereafter to Executive, and (iv)
Executive's receipt of compensation from time to time by the Company; and
WHEREAS, the Company desires to retain the services of Executive, and
Executive is willing to accept employment with the Company, upon the terms and
subject to the conditions hereinafter set forth.
NOW, THEREFORE, intending to be legally bound, the Company agrees to
employ Executive, and Executive hereby agrees to be employed by the Company,
upon the following terms and conditions:
ARTICLE I
EMPLOYMENT
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1.01. Office. Executive is hereby employed as Vice President, Human
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Resources and General Counsel of the Company and in such other executive and
managerial capacities as the Board of Directors or the President of the Company
may from time to time determine, and in such capacity or capacities shall use
his best energies or abilities in the performance of his duties hereunder and as
prescribed in the By-Laws of the Company.
1.02. Term. Subject to the terms and provisions of Article II hereof,
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Executive shall be employed by the Company for a period of three years (the
"Term"), commencing on the date of this Employment Agreement and ending
. Subject to the terms and provisions of
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Article II hereof, the Term shall automatically be extended for an additional
year unless, not less than ninety (90) days prior to the expiration of the then-
current first year of the Term, either Executive or the Company shall advise the
other that the Term will not be further extended.
1.03. Base Salary. During the Term, compensation shall be paid to
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Executive by the Company at the rate of $147,524 per annum (the "Base Salary"),
payable bi-weekly. The Base Salary to be paid to Executive may be adjusted
upward or downward (but not below the amount specified in the preceding
sentence) by the Board of Directors of the Company at any time (but not less
frequently than annually) based upon Executive's contribution to the success of
the Company and on such other factors as the Board of Directors of the Company
shall deem appropriate.
1.04. Executive Benefits. At all times during the Term, Executive
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shall have the right to participate in and receive benefits under and in
accordance with the then-current provisions of all incentive, profit sharing,
retirement, stock option or purchase plans, life, health and accident insurance,
hospitalization and other incentive and benefit plans or programs (except for
any such plan in which Executive may not participate pursuant to the terms of
such plan or Executive's geographic location) which the Company may at any time
or from time to time have in effect for executive employees of the Company or
its subsidiaries, Executive's participation to be on a basis commensurate with
other executive employees considering their respective responsibilities and
compensation. Executive shall also be entitled to be reimbursed for all
reasonable expenses incurred by him in the performance of his duties hereunder.
1.05. Principal Place of Business. The headquarters and principal
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place of business of the Company is located in Pittsburgh, Pennsylvania.
Executive's principal place of business will be in Pittsburgh, Pennsylvania, and
he will reside within a reasonable distance thereof.
ARTICLE II
TERMINATION
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2.01. Illness, Incapacity. If, during the Term of Executive's
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employment hereunder, the Board of Directors of the Company shall determine that
Executive shall be prevented from effectively performing all his duties
hereunder by reason of illness or disability and such failure so to perform
shall have continued for a period of not less than three months, then the
Company may, by written notice to
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Executive, terminate Executive's employment hereunder effective at any time
after such three month period. Upon delivery to Executive of such notice,
together with payment of any salary accrued and unpaid under Section 1.03
hereof, Executive's employment and all obligations of the Company under Article
I hereof shall forthwith terminate. The obligations of Executive under Article
IV hereof shall continue notwithstanding termination of Executive's employment
pursuant to this Section 2.01.
2.02. Death. If Executive dies during the Term of his employment
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hereunder, Executive's employment hereunder shall terminate and all obligations
of the Company hereunder, other than any obligations with respect to the payment
of accrued and unpaid salary, shall terminate.
2.03. Company Termination. (a) For Cause. In the event that, in the
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reasonable judgment of the Board of Directors of the Company, Executive shall
have (a) been guilty of any act of dishonesty material with respect to the
Company, (b) been convicted of a crime involving moral turpitude, (c)
intentionally disregarded the provisions of this Agreement or d) intentionally
disregarded express instructions of the Board of Directors of the Company with
respect to matters of policy continuing (in the case of clause (d)) for a period
of not less than thirty (30) days after notice of such disregard, the Company
may terminate this Agreement effective at such date as it shall specify in a
written notice to Executive. Any such termination by the Company shall be deemed
to be termination "for cause". Upon delivery to Executive of such notice of
termination, together with payment of any salary accrued and unpaid under
Section 1.03 hereof, Executive's employment and all obligations of the Company
under Article I hereof shall forthwith terminate. The obligations of Executive
under Article IV hereof shall continue notwithstanding termination of
Executive's employment pursuant to this Section 2.03(a).
(b) Without Cause. Executive's employment hereunder may be terminated
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at any time by the Company without cause if the Board of Directors of the
Company, by resolution duly adopted by the Board, so determines. Except as set
forth in Section 2.05 hereof, all obligations of the Company under Article I
cease upon termination. The obligations of Executive under Article IV hereof
shall continue notwithstanding termination of Executive's employment pursuant to
this Section 2.03(b).
2.04. Executive Termination. Executive agrees to give the Company
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ninety (90) days prior written notice of the termination of his employment with
the Company. Simultaneously with such notice, Executive shall inform the Company
in writing as to his employment plans following the termination of his
employment with the Company. In the event Executive has terminated his
employment with the Company because, in his reasonable judgment, there has been:
(a) a material downgrading in Executive's duties, titles or responsibilities,
(b) a change in Executive's principal place of business to a location not
within 30 miles of its present location, (c) any significant and prolonged
increase in the traveling
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requirements applicable to the discharge of Executive's responsibilities or
(d) any other significant material adverse change in working conditions,
responsibilities or prestige, Executive shall be entitled to the compensation
provided for in Section 2.05 upon such termination. Otherwise, all obligations
of the Company under Article I cease upon termination, except for the payment of
any salary accrued and unpaid under Section 1.03 hereof. The obligations of
Executive under Article IV hereof shall continue notwithstanding termination of
Executive's employment pursuant to this Section 2.04.
2.05. Termination Payments - Discharge Without Cause. If the Company
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terminates Executive's employment without cause pursuant to Section 2.03(b),
Executive shall be paid for the balance of the Term the Base Salary then in
effect.
2.06. Termination Payments - After Chance of Control. If Executive or
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the Company (except pursuant to Section 2.03(a) hereof) terminates this
Agreement during the Term upon or after the occurrence of a Business Combination
not approved by a majority of Disinterested Directors then in office, as those
terms are defined in Article Ninth of the Company's Certificate of
Incorporation, Executive shall be paid an amount equal to three times the annual
Base Salary then in effect (i.e., a total of three years Base Salary), such
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payment to be made in a lump sum within sixty (60) days of termination.
ARTICLE III
EXECUTIVE'S ACKNOWLEDGMENTS
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Executive recognizes and acknowledges that: (a) in the course of
Executive's employment by the Company it will be necessary for Executive to
acquire information which could include, in whole or in part, information
concerning the Company's sales, sales volume, sales methods, sales proposals,
customers and prospective customers, identity of customers and prospective
customers, identity of key purchasing personnel in the employ of customers and
prospective customers, amount or kind of customer's purchases from the Company,
the Company's sources of supply, the Company's computer programs, system
documentation, special hardware, product hardware, related software development,
the Company's manuals, formulae, processes, methods, machines, compositions,
ideas, improvements, inventions or other confidential or proprietary information
belonging to the Company or relating to the Company's affairs (collectively
referred to herein as the "Confidential Information"); (b) for purposes of this
Employment Agreement, confidential information of an affiliate of the Company is
considered to be Confidential Information; (c) the Confidential Information is
the property of the Company; (d) the use, misappropriation or disclosure of the
Confidential Information would constitute a breach of trust and could cause
irreparable injury to the Company; and (e) it is essential to the protection of
the Company's good will and to the maintenance of the Company's competitive
position that the Confidential
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Information be kept secret and that Executive not disclose the Confidential
Information to others or use the Confidential Information to Executive's own
advantage or the advantage of others. For purposes of this Agreement,
Confidential Information shall not include any information that is in the public
domain, so long as such information is not in the public domain as a result of
any action or inaction by Executive which would constitute a violation of this
Agreement or the Company's policies with respect to such information.
Executive further recognizes and acknowledges that it is essential for
the proper protection of the business of the Company that Executive be
restrained, but only to the extent hereinafter provided (a) from soliciting or
inducing any employee of the Company to leave the employ of the Company, (b)
from hiring or attempting to hire any employee of the Company, (c) from
soliciting the trade of or trading with the customers and suppliers of the
Company, and (d) from competing against the Company for a reasonable period
following the termination of Executive's employment with the Company.
Executive further recognizes and understands that his duties at the
Company may include the preparation of materials, including written or graphic
materials, and that any such materials conceived or written by him shall be done
as "work made for hire" as defined and used in the Copyright Act of 1976, 17 USC
(S) 1 et seq. In the event of publication of such materials, Executive
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understands that since the work is a "work made for hire", the Company will
solely retain and own all rights in said materials, including right of
copyright, and that the Company may, at its discretion, on a case-by-case basis,
grant Executive by-line credit on such materials as the Company may deem
appropriate.
For purposes of interpreting Article III and Article IV hereof, the
acknowledgments, covenants and obligations of Executive with respect to the
Company apply equally with respect to its affiliates.
ARTICLE IV
EXECUTIVE'S COVENANTS AND AGREEMENTS
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4.01. Non-Disclosure of Confidential Information. Executive agrees to
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hold and safeguard the Confidential Information in trust for the Company, its
successors and assigns and agrees that he shall not, without the prior written
consent of the Company, misappropriate or disclose or make available to anyone
for use outside the Company's organization at any time, either during his
employment with the Company or subsequent to the termination of his employment
with the Company for any reason, including without limitation termination by the
Company for cause or without cause, any of the Confidential Information, whether
or not developed by Executive, except as required in the performance of
Executive's duties to the Company.
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4.02. Disclosure of Works and Inventions/Assignment of Patents and
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Other Rights. (a) Executive shall disclose promptly to the Company or its
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nominee any and all works, inventions, discoveries and improvements authored,
conceived or made by Executive during the period of employment and related to
the business or activities of the Company, and hereby assigns and agrees to
assign all his interest therein to the Company or its nominee. Whenever
requested to do so by the Company, Executive shall execute any and all
applications, assignments or other instruments which the Company shall deem
necessary to apply for and obtain Letters Patent or Copyrights of the United
States or any foreign country or to otherwise protect the Company's interest
therein. Such obligations shall continue beyond the termination of employment
with respect to works, inventions, discoveries and improvements authored,
conceived or made by Executive during the period of employment, and shall be
binding upon Executive's assigns, executors, administrators and other legal
representatives.
(b) Executive agrees that in the event of publication by Executive of
written or graphic materials the Company will retain and own all rights in said
materials, including right of copyright.
4.03. Duties. Executive agrees to be a loyal employee of the Company.
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Executive agrees to devote his best efforts full time to the performance of his
duties for the Company, to give proper time and attention to furthering the
Company's business, and to comply with all rules, regulations and instruments
established or issued by the Company. Executive further agrees that during the
term of this Agreement, Executive shall not, directly or indirectly, engage in
any business which would detract from Executive's ability to apply his best
efforts to the performance of his duties hereunder. Executive also agrees that
he shall not usurp any corporate opportunities of the Company.
4.04. Return of Materials. Upon the termination of Executive's
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employment with the Company for any reason, including without limitation
termination by the Company for cause or without cause, Executive shall promptly
deliver to the Company all correspondence, drawings, blueprints, manuals,
letters, notes, notebooks, reports, flow-charts, programs, proposals and any
documents concerning the Company's customers or concerning products or processes
used by the Company and, without limiting the foregoing, will promptly deliver
to the Company any and all other documents or materials containing or
constituting Confidential Information.
4.05. Restrictions on Competition. Executive covenants and agrees that
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during the period of Executive's employment hereunder plus a period of two years
(or such longer period, not in excess of three years, in respect of which base
salary is paid to Executive pursuant to (S) 2.04 or 2.05) following the
termination of Executive's employment, including without limitation termination
by the Company for cause or without cause, Executive shall not, in the United
States of America or in any other country of the world in which the Company has
done business at any time
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during the last three years prior to termination of Executive's employment with
the Company, engage, directly or indirectly, whether as principal or as agent,
officer, director, employee, consultant, shareholder, or otherwise, alone or in
association with any other person, corporation or other entity, in any Competing
Business. For purposes of this Agreement, the term "Competing Business" shall
mean and include any person, corporation or other entity which develops,
manufactures, sells markets or attempts to develop, manufacture, sell or market
any product or services which are the same as or similar to the Products and
services sold by the Company at any time and from time to time during the last
three years prior to the termination of Executive's employment hereunder;
provided, however, that for purposes of determining what constitutes a Competing
Business there shall not be included (x) any product or service of any entity
which product or service Executive determines is not material to the business or
prospects of the Company and which product or service the Company's Board,
having been requested to do so by Executive, also so determines; or (y) any
product or service of any entity so long as the Executive and such entity can
demonstrate to the reasonable satisfaction of the Company that Executive is and
will continue to be effectively isolated from and not participate in the
development, manufacture, sale or marketing of such product or service, but only
so long as Executive is effectively so isolated and does not so participate. In
the event the employment of Executive terminates at the conclusion of the Term
before Executive obtains the age of 65 and because the Company has elected not
to further extend the Term pursuant to (S) 1.02, then the provisions of this (S)
4.05 and (S)'s 4.06 and 4.07 shall not be applicable after the conclusion of the
Term unless the Company advises Executive at least six months prior to
conclusion of the Term that it will continue to pay the Base Salary in effect at
conclusion of the Term for such two-year period or such shorter portion thereof
as the Company may specify (which specification shall foreshorten such two-year
period accordingly) and the Company pays such amounts during such two-year or
shorter period.
4.06. Non-Solicitation of Customers and Suppliers. Executive agrees
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that during his employment with the Company he shall not, directly or
indirectly, solicit the trade of, or trade with, any customer, prospective
customer, supplier, or prospective supplier of the Company for any business
purpose other than for the benefit of the Company, with respect to any products
competitive with those of the Company. Executive further agrees that for two
years following termination of his employment with the Company, including
without limitation termination by the Company for cause or without cause,
Executive shall not, directly or indirectly, solicit the trade of, or trade
with, any customers or suppliers, or prospective customers or suppliers, of the
Company with respect to any products competitive with those of the Company.
4.07. Non-Solicitation of Employees. Executive agrees that, during his
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employment with the Company and for two years following termination of
Executive's employment with the Company, including without limitation
termination by the Company for cause or without cause, Executive shall not,
directly or indirectly, solicit or induce, or attempt to solicit or induce, any
employee of the
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Company to leave the Company for any reason whatsoever, or hire any employee of
the Company.
ARTICLE V
EXECUTIVE'S REPRESENTATIONS AND WARRANTIES
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5.01. No Prior Agreements. Executive represents and warrants that he
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is not a party to or otherwise subject to or bound by the terms of any contract,
agreement or understanding which in any manner would limit or otherwise affect
his ability perform his obligations hereunder, including without limitation any
contract, agreement or understanding containing terms and provisions similar in
any manner to those contained in Article IV hereof. Executive further represents
and warrants that his employment with the Company will not require him to
disclose or use any confidential information belonging to prior employers or
other persons or entities.
5.02. Executive's Abilities. Executive represents that his experience
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and capabilities are such that the provisions of Article IV will not prevent him
from earning his livelihood, and acknowledges that it would cause the Company
serious and irreparable injury and cost if Executive were to use his ability and
knowledge in competition with the Company or to otherwise breach the obligations
contained in Article IV.
5.03. Remedies. In the event of a breach by Executive of the terms of
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this Agreement, the Company shall be entitled, if it shall so elect, to
institute legal proceedings to obtain damages for any such breach, or to enforce
the specific performance of this Agreement by Executive and to enjoin Executive
from any further violation of this Agreement and to exercise such remedies
cumulatively or in conjunction with all other rights and remedies provided by
law. Executive acknowledges, however, that the remedies at law for any breach by
him of the provisions of this Agreement may be inadequate and that the Company
shall be entitled to injunctive relief against him in the event of any breach.
ARTICLE VI
MISCELLANEOUS
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6.01. Authorization to Modify Restrictions. It is the intention of the
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parties that the provisions of Article IV hereof shall be enforceable to the
fullest extent permissible under applicable law, but that the unenforceability
(or modification to conform to such law) of any provision or provisions hereof
shall not render unenforceable, or impair, the remainder thereof. If any
provision or provisions hereof shall be deemed invalid or unenforceable, either
in whole or in part, this Agreement shall be deemed amended to delete or modify,
as necessary, the
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offending provision or provisions and to alter the bounds thereof in order to
render it valid and enforceable.
6.02. Tolling Period. The non-competition, non-disclosure and non-
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solicitation obligations contained in Article IV hereof shall be extended by the
length of time during which Executive shall have been in breach of any of the
provisions of such Article IV.
6.03. Entire Agreement. This Agreement represents the entire agreement
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of the parties with respect to the employment of Executive by the Company and
may be amended only by a writing signed by each of them.
6.04. Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the Commonwealth of Pennsylvania.
6.05. Consent to Jurisdiction; Venue. Executive hereby irrevocably
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submits to the personal jurisdiction of the United States District Court for the
Western District of Pennsylvania or the Court of Common Pleas of Allegheny
County, Pennsylvania in any action or proceeding arising out of or relating to
this Agreement, and Executive hereby irrevocably agrees that all claims in
respect of any such action or proceeding may be heard and determined in either
such court. Executive hereby irrevocably waives any objection which he now or
hereafter may have to the laying of venue of any action or proceeding arising
out of or relating to this Agreement brought in the United States District Court
for the Western District of Pennsylvania or the Court of Common Pleas of
Allegheny County, Pennsylvania and any objection on the ground that any such
action or proceeding in either of such Courts has been brought in an
inconvenient forum. Nothing in this Section 6.05 shall affect the right of the
Company to bring any action or proceeding against Executive or his property in
the courts of other jurisdictions where the Executive resides or has his
principal place of business or where such property is located.
6.06. Service of Process. Executive hereby irrevocably consents to the
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service of any summons and complaint and any other process which may be served
in any action or proceeding arising out of or related to this Agreement brought
in the United States District Court for the Western District of Pennsylvania or
the Court of Common Pleas of Allegheny County by the mailing by certified or
registered mail of copies of such process to Executive at his address as set
forth on the signature page hereof.
6.07. Remedies. If the Company finally prevails in a proceeding for
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damages or injunctive relief, the Company, in addition to other relief, shall be
entitled to reasonable attorneys' fees, costs and the expenses of litigation
incurred by the Company in securing the relief granted by the Court.
6.08. Agreement Binding. The obligations of Executive under this
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Agreement shall continue after the termination of his employment with the
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Company for any reason, with or without cause, and shall be binding on his
heirs, executors, legal representatives and assigns and shall inure to the
benefit of any successors and assigns of the Company.
6.09. Counterparts, Section Headings. This Agreement may be executed
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in any number of counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument. The
section headings of this Agreement are for convenience of reference only and
shall not affect the construction or interpretation of any of the provisions
hereof.
6.10. Notices. All notices, requests, demands and other communications
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hereunder shall be in writing and shall be deemed to have been duly given if (a)
hand delivered or (b) mailed, registered mail, first class postage paid, return
receipt requested, or (c) sent via overnight delivery service or courier,
delivery acknowledgment requested, or (d) via any other delivery service with
proof of delivery:
if to the Company:
Respironics, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Attn: President
if to Executive, at the address set forth on the signature page hereof
or to such other address or to such other person as either party hereto shall
have last designated by notice to the other party.
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Executive acknowledges that he has read and understands the foregoing
provisions and that such provisions are reasonable and enforceable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused
this Agreement to be executed the day and year first above written.
Witness:
/s/ Xxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Address: 000 Xxxxxxxx Xx.
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Xxx XX 00000
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Attest
RESPIRONICS, INC.
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Secretary
Title: Pres & CEO
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[Corporate Seal]
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