EMPLOYMENT AGREEMENT
This
AGREEMENT (this “Agreement”) is made effective as of June 1, 2008 (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. Xxxxxxx (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 herein, 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 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 first
anniversary of the Effective Date; provided that the Term shall automatically be
renewed for successive periods of one (1) year unless either party gives written
notice to the other party, at least ninety (90) days prior to the end date of
the then-current Term, of that party’s intent not to renew 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 three hundred thousand
dollars ($300,000.00), 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) Performance Bonus. The
Executive may be awarded performance bonuses on an annual basis, commencing with
a bonus that may be awarded for the 2008 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) Employment
Bonus. The Employer shall pay the Executive a one-time
employment bonus equal to one hundred thousand dollars ($100,000.00), payable on
the Effective Date.
(d) Stock Options. All options to
purchase shares of common stock of the Employer issued to the Executive in
accordance with the Employer’s stock option plan and the Executive’s stock
option agreement thereunder which have not vested as of the time any Change in
Control (as defined in Section 7(c)) occurs, shall automatically vest upon such
occurrence.
(e) 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.
(f) Automobile. The Employer
shall provide the Executive with an automobile allowance of $995 per month to
compensate the Executive for expenses related to the use of an automobile and
reasonable business-related expenses associated with such automobile and its
maintenance and operation.
(g) 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.
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(h) Place of Performance and Relocation
Expenses. The Executive’s main office will be located at the Employer’s
main office in Melville, New York or at any other location where such offices
are moved. The Employer will reimburse the Executive for travel and living
expenses incurred by the Executive in traveling from his residence in
Massachusetts to Melville, New York or any other location where such offices are
moved, and while temporarily residing at or near such location in connection
with his employment with the Employer, during the period that the Executive
maintains a residence in Massachusetts and for at least two (2) years from the
date of this Agreement. If at any time reimbursement for such expenses (whether
paid before this Agreement was entered into, or after) is characterized by the
Internal Revenue Service as compensation to the Executive, the Employer shall
pay to the Executive an additional amount equal to the tax paid by the Executive
on such compensation fully grossed up so that the amount retained by the
Executive after payment of taxes on such amount equals the tax imposed on the
reimbursement payments. If the Executive determines to relocate his residence at
any time while this Agreement is in effect, the Executive will be reimbursed for
his relocation expenses, including but not limited to expenses incurred to find
a house near the Employer’s main office, sales commissions payable to a real
estate agent in connection with the sale of the Massachusetts residence, moving
expenses and other expenses incurred incidental to the process of
relocation.
(i) 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 required by the Transition Agreement,
effective as of June 1, 2008, by and between the Executive and EnduraCare
Therapy Management, Inc. (a copy of which has been provided to the Employer) or
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;
(iv) the Executive’s employment shall terminate upon the Executive’s disability
as provided in Section 6(c); and (v) the Executive’s employment shall terminate
at the end of the then-current Term upon the Executive’s delivery of notice of
nonrenewal as provided in Section 3. The date of termination of the Executive’s
employment hereunder, whether upon 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, (i) in the case of nonrenewal by the Executive, the
date of scheduled termination of the then-current Term, (ii) 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),
(iii) the date of death, or (iv) 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 21 of this
Agreement.
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(a) Termination by the Employer for
Cause, by the Executive without Good Reason or notice of nonrenewal by the
Executive. If, during the Term, (i) the Employer terminates the
Executive’s employment for Cause, (ii) the Executive terminates his employment
with the Employer without Good Reason, or (iii) the Executive provides the
Employer with notice of non-renewal, 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 21 of this
Agreement).
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.
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(b) Termination by the Executive for
Good Reason, by the Employer Without Cause, or following notice of nonrenewal by
the Employer. 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, (ii) the Employer
terminates the Executive’s employment with the Employer without Cause, or (iii)
the Employer terminates the Executive’s employment within 90 days following
Employer’s termination of this Agreement by reason of having delivered a notice
of nonrenewal, 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),
through the expiration of the then-current Term, payable according to the normal
payroll policies of the Employer for senior executives;
(iii) an amount equal to one
hundred and forty percent (140%) of Salary in effect on the Termination Date,
payable in a lump sum within five (5) business days after the Termination
Date;
(iv) 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 (iv) 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
(such period of continuation, the “Termination Benefits Period”);
and
(v) accelerated vesting of all
options to purchase shares of common stock of the Employer issued to the
Executive in accordance with the Employer’s stock option plan and the
Executive’s stock option agreement thereunder.
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) Death. If, during
the Term, the Executive’s employment with the Employer is terminated by reason
of the Executive’s death, the Executive’s estate shall be entitled
to:
(i) the Accrued Benefits;
and
(ii) a
pro-rata performance bonus for the year of termination, calculated by
multiplying (A) the Executive’s performance bonus, as awarded by the Board of
Directors or the Compensation Committee after determining whether and to what
extent performance goals were achieved for the Pro-rata Period (as defined
below), by (B) a fraction (the “Pro-rata Period”), the numerator of which shall
be the number of days the Executive was employed in the applicable performance
period and the denominator of which shall be the number of days in the
applicable performance period. The pro-rata performance bonus shall be paid to
the Executive’s estate no later than March 15 next following the end of the
calendar year for which the performance bonus, if any, was earned.
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(d) 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 obligation 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. For purposes of this Agreement, the Executive shall not
be deemed to have been terminated for Cause unless and until there shall has
been delivered to the Executive a copy of a resolution, duly adopted by the
Board of Directors, stating that, in the good faith opinion of the Board of
Directors, Cause exists and specifying the particulars thereof in reasonable
detail. Before adopting any such resolution, the Board of Directors shall offer
the Executive, upon reasonable prior written notice (which need not exceed five
business days), an opportunity for him, together with his counsel, to be heard
by the Board of Directors.
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(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;
(ii) Any reduction in the amount
of the Executive’s Salary or any material reduction in the Executive’s benefits
as set forth in Section 4 of this Agreement;
(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 Salary and benefits as set
forth in Section 4 of this Agreement;
(iv) A
material change in the geographic location of the Executive’s principal place of
employment with the Employer; provided, that, for purposes of this Agreement, a
change of 35 miles or more from the current location will be considered
material; or
(v) A Change in Control (as
defined in Section 4(c) below), provided that the Executive has given the
Employer notice of his termination of employment for Good Reason within thirty
(30) days after such Change in Control.
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 described in clauses (i) through (iv) above, the Executive must
resign within 90 days of the occurrence of the event of Good Reason in order to
be entitled to the Termination Benefits of Section 6(b) of this
Agreement.
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(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).
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(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).
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(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.
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(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. Subject to Section 21, regardless of the prevailing
party, each party agrees to share equally the costs of the arbitration. 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. Consent to
Jurisdiction. To the extent that any court action is permitted consistent
with or to enforce Section 8 of this Agreement, the parties hereby consent to
the jurisdiction of the Supreme Court of the State of New York, Suffolk County,
and the United States District Court for the Eastern District of New York.
Accordingly, with respect to any such court action, the Executive (a) submits to
the personal jurisdiction of such courts; (b) consents to service of process;
and (c) waives any other requirement (whether imposed by statute, rule of court,
or otherwise) with respect to personal jurisdiction or service of
process.
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11. 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. 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.
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18. 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.
19. Indemnification. The
provisions of Article VII (Indemnification) of the Fourth Amended and Restated
Bylaws 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.
20. 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.
21. Legal Fees. The
Employer shall reimburse the Executive for legal fees incurred in connection
with the preparation of this Agreement in an amount not to exceed $4,000. If
there is an arbitration or court proceeding between the Executive and the
Employer in connection with Executive’s enforcement of the terms of this
Agreement and it has been determined in such arbitration or proceeding that the
Executive has substantially prevailed in such arbitration or proceeding, the
Employer shall reimburse the Executive’s reasonable fees and expenses incurred
in connection with such arbitration or proceeding in an amount not to exceed
$100,000.
22. 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.
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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]
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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.
Xxxxxxx
Xxxxxxx
X. Xxxxxxx
ALLION
HEALTHCARE, INC.
By: /s/ Xxxxxxx X.
Xxxxx
Name: Xxxxxxx
X. Xxxxx
Title: Chief
Executive Officer
