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Exhibit 10.3 AMENDED AND RESTATED EMPLOYMENT
AGREEMENT This AMENDED AND
RESTATED AGREEMENT (this " Agreement ") is made and entered
into this 31st day of December, 2008, by and between Allion
Healthcare, Inc., a corporation with its headquarters located at
1660 Walt Whitman Road, Melville, New York 11747 (the "
Employer "), and Stephen A. Maggio (the " Executive
"). This Agreement amends and restates the Employment Agreement
between the parties dated as of July 20, 2007 (the "
Original Employment Agreement ").
WHEREAS, the Employer and the
Executive entered into the Original Employment 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 agreed to
certain confidentiality, non-competition and non-solicitation
covenants contained hereunder, in consideration of the additional
benefits provided to the Executive under the Original Employment
Agreement; and WHEREAS, the Original
Employment Agreement became effective as of July 20, 2007 (the
" Effective Date ") and for all purposes of this Agreement,
the Effective Date shall remain July 20, 2007; and
WHEREAS, the Employer employs
Executive as its Director of Finance, under terms and conditions as
set forth in the Original Employment Agreement; and
WHEREAS, the Employer and the
Executive desire to amend and restate the Original Employment
Agreement for the purpose of complying with Section 409A of
the Internal Revenue Code of 1986, as amended (the " Code ")
and the Treasury Regulations and Internal Revenue Service guidance
thereunder; NOW THEREFORE, in
consideration of the mutual covenants contained in this Agreement,
and intending to be legally bound, the Employer and the Executive
agree as follows: 1.
Employment . The Employer agrees to employ the Executive and
the Executive agrees to be employed by the Employer on the terms
and conditions set forth in this Agreement.
2. Capacity . The
Executive shall serve the Employer as its Director of Finance, and
as its Interim Chief Financial Officer until such time as the
Employer hires a permanent Chief Financial Officer. The Executive
shall also serve the Employer in such other or additional offices
as the Executive may reasonably be requested to serve by the Board
of Directors of the Employer (the " Board of Directors ").
In such capacity or capacities, the Executive shall perform such
services and duties in connection with the business, affairs and
operations of the Employer, consistent with such positions, as may
be assigned or delegated to the Executive from time to time by or
under the authority of the Board of Directors.
3. Term . Subject to the
provisions of Section 6, the term of employment pursuant to
this Agreement (the " Term ") shall commence on the
Effective Date and terminate on the second anniversary of the
Effective Date. Expiration of the Term shall not constitute
termination of Executive’s employment during the Term for
purposes of termination benefits under Section 6 of this
Agreement.
4. Compensation and
Benefits . The compensation and benefits payable to the
Executive during the Term shall be as follows:
(a)
Salary . For all services rendered by the Executive under
this Agreement, the Employer shall pay the Executive a salary ("
Salary ") at the annual rate of one hundred sixty thousand
dollars ($160,000.00) per annum, less normal withholdings,
effective beginning July 20, 2007, and subject to increases
from time to time in the sole discretion of the Compensation
Committee of the Board of Directors (the " Compensation
Committee "). Salary shall be payable in periodic installments
in accordance with the Employer’s usual practice for its
senior executives.
(b)
Bonus . The Executive may be awarded performance bonuses on
an annual basis, commencing with a bonus that may be awarded for
the 2007 calendar year, as determined by the Board of Directors or
the Compensation Committee in the sole discretion of the Board of
Directors or Compensation Committee, respectively; provided,
however, that the bonus for any such year shall not exceed forty
percent (40%) of Salary for such year. The performance bonus, if
any, shall be paid to the Executive within thirty (30) days
after the Board of Directors or the Compensation Committee
determines whether and to what extent performance goals were
achieved, but no later than March 15 next following the end of
the calendar year for which the performance bonus, if any, was
earned.
(c)
Stock Options. The Executive has been issued options to
purchase shares of common stock of the Employer in accordance with
the Employer’s stock option plan and the Executive’s
stock option agreement thereunder. All options issued to the
Executive, which have not been vested as of the time any Change in
Control (as defined in Section 7(c)) occurs, shall
automatically vest upon such occurrence.
(d)
Regular Benefits . The Executive shall also be eligible to
participate in any employee benefit plans, medical insurance plans,
life insurance plans, disability income plans, retirement plans,
vacation plans, expense reimbursement plans and other benefit plans
which the Employer may from time to time have in effect for all or
most of its senior executives. Such participation shall be subject
to the terms of the applicable plan documents, generally applicable
policies of the Employer, applicable law and the discretion of the
Board of Directors, the Compensation Committee or any
administrative or other committee provided for in or contemplated
by any such plan. Nothing contained in this Agreement shall be
construed to create any obligation on the part of the Employer to
establish any such plan or to maintain the effectiveness of any
such plan which may be in effect from time to time.
(e)
Taxation of Payment and Benefits . The Employer shall
undertake to make deductions, withholdings and tax reports with
respect to payments and benefits under this Agreement to the extent
that it reasonably and in good faith believes that it is required
to make such deductions, withholdings and tax reports. Payments
under this Agreement shall be in amounts net of any such deductions
or withholdings. Nothing in this Agreement shall be construed to
require the Employer to make any payments to compensate the
Executive for any adverse tax effect associated with any payments
or benefits or for any deduction or withholding from any payment or
benefit.
(f)
Exclusivity of Salary and Benefits . The Executive shall not
be entitled to any payments or benefits other than those provided
under this Agreement, unless otherwise approved by the Board of
Directors.
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5. Extent of Service
. During the Term, the Executive shall, subject to the direction
and supervision of the Board of Directors, devote the
Executive’s full business time, best efforts and business
judgment, skill and knowledge to the advancement of the
Employer’s interests and to the discharge of the
Executive’s duties and responsibilities under this Agreement.
The Executive shall not engage in any other business activity,
except as may be approved by the Board of Directors; provided that
nothing in this Agreement shall be construed as preventing the
Executive from (a) investing the Executive’s assets in
any company or other entity in a manner not prohibited by
Section 8(d), or (b) engaging in religious, charitable or
other community or non-profit activities that, in the case of
(a) or (b) above, do not in any way impair the
Executive’s ability to fulfill the Executive’s duties
and responsibilities under this Agreement.
6. Termination and
Termination Benefits . Notwithstanding any other provision of
this Agreement, (i) the Employer may terminate the
Executive’s employment hereunder at any time with or without
Cause (as defined in Section 7(a)) at its election;
(ii) the Executive may terminate the Executive’s
employment hereunder at any time with or without Good Reason (as
defined in Section 7(b)) at the Executive’s election;
(iii) Executive’s employment hereunder shall
automatically terminate upon the Executive’s death; and
(iv) the Executive’s employment shall terminate upon the
Executive’s disability as provided in Section 6(c). The
date of termination of the Executive’s employment hereunder,
whether upon scheduled termination of the Term, termination by
either the Employer or the Executive as provided in this Agreement,
or by reason of the Executive’s death or disability, is the "
Termination Date ." Any termination of employment hereunder
shall be effective upon the date of scheduled termination of the
Term, the date of receipt by the non-terminating party of a notice
of termination from the terminating party with or without Cause (in
the case of a termination by the Employer) or with or without Good
Reason (in the case of a termination by the Executive), the date of
death, or after the onset of disability as provided in
Section 6(c), as the case may be; provided that, in the case
of a termination by the Employer, the Employer may specify in the
notice of termination a later termination date (which date shall be
no later than thirty (30) days after the date of such notice
of termination). The amounts payable to the Executive and other
benefits provided to the Executive under this Section 6 shall
be referred to as " Termination Benefits ". Payment of the
Termination Benefits under this Section 6 shall be subject to
Section 20 of this Agreement.
(a)
Termination by the Employer for Cause, by the Executive without
Good Reason or Death . If, during the Term, (i) the
Employer terminates the Executive’s employment for Cause or
(ii) the Executive terminates his employment with the Employer
without Good Reason, or upon the Executive’s death, the
Executive shall be entitled to: (i)
accrued but unpaid Salary through the Termination Date;
(ii) cash in lieu of any accrued but
unused vacation through the Termination Date (the payments provided
in (i) and (ii) above collectively referred to as the "
Accrued Obligations "); and
(iii) any benefits accrued or payable
to the Executive under the Employer’s benefit plans (in
accordance with the terms of such benefit plans and subject to
Section 20 hereof) (the " Other Benefits ").
The Accrued Obligations shall be paid
in a lump sum in cash within five (5) days after the
Termination Date. Upon payment or provision of the Accrued
Obligations and the Other Benefits, if any, 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 or by the Employer
Without Cause. If, during the Term, (i) the Executive
terminates his employment with the Employer for Good Reason within
a period of 90 days after the occurrence of an uncured event
of Good Reason, or (ii) the Employer terminates the
Executive’s employment with the Employer without Cause, then
the Executive shall be entitled to:
(i) the Accrued Obligations, payable
in a lump sum in cash, within five (5) days after the Termination
Date; (ii) an amount equal to the
Salary, at the rate in effect on the Termination Date, that would
have been paid to the Executive as if there had been no termination
described in this Section 6(b), for a period of one
(1) year after the Termination Date, including a termination
by the Executive for Good Reason or by the Employer without Cause
within twelve (12) months following a Change in Control. Such
severance payment shall be payable in a lump sum in cash within
five (5) days following the Termination Date;
(iii) continuation of group health
plan benefits to the extent authorized by and consistent with 29
U.S.C. § 1161 et seq. (commonly known as " COBRA "),
with the cost of the regular premium for such benefits shared in
the same relative proportion by the Employer and the Executive as
in effect on the Termination Date, provided that the
Executive’s entitlements under this clause (iii) shall
terminate as of the earlier of (x) one (1) year from the
Termination Date or (y) the date of commencement of
eligibility for health insurance pursuant to other employment or
self-employment; (iv) accelerated
vesting of all of the Executive’s options to purchase shares
of common stock of the Employer referred to in Section 4(c);
and (v) the timely payment or
provision of the Other Benefits, if any.
Notwithstanding the foregoing,
nothing in this Section 6(b) shall be construed to affect the
Executive’s right to receive COBRA continuation entirely at
the Executive’s own cost to the extent that the Executive may
continue to be entitled to COBRA continuation after the
Executive’s right to cost sharing under
Section 6(b)(iii) ceases. The Executive shall be obligated to
give prompt notice of the date of commencement of any employment or
self-employment and shall respond promptly to any reasonable
inquiries concerning any employment or self-employment in which the
Executive engages during the Termination Benefits Period.
(c)
Disability . If the Executive shall be physically or
mentally disabled so as to be unable to perform substantially all
of the essential functions of the Executive’s then existing
position or positions under this Agreement with or without
reasonable accommodation, the Board of Directors may remove the
Executive from any responsibilities and/or reassign the Executive
to another position with the Employer for the remainder of the Term
or during the period of such disability. Notwithstanding any such
removal or reassignment, the Executive shall continue to be
employed by the Employer and shall receive a payment equal to the
lesser of (i) the Salary that he would have received through
the date that is six (6) months after the onset of the
disability, or (ii) the Salary that he would have received
through the termination of the then Term (less any disability pay
or sick pay benefits to which the Executive may be entitled under
the Employer’s plans and policies), payable in a lump sum in
cash within five (5) days following the date on
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which the Executive is determined to be disabled. In addition,
Executive shall be entitled to any annual bonus that is earned
within the period described in the foregoing sentence, which bonus
shall be payable at the normal time for payment of bonuses, as
prescribed in Section 4(b). Executive also shall continue to
receive other 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 Obligation, and the Employer
shall have no further obligations to the Executive under this
Agreement. If any question shall arise as to whether 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
Disabilities Act, 42 U.S.C. §12101 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 Agreeme
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