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Exhibit 10.4  


 
 

EMPLOYMENT AGREEMENT  
    


        THIS EMPLOYMENT AGREEMENT (the "Agreement") made as of March 9, 2004, by and between Millstream Acquisition Corporation (to be renamed
NationsHealth, Inc. at the Effective Time), a Delaware corporation (the "Company"), and Lewis Stone (the "Executive"). 


 
 

W I T N E S S E T H:    
    


        WHEREAS, the Company wishes to employ the Executive as President on the terms and conditions set forth in this
Agreement; and 


        WHEREAS, the Executive is willing to accept such employment on such terms and conditions; 


        NOW, THEREFORE, in consideration of the premises and of the mutual promises, representations and covenants herein contained, the parties
hereto agree as follows: 


1.     SCOPE OF EMPLOYMENT  


        The Company hereby agrees to employ the Executive upon the terms and conditions herein set forth and to perform such executive duties as may be determined and
assigned to him by the Board of Directors of the Company (the "Board"). The Executive hereby accepts such employment, subject to the terms and conditions herein set forth. The Executive shall have the
title of President. While serving as President, the Executive shall have the customary duties and powers of such position. Executive shall not be employed by any other organization during the term of
this Agreement. 


2.     TERM  


        (a)    The
term of Executive's employment under this Agreement shall be for five (5) years. Such term shall be extended at the end of such 5-year period on
an annual basis unless terminated by either party. It shall begin at the Effective Time (as defined below) and thereafter on an annual basis, unless it is earlier terminated as follows: 



        (i)    By
the Company for Cause (as hereinafter defined); 


        (ii)    By
the Company for other than Cause. For purposes hereof, Executive shall be deemed terminated by the Company for other than Cause if he terminates employment for Good
Reason (as hereinafter defined); 



        (iii)    In
the event of the Company's dissolution or liquidation; 


        (iv)    By
the Executive for any reason; 


        (v)    In
the event of the death of the Executive; or 


        (vi)    In
the event of the disability of Executive (as hereinafter defined). 




        (b)    For
purposes hereof, "Cause" shall mean, and be limited to any of the following that is reasonably determined by the Board, to be substantially detrimental to the
business or reputation of the Company, and which occur after the Effective Time: (i) the Executive's willful commission of acts of dishonesty in connection with his position, (ii) the
Executive's willful failure or refusal to perform the essential duties of his position, or (iii) conviction of a felony or engaging in illegal conduct. If a ground for termination under this
Section 2(b) is amenable to cure, the Company shall provide the Executive with written notice describing the nature of the ground for termination. If the Executive cures same within thirty
(30) days after receiving such notice, there shall be no termination for Cause. 





 

        (c)    For
purposes hereof, the term "Good Reason" shall mean the occurrence of any one or more of the following events unless Executive specifically agrees in writing that
such event shall not be Good Reason: 



        (i)    the
assignment to Executive by the Board of Directors or other officers or representatives of Company of duties materially inconsistent with the duties associated with
the position described in Section 1; 


        (ii)    a
material change in the nature or scope of Executive's authority from those applicable to him as President; 



        (iii)    the
occurrence of material acts or conduct on the part of Company or its officers and representatives which have as their purpose forcing the resignation of Executive
or preventing him from performing his duties and responsibilities pursuant to this Agreement; 


        (iv)    a
material breach by Company of any material provision of this Agreement, provided that failure of Company to pay any amount, or to provide any benefit, pursuant to the
provision of Articles 3 and 4 hereof shall be deemed to be a material breach by Company of a material provision of this Agreement and shall provide Executive the right to terminate his employment
under this Agreement at any time after such 30 day period; provided, however, if the Company cures the same within thirty (30) days after receiving such notice, there shall be no
termination for Good Reason; or 


        (v)    on
or after a Change of Control, requiring Executive to be principally based at any office or location more than 45 miles from the current offices of the Company in
Sunrise, Florida. 




        (d)    For
purposes hereof, the term "disability" shall mean the inability of the Executive, due to illness, accident or any other physical or mental incapacity, to perform his
duties in a normal manner for (i) a period of four (4) consecutive months or (ii) six (6) months (with each month being composed of 31 consecutive days) during any twelve
(12) consecutive month period. 


3.     COMPENSATION  


        (a)    Annual
Salary. The Company agrees to pay the Executive, and the Executive agrees to accept, in payment for services to be rendered by the
Executive hereunder, a minimum base salary of $500,000 per annum (the "Annual Salary"). The Annual Salary shall be payable in equal periodic installments, not less frequently than monthly, less such
sums as may be required to be deducted or withheld under the provisions of federal, state or local law. The Company agrees to review the Annual Salary on or around January 1st of each calendar
year (or such other time as the Company and Executive mutually agree), commencing on or about January 1, 2005, for adjustment based on the Executive's performance;
provided, however, that no such adjustment shall be effective to reduce the Annual Salary below $500,000 per annum. 


        (b)    Annual
Bonus. In addition to Executive's salary, the Executive shall be eligible to receive an annual bonus based upon the achievement of
goals established by the Company after due consultation with the Executive. Any bonus up to $500,000 shall require the approval of Arthur Spector and Robert Gregg or any individual they name as their
respective successors. Any annual bonus paid that would result in Executive receiving total compensation in excess of $1,000,000, shall require the approval of the independent directors who are
members of the compensation committee of the Board (the "Independent Compensation Committee Members"). 


        (c)    Incentive
Compensation Plan. The Independent Compensation Committee Members, in their discretion, shall pay an additional incentive
compensation payment to include cash bonuses, stock options and restricted stock upon the satisfaction of one or more performance goals ("Performance Goals"). The Performance Goals shall be based upon
the achievement of (i) a specified level, of (x) the 


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Company's
consolidated pre-tax or after-tax earnings or earnings before interest, taxes, depreciation and amortization ("EBITDA") or (y) the pre-tax or
after-tax earnings, or EBITDA, of any particular subsidiary, division or other business unit of the Company, (ii) the achievement of a specified level of revenues, earnings, costs,
return on assets, return on equity, return on capital, return on investment, return on assets under management, net operating income or net operating income as a percentage of book value or with
regard to the Company, particular subsidiaries, divisions or business units of the Company, particular assets or groups of assets or particular employees or groups of employees, (iii) stock
performance; (iv) the creation of strategic partnerships, (v) acquisitions or divestitures or (vi) any combination of the foregoing. Prior to the payment of any such incentive
compensation hereunder, the Independent Compensation Committee Members shall have certified that any applicable Performance Goals have been satisfied. 


        (d)    Equity
Compensation Plan. Executive shall be considered for any type of equity compensation plan as determined by the Independent
Compensation Committee. 


4.     FRINGE BENEFITS, REIMBURSEMENT OF EXPENSES, ETC.  


        (a)    The
Executive shall be entitled to paid vacation, holidays and sick leave benefits in accordance with the Company's policies for executive employees. 


        (b)    The
Executive and/or his family shall be entitled to medical and disability insurance from the Company in accordance with the Company's policies for employees. Such
coverage shall be paid for by the Company. If this Agreement is terminated (x) by the Executive for Good Reason or disability or (y) by the Company for other than Cause, the Company and
any of its successors and assigns shall provide to Executive similar medical coverage to that described above, at the expense of the Company during the period that the Executive or his beneficiaries
are eligible to receive benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). 


        (c)    The
Company agrees to pay up to $10,000 per year toward premiums or to reimburse Executive for premiums for life or disability insurance, as directed by the Executive. 


        (d)    The
Company agrees to pay, or promptly reimburse the Executive for, all reasonable expenses (including, without limitation, any costs of private counsel or
investigators, incurred in connection with representation of Executive relating to audits, inquiries, regulatory reviews or any similar matters of the Company); provided,
however, that the Executive furnishes appropriate documentation for such expenses in accordance with the Company's practices and procedures. 


        (e)    Executive
shall be entitled to participate in those retirement plans, both defined contribution and defined benefit, qualified and non-qualified, as are then
currently available to the Company's executive employees and such new retirement plans, if any, as may be adopted by the Company from time to time. 


5.     TERMINATION BENEFITS  


        In addition to the benefits described under the Agreement that survive the termination of the Agreement, the following benefits will be paid on account of the
termination of the Agreement for the following reasons: 


        (a)    Upon
termination of this Agreement by the Company for Cause pursuant to Section 2(a)(i), or by the Executive for other than Good Reason or upon the Executive's
death, the Company shall pay to Executive immediately after the date of termination an amount equal to the sum of Executive's accrued base salary and any bonus amount earned but not yet paid; 


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        (b)    Upon
termination of this Agreement (x) by the Company for other than Cause or (y) by the Executive for Good Reason or disability, Executive shall be
entitled to: 



        (i)    the
Company shall pay to Executive or his beneficiaries, as the case may be, immediately after the Date of Termination an amount which is equal to the Executive's base
salary for twenty-four (24) months; 


        (ii)    the
Company shall pay for the Executive in the event of disability (after termination of the Agreement under this section), medical insurance during the period the
Executive's spouse (and children), or the Executive, as the case may be, is eligible to receive benefits under COBRA; 


        (iii)    the
Company shall fully vest any stock options or restricted stock previously granted to the Executive; and 



        (iv)    the
Executive (or his spouse, in the event of his permanent disability that affects his ability to so elect) shall have the right to require the Company to purchase
from the Executive a number of shares of common stock, par value $0.0001 per share, of the Company (the "Common Stock"), owned by the Executive or by any entity in which the Executive has an equity or
ownership interest, worth up to $3,000,000. Such Common Stock shall be valued as of the close of business on the day prior to the date the Executive or his spouse delivers a notice to the Company in
writing (a "Put Notice") of his decision to require the Company to purchase such Common Stock. The Executive or his spouse (in the event of his disability) shall have up to 21 days following
the termination of this Agreement to deliver the Put Notice to the Company. Subject to the fifth sentence of this paragraph, within 30 days of receiving the Put Notice, the Company shall pay
Executive or his spouse the proceeds from the purchase of the shares of Common Stock specified in the Put Notice, up to a maximum of $3,000,000. To the extent Robert Gregg or Glenn M. Parker, M.D.
(each, a "Co-Executive") delivers a Put Notice at the same time as Executive, the Company shall have the right to pay the funds due hereunder over two years (in the case of delivery of a
Put Notice by a single Co-Executive), or three
years (in the case of delivery of a Put Notice by both Co-Executives), in equal amounts each year pro rata among the Executive and any Co-Executive based on the number of
shares of Common Stock specified in each Put Notice; provided, however, that the Company shall not have such right to delay the payment of
such funds in any succeeding year or years if the Company elects to sell the shares of Common Stock as set forth in the succeeding sentence. In lieu of a cash payment, the Company shall have the
option of causing the shares specified in a Put Notice to be sold, as promptly as is reasonably practicable, pursuant to a registration statement filed by the Company under the Securities Act of 1933,
as amended (the "Securities Act"), in which the shares shall be included, or pursuant to an exemption from the registration requirements of the Securities Act, in either case with the funds being
remitted to the Executive on the close of such sale (provided, further, that (x) the Executive shall receive at least $3,000,000 from
such sale and (y) any sale pursuant to a registration statement shall not count as a "Demand Registration" pursuant to that certain Registration Rights Agreement (the "Registration Rights
Agreement"), dated as of the date hereof by and among the Company, RGGPLS Holding, Inc., a Florida corporation ("RGGPLS"), GRH Holdings, L.L.C., a Florida limited liability company, and Becton,
Dickinson and Company, a New Jersey corporation). The Company agrees and acknowledges that the Executive shall have the right to require the Company to purchase shares of Common Stock from him
hereunder without regard to the limitations set forth in Section 2.4 of the Registration Rights Agreement. 




        (c)    For
purposes of this Agreement, a "Change in Control" means any of the following events: 



        (i)    any
person or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended ("Exchange Act")), other than RGGPLS, a subsidiary
of the Company or any employee benefit plan (or any related trust) of the Company or a subsidiary of the Company, 



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becomes,
after the Effective Time the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the Common Stock; 



        (ii)    individuals
who constitute the Board as of the Effective Time (the "Incumbent Board"), cease for any reason to constitute a majority of the members of the Board (except
that any individual who becomes a director after the Effective Time, whose election by the Company's stockholders was approved by a majority of the members of the Incumbent Board shall be considered
as through such individual were a member of the Incumbent Board); or 


        (iii)    approval
by the stockholders of the Company of either of the following: 



        (1)    a
merger, reorganization, consolidation, business combination or similar transaction (any of the foregoing, a "Merger") as a result of which the persons who were the
respective beneficial owners of the outstanding Common Stock immediately before such Merger are not expected to beneficially own,
immediately after such Merger, directly or indirectly, more than 50% of the common stock and the combined voting power of the then outstanding voting securities of the corporation or other entity
resulting from such Merger in substantially the same proportions as immediately before such Merger, or 



        (2)    a
plan of liquidation of the Company or a plan or agreement for the sale or other disposition of all or substantially all of the assets of the Company. 




        (iv)    Notwithstanding
the foregoing, there shall not be a Change in Control if, in advance of such event, Executive agrees in writing that such event shall not constitute a
Change in Control. 




        (d)    The
Company's obligations under this Section 5 shall survive termination of this Agreement. 



6.     ENTIRE AGREEMENT  


        This Agreement contains the entire understanding between the parties hereto and supersede all other oral and written agreements or understandings between them.
All previous oral or written agreements between the parties hereto shall be deemed to have been completely fulfilled by both parties and shall be superseded by this Agreement. No modification or
addition hereto or waiver or cancellation of any provision shall be valid except by a writing signed by the party to be charged therewith. 



7.     SUCCESSORS AND ASSIGNS  


        This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their heirs, successors, assigns and personal representatives. As used
herein, the successors of the Company shall include, but not be limited to, any successor by way of merger, consolidation, sale of all or substantially all of its assets, or similar reorganization. In
no event may Executive assign any duties or obligations under this Agreement. It is expressly agreed for purposes of this Agreement that the spouse and children of Executive shall be third-party
beneficiaries of Executive under this Agreement and shall be entitled to enforce the rights of Executive hereunder in the event of Executive's death or disability. 


8.     CONTROLLING LAW  


        The validity and construction of this Agreement or of any of its provisions shall be determined under the laws of Florida, without giving effect to any choice or
conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than Florida. The invalidity or unenforceability of any provision of this Agreement shall not
affect or limit the validity and enforceability of the other provisions hereof. 


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9.     COUNTERPARTS  


        This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same
instrument. 


10.   HEADINGS  


        The headings herein are inserted only as a matter of convenience and reference, and in no way define, limit or describe the scope of this Agreement or the intent
of any provisions thereof. 


11.    INDEMNIFICATION. The Company shall indemnify and hold Executive harmless from and against all claims,
investigations, actions, awards and judgments, including costs and attorneys' fees, incurred by Executive in connection with acts or decisions made by Executive in good faith in his capacity as either
a director or as an officer of the Company, so long as Executive reasonably believed that the acts or decisions were in the best interests of the Company. The Company further agrees to retain and pay
the fees and costs of counsel selected by Executive to represent him in any action or proceeding covered by this indemnification. The Company shall not settle any claim or action or pay any award or
judgment against Executive without Executive's prior written consent, which shall not be unreasonably withheld. The Company may obtain coverage for Executive under an insurance policy covering the
directors and officers of the Company against claims set forth herein if such coverage is possible at a reasonable cost, provided, however, it is understood and agreed that the Company's obligation to
indemnify Executive as set forth in this Section 11 shall not be affected by the Company's ability or inability to obtain insurance coverage. 


12.    MERGER AGREEMENT. The parties acknowledge that the Company has entered into an Agreement and Plan of
Merger dated as of the date hereof (the "Merger Agreement"), among the Company, N Merger L.L.C., a Florida limited liability company and a wholly owned subsidiary of the Company, and NationsHealth
Holdings, L.L.C., a Florida limited liability company. Notwithstanding anything in this Agreement to the contrary, this Agreement shall become effective upon the Effective
Time (as defined in the Merger Agreement); provided, however, if the Merger Agreement is terminated in accordance with Article VIII
thereof, then this Agreement shall terminate and be of no further force and effect as if this Agreement was never executed and delivered. 


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        IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date and year first above written. 



	 
	 	 
	 	 

	WITNESS:

	 	MILLSTREAM ACQUISITION CORPORATION
	

 	
 	

By:	
 	

/s/  ARTHUR SPECTOR      
	
	 	 	 	

	 	 	 	 	Name: Arthur Spector

Title:  Chairman, Chief Executive

Officer and President
	

WITNESS:	
 	

 	
 	

 
	

 	
 	

By:	
 	

/s/  LEWIS STONE      
	
	 	 	 	

	 	 	 	 	Name: Lewis Stone




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