Exhibit
10.1


 


VIASYS HEALTHCARE INC.


 


AMENDED AND RESTATED


EMPLOYMENT AGREEMENT


 


THIS AGREEMENT is made and entered into as of the 29th
day of November 2004 (the “Restatement Effective Date”), by and among VIASYS
Healthcare Inc., a Delaware corporation (together with its successors and
assigns permitted under this Agreement, the “Company”), and Randy H. Thurman
(the “Executive”).


 


W I T N E S S E T H :


 


WHEREAS, the Company previously entered into an
employment agreement dated as of April 2, 2001, with the Executive whereby the
Executive commenced employment with the Company;


 


WHEREAS, the employment agreement was amended as of
September 24, 2001 and November 19, 2002;


 


WHEREAS, the Company and the Executive entered into a
retention agreement (the “Retention Agreement”) on April 16, 2001, as amended
on November 19, 2002;


 


WHEREAS, effective as of the Restatement Effective
Date, the Company and the Executive now desire to amend and restate the
employment agreement as set forth herein to embody more clearly and fully the
terms and provisions of such employment (the “Agreement”) and to incorporate
into this Agreement certain provisions previously addressed in the Retention
Agreement.


 


NOW, THEREFORE, in consideration of the premises and
mutual covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is mutually acknowledged,
the Company and the Executive hereby agree as follows:


 


1.                                       DEFINITIONS.


 


(a)                                  “Affiliate”
means a  person or other entity that
directly or indirectly controls, is controlled by, or is under common control
with the person or other entity specified.


 


(b)                                 “Base
Salary” means the salary provided for in Section 4
or any increased salary granted to the Executive pursuant thereto.


 


(c)                                  “Board”
means the Board of Directors of the Company.


 


(d)                                 “Cause”
means the occurrence of any one or more of the following events:


 


(i)                                     the
Executive’s willful and repeated failure to comply with the directives of the
Board;


 


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(ii)                                  the
Executive’s conviction of a felony or any crime involving moral turpitude; or


 


(iii)                               the Executive’s willful
and continued gross neglect of his duties with the Company (other than any such
occurrence resulting from incapacity due to physical or mental illness);


 


provided, however, that,
with respect to events described in subsection (i) or (iii), (A) the Executive
must be provided with a written demand by the Board which specifically
identifies the manner in which the Executive is considered to have breached his
obligation and providing the Executive with at least a thirty (30) calendar day
period in which to cure the breach, if the breach is curable; and (B) following
such event, the Executive must receive a Notice of Termination for Cause from
the Company indicating that the majority of the outside directors of the Board
has made a good faith determination that the Executive has engaged in conduct
that constitutes Cause.  For purposes of
this Section 1(d), no act or failure to act, on the part of the Executive,
shall be considered willful unless it is done, or omitted to be done, by him in
bad faith and without a reasonable belief that his action or omission was in
the best interests of the Company.


 


(e)                                  “Change
in Control” means an event or occurrence set forth in any one or more of
subsections (i) through (iv) below (including an event or occurrence that
constitutes a Change in Control under one of such subsections but is
specifically exempted from another such subsection):


 


(i)                                     the
acquisition by an individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership of any capital stock of the Company
if, after such acquisition, such Person beneficially owns (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) forty percent (40%) or more
of either (i) the then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”), or (ii) the combined voting power of the
then-outstanding securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided,
however, that for purposes of this subsection (i), the following acquisitions
shall not constitute a Change in Control:


 


(1)                                  any
acquisition by the Company;


 


(2)                                  any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company; or


 


(3)                                  any
acquisition by any corporation pursuant to a transaction that complies with
clauses (A) and (B) of subsection (iii) of this Section 1(e);


 


(ii)                                  the
Continuing Directors (as defined below) do not constitute a majority of the
Board (or, if applicable, the Board of Directors of a successor corporation to
the Company), where the term “Continuing Director” means at any date a member
of the Board (i) who was a member of the Board on the date of the execution of
this Agreement or (ii) who was nominated or elected subsequent to such date by
at least a majority of the directors who were Continuing Directors at the time
of such nomination or election or whose election to the Board was recommended
or endorsed by at least a majority of the directors who were


 


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Continuing Directors at the time of such nomination or election;
provided, however, that there shall be excluded from this clause (ii) any
individual whose initial assumption of office occurred as a result of an actual
or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents, by
or on behalf of a person other than the Board;


 


(iii)                               the
consummation of a merger, consolidation, reorganization, recapitalization or
statutory share exchange involving the Company or a sale or other disposition
of all or substantially all of the assets of the Company in one or a series of
transactions (a “Business Combination”), unless, immediately following such
Business Combination, each of the following two conditions is satisfied: (A)
all or substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty percent (50%) of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such
Business Combination (which shall include, without limitation, a corporation
which as a result of such transaction owns the Company or substantially all of
the Company’s assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively; and (B)
no Person (excluding the Acquiring Corporation or any employee benefit plan (or
related trust) maintained or sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly, forty percent (40%) or
more of the then outstanding shares of common stock of the Acquiring
Corporation, or of the combined voting power of the then-outstanding securities
of such corporation entitled to vote generally in the election of directors; or


 


(iv)                              approval
by the stockholders of the Company of a complete liquidation or dissolution of
the Company.


 


(f)                                    “Change
in Control Date” means the first date during the Employment Term on which a
Change in Control occurs.


 


(g)                                 “Code”
means the Internal Revenue Code of 1986, as amended.


 


(h)                                 “Disability”
or “Disabled” means the Executive’s inability to substantially perform his
duties and responsibilities under this Agreement due to physical or mental
incapacity, as determined by a medical doctor selected by the Company and the
Executive. If the Parties cannot agree on a medical doctor for such purpose,
each Party shall select one medical doctor and such doctors will jointly select
a third medical doctor who shall be the approved medical doctor for such
purpose.


 


(i)                                     “Effective
Date” means November 15, 2001.


 


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(j)                                     “Equity
Grant” means any compensatory grant of Stock, options with respect to Stock,
restricted Stock, Stock appreciation rights or any other compensatory grant
(whether or not such grant is payable in stock) the value of which is
determined with reference to Stock valuation.


 


(k)                                  “Good
Reason” means,


 


(i)                                     other
than in connection with a Change in Control, the occurrence, without the
Executive’s written consent, of any of the events or circumstances set forth in
clauses (A) through (E) below:


 


(A)                              the
failure of the Company to provide Executive with aggregate compensation (Base
Salary and long-term and short-term incentive compensation) or aggregate
benefits that are at least equal (in terms of benefit levels and reward
opportunities) to those provided by the Company to Executive immediately before
the change; provided, however, that a change in the compensation or benefits
for all executives of the Company, in which Executive is treated similarly as
all other executives of a comparable responsibility level, shall not constitute
Good Reason under this Agreement;


 


(B)                                the
failure to elect or reelect the Executive to the position of Chairman or Chief
Executive Officer or the removal of the Executive from either position (other
than due to a termination of his employment for Cause, without Cause, or as a
result of Disability, death or the Executive’s resignation without good
reason);


 


(C)                                other
than with respect to his position as President, a significant change in the
Executive’s duties or responsibilities (including reporting responsibilities)
that is inconsistent with the Executive’s experience, training and skills and
represents a substantial diminution of the Executive’s position and
responsibilities in effect immediately prior thereto;


 


(D)                               other
than with respect to his position as President, a change in the reporting
structure so that the Executive reports to an entity other than the Board; or


 


(E)                                 the
relocation of the offices of the Company at which Executive is principally
located to a location that is more than fifty (50) miles from the location of
such offices immediately prior to the relocation, or the Company’s requiring
the Executive to be based anywhere other than such offices, except for required
travel on the Company’s business to an extent substantially consistent with the
Executive’s business travel obligations at the date of this Agreement.


 


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(ii)                                  in
connection with a Change in Control, the occurrence, without the Executive’s
written consent, of any of the events or circumstances set forth in clauses (A)
through (G) below.  Notwithstanding the
occurrence of any such event or circumstance, such occurrence shall not be
deemed to constitute Good Reason if, prior to the Termination Date specified in
the Notice of Termination given by the Executive in respect thereof, such event
or circumstance has been fully corrected and the Executive has been reasonably
compensated for any losses or damages resulting therefrom (provided that such
right of correction by the Company shall only apply to the first Notice of
Termination for Good Reason given by the Executive).  The Executive’s right to terminate his
employment for Good Reason under this subsection (ii) shall not be affected by
the Executive’s incapacity due to physical or mental illness.


 


(A)                              The
assignment to the Executive of duties inconsistent in any material respect with
the Executive’s position (including, as to all positions other than that of the
position of President, status, offices, the title of Chairman or Chief
Executive Officer and reporting requirements), authority or responsibilities in
effect immediately prior to the earliest to occur of (1) the Change in Control
Date, (2) the date of the execution by the Company of the initial written
agreement or instrument providing for the Change in Control or (3) the date of
the adoption by the Board of Directors of a resolution providing for the Change
in Control (with the earliest to occur of such dates referred to herein as the “Measurement
Date”) or a material diminution in such position, authority or
responsibilities;


 


(B)                                a
reduction in the Executive’s aggregate compensation (base salary and long-term
and short-term cash incentive compensation) or aggregate benefits as in effect
on the Measurement Date or as the same was or may be increased thereafter from
time to time;


 


(C)                                the
failure by the Company to (i) continue in effect any material compensation or
benefit plan or program (including without limitation any life insurance,
medical, health and accident or disability plan and any vacation or automobile
program or policy) (a “Benefit Plan”) in which the Executive participates or
which is applicable to the Executive immediately prior to the Measurement Date,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan or program, (ii)
continue the Executive’s participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable than the basis
existing immediately prior to the Measurement Date, (iii) award cash bonuses to
the Executive in amounts and in a manner substantially consistent with past
practice in light of the Company’s financial performance or (iv) continue to
provide any material fringe benefit enjoyed by Executive immediately prior to
the Measurement Date;


 


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(D)                               the
relocation of the offices of the Company at which Executive is principally
located to a location that is more than fifty (50) miles from the location of
such offices immediately prior to the relocation, or the Company’s requiring
the Executive to be based anywhere other than such offices, except for required
travel on the Company’s business to an extent substantially consistent with the
Executive’s business travel obligations prior to the Change of Control;


 


(E)                                 the
failure of the Company to obtain the agreement from any successor to the
Company to assume and agree to perform this Agreement;


 


(F)                                 a
purported termination of the Executive’s employment which is not effected
pursuant to a Notice of Termination satisfying the requirements of Section
1(l); or


 


(G)                                any
failure of the Company to pay or provide to the Executive any portion of the
Executive’s compensation or benefits then due under any Benefit Plan within
seven days of the date of receipt by the Company of notice that such
compensation or benefits are due, or any material breach by the Company of this
Agreement or any employment agreement with the Executive.


 


(l)                                     “Notice
of Termination” means a written notice from one party to the other party hereto
given in accordance with Section 27, terminating the Executive’s employment
hereunder.  Any Notice of Termination
shall (i) indicate the specific termination provision hereunder relied on by
the party giving such notice and (ii) to the extent applicable, set forth in
reasonable detail the facts and circumstances providing a basis for termination
of the Executive’s employment under the provision so indicated.  The failure by the Executive or the Company
to set forth any fact or circumstance that contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting any such fact or circumstance in enforcing his or its respective
rights hereunder.  Any Notice of
Termination for (x) Cause given by the Company must be given within ninety (90)
days from the Company becoming aware of the events or circumstances that
constitute Cause and (y) Good Reason given by the Executive must be given
within sixty (60) days from the Executive becoming aware of the events and
circumstances that constitute Good Reason.


 


(m)                               “Stock”
means the common stock, $0.01 par value per share, of the Company.


 


(n)                                 “Termination
Date” means, with respect to any termination of the Executive’s employment
hereunder, the effective date of such termination pursuant to Section 10.


 


2.                                       EMPLOYMENT
TERM.


 


The Executive’s employment under the predecessor to
this Agreement commenced on the Effective Date and continued until the
Restatement Effective Date, on which date the terms of


 


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this restated Agreement became effective.  This restated Agreement shall have an initial
three-year term commencing on the Restatement Effective Date (the “Initial
Employment Term”).  In addition, the term
of this Agreement shall automatically renew for periods of three years (each an
“Extension Term”) unless either party gives written notice to the other party,
at least ninety (90) days prior to the end of the Initial Employment Term or at
least ninety (90) days prior to the end of the relevant Extension Term, that
the Agreement shall not be further extended. The period commencing on the
Effective Date and ending on the date on which the term of the Executive’s
employment under the Agreement shall terminate is hereinafter referred to as
the “Employment Term.”


 


3.                                       POSITION,
DUTIES AND RESPONSIBILITIES.


 


(a)                                  Commencing
on the Effective Date, the Executive was employed as the Chairman, President
and Chief Executive Officer of the Company and the Executive has been assigned
and shall be assigned such duties and responsibilities as are reasonably
consistent with such positions and such other duties and responsibilities as
the Board from time to time deems appropriate.


 


(b)                                 During
the Employment Term, the Executive shall devote his entire business time,
attention and energies to the business and interest of the Company in
performing his duties and responsibilities under this Agreement, and to that
end, the Executive shall not serve on the board of directors of other
corporations or entities without the prior approval of the Board in each case,
except with regard to directorships of the corporations set forth on Schedule
3(b) as attached hereto and/or any subsidiary thereof; provided, that during
business hours the Executive shall not devote more than 12 days per calendar
year to such positions (subject to the occurrence of any extraordinary
corporate event that may require, as a matter of fiduciary duty, the devotion
of more time, such as an unsolicited takeover bid for a public company) and
that such positions do not materially interfere with the proper performance of
the Executive’s duties and responsibilities as set forth in Section 3.


 


(c)                                  Notwithstanding
anything contained in Section 3(b) to the contrary,
nothing herein shall preclude the Executive from (i) serving on the boards of
directors of a reasonable number of trade associations and/or charitable
organizations, (ii) engaging in charitable activities and community affairs,
and (iii) managing his personal investments and affairs, provided, that such
activities do not materially interfere with the proper performance of his
duties and responsibilities as set forth in Section 3.


 


(d)                                 The
Executive, in carrying out his duties and responsibilities under this
Agreement, shall report directly to the Board.


 


(e)                                  In
the event of a termination of employment of the Executive for any reason, the
Executive shall immediately resign as a member of the Board and as a member of
each of the boards of directors of the Company’s Affiliates upon which the
Executive serves, unless the Board determines otherwise.


 


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4.                                       BASE
SALARY.


 


The Executive shall be paid an annualized base salary,
payable in accordance with the regular payroll practices of the Company, of
$600,000, effective as of March 1, 2004, which amount may be increased from
time to time in the discretion of the Board; provided, however, that once such
amount is increased, it may not be decreased except in the case of a decrease
in compensation of all executives of the Company, in which the Executive is
treated similarly as all other executives of a comparable responsibility level.


 


5.                                       LOAN.


 


The Company has made a loan to the Executive in the
original principal amount of $500,000 (the “Loan”) bearing interest at a rate
of six percent (6%) per annum.  The
Executive’s obligation to pay the principal of and interest on the Loan is
evidenced by a Promissory Note, which the Executive executed and delivered to
the Company on April 19, 2001 (the “Loan Effective Date”).  So long as the Executive is still employed by
the Company on each such anniversary of the Loan Effective Date, the Company
shall credit the Executive with payment of twenty-five percent (25%) of the
outstanding principal of the Loan on the first four anniversaries of the Loan
Effective Date (such that on the fourth anniversary of the Loan Effective Date
all of the outstanding principal of the Loan shall have been paid in
full).   The parties hereto hereby
acknowledge and agree that the Loan shall be treated by the parties as a loan
for all purposes.


 


6.                                       ANNUAL
CASH INCENTIVE AWARD.


 


During the Employment Term, the
Executive shall be entitled to participate in all long-term and short-term
incentive programs established by the Company for its senior level executives
generally.  Specifically, the Executive
shall be entitled to participate in the annual cash incentive program of the
Company.  Effective as of March 1, 2004,
under such program, the Executive shall be eligible to receive an annual bonus
targeted at 100% of the Executive’s annual base pay, or such higher percentage
as the Board may, in its discretion, determine. 
The Board shall also have similar discretion to determine any Pro-Rated
Annual Bonus pursuant to Section 11(a)(ii), 11(b)(iii), 11(d)(ii) and
11(g)(ii).  The target bonus shall be
subject to certain conditions, including without limitation multipliers, that
are consistent with the annual bonus plan applicable to other senior executives
of the Company.


 


7.                                       EMPLOYEE
BENEFIT PROGRAMS.


 


During the Employment Term, the Executive shall be
entitled to participate in all employee pension and welfare benefit plans and
programs made available to the Company’s senior level executives or to its
employees generally, as such plans or programs may be in effect from time to
time, including, without limitation, pension, profit sharing, savings and other
retirement plans or programs, medical, dental, hospitalization, short-term and
long-term disability and life insurance plans, accidental death and
dismemberment protection, travel accident insurance, and any other pension or
retirement plans or programs and any other employee welfare benefit plans or
programs that may be sponsored by the Company from time to time, including
without limitation any plans that supplement the above-listed types of plans or


 


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programs, whether funded or unfunded. 
The Executive shall be entitled to vacation and sick leave in accordance
with the Company’s vacation, holiday and other pay for time not worked policies
on a basis no less favorable than that which is authorized for the Company’s
senior-level executives.


 


8.                                       PERQUISITES.


 


During the Employment Term, the Executive shall be
entitled to participate in all of the Company’s executive perquisites in
accordance with the terms and conditions of such arrangements as are in effect
from time to time for the Company’s senior-level executives.


 


9.                                       REIMBURSEMENT
OF BUSINESS AND OTHER EXPENSES.


 


The Executive is authorized to incur reasonable
expenses in carrying out his duties and responsibilities under this Agreement,
including, without limitation, reasonable legal fees incurred in the negotiation
and preparation of this Agreement, and the Company shall promptly reimburse him
for such expenses, subject to documentation in accordance with the Company’s
policy.


 


10.                                 TERMINATION
OF EMPLOYMENT.


 


The Executive’s employment hereunder shall terminate
effective immediately upon the earliest to occur of the following events:


 


(a)                                  death
of the Executive;


 


(b)                                 receipt
by either party of a Notice of Termination for Disability from the other party,
but in any event not until the Executive is determined to be disabled in
accordance with Section 1(h);


 


(c)                                  the
31st day following receipt by the Executive of the Notice of Termination for
Cause from the Company indicating that a majority of the outside directors of
the Board has made a good faith determination that the Executive has engaged in
conduct that constitutes Cause; provided, that (i) if such action or failure to
act is curable, the Executive fails to correct the action or failure to act
that constitutes the grounds for Cause in a manner reasonably satisfactory to
the Board within the thirty (30) day period following receipt by the Executive
of the Notice of Termination for Cause; and (ii) the Executive together with
his counsel, shall have had an opportunity to be heard by the Board regarding
the conduct in question.  Immediately
upon receipt by the Executive of a Notice of Termination for Cause from the
Company, the Executive shall take a mandatory paid leave of absence from the
Company for such thirty (30) day period; provided, however, that the leave of
absence shall terminate within two (2) days of the cure if such cure is
effected prior to the end of the thirty-day period;


 


(d)                                 the
31st day following receipt by the Company of a Notice of Termination for Good
Reason from the Executive if the Company fails to cure within the thirty (30)
day period following the Company’s receipt of such written notice;


 


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(e)                                  the
31st day following receipt by the Executive of a Notice of Termination Without
Cause from the Company;


 


(f)                                    the
31st day following receipt by the Company of a Notice of Termination Without
Good Reason from the Executive; and


 


(g)                                 the
last day of the Employment Term following expiration of the Employment Term
without renewal by the Company.


 


11.                                 RIGHTS
AND REMEDIES UPON TERMINATION OF EMPLOYMENT; CHANGE IN CONTROL.


 


(a)                                  TERMINATION
DUE TO DEATH.  In the event that the
Executive’s employment is terminated due to his death, his estate or his
beneficiaries, as the case may be, shall be entitled to the following benefits:


 


(i)                                     the
Executive’s then current Base Salary through the Termination Date, which shall
be payable in a lump sum within thirty (30) days of the Termination Date;


 


(ii)                                  an
annual cash incentive bonus award for the year in which the termination occurs,
pro-rated through the Termination Date, determined in accordance with the
annual bonus plan and the provisions of Section 6, which award, if and to the
extent so determined to be owed, shall be payable when long-term and short-term
incentive awards, as applicable, are normally paid to comparable executives
(the “Pro-Rated Annual Bonus”);


 


(iii)                               each Equity Grant held
by the Executive, whether or not issued under this Employment Agreement, that
has not vested prior to that date shall immediately vest (and all relevant
vesting restrictions shall lapse) and to the extent subject to an exercise
period, shall remain exercisable until one year following the Termination Date
(but in no event beyond the end of each such Grant’s otherwise applicable
exercise period);


 


(iv)                              the
unpaid principal balance of the Loan shall be forgiven effective upon the
Termination Date; and


 


(v)                                 a
lump sum cash payment equal to two times the Executive’s then current Base
Salary.


 


(b)                                 TERMINATION
DUE TO DISABILITY.  In the event that the
Executive’s employment is terminated by either party due to his Disability, he
shall be entitled to the following benefits:


 


(i)                                     disability
benefits in accordance with the long-term disability (“LTD”) program then in
effect for comparable executives of the Company;


 


(ii)                                  the
Executive’s then current Base Salary through the end of the LTD elimination
period, which shall be payable in a lump sum within thirty (30) days of the
Termination Date;


 


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(iii)                               a Pro-Rated Annual
Bonus;


 


(iv)                              each
Equity Grant held by the Executive, whether or not issued under this Employment
Agreement, that has not vested prior to that date shall immediately vest (and
all relevant vesting restrictions shall lapse) and to the extent subject to an
exercise period, shall remain exercisable until one year following the
Termination Date (but in no event beyond the end of each such Grant’s otherwise
applicable exercise period);


 


(v)                                 the
unpaid principal balance of the Loan shall be forgiven effective upon the
Termination Date;


 


(vi)                              a
lump sum cash payment equal to two times the Executive’s then current Base
Salary; and


 


(vii)                           continued participation at
the Company’s expense in all medical and dental insurance coverage in which he
was participating on the date of his termination until the earlier of (A)
eighteen (18) months following the Termination Date, or (B) the date, or dates,
he receives substantially equivalent coverage and benefits under the plans and
programs of a subsequent employer.


 


(c)                                  TERMINATION
BY THE COMPANY FOR CAUSE.  In the event
that the Company terminates the Executive’s employment for Cause:


 


(i)                                     the
Executive shall be entitled to receive his current Base Salary through the
Termination Date, which shall be payable in a lump sum within thirty (30) days
of the Termination Date;


 


(ii)                                  each
Equity Grant held by the Executive, whether or not issued under this Employment
Agreement, (A)  that has not vested prior
to that date shall immediately cease to vest and shall be forfeited to the
Company and cancelled, and (B)  that has
vested prior to or on the Termination Date, to the extent subject to an
exercise period, shall remain exercisable for ninety (90) days following the
Termination Date (but in no event beyond the end of each such Grant’s otherwise
applicable exercise period); and


 


(iii)                               the Executive shall not
be entitled to any benefits, severance or other compensation.


 


(d)                                 TERMINATION
FOR GOOD REASON.  In the event the
Executive’s employment is terminated by the Executive for Good Reason other
than in connection with a Change in Control pursuant to Section 11(i), the
Executive shall be entitled to the following benefits:


 


(i)                                     the
Executive’s then current Base Salary through the Termination Date, which shall
be payable in a lump sum within thirty (30) days of the Termination Date;


 


(ii)                                  a
Pro-Rated Annual Bonus;


 


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(iii)                               an amount equal to two
times the sum of (i) the Executive’s then current Base Salary and (ii) the most
recent short term and long term cash incentive award paid or awarded to the
Executive pursuant to Section 6, payable in a lump sum within ninety (90) days
of the Termination Date;


 


(iv)                              each
Equity Grant held by the Executive, whether or not issued under this Employment
Agreement, that has not vested prior to that date shall immediately vest (and
all relevant vesting restrictions shall lapse) and to the extent subject to an
exercise period, shall remain exercisable until one year following the
Termination Date (but in no event beyond the end of each such Grant’s otherwise
applicable exercise period);


 


(v)                                 the
unpaid principal balance of the Loan shall be forgiven effective upon the
Termination Date; and


 


(vi)                              continued
participation at the Company’s expense in all medical and dental insurance
coverage in which he was participating on the date of his termination until the
earlier of (A) eighteen (18) months following the Termination Date or (B) the
date, or dates, he receives substantially equivalent coverage and benefits
under the plans and programs of a subsequent employer.


 


(e)                                  TERMINATION
WITHOUT GOOD REASON.  In the event of a
termination of employment by the Executive on his own initiative, other than
due to (A) death, (B) Disability, (C) Good Reason, (D)
the expiration of the then current Employment Term, (E) a notice from one party
to the other of its intent not to extend the Employment Term; or (F) in
connection with a Change in Control:


 


(i)                                     the
Executive shall be entitled to receive his current Base Salary through the
Termination Date, which shall be payable in a lump sum within thirty (30) days
of the Termination Date;


 


(ii)                                  each
Equity Grant held by the Executive, whether or not issued under this Employment
Agreement, (A) that has not vested prior to that date shall immediately cease
to vest and shall be forfeited to the Company and cancelled, and (B) that has
vested prior to the Termination Date, to the extent subject to an exercise
period, shall remain exercisable until three months following the Termination
Date (but in no event beyond the end of each such Grant’s otherwise applicable
exercise period); and


 


(iii)                               the Executive shall not
be entitled to any benefits, severance or other compensation.


 


(f)                                    TERMINATION
WITHOUT CAUSE.  A termination of the
Executive’s employment by the Company, other than due to (A) death, (B)
Disability, (C) Cause, (D) the expiration of the then current Employment Term,
(E) a notice from one party to the other of its intent not to extend the
Employment Term or (F) in connection with a Change in Control,  shall have the same consequences as provided
in Section 11(d) for a termination of the Executive’s employment by the
Executive for Good Reason.


 


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(g)                                 EXPIRATION
OF EMPLOYMENT TERM.  In the event that
Executive’s employment with the Company ceases due to expiration of the
Employment Term as a result of the Company’s notification to the Executive of
the non-renewal of the Employment Term, the Executive shall be entitled to:


 


(i)                                     his
current Base Salary through the Termination Date, which shall be payable in a
lump sum within thirty (30) days of the Termination Date;


 


(ii)                                  a
Pro-Rated Annual Bonus; and


 


(iii)                               a
severance payment equal to his then current Base Salary payable in twelve (12)
equal monthly installments commencing with the calendar month immediately
following the calendar month in which he separates from the service of the
Company.


 


(h)                                 OTHER
TERMINATION BENEFITS.  In the case of any
of the foregoing terminations, to the extent not previously paid or provided or
otherwise contrary to the terms and conditions of this Agreement, the Executive
or his estate or beneficiaries, as the case may be, shall also be entitled to
the balance of any incentive awards due the Executive but not yet paid
(including without limitation awards due for performance periods that have been
completed, but have not yet been paid), any expense reimbursements due the
Executive, and other benefits, if any, in accordance with applicable plans or programs
of or contracts or agreements of the Executive with the Company.


 


(i)                                     TERMINATION
IN CONNECTION WITH A CHANGE IN CONTROL. 
Notwithstanding anything to the contrary in this Agreement, in the event
that (A) a Change of Control occurs; and (B) the Executive’s employment with
the Company is terminated by the Company without Cause or by the Executive with
Good Reason, in either case within (x) six (6) months prior to a Change of
Control and it is reasonably demonstrated by the Executive that such termination
of employment (1) was at the request of a third party who has taken steps
reasonably calculated to effect a Change of Control or (2) otherwise arose in
connection with or in anticipation of a Change of Control; or (y) eighteen (18)
months following a Change in Control, the Executive shall be entitled to the
following payments and benefits, with any cash payments to be made in a lump
sum within thirty (30) days following the Termination Date:


 


(i)                                     the
sum of (A) the Executive’s Base Salary through the Termination Date, (B) the
product of (x) the annual bonus paid or payable (including without limitation
any bonus or portion thereof which has been earned but deferred) for the most
recently completed fiscal year and (y) a fraction, the numerator of which is
the number of days in the current fiscal year through the Termination Date, and
the denominator of which is 365 and (C) the amount of any compensation
previously deferred by the Executive (together with any accrued interest or
earnings thereon) and any accrued vacation pay, in each case to the extent not
previously paid (the sum of the amounts described in clauses (A), (B), and (C)
shall be hereinafter referred to as the “Accrued Obligations”);


 


(ii)                                  an
amount equal to (A) three (3) multiplied by (B) the sum of (x) the Executive’s
highest annual base salary in any twelve-month period (on a rolling basis)
during the five-year period prior to the Change in Control Date and (y) the
Executive’s


 


13





















 


highest
annual bonus in any twelve-month period (on a rolling basis) during the
five-year period prior to the Change in Control Date;


 


(iii)                               for three years after
the Termination Date, or such longer period as may be provided by the terms of
the appropriate plan, program, practice or policy, the Company shall continue
to provide benefits to the Executive and the Executive’s family at least equal
to those which would have been provided to them if the Executive’s employment
had not been terminated, in accordance with the applicable Benefit Plans in
effect on the Measurement Date or, if more favorable to the Executive and his
family, in effect generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies; provided, however, that
if the Executive becomes reemployed with another employer and is eligible to
receive a particular type of benefits (e.g., health insurance benefits) from
such employer on terms at least as favorable to the Executive and his family as
those being provided by the Company, then the Company shall no longer be
required to provide those particular benefits to the Executive and his family;


 


(iv)                              to
the extent not previously paid or provided, the Company shall timely pay or
provide to the Executive any other
amounts or benefits required to be paid or provided or which the Executive is
eligible to receive following the Executive’s termination of employment under
any plan, program, policy, practice, contract or agreement of the Company and
its affiliated companies; provided, however, that for purposes of this
subparagraph (iv), and without regard to the requirements of Sections 11(i)(A)
and 11(i)(B) above, Section 4.3 (Taxes) of the Retention Agreement (as it stood
immediately prior to the Restatement Effective Date) shall remain in effect and
shall continue to be deemed to be an agreement of the Company; and


 


(v)                                 the unpaid principal balance of the Loan
shall be forgiven effective upon the Termination Date.


 


For purposes of
determining eligibility (but not the time of commencement of benefits) of the
Executive for retiree benefits to which the Executive is entitled, the
Executive shall be considered to have remained employed by the Company until
three years after the Termination Date.


 


(j)                                     OUTPLACEMENT
SERVICES.  In the event that the
Executive’s employment is terminated in accordance with Section 11 without
Cause or for Good Reason, the Company shall provide outplacement services
through one or more outside firms of the Executive’s choosing up to an
aggregate of $40,000, with such services to extend until the earlier of (i)
twelve (12) months following the Termination Date or (ii) the date on which the
Executive secures full time employment.


 


(k)                                  NATURE
OF PAYMENTS.  Any amounts due under this
Section 11  are in the nature of severance payments
considered to be reasonable by the Company and are not in the nature of a
penalty.


 


(l)                                     NO
MITIGATION; NO OFFSET.  The Executive
shall not be required to mitigate the amount of any payment or benefit provided
in this Section 11 by seeking other


 


14





















 


employment or otherwise. 
Further, except as provided in this Section 11, the amount of any
payment or benefits provided for in this Section 11 shall not be reduced by any
compensation earned by the Executive as a result of employment by another
employer or be offset by any amount claimed to be owed by the Executive to the
Company.


 


(m)                               RELEASE. 
To the fullest extent permitted by applicable law, the Company’s
obligation to pay or provide any benefits to the Executive under this Agreement
shall be subject to the requirement that he execute (and not breach or rescind)
a comprehensive release in favor of the Company, its officers, directors and
related parties, with such release to be in such form as the Company may
determine as of the Termination Date.


 


(n)                                 TREATMENT OF EQUITY GRANTS UPON CHANGE IN
CONTROL.  In the event of the occurrence
of a Change in Control, each Equity Grant held by the Executive, whether or not
issued under this Employment Agreement, that has not vested prior to the date
of such occurrence shall immediately vest (and all relevant vesting
restrictions shall lapse) and to the extent subject to an exercise period,
shall remain exercisable until the termination date specified in the relevant
equity compensation plan or in the relevant Equity Grant instrument; provided,
however, that (i) the accelerated vesting described in this Section 11(n) shall
not be contingent on the termination of the Executive’s employment with the
Company; and (ii) if, pursuant to the terms of the relevant Company equity
compensation plan or of the relevant Equity Grant instrument, a longer exercise
period than the period provided for in this Section 11(n) is applicable, then
such longer exercise period shall control.


 


(o)                                 CONTINUATION
OF EMPLOYMENT TO TRANSITION A SUCCESSOR FOLLOWING DEPARTURE AS CHIEF EXECUTIVE
OFFICER.  At such point in time that
Executive is no longer Chief Executive Officer, other than as a result of his
termination for Cause at any time during the Employment Term or his termination
without Good Reason during the Initial Employment Term, he will be employed for
a period of three years, in a capacity mutually agreed to with the Board, in
order to provide continuity of strategy and a period of transition to his
successor.  During such three year
period, the Executive (i) will be paid an annualized salary of $100,000 in the
first year of service in such capacity, $75,000 in the second year, and $50,000
in the third year, which salaries shall be payable in accordance with the
regular payroll practices of the Company, and (ii) will be eligible for all
benefits provided to employees of the Company during that period.


 


12.                                 CONFIDENTIALITY
& ASSIGNMENT OF INVENTIONS.


 


(a)                                  The
Executive has executed and delivered to the Company on the Effective Date the
Company’s standard employee Confidentiality and Assignment of Inventions
Agreement, and acknowledges that he continues to be bound by that Agreement.


 


(b)                                 Upon
the termination of the Executive’s employment, the Executive (or in the event
of his death, the Executive’s personal representative) shall promptly surrender
to the Company the original and all copies of any materials containing
confidential information of the Company which are then in the Executive’s
possession or control; provided, however, that the Executive shall not be
required to surrender his rolodexes, personal diaries and other items of a
personal nature.


 


15





















 


13.                                 NON-COMPETITION;
NON-SOLICITATION.


 


(a)                                  The
Executive acknowledges (i) that in the course of his employment with the
Company he has and will become familiar with trade secrets and customer lists
of, and other confidential information concerning, the Company and its Affiliates,
customers, and clients and (ii) that his services will be of special, unique
and extraordinary value to the Company.


 


(b)                                 The
Executive agrees that, during the Employment Term and for a period of one year
following his termination of employment for any reason (the “Non-Competition
Period”), he shall not in any manner, directly or indirectly, through any
person, firm, corporation or enterprise, alone or as a member of a partnership
or as an officer, director, stockholder, investor or employee of or advisor or
consultant to any person, firm, corporation or enterprise or otherwise, engage
or be engaged, or assist any other person, firm, corporation or enterprise in
engaging or being engaged (collectively, the “Restricted Activity”), in any
Competitive Activity (as defined below). For the purposes of this Section 13, a
“Competitive Activity” shall mean unless otherwise determined by the Board a
business that (i) is being conducted by the Company or any Affiliate at the
time in question and (ii) was being conducted, or was under active
consideration to be conducted, by the Company or any Affiliate, at the date of
the termination of the Executive’s employment. 
It is agreed and understood that the prohibitions provided for in this
Section 13(b) shall not restrict the Executive from engaging in Restricted
Activity for any subsidiary, division or Affiliate or unit of a company
(collectively a “Related Entity”) if that Related Entity is not engaged in a
Competitive Activity, irrespective of whether some other Related Entity of that
company engages in what would otherwise be considered to be a Competitive
Activity (as long as Executive does not engage in Restricted Activity for such
other Related Entity).


 


(c)                                  The
Executive further agrees that during the Non-Competition Period he shall not
(i) in any manner, directly or indirectly, hire or cause to be hired any
employee of or advisor or consultant to the Company or any of its Affiliates
for any purpose or in any capacity whatsoever, or (ii) in connection with any business
to which Section 13(b) applies, call on, service, solicit or otherwise do
business with any customer of the Company or any of its Affiliates; provided,
however, that the restriction contained in clause (ii) of this Section 13(c)
shall not apply to, or interfere with, the proper performance by the Executive
of his duties and responsibilities under Section 3 of this Agreement.


 


(d)                                 Nothing
in this Section 13 shall prohibit the Executive from being a passive owner of
not more than two percent (2%) of the outstanding common stock, capital stock
and equity of any firm, corporation or enterprise so long as the Executive has
no active participation in the management of business of such firm, corporation
or enterprise.


 


(e)                                  If
the restrictions stated herein are found by a court to be unreasonable, the
parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area and that the court shall revise the restrictions contained herein
to cover the maximum period, scope and area permitted by law.


 


16





















 


14.                                 REMEDIES.


 


Each of the parties to this Agreement shall be
entitled to enforce its rights under this Agreement specifically, to recover
damages and costs (including without limitation reasonable attorney’s fees)
caused by any breach of any provision of this Agreement and to exercise all
other rights existing in its favor.  The parties hereto agree and
acknowledge that money damages would not be an adequate remedy for any breach
of the provisions of this Agreement and that any party may in its sole
discretion apply to any court of law or equity of competent jurisdiction
(without posting any bond or deposit) for specific performance and/or other
injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement.  Nothing in
this Section 14 is intended to prevent the parties from raising any and all
defenses with respect to the necessity for, and scope of, such injunctive or
equitable relief.


 


15.                                 NON-DISPARAGEMENT


 


The Executive agrees not to
disparage the name, business reputation or business practices of the Company or
any of its respective subsidiaries or affiliates, or their (or their subsidiaries’
or affiliates’) officers, employees and directors and the Company agrees not to
disparage the name or business reputation of the Executive.  If either party fails to comply with this
provision, the other party shall have the right to respond truthfully to such
disparaging statements, notwithstanding the terms of this Section 15.


 


16.                                 RESOLUTION
OF DISPUTES.


 


Subject to the provisions of Section 14 regarding
specific performance and/or injunctive relief, any disputes arising under or in
connection with this Agreement shall be resolved by binding arbitration, to be
held in Philadelphia, Pennsylvania, in accordance with the rules and procedures
of the American Arbitration Association. 
Judgment upon the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof.


 


17.                                 EXPENSES.


 


(a)                                  Subject
to the provisions of Sections 15 and 16, in the event any party hereto (for the
purposes of this Section 17, the “Aggrieved Party”) seeks a judicial
adjudication of, or an award in arbitration to enforce, the Aggrieved Party’s
rights under, or to recover damages for the breach of, this Agreement, the
Aggrieved Party shall be entitled to recover from the other party or parties,
as the case may be, and shall be indemnified by the other party or parties, as
the case may be, against, any and all costs actually and reasonably incurred by
the Aggrieved Party in such judicial adjudication or arbitration, including,
without limitation, reasonable attorney’s fees, but only if the Aggrieved Party
prevails in such proceeding.


 


(b)                                 The
Company agrees to pay all costs actually and reasonably incurred by the
Executive in connection with the review and negotiation of this Agreement and
the Exhibits attached hereto, including, without limitation, the reasonable
fees of counsel selected by the Executive, within thirty (30) days after
receipt by the Company of a statement requesting such payment, which statement
shall reasonably evidence such costs incurred by the Executive.


 


17





















 


18.                                 LIABILITY
INSURANCE.


 


The Company agrees to obtain, continue and maintain a
directors’ and officers’ liability insurance policy covering the Executive to
the extent the Company provides such coverage for its other comparable executives.  The parties have entered into an
Indemnification Agreement and each party acknowledges its ongoing
applicability.


 


19.                                 ASSIGNABILITY;
BINDING NATURE.


 


This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors, heirs (in the case of
the Executive) and assigns.  Rights or
obligations of the Company under this Agreement may be assigned or transferred
by the Company pursuant to a merger or consolidation in which the Company is
not the continuing entity, or the sale or liquidation of all or substantially
all of the assets of the Company, provided that the assignee or transferee is
the successor to all or substantially all of the assets of the Company and such
assignee or transferee assumes the liabilities, obligations and duties of the
Company, as contained in this Agreement, either contractually or as a matter of
law.  The Company further agrees that, in
the event of a sale of assets or liquidation as described in the preceding
sentence, it shall take whatever action it reasonably can in order to cause
such assignee or transferee to expressly assume the liabilities, obligations
and duties of the Company hereunder.  No
rights or obligations of the Executive under this Agreement may be assigned or
transferred by the Executive other than his rights to compensation and
benefits, which may be transferred only by will or operation of law.


 


20.                                 REPRESENTATIONS
AND WARRANTIES.


 


(a)                                  The
Company represents and warrants that it has all requisite corporate power and
authority to enter into this Agreement and that the performance by the Company
of its obligations under this Agreement will not violate any agreement to which
it is a party.


 


(b)                                 The
Executive represents that the execution of this Agreement by the Executive and
the performance by him of his obligations hereunder will not violate any
agreement to which he is a party.


 


(c)                                  The
Executive hereby represents and warrants that he is not bound by the terms of
any agreement with any previous employer or other party to refrain from
competing, directly or indirectly, with the business of such previous employer
or any other party.  The Executive
further represents and warrants that Executive’s performance of all the terms
of this Agreement and as an employee of the Company does not and will not
breach any agreement to keep in confidence proprietary information, knowledge
or data acquired by the Executive in confidence or in trust prior to Executive’s
employment with the Company.  The
Executive will not disclose to the Company or induce the Company to use any
confidential or proprietary information or material belonging to any previous
employer or others.  The Executive will
not hereafter grant anyone any rights inconsistent with the terms of this
Agreement.


 


18





















 


21.                                 ENTIRE
AGREEMENT.


 


This Agreement and the Exhibits attached hereto and
incorporated herein by reference contain the entire understanding and agreement
between the parties concerning the subject matter hereof and thereof and
supersede all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with respect
thereto.  This is an integrated document.


 


22.                                 AMENDMENT
OR WAIVER.


 


No provision in this Agreement may be amended unless
such amendment is agreed to in writing and signed by the Executive and an
authorized officer of the Company, other than the Executive.  No waiver by either party of any breach by
the other party of any condition or provision contained in this Agreement to be
performed by such other party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent
time.  Any such waiver must be in writing
and signed by the Executive or an authorized officer of the Company, other than
the Executive, as the case may be.


 


23.                                 SEVERABILITY.


 


In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law so as to achieve the purposes of this Agreement.


 


24.                                 SURVIVORSHIP.


 


Except as otherwise expressly set forth in this Agreement,
the respective rights and obligations of the parties hereunder shall survive
any termination of the Executive’s employment. 
This Agreement itself (as distinguished from the Executive’s employment)
may not be terminated by either party without the written consent of the other
party.  In the event of a Change in
Control, the Company shall require any successor to the Company or any acquiror
of all or substantially all the Company’s assets to assume and honor the
Agreement.


 


25.                                 REFERENCES.


 


In the event of the Executive’s death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or
other legal representative.


 


26.                                 GOVERNING
LAW/JURISDICTION.


 


This Agreement shall be governed in accordance with
the laws of the Commonwealth of Pennsylvania without reference to principles of
conflict of laws.


 


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27.                                 NOTICES.


 


All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given when (a)
delivered personally, (b) sent by certified or registered mail, postage
prepaid, return receipt requested or (c) delivered by overnight courier
(provided that a written acknowledgment of receipt is obtained by the overnight
courier) to the party concerned at the address indicated below or to such
changed address as such party may subsequently give such notice of:


 


	
  If to the Company:

  	
   

  	
  VIASYS Healthcare Inc.

  227 Washington Street, Suite 200

  Conshohocken, PA 19428

  Attn: General Counsel

  
	
   

  	
   

  	
   

  
	
  Copy to:

  	
   

  	
  Chairman, Compensation Committee of the

  Board of Directors

  

  c/o VIASYS Healthcare Inc.

  227 Washington Street, Suite 200

  Conshohocken, PA 19428

  
	
   

  	
   

  	
   

  
	
  If to Executive:

  	
   

  	
  Randy H. Thurman

  139 Dutton Mill Road

  Malvern, PA 19355

  



 


28.                                 HEADINGS.


 


The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.


 


29.                                 COUNTERPARTS.


 


This Agreement may be executed in counterparts.


 


[Remainder of Page
Intentionally Left Blank]


 


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IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the restatement set forth above.


 


	
   

  	
  VIASYS
  HEALTHCARE INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Ronald A.
  Ahrens

  	
   

  
	
   

  	
  Name:

  	
  Ronald A. Ahrens

  
	
   

  	
  Title:

  	
  Chairman,
  Compensation Committee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Randy H.
  Thurman

  	
   

  
	
   

  	
  Randy H. Thurman

  
					



 


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SCHEDULE 3(b)


 


Valeant Pharmaceuticals
International – Member, Board of Directors


Closure Medical Corp. –
Member, Board of Directors