<PAGE>   1


                              EMPLOYMENT AGREEMENT


                 EMPLOYMENT AGREEMENT dated as of January 1, 1997, by and
between LINCARE HOLDINGS INC., a Delaware corporation (the "Company"), and
JAMES M. EMANUEL (the "Employee").

                              W I T N E S S E T H:

                 WHEREAS, prior to the date hereof, the Employee has been an
employee of the Company; and

                 WHEREAS, the Company desires to induce the Employee to
continue in the employ of the Company for the period provided in this
Agreement, and the Employee is willing to accept such employment with the
Company on a full-time basis, all in accordance with the terms and conditions
set forth below;

                 NOW, THEREFORE, for and in consideration of the premises
hereof and the mutual covenants contained herein, the parties hereto do hereby
covenant and agree as follows:

                 1.    Employment.  (a)  The Company hereby employs the 
Employee, and the Employee hereby accepts such employment with the Company, for
the period set forth in Section 2 hereof, all upon the terms and conditions
hereinafter set forth.

                 (b)      The Employee affirms and represents that he is under
no obligation to any former employer or other party which is in any way
inconsistent with, or which imposes any restriction upon, the Employee's
acceptance of employment hereunder with the Company, the employment of the
Employee by the Company, or the Employee's undertakings under this Agreement.


















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                 2.       Term of Employment.       Unless earlier terminated
as hereinafter provided, the initial term of the Employee's employment under
this Agreement shall be for a period beginning on the date hereof and ending on
December 31, 1997 (such period from the date hereof until December 31, 1997 or,
if the Employee's employment hereunder is earlier terminated, such shorter
period, being hereinafter called the "Initial Employment Term").  In the event
that the Employee continues in the full-time employ of the Company after the
end of the Initial Employment Term (it being expressly understood and agreed
that the Company does not now, nor hereafter shall have, any obligation to
continue the Employee in its employ, whether or not on a full-time basis),
then, unless otherwise expressly agreed to by the Employee and the Company in
writing, the Employee's continued employment with the Company shall,
notwithstanding anything to the contrary expressed or implied herein, continue
to be subject to the terms and conditions of this Agreement.  As used in this
Agreement, the term "Employment Term" shall mean the period beginning on the
date hereof and ending on the date of the Employee's cessation of employment
with the Company, whether such date is before, on, or after the expiration of
the Initial Employment Term.

                 3.       Duties.  The Employee shall be employed as the Chief
Financial Officer of the Company, shall faithfully and competently perform such
duties as are specified in the By-laws of the Company and shall also perform
and discharge such other reasonable employment duties and responsibilities as
the Board of Directors of the Company may from time to time prescribe.  The
Employee shall perform his duties at such places and times as the Board of
Directors of the Company may reasonably prescribe.  Except as may otherwise be
approved in advance by the Company, and except during vacation periods and
reasonable periods of absence due to sickness, personal injury or other
disability, the Employee shall devote his full time throughout the Employment
Term to the services required of him hereunder.  Except as may otherwise be
approved in advance by the Company, the Employee shall render his services
exclusively to the Company during the Employment Term and shall use his best
efforts, judgment and energy to improve and advance the business and interests
of the Company in a manner consistent with the duties of his position.


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                 4.       Salary and Bonus.  (a)  Salary.  As compensation for
the complete and satisfactory performance by the Employee of the services to be
performed by the Employee hereunder during the Employment Term, the Company
shall pay the Employee a base salary at the annual rate of ONE HUNDRED SEVENTY
FIVE THOUSAND DOLLARS ($175,000) (said amount, together with any adjustments
thereto during the Employment Term, being hereinafter referred to as the
"Salary").  Any Salary payable hereunder shall be paid in regular intervals in
accordance with the Company's payroll practices.  The Salary payable to the
Employee pursuant to this Section 4(a) shall be reviewed annually, as of each
January 1 included in the Employment Term, and such Salary amount may be
increased by the Board of Directors of the Company in its sole discretion.

                 (b)      Bonus.  During the Employment Term, in addition to
Salary, the Employee shall have the opportunity to earn bonus compensation in
respect of each calendar year (or applicable portion thereof) during the
Employment Term, such bonus compensation ("Bonus") to be an amount determined
pursuant to a bonus plan to be mutually agreed upon by Company and the Employee
with respect to each calendar year included in the Employment Term.

                 Nothing contained herein and no action taken in respect of any
Bonus (or otherwise in respect of this Section 4(b)) shall create or be
construed to create a trust of any kind.  The Employee's right to receive any
Bonus pursuant to this Section 4(b) shall be no greater than the right of an
unsecured general creditor of the Company to receive payment from the Company.
All bonuses under this Section 4(b) shall be paid from the general funds of the
Company, and no special or separate fund shall be established, and no
segregation of assets shall be made, to assure payment of any Bonuses
hereunder.



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                 (c)      Withholding.  The payment of any Salary and Bonus
hereunder shall be subject to applicable withholding and payroll taxes, and
such other deductions as may be required under the Company's employee benefit
plans.

                 5.       Benefits.  During the Employment Term, the Employee
shall:

                 (a)      be eligible to participate in all employee fringe
         benefits and any pension and/or profit sharing plans that may be
         provided by the Company for its key executive employees in accordance
         with the provisions of any such plans, as same may be in effect on and
         after the date hereof;

                 (b)      be eligible to participate in any medical and health
         plans or other employee welfare benefit plans that may be provided by
         the Company for its key executive employees in accordance with the
         provisions of any such plans, as same may be in effect on and after
         the date hereof;

                 (c)      be entitled to annual paid vacation in accordance
         with the Company policy that may be applicable on and after the date
         hereof to key executive employees;

                 (d)      be entitled to sick leave, sick pay and disability
         benefits in accordance with any Company policy that may be applicable
         on and after the date hereof to key executive employees; and

                 (e)      be entitled to reimbursement for all reasonable and
         necessary out-of-pocket living and travel expenses incurred by the
         Employee while away from his usual place of business in the
         performance of his duties hereunder in accordance with the Company's
         policies applicable on and after the date hereof in respect thereto.

                 6.       Inventions and Confidential Information.  The
Employee hereby covenants, agrees and acknowledges as follows:

                 (a)      The Company is engaged in a continuous program of
         research, design, development, production, marketing 




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<PAGE>   5

         and servicing with respect to its business and that as part of the 
         Employee's employment by the Company the Employee is (or may be) 
         expected to make new contributions and inventions of value to the 
         Company.

                 (b)      The Employee's employment hereunder creates a
         relationship of confidence and trust between the Employee and the
         Company with respect to certain information pertaining to the business
         of the Company and its Affiliates (as hereinafter defined) or
         pertaining to the business of any client or customer of the Company or
         its Affiliates which may be made known to the Employee by the Company 
         or any of its Affiliates or by any client or customer of the Company or
         any of its Affiliates or learned by the Employee during the period of
         his employment.

                 (c)      The Company possesses and will continue to possess
         information that has been created, discovered or developed by, or
         otherwise become known to it (including, without limitation,
         information created, discovered, developed or made known by the
         Employee during the period of or arising out of his employment
         hereunder) or in which property rights have been or may be assigned or
         otherwise conveyed to the Company, which information has commercial
         value in the business in which the Company is engaged and is treated
         by the Company as confidential.

                 (d)      Any and all inventions, products, discoveries,
         improvements, processes, manufacturing, marketing and service methods
         or techniques, formulae, designs, styles, specifications, data bases,
         computer programs (whether in source code or object code), know-how,
         strategies and data, whether or not patentable or registrable under
         copyright or similar statutes, made, developed or created by the
         Employee (whether at the request or suggestion of the Company, any of
         its Affiliates, or otherwise, whether alone or in conjunction with
         others, and whether during regular hours of work or otherwise) during
         the period of his employment by the Company (collectively, hereinafter
         referred to as "Inventions"), which may pertain to the business,
         products, or processes of the Company or any of its Affiliates, will
         be promptly and fully disclosed by 




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         the Employee to an appropriate executive officer of the Company (other
         than the Employee) and shall be the Company's exclusive property, and
         the Employee will promptly execute and/or deliver to an appropriate
         executive officer of the Company (other than the Employee)
         without any additional compensation therefor, all papers, drawings,
         models, data, documents and other material pertaining to or in any way
         relating to any Inventions made, developed or created by him as
         aforesaid.  For the purposes of this Agreement, the term "Affiliate"
         or "Affiliates" of the Company shall mean any corporation or other
         entity which is controlled, directly or indirectly, by the Company. 
         As used in the preceding sentence, the word "control" shall mean, with
         respect to any entity, the power to vote or direct the voting of more
         than 50% of the voting equity interests in such entity.

                 (e)      The Employee will keep confidential and will hold for
         the Company's sole benefit any Invention which is to be the exclusive
         property of the Company under this Section 6 for which no patent,
         copyright, trademark or other right or protection is issued.

                 (f)      The Employee also agrees that he will not without the
         prior written consent of an appropriate executive officer of the
         Company (other than the Employee) use for his benefit or disclose at
         any time during his employment by the Company, or thereafter, except
         to the extent required by the performance by him of his duties as an
         employee of the Company, any information obtained or developed by him
         while in the employ of the Company with respect to any Inventions or
         with respect to any customers, clients, suppliers, products,
         employees, financial affairs, or methods of design, distribution,
         marketing, service, procurement or manufacture of the Company or any
         of its Affiliates, or any confidential matter, except information
         which at the time is generally known to the public other than as a
         result of disclosure by him not permitted hereunder, or if such
         information is required to be disclosed under court order or other
         applicable law.




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                 (g)      The Employee acknowledges and agrees that a remedy at
         law for any breach or threatened breach of the provisions of this
         Section 6 would be inadequate and, therefore, agrees that the Company
         and its Affiliates shall be entitled to injunctive relief in addition
         to any other available rights and remedies in case of any such breach
         or threatened breach; provided, however, that nothing contained herein
         shall be construed as prohibiting the Company or any of its Affiliates
         from pursuing any other rights and remedies available for any such
         breach or threatened breach.

                 (h)      The Employee agrees that upon termination of his
         employment hereunder for any reason, the Employee shall forthwith
         return to the Company all documents and other property in his
         possession belonging to the Company or any of its Affiliates.

                 (i)      Without limiting the generality of Section 10 hereof,
         the Employee hereby expressly agrees that the foregoing provisions of
         this Section 6 shall be binding upon the Employee's heirs, successors
         and legal representatives.

                 7.      Termination.     (a)  The Employment Term shall end 
         and the Employee's employment hereunder shall be terminated upon the 
         occurrence of any of the following:

                (i)  the death of the Employee;

               (ii)  termination of the Employee's employment hereunder by the
         Company based upon the inability of the Employee to perform his duties
         on account of disability or incapacity for a period of one hundred
         eighty (180) or more days, whether or not consecutive, occurring
         within any period of twelve (12) consecutive months; provided,
         however, that such employment shall not be terminated by the Company
         if it can reasonably accommodate the Employee's disability or
         incapacity;

              (iii)  the termination of the Employee's employment hereunder by
         the Employee at any time for any reason 




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         whatsoever (including, without limitation, resignation or retirement);

                (iv)  termination of the Employee's employment hereunder by the
         Company at any time "for cause", such termination to take effect
         immediately upon written notice from the Company to the Employee; or

                 (v)  termination of the Employee's employment hereunder by
         the Company at any time after December 31, 1997, other than for
         "cause", such termination to take effect immediately upon written
         notice from the Company to the Employee.

                 The following actions, failures or events by or affecting the
Employee shall constitute "cause" for termination within the meaning of clause
(iv) above: (1) conviction of having committed a felony; (2) determination by
at least two-thirds of the members of the Board of Directors that the Employee
has committed acts of dishonesty or moral turpitude; (3) failure to follow
reasonable and lawful directives of the Board of Directors of the Company; or
(4) gross negligence or willful misconduct by the Employee in the performance
of his obligations hereunder.  The term "willful" shall mean any act or failure
to act taken or omitted to be taken by the Employee not in good faith and
without reasonable belief that the act or omission was in the best interest of
the Company.

                 (b)  Notwithstanding anything to the contrary expressed or
implied herein, and except as set forth in Section 7(b) hereof, the Company
(and its Affiliates) shall not be obligated to make any payments to the
Employee or on his behalf of whatever kind or nature by reason of the
Employee's cessation of employment other than: (1) such amounts, if any, of his
Salary and bonus compensation as shall have accrued and remained unpaid as of
the date of said cessation (including, but not limited to, the amount of any
bonus compensation payable in respect of the then-current calendar year); and
(2) such other amounts which may be otherwise payable to the Employee from the
Company's retirement plans or other benefit plans on account of such cessation
of employment (including, but to limited to, payment 





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<PAGE>   9

for any vested but unused vacation); (3) Company shall cover the Employee under
its medical and dental plan, and life insurance through the end of the last
calendar day of the month during which the Employment Term ends, thereafter,
the Employee shall be given COBRA conversion rights for the Company's medical
and dental plan; and (4) notwithstanding anything to the contrary contained
herein or in any stock option agreements between Company and the Employee, in
the event that the Employment Term ends upon the occurrence of any of any of
the events specified in Section 7(a)(i),(ii) or (v) hereof, then the Employee
(or the executor or administrator of the Employee's estate or the Employee's
distributee or beneficiary) shall be entitled to exercise and receive the full
benefit of all Company stock options granted to the Employee and which would
otherwise have vested in accordance with their terms during the twelve (12)
month period immediately following the termination of this Agreement. 
Accordingly, all stock options granted to the Employee which have either vested
at the time the Employment Term ends or which may vest pursuant to subsection
7(b)(4) hereof, shall be exercisable in accordance with their terms until the
latest date specified in each such option agreement without regard for any time
limitation based upon cessation of employment by the Employee.  Nothing in this
Section 7(b) shall limit the Employee's right to contest any termination of the
Employee's employment hereunder by appropriate legal proceedings. It is
understood and agreed that this Section 7(b) shall survive the expiration or
termination of this Agreement and the provisions hereof shall be binding upon
any successor in interest of the Company.

                 (c)      No interest shall accrue on or be paid with respect
to any portion of any payments hereunder paid in accordance with the terms of
this Agreement.

                 8.       Non-Assignability.  (a)  Neither this Agreement nor
any right or interest hereunder shall be assignable by the Employee, his
beneficiaries, or legal representatives without the Company's prior written
consent; provided, however, that nothing in this Section 8(a) shall preclude
the Employee from designating a beneficiary to receive any benefit payable
hereunder upon his death.  Neither this Agreement nor any right or interest
hereunder shall be assignable by the 




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Company, nor shall any obligations of the Company hereunder be delegated.

                 (b)      Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to exclusion, attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.

                 9.       Competition.  During the Employee's employment by the
Company and during the twelve (12) month period commencing on the date of
cessation of the Employee's employment for any reason whatsoever:

                 (a)      The Employee will not make any statement or perform
         any act intended to advance an interest of any existing or prospective
         competitor of the Company or any of its Affiliates in any way that
         will or may injure an interest of the Company or any of its Affiliates
         in its relationship and dealings with existing or potential customers
         or clients, or solicit or encourage any other employee of the Company
         or any of its Affiliates to do any act that is disloyal to the Company
         or any of its Affiliates or inconsistent with the interest of the
         Company or any of its Affiliate's interests or in violation of any
         provision of this Agreement;

                 (b)      The Employee will not discuss with any existing or
         potential customers or clients of the Company or any of its Affiliates
         the present or future availability of services or products by a
         business, if the employee has or expects to acquire a proprietary
         interest in such business or is or expects to be an employee, officer
         or director of such business, where such services or products are
         competitive with services or products which the Company or any of its
         Affiliates provides during the Employment Term;





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                 (c)     The Employee will not make any statement or do any 
         act intended to cause any existing or potential customers (with whom
         the Company has made contact) or clients of the Company or any
         of its Affiliates to make use of the services or purchase the products
         of any competitive business in which the Employee has or expects to
         acquire a proprietary interest or in which the Employee is or expects
         to be made an employee, officer or director, if such services or
         products in any way relate to or arise out of the services or products
         sold or provided by the Company or any of its Affiliates to any such
         existing customer or client during the Employment Term;

                 (d)      The Employee will not directly or indirectly (as a
         director, officer, employee, manager, consultant, independent
         contractor, advisor or otherwise) engage in competition with, or own
         any interest in, perform any services for, participate in or be
         connected with (i) any business or organization which engages in
         competition with the Company or any of its Affiliates in any
         geographical area where any business is presently carried on by the
         Company or any of its Affiliates, or (ii) any business or organization
         which engages in competition with the Company or any of its Affiliates
         in any geographical area where any business shall be hereafter, during
         the period of the Employee's employment by the Company, carried on by
         the Company or any of its Affiliates, if such business is then being
         carried on by the Company or any of its Affiliates in such
         geographical area; provided, however, that the provisions of this
         Section 9(d) shall not be deemed to prohibit the Employee's ownership
         of not more than 1% of the total shares of all classes of stock
         outstanding of any publicly held company;

                 (e)      The Employee will not directly or indirectly solicit
         for employment, or advise or recommend to any other person that they
         employ or solicit for employment, any employee of the Company or any
         of its Affiliates; and

                 (f)      The Employee will not directly or indirectly hire,
         engage, send any work to, place orders with, or in 




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         any manner be associated with any supplier, contractor, subcontractor
         or other person or firm which rendered manufacturing or other
         services, or sold any products, to the Company or any of its
         Affiliates if such action by him would have a material adverse effect
         on the business, assets or financial condition of the Company or any
         of its Affiliates.

                 For purposes of this Section 9, a person or entity (including,
without limitation, the Employee) shall be deemed to be a competitor of the
Company or any of its Affiliates, or a person or entity (including, without
limitation, the Employee) shall be deemed to be engaging in competition with
the Company or any of its Affiliates, if such person or entity in any way
conducts, operates, carries out or engages (i) in the business of delivering
medical oxygen, respiratory therapy services, or durable medical equipment to
customers in their homes or (ii) in any other business engaged in by the
Company or any of its Affiliates on or prior to the date upon which such
Employee ceases to be employed hereunder.

                 In connection with the foregoing provisions of this Section 9,
the Employee represents that his experience, capabilities and circumstances are
such that such provisions will not prevent him from earning a livelihood.  The
Employee further agrees that the limitations set forth in this Section 9
(including, without limitation, any time or territorial limitations) are
reasonable and properly required for the adequate protection of the business of
the Company (and of its Affiliates).  It is understood and agreed that the
covenants made by the Employee in this Section 9 (and in Section 6 hereof)
shall survive the expiration or termination of this Agreement.

                 For purposes of this Section 9, proprietary interest in a
business is ownership, whether through direct or indirect stock holdings or
otherwise, of one percent (1%) or more of such business.

                 The Employee acknowledges and agrees that a remedy at law for
any breach or threatened breach of the provisions of this Section 9 would be
inadequate and, therefore, agrees that the Company and any of its Affiliates
shall be entitled 




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to injunctive relief in addition to any other available rights and remedies in
cases of any such breach or threatened breach; provided, however, that nothing
contained herein shall be construed as prohibiting the Company or any of its
Affiliates from pursuing any other rights and remedies available for any such
breach or threatened breach.

                 10.      Binding Effect.  Without limiting or diminishing the
effect of Section 8 hereof, this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, successors, legal
representatives and permitted assigns.

                 11.      Notices.  Any notice required or permitted to be
given under this Agreement shall be sufficient if in writing and either
delivered in person or sent by first class certified or registered mail,
postage prepaid, if to the Company, at the Company's principal place of
business, and if to the Employee, at his home address most recently filed with
the Company, or to such other address or addresses as either party shall have
designated in writing to the other party hereto.

                 12.      Law Governing.  This Agreement shall be governed by
and construed in accordance with the laws of the State of Florida.

                 13.      Severability.  If any provision of this Agreement
shall be determined to be invalid, illegal or unenforceable in whole or in
part, neither the validity of the remaining part of such provision nor the
validity of any other provision of this Agreement shall in any way be affected
thereby.

                 14.      Waiver.  Failure to insist upon strict compliance
with any of the terms, covenants or conditions hereof shall not be deemed a
waiver of such term, covenant or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any other time or
times.





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                 15.      Entire Agreement; Modifications.  This Agreement
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior agreements, oral and written, between
the parties hereto with respect to the subject matter hereof.  This Agreement
may be modified or amended only by an instrument in writing signed by both
parties hereto.  It is acknowledged and agreed that this Agreement shall
supersede the Employment Agreement between the Employee and Lincare Inc., dated
November 1, 1993, which agreement shall be of no further force or effect from
the date of this Agreement.

                 16.      Survival.  The provisions of Sections 6, 7 and 9
hereof shall survive and continue after the expiration or termination of this
Agreement.

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

         IN WITNESS WHEREOF, the Company and the Employee have duly executed
and delivered this Agreement as of the day and year first above written.


                                        LINCARE HOLDINGS INC.


                                                 
                                        By:  /s/  John P. Brynes
                                           ---------------------------------    



                                        Title:  CEO




                                        /s/  James M. Emanuel
                                        ------------------------------------
                                             JAMES M. EMANUEL





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