Document:

dex10-2.htm

    
      

    

    Exhibit
      10.2

    EMPLOYMENT
      AGREEMENT

     

    This
      AGREEMENT (this “Agreement”) is made effective as of July 20, 2007 (the
“Effective Date”), by
      and between
      Allion Healthcare, Inc., a corporation with its headquarters located at 1660
      Walt Whitman Road, Melville, New York 11747 (the “Employer”), and Robert
      E. Fleckenstein, R.Ph. (the “Executive”).

     

    WHEREAS,
      the Employer and the Executive desire to enter into an agreement to reflect
      the
      Executive’s duties and responsibilities and to provide for the Executive’s
      employment by the Employer upon the terms and conditions set forth herein;
      and

     

    WHEREAS,
      the Executive has agreed to certain confidentiality, non-competition and
      non-solicitation covenants contained hereunder, in consideration of the
      additional benefits provided to the Executive under this Agreement;

     

    NOW
      THEREFORE, in consideration of the mutual covenants contained in this Agreement,
      and intending to be legally bound, the Employer and the Executive agree as
      follows:

     

    1.            Employment.
      The Employer agrees to employ the Executive and the Executive agrees to be
      employed by the Employer on the terms and conditions set forth in this
      Agreement.

     

    2.            Capacity.
      The Executive shall serve the Employer as its Vice President, Pharmacy
      Operations. The Executive shall also serve the Employer in such other or
      additional offices as the Executive may reasonably be requested to serve by
      the
      Board of Directors of the Employer (the “Board of Directors”). In such
      capacity or capacities, the Executive shall perform such services and duties
      in
      connection with the business, affairs and operations of the Employer, consistent
      with such positions, as may be assigned or delegated to the Executive from
      time
      to time by or under the authority of the Board of Directors.

     

    3.            Term.
      Subject to the provisions of Section 6, the term of employment pursuant to
      this
      Agreement (the “Term”) shall commence on the Effective Date and terminate
      on the second anniversary of the Effective Date. Expiration of the Term shall
      not constitute termination of Executive's employment during the Term for
      purposes of termination benefits under Section 6 of this Agreement.

     

    4.            Compensation
      and Benefits. The compensation and benefits payable to the Executive during
      the Term shall be as follows:

     

    (a)            Salary.
      For all services rendered by the Executive under this Agreement, the Employer
      shall pay the Executive a salary (“Salary”) at the annual rate of one
      hundred eighty thousand dollars ($180,000.00) per annum, less normal
      withholdings, effective beginning July 20, 2007, and subject to increases from time
      to
      time in the sole discretion of the Compensation Committee of the Board of
      Directors (the “Compensation Committee”). Salary
      shall be payable in periodic installments in accordance with the Employer’s
      usual practice for its senior executives.

    

    (b)            Bonus.
      The Executive may be awarded performance bonuses on an annual basis, commencing
      with a bonus that may be awarded for the 2007 calendar year, as determined
      by
      the Board of Directors or the Compensation Committee in the sole discretion
      of
      the Board of Directors or Compensation Committee, respectively; provided,
      however, that the bonus for any such year shall not exceed forty percent (40%)
      of Salary for such year.  The performance bonus, if any, shall be paid
      to the Executive within thirty (30) days after the Board of
      Directors or the Compensation Committee determines whether and to what extent
      performance goals were achieved, but no later than March 15 next following
      the
      end of the calendar year for which the performance bonus, if any, was
      earned. 
      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)
                  Stock
      Options. The Executive has been issued options to purchase shares of common
      stock of the Employer in accordance with the Employer’s stock option plan and
      the Executive’s stock option agreement thereunder. All options issued to the
      Executive, which have not been vested as of the time any Change in Control
      (as
      defined in Section 7(c)) occurs, shall automatically vest upon such
      occurrence.

     

    (d)            Regular
      Benefits. The Executive shall also be eligible to participate in any
      employee benefit plans, medical insurance plans, life insurance plans,
      disability income plans, retirement plans, vacation plans, expense reimbursement
      plans and other benefit plans which the Employer may from time to time have
      in
      effect for all or most of its senior executives. Such participation shall be
      subject to the terms of the applicable plan documents, generally applicable
      policies of the Employer, applicable law and the discretion of the Board of
      Directors, the Compensation Committee or any administrative or other committee
      provided for in or contemplated by any such plan. Nothing contained in this
      Agreement shall be construed to create any obligation on the part of the
      Employer to establish any such plan or to maintain the effectiveness of any
      such
      plan which may be in effect from time to time.

     

                                
         (e)            Automobile.
      The Employer shall provide the Executive with an automobile allowance of
      $800 per month to compensate the Executive for expenses
      related to the use of an automobile and reasonable business-related expenses
      associated with such automobile and its maintenance and operation.

    

    (f)           Taxation
      of Payment and Benefits. The Employer shall undertake to make deductions,
      withholdings and tax reports with respect to payments and benefits under this
      Agreement to the extent that it reasonably and in good faith believes that
      it is
      required to make such deductions, withholdings and tax reports. Payments under
      this Agreement shall be in amounts net of any such deductions or withholdings.
      Nothing in this Agreement shall be construed to require the Employer to make
      any
      payments to compensate the Executive for any adverse tax effect associated
      with
      any payments or benefits or for any deduction or withholding from any payment
      or
      benefit.

     

    (g)            Exclusivity
      of Salary and Benefits. The Executive shall not be entitled to any payments
      or benefits other than those provided under this Agreement, unless otherwise
      approved by the Board of Directors.

    

    5.            Extent
      of Service. During the Term, the Executive shall, subject to the direction
      and supervision of the Board of Directors, devote the Executive’s full business
      time, best efforts and business judgment, skill and knowledge to the advancement
      of the Employer’s interests and to the discharge of the Executive’s duties and
      responsibilities under this Agreement. The Executive shall not engage in any
      other business activity, except as may be approved by the Board of Directors;
      provided that nothing in this Agreement shall be construed as preventing the
      Executive from (a) investing the Executive’s assets in any company or other
      entity in a manner not prohibited by Section 8(d), or (b) engaging in religious,
      charitable or other community or non-profit activities that, in the case of
      (a)
      or (b) above, do not in any way impair the Executive’s ability to fulfill the
      Executive’s duties and responsibilities under this Agreement.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6.            Termination
      and Termination Benefits. Notwithstanding any other provision of this
      Agreement, (i) the Employer may terminate the Executive’s employment hereunder
      at any time with or without Cause (as defined in Section 7(a)) at its election;
      (ii) the Executive may terminate the Executive’s employment hereunder at any
      time with or without Good Reason (as defined in Section 7(b)) at the Executive’s
      election; (iii) Executive’s employment hereunder shall automatically terminate
      upon the Executive’s death; and (iv) the Executive’s employment shall terminate
      upon the Executive’s disability as provided in Section 6(c). The date of
      termination of the Executive’s employment hereunder, whether upon scheduled
      termination of the Term, termination by either the Employer or the Executive
      as
      provided in this Agreement, or by reason of the Executive’s death or disability,
      is the “Termination Date.” Any termination of employment hereunder shall
      be effective upon the date of scheduled termination of the Term, the date of
      receipt by the non-terminating party of a notice of termination from the
      terminating party with or without Cause (in the case of a termination by the
      Employer) or with or without Good Reason (in the case of a termination by the
      Executive), the date of death, or after the onset of disability as provided
      in
      Section 6(c), as the case may be; provided that, in the case of a termination
      by
      the Employer, the Employer may specify in the notice of termination a later
      termination date (which date shall be no later than thirty (30) days after
      the
      date of such notice of termination). The amounts payable to the Executive and
      other benefits provided to the Executive under this Section 6 shall be referred
      to as “Termination Benefits.” Payment of the Termination Benefits under
      this Section 6 shall be subject to Section 20 of this Agreement.

     

    (a)            Termination
      by the Employer for Cause, by the Executive without Good Reason or Death.
      If, during the Term, (i) the Employer terminates the Executive’s employment for
      Cause or (ii) the Executive terminates his employment with the Employer without
      Good Reason, or upon the Executive’s death, the Executive shall be entitled
      to:

     

    (i) accrued
      but unpaid Salary
      through the Termination Date;

     

    (ii) cash
      in lieu of any accrued but unused vacation through the Termination Date;
      and

     

    (iii) any
      benefits accrued or payable to the Executive under the Employer’s benefit plans
      (in accordance with the terms of such benefit plans and subject to Section
      20
      hereof).

     

    Upon
      payment or provision of (i) through (iii) above (collectively, the “Accrued
      Benefits”), the Employer shall have no further obligations to the Executive
      under this Agreement.

     

    (b)            Termination
      by the Executive for Good Reason or by the Employer Without Cause. If,
      during the Term, (i) the Executive terminates his employment with the Employer
      for Good Reason within a period of 90 days after the occurrence of an uncured
      event of Good Reason, or (ii) the Employer terminates the Executive’s employment
      with the Employer without Cause, then the Executive shall be entitled
      to:

    

     (i) 
      the Accrued Benefits;

     

    (ii)  continuation
      of Salary, at the rate in effect on the Termination Date, that would have been
      paid to the Executive as if there had been no termination described in this
      Section 6(b), for a period of one (1) year after the Termination Date, including
      termination within twelve (12) months following a Change in
      Control.  Such severance payments
      shall be payable according to the normal payroll policies of the Employer for
      senior executives;

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iii) continuation
      of group health plan benefits to the extent authorized by and consistent with
      29
      U.S.C. § 1161 et seq. (commonly known as “COBRA”),with the cost of the
      regular premium for such benefits shared in the same relative proportion by
      the
      Employer and the Executive as in effect on the Termination Date, provided that
      the Executive’s entitlements under this clause (iii) shall terminate as of the
      earlier of (x) one (1) year from the Termination Date or (y) the date of
      commencement of eligibility for health insurance pursuant to other employment
      or
      self-employment; and

    

    (iv) accelerated
      vesting of all of the Executive’s options to purchase shares of common stock of
      the Employer referred to in Section 4(c).

     

    Notwithstanding
      the foregoing, nothing in this Section 6(b) shall be construed to affect the
      Executive’s right to receive COBRA continuation entirely at the Executive’s own
      cost to the extent that the Executive may continue to be entitled to COBRA
      continuation after the Executive’s right to cost sharing under Section 6(b)(iii)
      ceases. The Executive shall be obligated to give prompt notice of the date
      of
      commencement of any employment or self-employment and shall respond promptly
      to
      any reasonable inquiries concerning any employment or self-employment in which
      the Executive engages during the Termination Benefits Period.

     

    (c)            Disability.
      If the Executive shall be physically or mentally disabled so as to be unable
      to
      perform substantially all of the essential functions of the Executive’s then
      existing position or positions under this Agreement with or without reasonable
      accommodation, the Board of Directors may remove the Executive from any
      responsibilities and/or reassign the Executive to another position with the
      Employer for the remainder of the Term or during the period of such disability.
      Notwithstanding any such removal or reassignment, the Executive shall continue
      to be employed by the Employer and continue to receive Salary (less any
      disability pay or sick pay benefits to which the Executive may be entitled
      under
      the Employer’s plans and policies) and other compensation and benefits under
      Section 4 of this Agreement (except to the extent that the Executive may be
      ineligible for one or more such benefits under applicable plan terms) until
      the
      earlier of (i) the date that is six (6) months after the onset of the disability
      and (ii) the termination of the Term, at which time this Agreement shall
      terminate and the Executive shall be entitled only to the Accrued Benefits,
      and
      the Employer shall have no further obligations to the Executive under this
      Agreement. If any question shall arise as to whether during any period the
      Executive is disabled so as to be unable to perform substantially all of the
      essential functions of the Executive’s then existing position or positions with
      or without reasonable accommodation, the Executive may, and at the request
      of
      the Employer shall, submit to the Employer a certification in reasonable detail
      by a physician selected by the Employer to whom the Executive or the Executive’s
      guardian has no reasonable objection as to whether the Executive is so disabled
      or how long such disability is expected to continue, and such certification
      shall for the purposes of this Agreement be conclusive of the issue. The
      Executive shall cooperate with any reasonable request of the physician in
      connection with such certification. If such question shall arise and the
      Executive shall fail to submit such certification, the Employer’s determination
      of such issue shall be binding on the Executive. Nothing in this Section 6(c)
      shall be construed to waive the Executive’s rights, if any, under existing law
      including, without limitation, the Family and Medical Leave Act of 1993, 29
      U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C.
§12101 et seq.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.            Definitions.
      For purposes of this Agreement, the following terms shall have the following
      meanings:

    

    (a) “Cause”
shall
      mean (i)
      the failure of the Executive to perform the Executive’s duties for the Employer
      in accordance with Section 2 above, including without limitation, the
      Executive’s failure to follow the directives of the Board of Directors,
      consistent with Section 2, or any other material breach by the Executive of
      this
      Agreement, provided that the Employer gives notice of such breach to the
      Executive in writing and such breach remains uncured for thirty (30) days
      following the date such notice is given; (ii) the Executive’s breach of any
      obligation of the Executive under Section 8; (iii) any act by the Executive
      of
      fraud or theft; (iv) a conviction by a court of competent jurisdiction that
      the
      Executive is guilty of a felony, or a misdemeanor involving moral turpitude,
      deceit, dishonesty or fraud, or a plea of nolo contendere thereto; or (v)
      engaging in reckless behavior (the failure to use even the slightest amount
      of
      care) or willful misconduct by the Executive with respect to the Employer or
      its
      business or assets that has had or is reasonably likely to have a material
      adverse effect on the Employer or its business or assets. No act or omission
      by
      the Executive reasonably believed to be in or not adverse to the interests
      of
      the Employer shall constitute Cause.

    

                                 
         (b) “Good Reason” shall mean, without Executive’s
      written consent:

    

    (i) Any
      material diminution in
      the nature or scope of the authorities, responsibilities or duties of the
      Executive, including a material diminution in his title or office;

    

    (ii) Any
      material reduction in
      the amount of the Executive’s Salary;

    

    (iii) Any
      material breach by the Employer or its successors of any other provision of
      this
      Agreement, including without limitation the obligation to provide the
      compensation and benefits as set forth in Section 4 of this Agreement;
      or

    

    (iv)           A
      material change in the geographic location of the Executive’s principal place of
      employment with the Employer, and for purposes of this Agreement, a change
      of 35
      miles or more from the current location will be considered
      material.

    

    Notwithstanding
      the foregoing, an event described in clauses (i) through (iv) above shall
      constitute Good Reason only if (i) the Executive gives written notice thereof
      to
      the Employer within 30 days after such event occurs, and (ii) the Employer
      fails
      to cure such event within 30 days after receipt from the Executive of such
      notice.  If the Employer fails to cure such event of Good Reason, the
      Executive must resign within 90 days of the occurrence of the Good Reason event
      in order to be entitled to the Termination Benefits of Section 6(b) of this
      Agreement.

    

    (c) “Change
      in Control” shall mean the occurrence of one or more of the following
      events:

     

    (i) any
      “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”)) becomes a
“beneficial owner” (as such term is defined in Rule 13d-3 promulgated under the
      Exchange Act) (other than the Employer, any trustee or other fiduciary holding
      securities under an employee benefit plan of the Employer, or any corporation
      owned, directly or indirectly, by the stockholders of the Employer, in
      substantially the same proportions as their ownership of stock of the Employer),
      directly or indirectly, of securities of the Employer,
      representing fifty percent (50%) or more of the combined voting power of the
      Employer’s then outstanding securities; or

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ii) persons
      who, as of the Effective Date, constituted the Employer’s Board of Directors
      (the “Incumbent Board”) cease for any reason including, without
      limitation, as a result of a tender offer, proxy contest, merger or similar
      transaction, to constitute at least a majority of the Board of Directors,
      provided that any person becoming a director of the Employer subsequent to
      the
      Effective Date whose election was approved by at least a majority of the
      directors then comprising the Incumbent Board shall, for purposes of this
      Section 7(c), be considered a member of the Incumbent Board; or

    

    (iii) the
      stockholders of the
      Employer approve a merger or consolidation of the Employer with any other
      corporation or other entity, other than (1) a merger or consolidation which
      would result in the voting securities of the Employer outstanding immediately
      prior thereto continuing to represent (either by remaining outstanding or by
      being converted into voting securities of the surviving entity) more than fifty
      percent (50%) of the combined voting power of the voting securities of the
      Employer or such surviving entity outstanding immediately after such merger
      or
      consolidation or (2) a merger or consolidation effected to implement a
      recapitalization of the Employer (or similar transaction) in which no “person”
(as hereinabove defined) acquires more than fifty percent (50%) of the combined
      voting power of the Employer’s then outstanding securities; or

     

    (iv) the
      stockholders of the Employer approve a plan of complete liquidation of the
      Employer or an agreement for the sale or disposition by the Employer of all
      or
      substantially all of the Employer’s assets.

     

    8.           Confidential
      Information, Noncompetition and Cooperation.

    

    (a)            Confidential
      Information. As used in this Agreement, “Confidential Information”
means nonpublic (not as a result of the Executive’s wrongful disclosure)
      information belonging to the Employer which is of value to the Employer in
      the
      course of conducting its business and the disclosure of which could result
      in a
      competitive or other disadvantage to the Employer. Confidential Information
      includes, without limitation, financial information, reports, and forecasts;
      inventions, improvements and other intellectual property, trade secrets,
      know-how, designs, processes or formulae, software, market or sales information
      or plans, customer lists; and business plans, prospects, strategies and
      opportunities (such as possible acquisitions or dispositions of businesses
      or
      facilities) which have been discussed or considered by the management of the
      Employer. Confidential Information includes information developed by the
      Executive in the course of the Executive’s employment by the Employer, as well
      as other information to which the Executive may have access in connection with
      the Executive’s employment. Confidential Information also includes the
      confidential information of others with which the Employer has a business
      relationship. Notwithstanding the foregoing, Confidential Information does
      not
      include information in the public domain, unless due to breach of the
      Executive’s duties under Section 8(b).

     

    (b)            Confidentiality.
      The Executive understands and agrees that the Executive’s employment creates a
      relationship of confidence and trust between the Executive and the Employer
      with
      respect to all Confidential Information. At all times, both during the
      Executive’s employment with the Employer and after its termination, the
      Executive will keep in

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    confidence
      and trust all such Confidential Information, and will not use or disclose any
      such Confidential Information without the prior written consent of the Employer,
      except as may be necessary in the ordinary course of performing the Executive’s
      duties to the Employer.

    

    (c)            Documents.
      Records. etc. All documents, records, data, apparatus, equipment and other
      physical property, whether or not pertaining to Confidential Information, which
      are furnished to the Executive by the Employer or are produced by the Executive
      in connection with the Executive’s employment will be and remain the sole
      property of the Employer. The Executive will return to the Employer all such
      materials and property as and when requested by the Employer. In any event,
      the
      Executive will return all such materials and property immediately upon
      termination of the Executive’s employment for any reason. The Executive will not
      retain with the Executive any such material or property or any copies thereof
      after such termination.

     

    (d)            Noncompetition
      and Nonsolicitation. During the Executive’s employment with the Employer
      and for one (1) year thereafter, the Executive (i) will not, directly or
      indirectly, whether as owner, partner, shareholder, consultant, agent, employee,
      co-venturer or otherwise, engage, participate, assist or invest in any Competing
      Business (as hereinafter defined), (ii) will refrain from directly or indirectly
      employing, attempting to employ, recruiting or otherwise soliciting, inducing
      or
      influencing any person to leave employment with the Employer (other than
      terminations of employment of subordinate employees undertaken in the course
      of
      the Executive’s employment with the Employer); and (iii) will refrain from
      soliciting or encouraging any customer or supplier to terminate or otherwise
      modify adversely its business relationship with the Employer. The Executive
      understands that the restrictions set forth in this Section 8 are intended
      to
      protect the Employer’s interest in its Confidential Information and established
      employee, customer and supplier relationships and goodwill, and agrees that
      such
      restrictions are reasonable and appropriate for this purpose. For purposes
      of
      this Agreement, the term “Competing Business” shall
      mean a
      business which consists of operating specialty HIV pharmacies anywhere within
      the United States. Notwithstanding the foregoing, the Executive may own up
      to
      one percent (1%) of the outstanding stock of a publicly-held corporation which
      constitutes or is affiliated with a Competing Business. The Employer may extend
      the period of noncompetition and nonsolicitation for an additional period not
      exceeding one (1) year, provided that it extends and pays Termination Benefits
      to the Executive for the duration of the extension. Notwithstanding the
      foregoing, the Executive’s obligations under Section 8(d)(i) shall terminate and
      be of no further force or effect upon termination of the Executive’s Employment
      under any of the circumstances described in Section 6(b).

     

    (e)            Third-Party
      Agreements and Rights. The Executive hereby confirms that the Executive is
      not bound by the terms of any agreement with any previous employer or other
      party which restricts in any way the Executive’s use or disclosure of
      information or the Executive’s engagement in any business. The Executive
      represents to the Employer that the Executive’s execution of this Agreement, the
      Executive’s employment with the Employer and the performance of the Executive’s
      proposed duties for the Employer will not violate any obligations the Executive
      may have to any such previous employer or other party. In the Executive’s work
      for the Employer, the Executive will not disclose or make use of any information
      in violation of any agreements with or rights of any such previous employer
      or
      other party, and the Executive will not bring to the premises of the Employer
      any copies or other tangible embodiments of non-public information belonging
      to
      or obtained from any such previous employment or other party.

    

                                 
        (f)           Litigation
      and Regulatory Cooperation. During and after the Executive’s employment,
      the Executive shall cooperate fully with the Employer in the defense or
      prosecution of any claims or actions now in existence or which may be brought
      in
      the future against or on behalf of the Employer which relate to events or
      occurrences that 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    transpired
      while the Executive was employed by the Employer. The Executive’s full
      cooperation in connection with such claims or actions shall include, but not
      be
      limited to, being available to meet with counsel to prepare for discovery or
      trial and to act as a witness on behalf of the Employer at mutually-convenient
      times. During and after the Executive’s employment, the Executive also shall
      cooperate fully with the Employer in connection with any investigation or review
      of any federal, state or local regulatory authority as any such investigation
      or
      review relates to events or occurrences that transpired while the Executive
      was
      employed by the Employer. The Employer shall reimburse the Executive for any
      reasonable out-of-pocket expenses incurred in connection with the Executive’s
      performance of obligations pursuant to this Section 8(f). If the Executive is
      entitled to reimbursement of expenses hereunder, the amount reimbursable in
      any
      one calendar year shall not affect the amount reimbursable in any other calendar
      year, and the reimbursement of an eligible expense must be made no later than
      December 31 of the year after the year in which the expense was
      incurred.  The Executive’s rights and obligations pursuant to this
      Section 8(f) shall expire at the end of six (6) years after the Effective Date
      and shall not be subject to liquidation or exchange for another
      benefit.

    

    (g)            Injunction.
      The Executive agrees that it would be difficult to measure any damages caused
      to
      the Employer which might result from any breach by the Executive of the promises
      set forth in this Section 8, and that in any event money damages would be an
      inadequate remedy for any such breach. Accordingly, subject to Section 8 of
      this
      Agreement, the Executive agrees that if the Executive breaches, or threatens
      to
      breach, any portion of this Agreement, the Employer shall be entitled, in
      addition to all other remedies that it may have, to an injunction or other
      appropriate equitable relief to restrain any such breach without showing or
      proving any actual damage to the Employer.

    

    (h)           Definition
      of Employer. For purposes of this Section 8, “Employer” shall
      include Allion Healthcare, Inc. and each of its subsidiaries.

    

    9.           Arbitration
      of Disputes. Any controversy or claim arising out of or relating to this
      Agreement or the breach thereof or otherwise arising out of the Executive’s
      employment or the termination of that employment (including, without limitation,
      any claims of unlawful employment discrimination whether based on age or
      otherwise) shall, to the fullest extent permitted by law, be settled by
      arbitration under the auspices of the American Arbitration Association
      (“AAA”) in New York, New York, in accordance with the Employment
      Arbitration and Mediation Procedures of the AAA, including, but not limited
      to,
      the rules and procedures applicable to the selection of arbitrators. In the
      event that any person or entity other than the Executive or the Employer may
      be
      a party with regard to any such controversy or claim, such controversy or claim
      shall be submitted to arbitration subject to such other person or entity’s
      agreement. Judgment upon the award rendered by the arbitrator may be entered
      in
      any court having jurisdiction thereof. This Section 9 shall be specifically
      enforceable. Notwithstanding the foregoing, this Section 9 shall not preclude
      either party from pursuing a court action for the sole purpose of obtaining
      a
      temporary restraining order or a preliminary injunction in circumstances in
      which such relief is appropriate; provided that any other relief shall be
      pursued through an arbitration proceeding pursuant to this Section
      9.

     

    10.            Integration.
      This Agreement constitutes the entire agreement between the parties with respect
      to the subject matter hereof and supersedes all prior agreements between the
      parties with respect to any related subject matter.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    11.            Assignment;
      Successors and Assigns; etc. Neither the Employer nor the Executive may make
      any assignment of this Agreement or any interest herein, by operation of law
      or
      otherwise, without the prior written consent of the other party; provided that
      the Employer may assign its rights under this Agreement without the consent
      of
      the Executive in the event that the Employer shall effect a reorganization,
      consolidate with or merge into any other corporation, partnership, organization
      or other entity, or transfer all or substantially all of its properties or
      assets to any other corporation, partnership, organization or other entity.
      This
      Agreement shall inure to the benefit of and be binding upon the Employer and
      the
      Executive, their respective successors, executors, administrators, heirs and
      permitted assigns.

     

    12.            Enforceability.
      If any portion or provision of this Agreement (including, without limitation,
      any portion or provision of any section of this Agreement) shall to any extent
      be declared illegal or unenforceable by a court of competent jurisdiction,
      then
      the remainder of this Agreement, or the application of such portion or provision
      in circumstances other than those as to which it is so declared illegal or
      unenforceable, shall not be affected thereby, and each portion and provision
      of
      this Agreement shall be valid and enforceable to the fullest extent permitted
      by
      law.

     

    13.            Waiver.
      No waiver of any provision hereof shall be effective unless made in writing
      and
      signed by the waiving party. The failure of any party to require the performance
      of any term or obligation of this Agreement, or the waiver by any party of
      any
      breach of this Agreement, shall not prevent any subsequent enforcement of such
      term or obligation or be deemed a waiver of any subsequent breach.

     

    14.            Notices.
      Any notices, requests, demands and other communications provided for by this
      Agreement shall be sufficient if in writing and delivered in person or sent
      by a
      nationally-recognized overnight courier service or by registered or certified
      mail, postage prepaid, return receipt requested, to the Executive at the last
      address the Executive has filed in writing with the Employer or, in the case
      of
      the Employer, at its main offices, attention of the Chairman of the Board of
      Directors, and shall be effective on the date of delivery in person or by
      courier or three (3) days after the date mailed.

     

    15.            Amendment.
      This Agreement may be amended or modified only by a written instrument signed
      by
      the Executive and by a duly authorized representative of the
      Employer.

     

    16.            Construction.
      This Agreement has been drafted and reviewed jointly by the parties, and no
      presumption of construction as to the drafting of this Agreement shall be
      applied against or in favor of any party.

     

    17.            Governing
      Law. This is a New York contract and shall be construed under and be
      governed in all respects by the laws of the State of New York, without giving
      effect to the conflict of laws principles of New York. With respect to any
      disputes concerning federal law, such disputes shall be determined in accordance
      with the law as it would be interpreted and applied by the United States Court
      of Appeals for the Second Circuit.

     

    18.           Indemnification.
      The provisions of Article VII (Indemnification) of the Third Amended and
      Restated By Laws of the Employer as in effect on the date hereof are deemed
      incorporated herein by reference and any amendment to such By Laws after the
      date hereof shall not be incorporated by reference herein if the effect thereof
      is to reduce the rights conferred on the Executive. To the extent the
      Executive is covered by any Director’s and Officer’s insurance maintained by the
      Employer for the period during which the Executive provides
      services

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    hereunder,
      the Employer will undertake reasonable efforts to make available to the
      Executive the benefit of such insurance.

    

    19.           Counterparts.
      This Agreement may be executed in any number of counterparts, each of which
      when
      so executed and delivered shall be taken to be an original; but such
      counterparts shall together constitute one and the same document.

    

    20.           Code
      Section 409A.  Notwithstanding anything in this Agreement to the
      contrary, if any amount or benefit that would constitute non-exempt “deferred
      compensation” for purposes of Section 409A of the Code would otherwise be
      payable or distributable under this Agreement by reason of the Executive’s
      separation from service during a period in which he is a Specified Employee
      (as
      defined below), then, subject to any permissible acceleration of payment by
      the
      Employer under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations
      order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of
      employment taxes):

    

    (a)           if
      the payment or distribution is payable in a lump sum, the Executive’s right to
      receive payment or distribution of such non-exempt deferred
      compensation will be delayed until the earlier of the Executive’s death or
      the first day of the seventh month following the Executive’s separation from
      service; and

    

    (b)           if
      the payment or distribution is payable over time, the amount of such non-exempt
      deferred compensation that would otherwise be payable during the six-month
      period immediately following the Executive’s separation from service will be
      accumulated and the Executive’s right to receive payment or distribution of such
      accumulated amount will be delayed until the earlier of the Executive’s death or
      the first day of the seventh month following the Executive’s separation from
      service, whereupon the accumulated amount will be paid or distributed to the
      Executive and the normal payment or distribution schedule for any remaining
      payments or distributions will resume.

    

    For
      purposes of this Agreement, the term “Specified Employee” has the meaning given
      such term in Code Section 409A and the final regulations thereunder,
provided, however, that, as permitted in such final regulations, the
      Employer’s Specified Employees and its application of the six-month delay rule
      of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules
      adopted by the Board of Director or the Compensation Committee, which shall
      be
      applied consistently with respect to all nonqualified deferred compensation
      arrangements of the Employer, including this Agreement.

    

    [Signatures
      on Following Page]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, this Agreement has been executed by the Employer, by its duly
      authorized officer, and by the Executive, as of the Effective Date.

    

    

     /s/
      Robert E.
      Fleckenstein                                                                

    Robert
      E.
      Fleckenstein, R.Ph.

     

     

    ALLION
      HEALTHCARE, INC.

    

    

    By:  
      /s/ Michael P.
      Moran                                                                

    Name:  Michael
      P. Moran

    Title:  Chief
      Executive Officerdex10-3.htm

    
      

    

    Exhibit
      10.3

    EMPLOYMENT
      AGREEMENT

     

    This
      AGREEMENT (this “Agreement”) is made effective as of July 20, 2007 (the
“Effective Date”), by
      and between
      Allion Healthcare, Inc., a corporation with its headquarters located at 1660
      Walt Whitman Road, Melville, New York 11747 (the “Employer”), and Anthony
      D. Luna (the “Executive”).

     

    WHEREAS,
      the Employer and the Executive desire to enter into an agreement to reflect
      the
      Executive’s duties and responsibilities and to provide for the Executive’s
      employment by the Employer upon the terms and conditions set forth herein;
      and

     

    WHEREAS,
      the Executive has agreed to certain confidentiality, non-competition and
      non-solicitation covenants contained hereunder, in consideration of the
      additional benefits provided to the Executive under this Agreement;

     

    NOW
      THEREFORE, in consideration of the mutual covenants contained in this Agreement,
      and intending to be legally bound, the Employer and the Executive agree as
      follows:

     

    1.            Employment.
      The Employer agrees to employ the Executive and the Executive agrees to be
      employed by the Employer on the terms and conditions set forth in this
      Agreement.

     

    2.            Capacity.
      The Executive shall serve the Employer as its Vice President, HIV Sales and
      Oris
      Health, Inc. The Executive shall also serve the Employer in such other or
      additional offices as the Executive may reasonably be requested to serve by
      the
      Board of Directors of the Employer (the “Board of Directors”). In such
      capacity or capacities, the Executive shall perform such services and duties
      in
      connection with the business, affairs and operations of the Employer, consistent
      with such positions, as may be assigned or delegated to the Executive from
      time
      to time by or under the authority of the Board of Directors.

     

    3.            Term.
      Subject to the provisions of Section 6, the term of employment pursuant to
      this
      Agreement (the “Term”) shall commence on the Effective Date and terminate
      on the second anniversary of the Effective Date. Expiration of the Term shall
      not constitute termination of Executive's employment during the Term for
      purposes of termination benefits under Section 6 of this Agreement.

     

    4.            Compensation
      and Benefits. The compensation and benefits payable to the Executive during
      the Term shall be as follows:

     

    (a)            Salary.
      For all services rendered by the Executive under this Agreement, the Employer
      shall pay the Executive a salary (“Salary”) at the annual rate of two
      hundred thousand dollars ($200,000.00) per annum, less normal withholdings,
      effective beginning July 20, 2007, and subject to increases from time
      to
      time in the sole discretion of the Compensation Committee of the Board of
      Directors (the “Compensation Committee”). Salary
      shall be payable in periodic installments in accordance with the Employer’s
      usual practice for its senior executives.

    

    (b)            Bonus.
      The Executive may be awarded performance bonuses on an annual basis, commencing
      with a bonus that may be awarded for the 2007 calendar year, as determined
      by
      the Board of Directors or the Compensation Committee in the sole discretion
      of
      the Board of Directors or Compensation Committee, respectively; provided,
      however, that the bonus for any such year shall not exceed forty percent (40%)
      of Salary for such year.  The performance bonus, if any, shall be paid
      to the Executive within thirty (30) days after the Board of
      Directors or the Compensation Committee determines whether and to what extent
      performance goals were achieved, but no later than March 15 next following
      the
      end of the calendar year for which the performance bonus, if any, was
      earned. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)
                  Stock
      Options. The Executive has been issued options to purchase shares of common
      stock of the Employer in accordance with the Employer’s stock option plan and
      the Executive’s stock option agreement thereunder. All options issued to the
      Executive, which have not been vested as of the time any Change in Control
      (as
      defined in Section 7(c)) occurs, shall automatically vest upon such
      occurrence.

     

    (d)            Regular
      Benefits. The Executive shall also be eligible to participate in any
      employee benefit plans, medical insurance plans, life insurance plans,
      disability income plans, retirement plans, vacation plans, expense reimbursement
      plans and other benefit plans which the Employer may from time to time have
      in
      effect for all or most of its senior executives. Such participation shall be
      subject to the terms of the applicable plan documents, generally applicable
      policies of the Employer, applicable law and the discretion of the Board of
      Directors, the Compensation Committee or any administrative or other committee
      provided for in or contemplated by any such plan. Nothing contained in this
      Agreement shall be construed to create any obligation on the part of the
      Employer to establish any such plan or to maintain the effectiveness of any
      such
      plan which may be in effect from time to time.

     

                                 
        (e)            Automobile.
      The Employer shall provide the Executive with an automobile allowance of
      $800 per month to compensate the Executive for expenses
      related to the use of an automobile and reasonable business-related expenses
      associated with such automobile and its maintenance and operation.

    

    (f)           Taxation
      of Payment and Benefits. The Employer shall undertake to make deductions,
      withholdings and tax reports with respect to payments and benefits under this
      Agreement to the extent that it reasonably and in good faith believes that
      it is
      required to make such deductions, withholdings and tax reports. Payments under
      this Agreement shall be in amounts net of any such deductions or withholdings.
      Nothing in this Agreement shall be construed to require the Employer to make
      any
      payments to compensate the Executive for any adverse tax effect associated
      with
      any payments or benefits or for any deduction or withholding from any payment
      or
      benefit.

     

    (g)            Exclusivity
      of Salary and Benefits. The Executive shall not be entitled to any payments
      or benefits other than those provided under this Agreement, unless otherwise
      approved by the Board of Directors.

    

    5.            Extent
      of Service. During the Term, the Executive shall, subject to the direction
      and supervision of the Board of Directors, devote the Executive’s full business
      time, best efforts and business judgment, skill and knowledge to the advancement
      of the Employer’s interests and to the discharge of the Executive’s duties and
      responsibilities under this Agreement. The Executive shall not engage in any
      other business activity, except as may be approved by the Board of Directors;
      provided that nothing in this Agreement shall be construed as preventing the
      Executive from (a) investing the Executive’s assets in any company or other
      entity in a manner not prohibited by Section 8(d), or (b) engaging in religious,
      charitable or other community or non-profit activities that, in the case of
      (a)
      or (b) above, do not in any way impair the Executive’s ability to fulfill the
      Executive’s duties and responsibilities under this Agreement.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6.            Termination
      and Termination Benefits. Notwithstanding any other provision of this
      Agreement, (i) the Employer may terminate the Executive’s employment hereunder
      at any time with or without Cause (as defined in Section 7(a)) at its election;
      (ii) the Executive may terminate the Executive’s employment hereunder at any
      time with or without Good Reason (as defined in Section 7(b)) at the Executive’s
      election; (iii) Executive’s employment hereunder shall automatically terminate
      upon the Executive’s death; and (iv) the Executive’s employment shall terminate
      upon the Executive’s disability as provided in Section 6(c). The date of
      termination of the Executive’s employment hereunder, whether upon scheduled
      termination of the Term, termination by either the Employer or the Executive
      as
      provided in this Agreement, or by reason of the Executive’s death or disability,
      is the “Termination Date.” Any termination of employment hereunder shall
      be effective upon the date of scheduled termination of the Term, the date of
      receipt by the non-terminating party of a notice of termination from the
      terminating party with or without Cause (in the case of a termination by the
      Employer) or with or without Good Reason (in the case of a termination by the
      Executive), the date of death, or after the onset of disability as provided
      in
      Section 6(c), as the case may be; provided that, in the case of a termination
      by
      the Employer, the Employer may specify in the notice of termination a later
      termination date (which date shall be no later than thirty (30) days after
      the
      date of such notice of termination). The amounts payable to the Executive and
      other benefits provided to the Executive under this Section 6 shall be referred
      to as “Termination Benefits.” Payment of the Termination Benefits under
      this Section 6 shall be subject to Section 20 of this Agreement.

     

    (a)            Termination
      by the Employer for Cause, by the Executive without Good Reason or Death.
      If, during the Term, (i) the Employer terminates the Executive’s employment for
      Cause or (ii) the Executive terminates his employment with the Employer without
      Good Reason, or upon the Executive’s death, the Executive shall be entitled
      to:

     

    (i) accrued
      but unpaid Salary
      through the Termination Date;

     

    (ii) cash
      in lieu of any accrued but unused vacation through the Termination Date;
      and

     

    (iii) any
      benefits accrued or payable to the Executive under the Employer’s benefit plans
      (in accordance with the terms of such benefit plans and subject to Section
      20
      hereof).

     

    Upon
      payment or provision of (i) through (iii) above (collectively, the “Accrued
      Benefits”), the Employer shall have no further obligations to the Executive
      under this Agreement.

     

    (b)            Termination
      by the Executive for Good Reason or by the Employer Without Cause. If,
      during the Term, (i) the Executive terminates his employment with the Employer
      for Good Reason within a period of 90 days after the occurrence of an uncured
      event of Good Reason, or (ii) the Employer terminates the Executive’s employment
      with the Employer without Cause, then the Executive shall be entitled
      to:

    

     (i) 
      the Accrued Benefits;

     

    (ii)  continuation
      of Salary, at the rate in effect on the Termination Date, that would have been
      paid to the Executive as if there had been no termination described in this
      Section 6(b), for a period of one (1) year after the Termination Date, including
      termination within twelve (12) months following a Change in
      Control.  Such severance payments
      shall be payable according to the normal payroll policies of the Employer for
      senior executives;

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iii) continuation
      of group health plan benefits to the extent authorized by and consistent with
      29
      U.S.C. § 1161 et seq. (commonly known as “COBRA”),with the cost of the
      regular premium for such benefits shared in the same relative proportion by
      the
      Employer and the Executive as in effect on the Termination Date, provided that
      the Executive’s entitlements under this clause (iii) shall terminate as of the
      earlier of (x) one (1) year from the Termination Date or (y) the date of
      commencement of eligibility for health insurance pursuant to other employment
      or
      self-employment; and

    

    (iv) accelerated
      vesting of all of the Executive’s options to purchase shares of common stock of
      the Employer referred to in Section 4(c).

     

    Notwithstanding
      the foregoing, nothing in this Section 6(b) shall be construed to affect the
      Executive’s right to receive COBRA continuation entirely at the Executive’s own
      cost to the extent that the Executive may continue to be entitled to COBRA
      continuation after the Executive’s right to cost sharing under Section 6(b)(iii)
      ceases. The Executive shall be obligated to give prompt notice of the date
      of
      commencement of any employment or self-employment and shall respond promptly
      to
      any reasonable inquiries concerning any employment or self-employment in which
      the Executive engages during the Termination Benefits Period.

     

    (c)            Disability.
      If the Executive shall be physically or mentally disabled so as to be unable
      to
      perform substantially all of the essential functions of the Executive’s then
      existing position or positions under this Agreement with or without reasonable
      accommodation, the Board of Directors may remove the Executive from any
      responsibilities and/or reassign the Executive to another position with the
      Employer for the remainder of the Term or during the period of such disability.
      Notwithstanding any such removal or reassignment, the Executive shall continue
      to be employed by the Employer and continue to receive Salary (less any
      disability pay or sick pay benefits to which the Executive may be entitled
      under
      the Employer’s plans and policies) and other compensation and benefits under
      Section 4 of this Agreement (except to the extent that the Executive may be
      ineligible for one or more such benefits under applicable plan terms) until
      the
      earlier of (i) the date that is six (6) months after the onset of the disability
      and (ii) the termination of the Term, at which time this Agreement shall
      terminate and the Executive shall be entitled only to the Accrued Benefits,
      and
      the Employer shall have no further obligations to the Executive under this
      Agreement. If any question shall arise as to whether during any period the
      Executive is disabled so as to be unable to perform substantially all of the
      essential functions of the Executive’s then existing position or positions with
      or without reasonable accommodation, the Executive may, and at the request
      of
      the Employer shall, submit to the Employer a certification in reasonable detail
      by a physician selected by the Employer to whom the Executive or the Executive’s
      guardian has no reasonable objection as to whether the Executive is so disabled
      or how long such disability is expected to continue, and such certification
      shall for the purposes of this Agreement be conclusive of the issue. The
      Executive shall cooperate with any reasonable request of the physician in
      connection with such certification. If such question shall arise and the
      Executive shall fail to submit such certification, the Employer’s determination
      of such issue shall be binding on the Executive. Nothing in this Section 6(c)
      shall be construed to waive the Executive’s rights, if any, under existing law
      including, without limitation, the Family and Medical Leave Act of 1993, 29
      U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C.
§12101 et seq.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.            Definitions.
      For purposes of this Agreement, the following terms shall have the following
      meanings:

    

    (a) “Cause”
shall
      mean (i)
      the failure of the Executive to perform the Executive’s duties for the Employer
      in accordance with Section 2 above, including without limitation, the
      Executive’s failure to follow the directives of the Board of Directors,
      consistent with Section 2, or any other material breach by the Executive of
      this
      Agreement, provided that the Employer gives notice of such breach to the
      Executive in writing and such breach remains uncured for thirty (30) days
      following the date such notice is given; (ii) the Executive’s breach of any
      obligation of the Executive under Section 8; (iii) any act by the Executive
      of
      fraud or theft; (iv) a conviction by a court of competent jurisdiction that
      the
      Executive is guilty of a felony, or a misdemeanor involving moral turpitude,
      deceit, dishonesty or fraud, or a plea of nolo contendere thereto; or (v)
      engaging in reckless behavior (the failure to use even the slightest amount
      of
      care) or willful misconduct by the Executive with respect to the Employer or
      its
      business or assets that has had or is reasonably likely to have a material
      adverse effect on the Employer or its business or assets. No act or omission
      by
      the Executive reasonably believed to be in or not adverse to the interests
      of
      the Employer shall constitute Cause.

    

                                    (b) “Good
      Reason” shall mean, without Executive’s written consent:

    

    (i) Any
      material diminution in
      the nature or scope of the authorities, responsibilities or duties of the
      Executive, including a material diminution in his title or office;

    

    (ii) Any
      material reduction in
      the amount of the Executive’s Salary;

    

    (iii) Any
      material breach by the Employer or its successors of any other provision of
      this
      Agreement, including without limitation the obligation to provide the
      compensation and benefits as set forth in Section 4 of this Agreement;
      or

    

    (iv)           A
      material change in the geographic location of the Executive’s principal place of
      employment with the Employer, and for purposes of this Agreement, a change
      of 35
      miles or more from the current location will be considered
      material.

    

    Notwithstanding
      the foregoing, an event described in clauses (i) through (iv) above shall
      constitute Good Reason only if (i) the Executive gives written notice thereof
      to
      the Employer within 30 days after such event occurs, and (ii) the Employer
      fails
      to cure such event within 30 days after receipt from the Executive of such
      notice.  If the Employer fails to cure such event of Good Reason, the
      Executive must resign within 90 days of the occurrence of the Good Reason event
      in order to be entitled to the Termination Benefits of Section 6(b) of this
      Agreement.

            

               (c) “Change
      in
      Control” shall mean the occurrence of one or more of the following
      events:

     

    (i) any
      “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”)) becomes a
“beneficial owner” (as such term is defined in Rule 13d-3 promulgated under the
      Exchange Act) (other than the Employer, any trustee or other fiduciary holding
      securities under an employee benefit plan of the Employer, or any corporation
      owned, directly or indirectly, by the stockholders of the Employer, in
      substantially the same proportions as their ownership of stock of the Employer),
      directly or indirectly, of securities of the Employer,
      representing fifty percent (50%) or more of the combined voting power of the
      Employer’s then outstanding securities; or

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ii) persons
      who, as of the Effective Date, constituted the Employer’s Board of Directors
      (the “Incumbent Board”) cease for any reason including, without
      limitation, as a result of a tender offer, proxy contest, merger or similar
      transaction, to constitute at least a majority of the Board of Directors,
      provided that any person becoming a director of the Employer subsequent to
      the
      Effective Date whose election was approved by at least a majority of the
      directors then comprising the Incumbent Board shall, for purposes of this
      Section 7(c), be considered a member of the Incumbent Board; or

    

          
      (iii) the stockholders of the Employer approve a merger or consolidation of
      the Employer with any other corporation or other entity, other than (1) a merger
      or consolidation which would result in the voting securities of the Employer
      outstanding immediately prior thereto continuing to represent (either by
      remaining outstanding or by being converted into voting securities of the
      surviving entity) more than fifty percent (50%) of the combined voting power
      of
      the voting securities of the Employer or such surviving entity outstanding
      immediately after such merger or consolidation or (2) a merger or consolidation
      effected to implement a recapitalization of the Employer (or similar
      transaction) in which no “person” (as hereinabove defined) acquires more than
      fifty percent (50%) of the combined voting power of the Employer’s then
      outstanding securities; or

     

    (iv) the
      stockholders of the Employer approve a plan of complete liquidation of the
      Employer or an agreement for the sale or disposition by the Employer of all
      or
      substantially all of the Employer’s assets.

     

    8.           Confidential
      Information, Noncompetition and Cooperation.

    

    (a)            Confidential
      Information. As used in this Agreement, “Confidential Information”
means nonpublic (not as a result of the Executive’s wrongful disclosure)
      information belonging to the Employer which is of value to the Employer in
      the
      course of conducting its business and the disclosure of which could result
      in a
      competitive or other disadvantage to the Employer. Confidential Information
      includes, without limitation, financial information, reports, and forecasts;
      inventions, improvements and other intellectual property, trade secrets,
      know-how, designs, processes or formulae, software, market or sales information
      or plans, customer lists; and business plans, prospects, strategies and
      opportunities (such as possible acquisitions or dispositions of businesses
      or
      facilities) which have been discussed or considered by the management of the
      Employer. Confidential Information includes information developed by the
      Executive in the course of the Executive’s employment by the Employer, as well
      as other information to which the Executive may have access in connection with
      the Executive’s employment. Confidential Information also includes the
      confidential information of others with which the Employer has a business
      relationship. Notwithstanding the foregoing, Confidential Information does
      not
      include information in the public domain, unless due to breach of the
      Executive’s duties under Section 8(b).

     

    (b)            Confidentiality.
      The Executive understands and agrees that the Executive’s employment creates a
      relationship of confidence and trust between the Executive and the Employer
      with
      respect to all Confidential Information. At all times, both during the
      Executive’s employment with the Employer and after its termination, the
      Executive will keep in

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    confidence
      and trust all such Confidential Information, and will not use or disclose any
      such Confidential Information without the prior written consent of the Employer,
      except as may be necessary in the ordinary course of performing the Executive’s
      duties to the Employer.

    

    (c)            Documents.
      Records. etc. All documents, records, data, apparatus, equipment and other
      physical property, whether or not pertaining to Confidential Information, which
      are furnished to the Executive by the Employer or are produced by the Executive
      in connection with the Executive’s employment will be and remain the sole
      property of the Employer. The Executive will return to the Employer all such
      materials and property as and when requested by the Employer. In any event,
      the
      Executive will return all such materials and property immediately upon
      termination of the Executive’s employment for any reason. The Executive will not
      retain with the Executive any such material or property or any copies thereof
      after such termination.

     

    (d)            Noncompetition
      and Nonsolicitation. During the Executive’s employment with the Employer
      and for one (1) year thereafter, the Executive (i) will not, directly or
      indirectly, whether as owner, partner, shareholder, consultant, agent, employee,
      co-venturer or otherwise, engage, participate, assist or invest in any Competing
      Business (as hereinafter defined), (ii) will refrain from directly or indirectly
      employing, attempting to employ, recruiting or otherwise soliciting, inducing
      or
      influencing any person to leave employment with the Employer (other than
      terminations of employment of subordinate employees undertaken in the course
      of
      the Executive’s employment with the Employer); and (iii) will refrain from
      soliciting or encouraging any customer or supplier to terminate or otherwise
      modify adversely its business relationship with the Employer. The Executive
      understands that the restrictions set forth in this Section 8 are intended
      to
      protect the Employer’s interest in its Confidential Information and established
      employee, customer and supplier relationships and goodwill, and agrees that
      such
      restrictions are reasonable and appropriate for this purpose. For purposes
      of
      this Agreement, the term “Competing Business” shall
      mean a
      business which consists of operating specialty HIV pharmacies anywhere within
      the United States. Notwithstanding the foregoing, the Executive may own up
      to
      one percent (1%) of the outstanding stock of a publicly-held corporation which
      constitutes or is affiliated with a Competing Business. The Employer may extend
      the period of noncompetition and nonsolicitation for an additional period not
      exceeding one (1) year, provided that it extends and pays Termination Benefits
      to the Executive for the duration of the extension. Notwithstanding the
      foregoing, the Executive’s obligations under Section 8(d)(i) shall terminate and
      be of no further force or effect upon termination of the Executive’s Employment
      under any of the circumstances described in Section 6(b).

     

    (e)            Third-Party
      Agreements and Rights. The Executive hereby confirms that the Executive is
      not bound by the terms of any agreement with any previous employer or other
      party which restricts in any way the Executive’s use or disclosure of
      information or the Executive’s engagement in any business. The Executive
      represents to the Employer that the Executive’s execution of this Agreement, the
      Executive’s employment with the Employer and the performance of the Executive’s
      proposed duties for the Employer will not violate any obligations the Executive
      may have to any such previous employer or other party. In the Executive’s work
      for the Employer, the Executive will not disclose or make use of any information
      in violation of any agreements with or rights of any such previous employer
      or
      other party, and the Executive will not bring to the premises of the Employer
      any copies or other tangible embodiments of non-public information belonging
      to
      or obtained from any such previous employment or other party.

    

                                 
        (f)           Litigation
      and Regulatory Cooperation. During and after the Executive’s employment,
      the Executive shall cooperate fully with the Employer in the defense or
      prosecution of any claims or actions now in existence or which may be brought
      in
      the future against or on behalf of the Employer which relate to events or
      occurrences that 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    transpired
      while the Executive was employed by the Employer. The Executive’s full
      cooperation in connection with such claims or actions shall include, but not
      be
      limited to, being available to meet with counsel to prepare for discovery or
      trial and to act as a witness on behalf of the Employer at mutually-convenient
      times. During and after the Executive’s employment, the Executive also shall
      cooperate fully with the Employer in connection with any investigation or review
      of any federal, state or local regulatory authority as any such investigation
      or
      review relates to events or occurrences that transpired while the Executive
      was
      employed by the Employer. The Employer shall reimburse the Executive for any
      reasonable out-of-pocket expenses incurred in connection with the Executive’s
      performance of obligations pursuant to this Section 8(f). If the Executive is
      entitled to reimbursement of expenses hereunder, the amount reimbursable in
      any
      one calendar year shall not affect the amount reimbursable in any other calendar
      year, and the reimbursement of an eligible expense must be made no later than
      December 31 of the year after the year in which the expense was
      incurred.  The Executive’s rights and obligations pursuant to this
      Section 8(f) shall expire at the end of six (6) years after the Effective Date
      and shall not be subject to liquidation or exchange for another
      benefit.

    

    (g)            Injunction.
      The Executive agrees that it would be difficult to measure any damages caused
      to
      the Employer which might result from any breach by the Executive of the promises
      set forth in this Section 8, and that in any event money damages would be an
      inadequate remedy for any such breach. Accordingly, subject to Section 8 of
      this
      Agreement, the Executive agrees that if the Executive breaches, or threatens
      to
      breach, any portion of this Agreement, the Employer shall be entitled, in
      addition to all other remedies that it may have, to an injunction or other
      appropriate equitable relief to restrain any such breach without showing or
      proving any actual damage to the Employer.

    

    (h)           Definition
      of Employer. For purposes of this Section 8, “Employer” shall
      include Allion Healthcare, Inc. and each of its subsidiaries.

    

    9.           Arbitration
      of Disputes. Any controversy or claim arising out of or relating to this
      Agreement or the breach thereof or otherwise arising out of the Executive’s
      employment or the termination of that employment (including, without limitation,
      any claims of unlawful employment discrimination whether based on age or
      otherwise) shall, to the fullest extent permitted by law, be settled by
      arbitration under the auspices of the American Arbitration Association
      (“AAA”) in New York, New York, in accordance with the Employment
      Arbitration and Mediation Procedures of the AAA, including, but not limited
      to,
      the rules and procedures applicable to the selection of arbitrators. In the
      event that any person or entity other than the Executive or the Employer may
      be
      a party with regard to any such controversy or claim, such controversy or claim
      shall be submitted to arbitration subject to such other person or entity’s
      agreement. Judgment upon the award rendered by the arbitrator may be entered
      in
      any court having jurisdiction thereof. This Section 9 shall be specifically
      enforceable. Notwithstanding the foregoing, this Section 9 shall not preclude
      either party from pursuing a court action for the sole purpose of obtaining
      a
      temporary restraining order or a preliminary injunction in circumstances in
      which such relief is appropriate; provided that any other relief shall be
      pursued through an arbitration proceeding pursuant to this Section
      9.

     

    10.            Integration.
      This Agreement constitutes the entire agreement between the parties with respect
      to the subject matter hereof and supersedes all prior agreements between the
      parties with respect to any related subject matter.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    11.            Assignment;
      Successors and Assigns; etc. Neither the Employer nor the Executive may make
      any assignment of this Agreement or any interest herein, by operation of law
      or
      otherwise, without the prior written consent of the other party; provided that
      the Employer may assign its rights under this Agreement without the consent
      of
      the Executive in the event that the Employer shall effect a reorganization,
      consolidate with or merge into any other corporation, partnership, organization
      or other entity, or transfer all or substantially all of its properties or
      assets to any other corporation, partnership, organization or other entity.
      This
      Agreement shall inure to the benefit of and be binding upon the Employer and
      the
      Executive, their respective successors, executors, administrators, heirs and
      permitted assigns.

     

    12.            Enforceability.
      If any portion or provision of this Agreement (including, without limitation,
      any portion or provision of any section of this Agreement) shall to any extent
      be declared illegal or unenforceable by a court of competent jurisdiction,
      then
      the remainder of this Agreement, or the application of such portion or provision
      in circumstances other than those as to which it is so declared illegal or
      unenforceable, shall not be affected thereby, and each portion and provision
      of
      this Agreement shall be valid and enforceable to the fullest extent permitted
      by
      law.

     

    13.            Waiver.
      No waiver of any provision hereof shall be effective unless made in writing
      and
      signed by the waiving party. The failure of any party to require the performance
      of any term or obligation of this Agreement, or the waiver by any party of
      any
      breach of this Agreement, shall not prevent any subsequent enforcement of such
      term or obligation or be deemed a waiver of any subsequent breach.

     

    14.            Notices.
      Any notices, requests, demands and other communications provided for by this
      Agreement shall be sufficient if in writing and delivered in person or sent
      by a
      nationally-recognized overnight courier service or by registered or certified
      mail, postage prepaid, return receipt requested, to the Executive at the last
      address the Executive has filed in writing with the Employer or, in the case
      of
      the Employer, at its main offices, attention of the Chairman of the Board of
      Directors, and shall be effective on the date of delivery in person or by
      courier or three (3) days after the date mailed.

     

    15.            Amendment.
      This Agreement may be amended or modified only by a written instrument signed
      by
      the Executive and by a duly authorized representative of the
      Employer.

     

    16.            Construction.
      This Agreement has been drafted and reviewed jointly by the parties, and no
      presumption of construction as to the drafting of this Agreement shall be
      applied against or in favor of any party.

     

    17.            Governing
      Law. This is a New York contract and shall be construed under and be
      governed in all respects by the laws of the State of New York, without giving
      effect to the conflict of laws principles of New York. With respect to any
      disputes concerning federal law, such disputes shall be determined in accordance
      with the law as it would be interpreted and applied by the United States Court
      of Appeals for the Second Circuit.

     

    18.           Indemnification.
      The provisions of Article VII (Indemnification) of the Third Amended and
      Restated By Laws of the Employer as in effect on the date hereof are deemed
      incorporated herein by reference and any amendment to such By Laws after the
      date hereof shall not be incorporated by reference herein if the effect thereof
      is to reduce the rights conferred on the Executive. To the extent the
      Executive is covered by any Director’s and Officer’s insurance maintained by the
      Employer for the period during which the Executive provides services hereunder,
      the Employer will undertake reasonable efforts to make available to the
      Executive the benefit of such insurance.
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    19.           Counterparts.
      This Agreement may be executed in any number of counterparts, each of which
      when
      so executed and delivered shall be taken to be an original; but such
      counterparts shall together constitute one and the same document.

    

    20.           Code
      Section 409A.  Notwithstanding anything in this Agreement to the
      contrary, if any amount or benefit that would constitute non-exempt “deferred
      compensation” for purposes of Section 409A of the Code would otherwise be
      payable or distributable under this Agreement by reason of the Executive’s
      separation from service during a period in which he is a Specified Employee
      (as
      defined below), then, subject to any permissible acceleration of payment by
      the
      Employer under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations
      order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of
      employment taxes):

    

    (a)           if
      the payment or distribution is payable in a lump sum, the Executive’s right to
      receive payment or distribution of such non-exempt deferred compensation will
      be
      delayed until the earlier of the Executive’s death or the first day of the
      seventh month following the Executive’s separation from service;
      and

    

    (b)           if
      the payment or distribution is payable over time, the amount of such non-exempt
      deferred compensation that would otherwise be payable during the six-month
      period immediately following the Executive’s separation from service will be
      accumulated and the Executive’s right to receive payment or distribution of such
      accumulated amount will be delayed until the earlier of the Executive’s death or
      the first day of the seventh month following the Executive’s separation from
      service, whereupon the accumulated amount will be paid or distributed to the
      Executive and the normal payment or distribution schedule for any remaining
      payments or distributions will resume.

    

    For
      purposes of this Agreement, the term “Specified Employee” has the meaning given
      such term in Code Section 409A and the final regulations thereunder,
provided, however, that, as permitted in such final regulations, the
      Employer’s Specified Employees and its application of the six-month delay rule
      of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules
      adopted by the Board of Director or the Compensation Committee, which shall
      be
      applied consistently with respect to all nonqualified deferred compensation
      arrangements of the Employer, including this Agreement.

    

    [Signatures
      on Following Page]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, this Agreement has been executed by the Employer, by its duly
      authorized officer, and by the Executive, as of the Effective Date.

    

    

     /s/
      Anthony D.
      Luna                                                                

    Anthony
      D. Luna

     

     

    ALLION
      HEALTHCARE, INC.

    

    

    By:  
      /s/ Michael P.
      Moran                                                                

    Name:  Michael
      P. Moran

    Title:  Chief
      Executive Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00132-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00132-of-00352.parquet"}]]