EXHIBIT 10.2
EXECUTIVE SEVERANCE AGREEMENT
This Executive Severance Agreement (this "Agreement") is made as of this
28th day of June, 1997, between Apria Healthcare Group Inc., a Delaware
corporation (the "Company"), and Xxxxxxx X. Xxxxxx (the "Executive").
RECITALS
A. It is the desire of the Company to retain the services of the Executive
and to recognize the Executive's contribution to the Company.
B. The Company and the Executive wish to set forth certain terms and
conditions of Executive's employment.
C. The Company wishes to provide to the Executive certain benefits in the
event that his employment is terminated by the Company without cause or in the
event that he terminates employment for Good Reason (as defined below), in order
to encourage the Executive's performance and continued commitment to the
Company.
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the parties hereto agree as follows:
1. Positions and Duties. The Executive shall serve in such positions and
undertake such duties and have such authority as the Company, through its Chief
Executive Officer, President or Board of Directors, shall assign to the
Executive from time to time in the Company's sole and absolute discretion. The
Company has the right to change the nature, amount or level of authority and
responsibility assigned to the Executive at any time, with or without cause. The
Company may also change the title or titles assigned to the Executive at any
time, with or without cause. The Executive agrees to devote substantially all of
his working time and efforts to the business and affairs of the Company. The
Executive further agrees that he shall not undertake any outside activities
which create a conflict of interest with his duties to the Company, or which, in
the judgement of the Board of Directors of the Company, interfere with the
performance of the Executive's duties to the Company.
2. Compensation and Benefits.
(a) Salary. The Executive's salary shall be such salary as the Company
assigns to him from time to time in accordance with its regular practices and
policies. The parties to this Agreement recognize that the Company may, in its
sole discretion, increase such salary at any time.
(b) Bonuses. The Executive's eligibility to receive any bonus shall be
determined in accordance with the Company's Incentive Compensation Plan or other
bonus plans as they shall be in effect from time to time. The parties to this
Agreement recognize that such bonus plans may be amended and/or terminated by
the Company at any time.
(c) Expenses. During the term of the Executive's employment, the
Executive shall be entitled to receive reimbursement for all reasonable and
customary expenses incurred by the Executive in performing services for the
Company in accordance with the Company's reimbursement policies as they may be
in effect from time to time. The parties to this Agreement recognize that such
policies may be amended and/or terminated by the Company at any time.
(d) Other Benefits. The Executive shall be entitled to participate in
all employee benefit plans, programs and arrangements of the Company (including,
without limitation, stock option plans or agreements and insurance, retirement
and vacation plans, programs and arrangements), in accordance with the terms of
such plans, programs or arrangements as they shall be in effect from time to
time during the period of the Executive's employment. The parties to this
Agreement recognize that the Company may terminate or modify such plans,
programs or arrangements at any time.
3. Grounds for Termination. The Executive's employment may be terminated on
any of the following grounds:
(a) Without Cause. The Executive or the Company may terminate the
Executive's employment at any time, without cause, by giving the other party to
this Agreement at least 30 days advance written notice of such termination.
(b) Death. The Executive's employment hereunder shall terminate upon
his death.
(c) Disability. If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall have been unable to perform the
essential functions of his position, even with reasonable accommodation that
does not impose an undue hardship on the Company, on a full-time basis for the
entire period of six (6) consecutive months, and within thirty (30) days after
written notice of termination is given (which may occur before or after the end
of such six-month period), shall not have returned to the performance of his
duties hereunder on a full-time basis (a "disability"), the Company may
terminate the Executive's employment hereunder.
(d) Cause. The Company may terminate the Executive's employment
hereunder for cause. For purposes of this Agreement, "cause" shall mean that the
Company, acting in good faith based upon the information then known to the
Company, determines that the Executive has engaged in or committed: willful
misconduct; theft, fraud or other illegal conduct; refusal or unwillingness to
substantially perform his duties (other than such failure resulting from the
Executive's disability) after written demand for substantial performance is
delivered by the Company that specifically identifies the manner in which the
Company believes the Executive has not substantially performed his duties;
insubordination; any willful act that is likely to and which does in fact have
the effect of injuring the reputation or business of the Company; violation of
any fiduciary duty; violation of the Executive's duty of loyalty to the Company;
or a breach of any term of this Agreement. For purposes of this Section 3(d), no
act, or failure to act, on the Executive's part shall be considered willful
unless done or omitted to be done, by him not in good faith and without
reasonable belief that his action or omission was in the best interest of the
Company. Notwithstanding the foregoing, the Executive shall not be deemed to
have been terminated for cause without delivery to the Executive of a notice of
termination signed by the Company's Chief Executive Officer or President stating
that, in the good faith opinion of the officer signing such notice, the
Executive has engaged in or committed conduct of the nature described above in
the second sentence of this Section 3(d), and specifying the particulars thereof
in detail.
4. Payments upon Termination.
(a) Without Cause or with Good Reason. In the event that the
Executive's employment is terminated by the Company for any reason other than
death, disability or cause as defined in Section 3 (b), (c) and (d) of this
Agreement, or in the event that the Executive terminates his employment
hereunder with Good Reason, the Executive shall be entitled to receive severance
pay in an aggregate amount equal to 100% of his Annual Compensation, which shall
be paid in periodic installments in accordance with the Company's customary
practice over the period of one (1) year, less any amounts required to be
withheld by applicable law, in exchange for a valid release of all claims the
Executive may have against the Company in a form acceptable to the Company. The
Company will also pay to the Executive any earned but unused vacation time at
the rate of pay in effect on the date of the notice of termination.
(b) Annual Compensation. For purposes of this Section 4, the term
"Annual Compensation" means an amount equal to the Executive's annual base
salary at the rate in effect on the date on which the Executive received or gave
written notice of his termination, plus the sum of (i) an amount equal to the
average of the Executive's two most recent annual bonuses, if any, received
under the Company's Incentive Compensation Plan prior to the notice of
termination, (ii) the Executive's annual car allowance, if any, and (iii) an
amount determined by the Company from time to time in its sole discretion to be
equal to the average annual cost for Company employees of obtaining medical,
dental and vision insurance under COBRA, which amount is hereby initially
determined to be $5,000 for 1997. In the event that the Executive's bonus for
one of the two calendar years preceding the calendar year in which the Executive
receives or gives written notice of termination was a prorated bonus due to
Executive having worked a partial year, solely for purposes of calculating
Annual Compensation, the Executive's prorated bonus will be recalculated to
reflect the bonus the Executive would have received had the Executive worked for
the entire year.
(c) Good Reason. For purposes of this Section 4 the term "Good Reason"
means:
(i) any reduction in the Executive's annual base salary, except
for a general one-time "across-the-board" salary reduction not exceeding ten
percent (10%) which is imposed simultaneously on all officers of the Company;
or
(ii) the Company requires the Executive to be based at an office
location which will result in an increase of more than thirty (30) miles in the
Executive's one-way commute.
(d) Release of all Claims. The Executive understands and agrees that
the Company's obligation to pay the Executive severance pay under this Agreement
is subject to the Executive's execution of a valid written waiver and release of
all claims which the Executive may have against the Company and/or its
successors in a form acceptable to the Company in its sole and absolute
discretion.
(e) Death, Disability or Cause. In the event that the Executive's
employment is terminated due to death, disability or cause, the Company shall
not be obligated to pay the Executive any amount other than earned unused
vacation, reimbursement for business expenses incurred prior to his termination
and in compliance with the Company's reimbursement policies, and any unpaid
salary for days worked prior to the termination.
5. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company in the same amount
and on the same terms as he would be entitled to hereunder if he terminated his
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the date of termination. As used in this Agreement, "Company" shall mean
the Company as herein before defined and any successor to its business and/or
assets as aforesaid which executes and delivers the agreement provided for in
this Section 5 or which otherwise becomes bound by all the terms and provisions
of this Agreement by operation of law.
(b) This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrator, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amounts would still
be payable to him hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive's devisee, legatee, or other designee or, if
there be no such designee, to the Executive's estate.
6. Notices. For purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States certified or registered mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive:
Xxxxxxx X. Xxxxxx
0000 000xx Xxxxx XX
Xxxxxxxx, XX 00000
If to the Company:
Apria Healthcare Group Inc.
0000 Xxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
With a copy to the attention of: Senior Vice President, Human Resources
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
7. Antisolicitation. The Executive promises and agrees that, during the
period of his employment by the Company and for a period of one year thereafter,
he will not influence or attempt to influence customers of the Company or any of
its present or future subsidiaries or affiliates, either directly or indirectly,
to divert their business to any individual, partnership, firm, corporation or
other entity then in competition with the business of the Company or any
subsidiary or affiliate of the Company.
8. Noncompetition. The Executive promises and agrees that for a period of
one year following termination of his employment, he will not enter business or
work with or for any business, individual, partnership, firm, corporation or
other entity then in competition with the business of the Company or any
subsidiary or affiliate of the Company.
9. Soliciting Employees. The Executive promises and agrees that for a
period of one year following termination of his employment, he will not,
directly or indirectly solicit any of the Company employees who earned annually
$50,000 or more as a Company employee during the last six months of his or her
own employment to work for any other business, individual, partnership, firm,
corporation, or other entity.
10. Confidential Information.
(a) The Executive, in the performance of his duties on behalf of the
Company, shall have access to, receive and be entrusted with confidential
information, including but not limited to systems technology, field operations,
reimbursement, development, marketing, organizational, financial, management,
administrative, clinical, customer, distribution and sales information, data,
specifications and processes presently owned or at any time in the future
developed, by the Company or its agents or consultants, or used presently or at
any time in the future in the course of its business that is not otherwise part
of the public domain (collectively, the "Confidential Material"). All such
Confidential Material is considered secret and will be available to the
Executive in confidence. Except in the performance of duties on behalf of the
Company, the Executive shall not, directly or indirectly for any reason
whatsoever, disclose or use any such Confidential Material, unless such
Confidential Material ceases (through no fault of the Executive's) to be
confidential because it has become part of the public domain. All records,
files, drawings, documents, notes, disks, diskettes, tapes, magnetic media,
photographs, equipment and other intangible items, wherever located, relating in
any way to the Confidential Material or otherwise to the Company's business,
which the Executive prepares, uses or encounters during the course of his
employment, shall be and remain the Company's sole and exclusive property and
shall be included in the Confidential Material. Upon termination of this
Agreement by any means, or whenever requested by the Company, the Executive
shall promptly deliver to the Company any and all of the Confidential Material,
not previously delivered to the Company, that may be or at any previous time has
been in the Executive's possession or under the Executive's control.
(b) The Executive hereby acknowledges that the sale or unauthorized
use or disclosure of any of the Company's Confidential Material by any means
whatsoever and at any time before, during or after the Executive's employment
with the Company shall constitute unfair competition. The Executive agrees he
shall not engage in unfair competition either during the time employed by the
Company or any time thereafter.
11. Modification and Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the Chief Executive Officer or
President of the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of California without regard to its conflicts of law
principles.
12. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement or Executive's employment by the Company shall be settled
exclusively by arbitration, conducted before a single neutral arbitrator in
accordance with the American Arbitration Association's National Rules for
Resolution of Employment Disputes as then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction; provided, however, that
the Company shall be entitled to seek a restraining order or injunction in any
court of competent jurisdiction to prevent any continuation of any violation of
the provisions of Sections 7, 8, 9 or 10 of this Agreement and the Executive
hereby consents that such restraining order or injunction may be granted without
the necessity of the Company's posting any bond, and provided, further, that the
Executive shall be entitled to seek specific performance of his right to be paid
until the date of employment termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement. The fees and
expenses of the arbitrator shall be borne by the Company.
15. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto; and any prior agreement of the parties
hereto in respect of the subject matter contained herein is hereby terminated
and canceled.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
APRIA HEALTHCARE GROUP INC.
By:
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Name: Xxxxxx X. Xxxxxxxxx
Title: President & Chief Operating Officer
EXECUTIVE
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Name: Xxxxxxx X. Xxxxxx
