SEVERANCE AGREEMENT
SEVERANCE AGREEMENT (this “Agreement”) dated as of August 24, 2006, by and
between BIOSCRIP, INC. (f/k/a MIM Corporation), a Delaware corporation, with its
principal place of business at 000 Xxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000
(hereinafter referred to as the “Company”), and Xxxxx X. Xxxxxx, residing at
0000 Xxxxxxxx, Xxx. 000X, Xxx Xxxx XX 00000 (hereinafter referred to as the
“Executive”).
WHEREAS, the Executive and the Company are parties to an employment
agreement dated as of March 1, 1999 (as amended to date, the “Employment
Agreement”);
WHEREAS, the Employment Agreement expired by its terms on March 31, 2006;
WHEREAS, the Executive continues to remain employed by the Company on an
“at will” basis; and
WHEREAS, the Company wishes to provide Executive with the severance payment
protection set forth in this agreement upon the termination of the Executive’s
employment with the Company;
Accordingly, the parties hereto agree as follows:
1. Severance upon Death or Disability.
1.1. Termination upon Death. If the Executive dies while employed
by the Company: (i) the Executive’s estate or beneficiaries shall be entitled to
receive any salary and other benefits (including bonuses awarded or declared but
not yet paid) earned and accrued prior to the date of termination and
reimbursement for expenses incurred prior to the date of termination; (ii) all
fully vested and exercisable stock options (“Options”) previously or hereafter
granted by the Company to Executive under any bonus program and held by the
Executive may be exercised by his estate for a period of one (1) year from and
after the date of the Executive’s death; (iii) all performance shares
(“Performance Shares”) granted to the Executive under any bonus program shall
vest in favor of the Executive’s estate; (iv) any shares of common stock
granted (“Stock Grants”) to Executive under any bonus program that are subject
to forfeiture shall become non-forfeitable and shall be fully vested and
transferable; and (v) the Executive’s estate and beneficiaries shall have no
further rights to any other compensation or benefits
hereunder on or after the termination of employment, or any other rights
hereunder. Notwithstanding
anything to the contrary contained in this Section
1.1, it is expressly understood and agreed that nothing in the foregoing clause
(v) shall restrict the ability of the Company to amend or terminate any benefits
plans and programs from time to time in its sole and absolute discretion;
provided, however, that the Company shall in no event be required to provide any
coverage under such benefit plans and programs after such time as the Executive
becomes entitled to coverage under the benefit plans and programs of another
employer or recipient of the Executive’s services (and provided, further, that
such entitlement shall be determined without regard to any individual waivers or
other arrangements).
1.2. Severance upon Disability. Upon termination of employment by
virtue of Executive’s disability, (i) the Executive shall receive salary and
other benefits (including bonuses awarded but not yet paid) earned and accrued
prior to the effective date of the termination of employment and reimbursement
for expenses incurred prior to the effective date of the termination of
employment; (ii) all fully vested and exercisable Options previously or
hereafter granted and held by the Executive may be exercised by the Executive or
his estate or beneficiaries for a period of one (1) year from and after the date
of the Executive’s disability; (iii) all Performance Shares granted to the
Executive under any bonus program shall vest in favor of the Executive; (iv)
any Stock Grants made to Executive under any bonus program that are subject to
forfeiture shall become non-forfeitable and shall be fully vested and
transferable; and (v) if the Executive’s disabilities shall continue for a
period of six (6) months after his termination, the Executive shall receive for
a period for two (2) years after termination of employment (A) the annual salary
that the Executive was receiving at the time of such termination of employment
(“Annual Salary”), less the gross proceeds paid to the Executive on account of
Social Security or other similar benefits and Company provided long-term
disability insurance, payable in accordance with the customary payroll practices
of the Company applicable to senior executives, in installments not less
frequently than monthly; and (B) such continuing coverage under the benefit
plans and programs the Executive would have received in the absence of such
termination, including, without limitation, coverage under any health insurance
plans or programs which are
available or provided to senior executives of the Company generally, in
each case to the extent that the Executive is eligible under the terms of such
plans or programs; it being expressly understood and agreed that nothing in this
clause
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(v) shall restrict the ability of the Company to amend or terminate such
benefits plans and programs from time to time in its sole and absolute
discretion; provided, however, that the Company shall in no event be required to
provide any coverage under such benefit plans and programs after such time as
the Executive becomes entitled to coverage under the benefit plans and programs
of another employer or recipient of the Executive’s services (and provided,
further, that such entitlement shall be determined without regard to any
individual waivers or other arrangements); and (vi) the Executive shall have no
further rights to any other compensation or benefits hereunder on or after the
termination of employment, or any other rights hereunder.
2. Severance in the Event of Certain Terminations of Employment
2.1. Termination for “Cause”; Termination of Employment by the Executive
Without Good Reason.
2.1.1. For purposes of this Agreement, “Cause” shall mean (i) the
Executive’s conviction of a felony or a crime of moral turpitude; or (ii) the
Executive’s commission of unauthorized acts intended to result in the
Executive’s personal enrichment at the material expense of the Company; or (iii)
the Executive’s material violation of the Executive’s duties or responsibilities
to the Company which constitute willful misconduct or dereliction of duty.
2.1.2. If the Company terminates the Executive for Cause, (i) the Executive
shall receive Annual Salary and other benefits (including bonuses awarded or
declared but not yet paid) earned and accrued prior to the effective date of the
termination of employment (and reimbursement for expenses incurred prior to the
effective date of the termination of employment); (ii) the Executive shall be
entitled to retain only those Performance Shares which shall have vested on or
prior to the date of termination under this Section 2.1; (iii) all vested and
unvested options shall lapse and terminate immediately and may no longer be
exercised; (iv) all Performance Units shall terminate immediately; (v) any
Restricted Stock Units shall terminate immediately; (vi) any Stock Grants made
to Executive under
any bonus program that are subject to forfeiture shall be immediately
forfeited; and (vii) the Executive shall have no further rights to any other
compensation or benefits hereunder on or after the termination of employment, or
any other rights hereunder.
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2.1.3. The Executive may terminate his employment other than for Good
Reason (as defined in Section 2.2.1 hereof) upon written notice to the Company
which specifies an effective date of termination not less than 30 days from the
date of such notice. If the Executive terminates his employment other than for
Good Reason under this Section 2.1.3: (i) the Executive shall receive Annual
Salary and other benefits (including bonuses awarded or declared but not yet
paid) earned and accrued prior to the effective date of the termination of
employment (and reimbursement for expenses incurred prior to the effective date
of the termination of employment); (ii) all fully vested and exercisable options
granted by the Company to the Executive under any bonus program or otherwise and
held by the Executive may be exercised by the Executive for a period of 30 days
from and after the date of the Executive’s effective date of termination; (iii)
Performance Shares shall lapse and terminate immediately; (iv) any Stock Grants
made to Executive under any bonus program that are subject to forfeiture shall
be immediately forfeited; and (v) the Executive shall have no further rights to
any compensation or other benefits hereunder on or after the termination of
employment, or any other rights hereunder.
2.2. Termination Without Cause; Termination for Good Reason.
For purposes of this Agreement, “Good Reason” shall mean the existence of any one or more
of the following conditions that shall continue for more than 45 days following written
notice thereof by the Executive to the Company: (i) the material change in or reduction
of the Executive’s authority, duties and responsibilities, or the assignment to the
Executive of duties materially inconsistent with the Executive’s position or positions
with the Company; (ii) a reduction in the Executive’s then current Annual Salary without
the Executive’s consent; or (iii) the relocation of the Executive’s principal location of
employment more than fifty (50) miles from the Executive’s current site without the
Executive’s consent.
2.2.1. If the Company terminates the Executive’s employment without Cause
or if the Executive terminates his employment for Good Reason: (i) the
Executive shall receive Annual Salary and other benefits (including bonuses
awarded but not yet paid) earned and accrued under this
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Agreement prior to the
effective date of the termination of employment (and reimbursement for
expenses incurred prior to the effective date of the termination of
employment); (ii) the Executive shall receive for two (2) years after
termination of employment, (A) the Annual Salary that the Executive was
receiving at the time of such termination of employment, payable in accordance
with the customary payroll practices of the Company applicable to senior
executives, in installments not less frequently than monthly, and (B) such
continuing coverage under the benefit plans and programs the Executive would
have received in the absence of such termination, including, without
limitation, coverage under any health insurance plans or programs which are
available or provided to senior executives of the Company generally, in each
case to the extent that the Executive is eligible under the terms of such
plans or programs; it being expressly understood and agreed that nothing in
this clause (ii) shall restrict the ability of the Company to amend or
terminate such benefits plans and programs from time to time in its sole and
absolute discretion; provided, however, that the Company shall in no event be
required to provide any coverage under such benefit plans and programs after
such time as the Executive becomes entitled to coverage under the benefit
plans and programs of another employer or recipient of the Executive’s
services (and provided, further, that such entitlement shall be determined
without regard to any individual waivers or other arrangements); (iii) all
outstanding unvested Options previously or hereafter granted to the Executive
and held by the Executive shall vest and become immediately exercisable and
shall otherwise be exercisable in accordance with their terms and the
Executive shall become vested in any pension or other deferred compensation
other than pension or deferred compensation under a plan intended to be
qualified under Section 401(a) or 403(a) of the Internal Revenue Code of 1986,
as amended; (iv) all Performance Shares granted under any bonus program ,
shall vest and become immediately payable at
any time and from time to time from and after the termination date at the
then applicable target rate set forth in the applicable bonus program; (v)
any Stock Grants made to Executive under any bonus program that are subject to
forfeiture shall become non-forfeitable and shall be fully vested and
transferable; and (vi) all Performance Shares granted under any bonus program
shall vest and become immediately transferable free of any restrictions on
transferability of the Performance Shares (other than restrictions
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on transfer
imposed under Federal and state securities laws) by the Executive and all
other restrictions imposed thereon shall cease, other than those restrictions,
limitations and/or obligations contained in the applicable bonus program that
expressly survive the termination of the Executive’s employment with the
Company; and (vi) the Executive shall have no further rights to any other
compensation or benefits hereunder on or after the termination of employment,
or any other rights hereunder.
3. Other Provisions.
3.1.
Severability. If it is determined that any of the provisions of
this Agreement, or any part thereof, is invalid or unenforceable, the remainder of
the provisions of this Agreement shall not thereby be affected and shall be given
full effect, without regard to the invalid portions thereof.
3.2. Enforceability; Jurisdictions. Any controversy or claim arising
out of or relating to this Agreement or the breach of this Agreement that is not
resolved by Executive and the Company (or its subsidiaries or affiliates, where
applicable) shall be submitted to arbitration in New York, New York in accordance
with New York law and the procedures of the American Arbitration Association. The
determination of the arbitrator(s) shall be conclusive and binding on the Company
(or its subsidiaries or affiliates, where applicable) and Executive and judgment
may be entered on the arbitrator(s)’ award in any court having jurisdiction. The
cost of any arbitration hereunder shall be borne by the Company.
3.3. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be deemed given
when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, five days after
the date of deposit in the United States mails as follows:
(i) If to the Company, to:
(ii) If to the Executive, to:
Xxxxx X. Xxxxxx
0000 Xxxxxxxx, Xxx. 000X
0000 Xxxxxxxx, Xxx. 000X
0
Xxx Xxxx, XX 00000
Any such person may by notice given in accordance with this Section 3.3 to the
other parties hereto designate another address or person for receipt by such
person of notices hereunder.
3.4. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, written or oral, with respect thereto.
3.5. Waivers and Amendments. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the parties or, in the case of a waiver, by
the party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any such right, power or privilege nor any
single or partial exercise of any such right, power or privilege, preclude any
other or further exercise thereof or the exercise of any other such right, power
or privilege.
3.6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPALS OF CONFLICTS OF LAW.
3.7. Assignment. This Agreement, and the Executive’s rights and
obligations hereunder, may not be assigned by the Executive; any purported
assignment by the Executive in violation hereof shall be null and void. In the
event of any sale, transfer or other disposition of all or substantially all
of the Company’s assets or business, whether by merger, consolidation or
otherwise, the Company (without limiting the Executive’s rights under Section 2.3)
may assign this Agreement and its rights hereunder.
3.8. Withholding. The Company shall be entitled to withhold from any
payments or deemed payments any amount of tax withholding required by law.
3.9. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors, permitted assigns,
heirs, executors and legal representatives.
3.10. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original but all such counterparts
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together shall constitute one and
the same instrument. Each counterpart may consist of two copies hereof each signed
by one of the parties hereto.
3.11. Survival. Anything contained in this Agreement to the contrary
not withstanding, the provisions hereof shall survive any termination of the
Executive’s employment hereunder.
3.12. Headings. The headings in this Agreement are for reference only
and shall not affect the interpretation of this Agreement.
3.13. Supersedes Prior Agreements. Upon execution and delivery of
this Agreement, this Agreement shall supersede in its entirety any and all prior
agreements with respect to the Company’s and the Executive’s respective rights and
obligations upon the termination of the Executive’s employment with the Company.
3.14. Mitigation. The Executive shall have no duty to mitigate, and
any compensation he may earn from a subsequent employer or entity shall not act as
an offset against the company’s obligations to Executive under thus Agreement.
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IN WITNESS WHEREOF, the parties hereto have signed their names as of the day
and year first above written.
| BIOSCRIP, INC. | ||||||||
By:
|
/s/ Xxxxxxx X. Xxxxxxxx
|
/s/ Xxxxx X. Xxxxxx
|
||||||
| Chief Executive Officer | ||||||||
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