APRIA HEALTHCARE GROUP INC. 2003 PERFORMANCE INCENTIVE PLAN RESTRICTED STOCK UNIT AWARD AGREEMENT
Exhibit
10.33
THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Award Agreement”) dated
by and between APRIA HEALTHCARE GROUP INC., a Delaware corporation (the
“Corporation”), and (the “Grantee”) evidences the award (the “Award”) of
restricted stock units (“Stock Units”) granted by the Corporation to the Grantee as to the number
of Stock Units first set forth below.
Number of Stock Units:1
|
Award Date: | |||||
Vesting:1,2 The Stock Units shall become vested as to one-third of the
total number of shares
of Common Stock subject to the Award on each of the first, second, and third anniversaries
of the Award Date (each a “Vesting Date”).
of the Award Date (each a “Vesting Date”).
The Award is granted under the Apria Healthcare Group Inc. 2003 Performance Incentive Plan
(the “Plan”) and subject to the Terms and Conditions of Restricted Stock Units (the “Terms”)
attached to this Award Agreement (incorporated herein by this reference) and to the Plan. The
Award has been granted to the Grantee in addition to, and not in lieu of, any other form of
compensation otherwise payable or to be paid to the Grantee. Capitalized terms are defined in the
Plan if not defined herein. The parties agree to the terms of the Award set forth herein. The
Grantee acknowledges receipt of a copy of the Terms and the Plan.
“GRANTEE”
CONSENT OF SPOUSE
In consideration of the Corporation’s execution of this Award Agreement, the undersigned
spouse of the Grantee agrees to be bound by all of the terms and provisions hereof and of the Plan.
| 1 | Subject to adjustment under Section 7 of the Terms and Section 7.1 of the Plan. | |
| 2 | Subject to early termination under Section 4 of the Terms and Section 7.4 of the Plan. |
TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS
| 1. | Stock Units; Vesting. |
As used herein, a “Stock Unit” is a non-voting unit of measurement which is deemed for
bookkeeping purposes to be equivalent in value to one outstanding share of Common Stock of the
Corporation. The Stock Units shall be used solely as a device for the determination of any payment
to eventually be made to the Grantee if and when such Stock Units vest pursuant to this Agreement.
Except as set forth herein, the Award shall vest as set forth on the cover page of this Agreement.
| 2. | Termination of Employment/Service; No Employment/Service Commitment. |
2.1 Continuance of Employment/Service Required. The vesting of Stock Units subject to the
Award and the rights and benefits under this Award Agreement require continued employment or
service through each applicable installment of the Award and the rights and benefits under this
Agreement. Except as expressly provided in this Section 2 or in Section 5,
employment or service for only a portion of the vesting period, even if a substantial portion, will
not entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights
and benefits upon or following a termination of employment or services as provided herein or under
the Plan.
2.2 Possible Vesting upon Termination of Employment/Service. If the Grantee ceases to be
employed by or ceases to provide services to the Corporation or a Subsidiary, unless the provisions
of Section 5 apply in which case the provisions of that section shall prevail, the
following rules shall apply (the last day that the Grantee is employed by or provides services to
the Corporation or a Subsidiary is referred to as the Grantee’s “Severance Date”). The
Administrator shall be the sole judge of whether the Grantee continues to render employment or
services for purposes of this Award Agreement.
2.2.1 Termination Due to Death, Disability or Retirement Prior to End of Vesting Period. In
the event the Grantee’s employment or services terminate due to the Grantee’s death, Disability (as
defined below) or Retirement (as defined below) at a time when any Stock Units are outstanding and
unvested hereunder, the Stock Units subject to this Award shall vest on a pro rata basis as of the
Grantee’s Severance Date. The number of Stock Units that shall so vest shall equal (i) the number
of Stock Units subject to the Award that would have otherwise vested on the Vesting Date that next
follows the Severance Date but for such termination of employment or services (to the extent such
units are not then vested), multiplied by (ii) a fraction, the numerator of which shall be the
number of whole months during the period commencing with the Vesting Date immediately preceding the
Severance Date (or, if none, the Award Date) and ending on the Severance Date, and the denominator
of which shall be twelve (12). If this Section 2.2.1 applies, any Stock Units subject to
the Award that do not vest in accordance with the foregoing provisions shall terminate as of the
Grantee’s Severance Date.
2.2.2 Termination for Any Reason Other than Death, Disability or Retirement. Subject to
Section 5 below, in the event the Grantee’s employment or services terminate for any reason
other than the Grantee’s death, Disability or Retirement, the Award and any Stock Units subject to
the Award, to the extent not vested on the Severance Date, shall terminate as of the Severance
Date.
2.2.3 Definitions. For purposes of this Award Agreement, “Disability” means a “disability” as
such term is defined for purposes of Section 409A of the Code. For purposes of this Award
Agreement, “Retirement” means a Separation from Service (as defined below) by the Grantee that
occurs both (a) upon or after the Grantee’s attainment of age 55 and (b) upon or after the date
when the sum of the Grantee’s age and the Grantee’s years of service to the Corporation and its
Subsidiaries (such years of service determined in accordance with the rules for determining years
of service under the Corporation’s 401(k) Plan) is at least 60. For purposes of this Award
Agreement, a “Separation from Service” means the Grantee’s “separation from service” with the
Corporation and its Subsidiaries as that term is used for purposes of Section 409A of the Code.
2.3 No Employment/Service Commitment. Nothing contained in this Award Agreement or the Plan
constitutes a continued employment or service commitment by the Corporation or any of its
Subsidiaries, affects the Grantee’s status, if he or she is an employee, as an employee at will who
is subject to termination without cause, confers upon the Grantee any right to remain employed by
or in service to the Corporation or any Subsidiary, interferes in any way with the right of the
Corporation or any Subsidiary at any time to terminate such employment or service, or affects the
right of the Corporation or any Subsidiary to increase or decrease the Grantee’s other
compensation.
| 3. | No Stockholder Rights. |
The Grantee shall have no rights as a stockholder of the Corporation, no dividend rights and
no voting rights with respect to the Stock Units or any shares of Common Stock issuable in respect
of such Stock Units, until shares of Common Stock are actually issued to and held of record by the
Grantee. No adjustments will be made for dividends or other rights of a holder for which the
record date is prior to the date of issuance of the stock certificate evidencing the shares.
| 4. | Timing and Manner of Distribution of Stock Units. |
Stock Units subject to the Award that vest will be paid in an equivalent number of shares of
Common Stock (either by delivering one or more certificates for such shares or by entering such
shares in book entry form, as determined by the Corporation in its discretion) no later than
seventy (70) days after the applicable Distribution Date with respect to such Stock Units. Such
payment shall be subject to the tax withholding provisions of Section 8 below and
Section 8.5 of the Plan and subject to adjustment as contemplated by Section 7
below and Section 7.1 of the Plan and shall be in complete satisfaction of such vested
Stock Units. The Grantee or other person entitled under the Plan to receive the shares shall
deliver to the Corporation any representations or other documents or assurances required pursuant
to Section 8.1 of the Plan. Delivery of any certificates will be made to the Grantee’s
last address reflected on the books of the Corporation or its Subsidiaries unless the Corporation
is otherwise instructed in writing.
The “Distribution Date” for the Stock Units that vest pursuant to the Award shall be
determined pursuant to this paragraph. The Distribution Date for Stock Units that vest pursuant to
Section 1 shall be the applicable Vesting Date. The Distribution Date for Stock Units that
vest pursuant to either Section 2.2.1 shall be the date of the Grantee’s death, Disability
or Retirement, as applicable. The Distribution Date for Stock Units that vest pursuant to
Section 5.1 or Section 5.2 shall be date on which the related Change in Control
Event occurs.
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| 5. | Changes in Control. |
5.1 Possible Acceleration upon Change in Control. Upon a Change in Control (as defined
below), if the Stock Units subject to the Award are not then otherwise fully vested (and have not
previously terminated), they shall automatically become vested immediately prior to the occurrence
of such event. For purposes of this Award Agreement, “Change in Control” shall mean a “change in
the ownership or effective control” of the Corporation, or a change “in the ownership of a
substantial portion of the assets” of the Corporation within the meaning of Section 409A of the
Code.
5.2 Termination of Employment in Connection with a Change in Control. The following
provisions of this Section 5.2 supersede any inconsistent provision of Section 2.2.
The Stock Units subject to the Award, to the extent such Stock Units are outstanding and have not
previously become vested in accordance with the terms hereof and except as provided in the next
sentence, shall be deemed to have been fully vested as of the Grantee’s Severance Date if the
Grantee incurs a Qualifying Termination. The Grantee shall be deemed to have incurred a
“Qualifying Termination” for this purpose if the Grantee’s employment is terminated by the
Corporation or a Subsidiary without Cause within the period that ends with a Change in Control and
begins with the first to occur of (i) the initial public announcement of the Change in Control, or
(ii) the 90th day preceding the Change in Control.
For purposes of this Award Agreement, “Cause” shall mean that the Corporation, acting in good
faith based upon the information then known to the Corporation, determines that the Grantee has (1)
engaged in or committed willful misconduct; (2) engaged in or committed theft, fraud or other
illegal conduct; (3) refused or demonstrated an unwillingness to substantially perform his duties
for a 30-day period after written demand for substantial performance that refers to this paragraph
and is delivered by the Corporation that specifically identifies the manner in which the
Corporation believes the Grantee has not substantially performed his duties; (4) refused or
demonstrated an unwillingness to reasonably cooperate in good faith with any Corporation or
government investigation or provide testimony therein (other than such failure resulting from the
Grantee’s disability); (5) engaged in or committed insubordination; (6) engaged in or committed any
willful act that is likely to and which does in fact have the effect of injuring the reputation or
business of the Corporation or, if the Grantee is employed by a Subsidiary, the Subsidiary that
employs the Grantee; (7) willfully violated his fiduciary duty or his duty of loyalty to the
Corporation or a Subsidiary, or the Corporation’s Code of Ethical Business Conduct in any material
respect; (8) used alcohol or drugs (other than drugs prescribed to the Grantee by a physician and
used by the Grantee for their intended purpose for which they had been prescribed) in a manner
which materially and repeatedly interferes with the performance of his duties hereunder or which
has the effect of materially injuring the reputation or business of the Corporation or a
Subsidiary; or (9) engaged in or committed a material breach of any written agreement with the
Corporation or a Subsidiary for a 30-day period after written notification is delivered by the
Corporation or a Subsidiary, as applicable, that specifically refers to this paragraph and
identifies the manner in which the Corporation or Subsidiary believes the Grantee has materially
breached such agreement. For purposes of this paragraph, no act, or failure to act, on the
Grantee’s part shall be considered willful unless done or omitted to be done, by the Grantee not in
good faith or without reasonable belief that his action or omission was in the best interest of the
Corporation or, if the Grantee is employed by a Subsidiary, the Subsidiary. Notwithstanding
anything herein to the contrary, for purposes of any termination of employment that occurs within
the period that (1) begins with the first to occur of (a) the initial
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public announcement of a Change in Control, or (b) the 90th day preceding a Change in Control and
(2) ends with such Change in Control, “Cause” shall instead mean only the occurrence of either or
both of the following: (A) the Grantee’s conviction for committing an act of fraud, embezzlement,
theft, or other act constituting a felony (other than traffic related offenses or as a result of
vicarious liability); or (B) the willful engaging by the Grantee in misconduct that is
significantly injurious to the Corporation. Notwithstanding the foregoing, the Grantee shall not
be deemed to have been terminated for Cause without delivery to the Grantee of a notice of
termination signed by the Corporation’s Chairman of the Board stating that the Board of Directors
of the Corporation has determined that the Grantee has engaged in or committed conduct of the
nature described in this paragraph, and specifying the particulars thereof in detail.
5.3 Section 280G. Notwithstanding anything else contained in this Section 5 to the
contrary, in no event shall the Award be accelerated to an extent or in a manner which would not be
fully deductible by the Corporation for federal income tax purposes because of Section 280G of the
Code. If the Grantee would be entitled to benefits or payments hereunder and under any other plan
or program that would constitute “parachute payments” as defined in Section 280G of the Code, then
the Grantee may by written notice to the Corporation designate the order in which such parachute
payments will be reduced or modified so that the Corporation is not denied federal income tax
deductions for any “parachute payments” because of Section 280G of the Code. Notwithstanding the
foregoing, if the Grantee is a party to an employment or other agreement with the Corporation, or
is a participant in a severance program sponsored by the Corporation, that contains express
provisions regarding Section 280G and/or Section 4999 of the Code (or any similar successor
provision), the Section 280G and/or Section 4999 provisions of such employment or other agreement
or plan, as applicable, shall control as to the Award.
5.4 Section 409A. Notwithstanding any provision of this Award Agreement to the contrary, if
the Grantee is a “specified employee” as defined in Section 409A of the Code, the Grantee shall not
be entitled to any payment with respect to the Award in connection with the Grantee’s Separation
From Service until the earlier of (a) the date which is six (6) months after the Grantee’s
Separation From Service for any reason other than the Grantee’s death, or (b) the date of the
Grantee’s death. Any amounts otherwise payable to the Grantee following the Grantee’s Separation
From Service that are not so paid by reason of this Section 5.4 shall be paid as soon as
practicable (and in all events within thirty (30) days) after the date that is six (6) months after
the Grantee’s Separation From Service (or, if earlier, the date of the Grantee’s death). The
provisions of this Section 5.4 shall only apply if, and to the extent, required to comply
with Section 409A of the Code.
| 6. | Non-Transferability. |
Prior to the time the Stock Units are vested and paid, neither the Stock Units comprising the
Award nor any other rights of the Grantee under this Award Agreement or the Plan may be
transferred, except as expressly provided in Section 5.7 of the Plan. No specific
exception to the general transfer prohibitions set forth in Section 5.7 of the Plan has
been authorized by the Administrator.
| 7. | Adjustments. |
Upon the occurrence of an Event (as defined below), the Administrator shall make adjustments
as it deems appropriate in the number and kind of securities or other consideration
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that may become payable with respect to the Award. If an Event shall occur and the Award has
not been fully vested and paid upon such Event or prior thereto, the Award may become payable in
securities or other consideration (the “Restricted Property”) rather than in the Common Stock
otherwise payable in respect of the Award. Such Restricted Property shall become payable at the
times set forth in Section 4 above. Notwithstanding the foregoing, to the extent that the
Restricted Property includes any cash, the commitment hereunder shall become an unsecured promise
to pay an amount equal to such cash (with earnings attributable thereto as if such amount had been
invested, pursuant to policies established by the Administrator, in interest bearing, FDIC insured
(subject to applicable insurance limits) deposits of a depository institution selected by the
Administrator) at such times and in such proportions as the Award becomes payable in accordance
with Section 4 above. Notwithstanding the foregoing, the Award and any Common Stock or
other securities or property payable in respect of the Award shall continue to be subject to
proportionate and equitable adjustments (if any) under this Section 7 consistent with the
effect of such events on stockholders generally, as the Administrator determines to be necessary or
appropriate, and in the number, kind and/or character of shares of Common Stock or other
securities, property and/or rights payable in respect of Stock Units granted under the Plan. All
rights of the Grantee hereunder are subject to those adjustments. For purposes of this Award
Agreement, “Event” means a liquidation, dissolution, merger, consolidation, or other combination,
reorganization, stock split, stock dividend, reverse stock split, or a recapitalization,
reclassification, extraordinary dividend or other distribution (including a split up or a spin off
of the Corporation or any significant Subsidiary), or a sale or other distribution of all or
substantially all the assets of the Corporation as an entirety.
| 8. | Tax Withholding. |
Subject to Section 8.5 of the Plan, upon any distribution of Common Stock in respect
of the Stock Units, the Corporation shall, to the extent it is legally permitted to do so,
automatically reduce the number of shares to be delivered by (or otherwise reacquire) the
appropriate number of whole shares, valued at their then fair market value (with the “fair market
value” of such shares determined in accordance with the applicable provisions of the Plan), to
satisfy any withholding obligations of the Corporation or its Subsidiaries with respect to such
distribution of shares at the minimum applicable withholding rates unless the Grantee has made
other arrangements approved by the Administrator to provide for such withholding. In the event
that the Corporation cannot legally satisfy such withholding obligations by such reduction of
shares, or in the event of a cash payment or any other withholding event in respect of the Stock
Units, the Corporation (or a Subsidiary) shall be entitled to require a cash payment by or on
behalf of the Grantee and/or to deduct from other compensation payable to the Grantee any sums
required by federal, state or local tax law to be withheld with respect to such distribution or
payment.
| 9. | Notices. |
Any notice to be given under the terms of this Award Agreement shall be in writing and
addressed to the Corporation at its principal office to the attention of the Secretary, and to the
Grantee at the address last reflected on the Corporation’s payroll records. Any notice shall be
delivered in person or shall be enclosed in a properly sealed envelope, addressed as aforesaid,
registered or certified, and deposited (postage and registry or certification fee prepaid) in a
post office or branch post office regularly maintained by the United States Government. Any such
notice shall be deemed to be “given” only when actually received, but if the Grantee is no longer
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an Eligible Person, shall be deemed to have been duly “given” as of the date mailed in
accordance with the foregoing provisions of this Section 9.
| 10. | Limitation on Grantee’s Rights. |
The Stock Units create no fiduciary duty to the Grantee and shall create only a contractual
obligation on the part of the Corporation to make distributions, subject to vesting and the other
terms and conditions hereof, as provided in Sections 3 and 4 above. The Stock Units shall
not be treated as property or as a trust fund of any kind. No assets have been secured or set
aside by the Corporation with respect to the Award and, if amounts become distributable or payable
to the Grantee pursuant to this Award Agreement, the Grantee’s rights with respect to such amounts
shall be no greater than the rights of any general unsecured creditor of the Corporation.
| 11. | Plan. |
The Award and all rights of the Grantee under this Award Agreement are subject to all of the
terms and conditions of the Plan, incorporated herein by this reference. The Grantee agrees to be
bound by the terms of the Plan and this Award Agreement (including these Terms). The Grantee
acknowledges having read and understanding the Plan, the Prospectus for the Plan, and this Award
Agreement and having had ample opportunity to consult (to the extent the Grantee has determined it
appropriate to do so) with his or her own legal, tax and financial advisors regarding the Award.
Unless otherwise expressly provided in other sections of this Award Agreement, provisions of the
Plan that confer discretionary authority on the Board or the Administrator do not and shall not be
deemed to create any rights in the Grantee unless such rights are expressly set forth herein or are
otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate
action of the Board or the Administrator under the Plan after the date hereof.
| 12. | Entire Agreement. |
This Award Agreement (including these Terms and any other document expressly referred to
herein) and the Plan together constitute the entire agreement and supersede all prior
understandings and agreements, written or oral, of the parties hereto with respect to the subject
matter hereof. The Plan and this Award Agreement may be amended pursuant to Section 8.6 of
the Plan. Such amendment must be in writing and signed by the Corporation. The Corporation may,
however, unilaterally waive any provision hereof in writing to the extent such waiver does not
adversely affect the interests of the Grantee hereunder, but no such waiver shall operate as or be
construed to be a subsequent waiver of the same provision or a waiver of any other provision
hereof.
| 13. | Governing Law. |
This Award Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Delaware without regard to conflict of law principles thereunder.
| 14. | Arbitration. |
Any dispute or controversy arising under or in connection with this Award Agreement shall be
settled exclusively by arbitration, conducted before a single neutral arbitrator in
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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. The fees and expenses of the arbitrator shall be borne by the Company.
| 15. | Construction. |
This Award Agreement shall be construed and interpreted to comply with Section 409A of the
Code. The Corporation reserves the right to amend this Award Agreement to the extent it reasonably
determines is necessary in order to preserve the intended tax consequences of the Stock Units in
light of Section 409A of the Code and any regulations or other guidance promulgated thereunder.
| 16. | Effect of this Agreement. |
This Award Agreement shall be assumed by, be binding upon and inure to the benefit of any
successor or successors to the Corporation.
| 17. | Counterparts. |
This Award Agreement may be executed simultaneously in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
instrument.
| 18. | Section Headings. |
The section headings of this Award Agreement are for convenience of reference only and shall
not be deemed to alter or affect any provision hereof.
| 19. | Agreements Regarding Noncompetition and Nonsolicitation. |
Notwithstanding anything else contained herein to the contrary, the right of the Grantee to
the Award, as well as the right of the Grantee to or with respect to any Common Stock or cash that
is payable or has, at the relevant time, previously been paid with respect to the Award (or any
consideration received in respect thereof, as the case may be) is subject to the terms and
conditions of the Grantee’s “Noncompetition and Nonsolicitation Agreement” with the Corporation (or
any similar or successor agreement, as applicable), including any such agreement that may be
entered into after the Award Date (the Grantee’s “Noncompetition and Nonsolicitation Agreement”).
This Restricted Stock Unit Award Agreement is one of the Grantee’s Incentive Compensation
Agreements as defined in such Noncompetition and Nonsolicitation Agreement. By accepting the Award,
and again by accepting any payment of Common Stock or cash with respect to the Award, the Grantee
affirms his or her representations, covenants and agreements set forth in his or her Noncompetition
and Nonsolicitation Agreement and agrees that his or her rights with respect to the Award and any
such payment (or any consideration received in respect thereof, as the case may be) are and shall
continue thereafter to be subject to such Noncompetition and Nonsolicitation Agreement. [Provision
included in agreements for Divisional Vice Presidents and above.]
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| 20. | Stock Ownership Requirements. |
The Award and all rights of Grantee under this Award Agreement or in connection with any
shares of the Corporation’s Common Stock acquired pursuant to this Award Agreement are and shall be
subject to, and Grantee agrees to be bound by, all of the terms and conditions of the Corporation’s
Stock Ownership Requirements as in effect from time to time. [Provision included in agreements for
Senior Vice Presidents and above.]
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