SEPARATION AGREEMENT
Exhibit 10.1
This Separation Agreement (“Agreement”), dated May 25, 2006, is entered into between BioScrip,
Inc. (“BioScrip”), its affiliates and subsidiaries (collectively, the “Company”), on the one hand,
and Xxxxxxx X. Xxxxx (“Employee”), on the other hand.
W I T N E S S E T H:
WHEREAS, Employee is currently employed by BioScrip as its Executive Vice President, Chief
Financial Officer and Treasurer as well as Treasurer of each of BioScrip’s subsidiaries;
WHEREAS, in the course of Employee’s employment with the Company, Employee has been provided
and/or had access to confidential information and trade secrets of the Company, and has been
intimately involved with its management and/or operation;
WHEREAS, Employee and BioScrip both desire to terminate Employee’s employment with BioScrip
effective June 9, 2006 (the “Termination Date”);
WHEREAS, the Company and Employee desire to settle fully and finally all claims Employee may
have against the Company; and
WHEREAS, Employee and the Company agree that this Agreement shall supersede and replace any
and all other agreements between Employee and the Company;
NOW, THEREFORE, in consideration of the covenants and agreements set forth herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Employee agree as follows:
1. Termination Date. Employee and the Company agree that Employee’s employment with
the Company shall terminate on the Termination Date, which shall also be the effective date of
Employee’s resignation from all positions and offices Employee holds with the Company. Employee
shall be entitled to continue to receive until the Termination Date Employee’s annual base salary
and other benefits as are in effect on the date that Employee signs this Agreement. Prior to the
Termination Date, Employee agrees to use Employee’s best efforts to ensure an orderly transition of
Employee’s functions to such individuals as may be designated by the Company.
2. Severance. Beginning on the Termination Date, Employee shall be entitled to
receive a severance payment equal to one (1) year of salary at his then current gross salary level,
$275,000. In addition, Employee shall be entitled to receive an amount equal to the average of any
bonus or incentive compensation paid or payable to Employee for the two most recent fiscal years,
payable in equal monthly installments or otherwise in accordance with BioScrip’s then applicable
payroll practices, representing, in the aggregate on a pre-tax basis, $80,000. The two payments
shall be due and payable as follows: Subject to the unwaived expiration of the time periods set
forth in Section 9 hereof, payable in two payments, (i) the first payment shall be due and payable,
in an
amount of $155,000 on June 9, 2006; and (ii) the second payment shall be in an amount equal to
$200,000 and shall be due and payable on January 10, 2007. All payments under this paragraph 2
shall be subject to all applicable federal, state and local withholding. In the event of a Change
of Control (as defined in paragraphs 4A and 4C of the Change of Control Severance Agreement, dated
June 14, 2004, between Chronimed Inc. and Employee) or at the written request of Employee upon five
(5) notice of all payments remaining to be paid to Employee under this paragraph 2 shall accelerate
and be payable to Employee on the date of the Change of Control.
3. Accrued Vacation. In addition to the severance payments to be made to Employee
pursuant to paragraph 2 above, at the next payroll date following the Termination Date, Employee
shall be entitled to receive payment for all vacation days accrued and unused as of the Termination
Date, which the parties acknowledge and agree shall be $21,000.
4. Outplacement Assistance. The Company shall reimburse Employee up to five thousand
($5,000) dollars for the services of an outplacement firm upon submission of receipts or other
supporting documentation in accordance with the then customary practices of the Company.
5. Consulting Services. Following the Termination Date Employee shall provide
consulting services to the Company on a reasonable and as needed basis. Employee shall render such
services as an independent contractor and not as an employee. The provision of consulting services
by Employee shall be scheduled on a reasonable basis by Employee and the Company. While serving as
a consultant, Employee shall not have any authority to bind or act on behalf of the Company or any
of its subsidiaries. Subject to Section 13, the Company shall pay the Employee two hundred
($200.00) dollars per hour as compensation for Employee’s consulting services. Notwithstanding the
foregoing, the Company shall have no obligation to pay Employee a consulting fee in connection with
Employee’s assistance and/or cooperation in defense of or in connection with any civil or criminal
litigation or investigation (including those involving governmental authorities or agencies).
6. COBRA Insurance Coverage. For the period beginning on the Termination Date,
Employee and Employee’s dependents shall be entitled to maintain health insurance under the
Company’s group medical and dental insurance plans to the extent, if any, permitted under the
Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”). Employee will be
provided with applicable COBRA forms and Employee shall timely and properly complete such forms.
The Company shall reimburse Employee for the value of any COBRA premiums that would be incurred for
health insurance for Employee and Employee’s dependents for the one-year period following the
Termination Date. Nothing contained herein shall require Employee to pay applicable COBRA payments
to the Company’s and Employee’s current health insurer.
7. No Other Payments. Employee agrees that except for the payments and benefits to be
made or provided to Employee under this Agreement, Employee is not due or owed any payments,
benefits, or compensation of any kind by the Company, including for wages, benefits, vacation, sick
leave, personal time off, or any other paid time away from work, as of the date Employee signs this
Agreement, including, but not limited to, any amounts arising under the (i) Employment Agreement
dated as of July 1, 2003 by and between Employee and Chronimed, Inc., as amended by the Amendment
and Assumption of Employment Agreement dated August
-2-
9, 2004 (“Employment Agreement”); and (ii) Form of Change of Control Agreement, dated as of
June 14, 2006, between the Employee and Chronimed, Inc, a wholly-owned subsidiary of the Company.
Employee further agrees that the Company has provided to Employee all leave that Employee requested
or to which Employee was entitled under the Family and Medical Leave Act (FMLA) prior to the date
that Employee signs this Agreement.
8. General Release by Employee. Employee, on behalf of Employee and Employee’s heirs,
successors and assigns, does hereby release, forever discharge, and covenant not to xxx the Company
and its current or former directors, officers, employees, agents, members, shareholders and
attorneys (collectively, the “Releasees”), collectively, separately, and severally, from, against,
or for all claims, demands, actions, costs, expenses, charges and other such rights, from the
beginning of time through the Termination Date, known or unknown, vested or unvested, accrued or
unaccrued, arising out of or related to any events, conduct or other transactions between or
related to the parties arising out of or related to: (1) Employee’s employment by the Company or
the termination thereof, and/or (2) Employee’s being a shareholder of the Company, including, but
not limited to, any such claims, demands, actions, costs, expenses, charges and other such rights
arising in connection with the Employment Agreement. This release includes, but is not limited to,
claims arising under federal, state or local laws prohibiting employment discrimination or claims
growing out of legal restrictions on the Company’s employment practices, including, but not limited
to, any claims arising under the Civil Rights Act of 1991, Title VII of the Civil Rights Act of
1964, as amended, 42 U.S.C. §2000(e) et seq., 42 U.S.C. §1981, Executive Order 11246, the Civil
Rights Act of 1866, the Civil Rights Act of 1871, the Americans with Disabilities Act of 1990,
federal, state and local laws prohibiting employment discrimination, wrongful discharge, claims of
defamation, any claims for loss consortium, slander or libel, severance pay claims, pension claims,
ERISA claims and claims arising under the Fair Labor Standards Act. This release does not include
claims under applicable worker’s compensation and unemployment compensation statutes or which are
otherwise prohibited by law.
9. Release of Claims Arising Under the ADEA. In addition to the claims identified in
Section 8 above, Employee hereby knowingly and voluntarily releases and discharges Releasees,
collectively, separately and severally, from or for any and all liability, claims, allegations, and
causes of action arising under the Age Discrimination in Employment Act of 1967, as amended
(“ADEA”), which Employee, Employee’s heirs, administrators, executors, personal representatives,
beneficiaries, and assigns may have or claim to have against Releasees (together with the claims
released in Section 8 above, the “Released Claims”). Notwithstanding any other provision or
section of this Agreement, Employee does not hereby waive any rights or claims under the ADEA that
may arise after the date on which this Agreement is signed by Employee.
Employee hereby acknowledges and represents that (i) Employee has been given a period of at
least twenty-one (21) days to consider the terms of this Agreement, (ii) the Company has advised or
hereby advises Employee in writing to consult with an attorney prior to executing this Agreement,
and (iii) Employee has received valuable and good consideration to which Employee is otherwise not
entitled in exchange for Employee’s execution of this Agreement.
-3-
Employee and the Company hereby acknowledge this Agreement shall not become effective or
enforceable until the close of business on the seventh (7th) day after the day on which it is
executed by Employee (“the Effective Date”) and that Employee may revoke this Agreement at any time
before the Effective Date.
In the event Employee chooses to exercise Employee’s option to revoke this Agreement, Employee
shall notify the Company in writing to the Company’s designated agent for this purpose, and return
to the Company all monies paid pursuant to this Agreement (if any). Such notice shall be delivered
to the Company by registered or certified mail, postmarked no later than 5:00 p.m. on the last day
of the revocation period, and with return receipt requested and addressed as follows:
10. No Pending Claims. Employee represents and covenants that Employee has not filed
or otherwise initiated any legal action or administrative proceeding of any kind against any of the
Releasees relating to any of the Released Claims.
11. No Admission of Liability. This Agreement is not intended to be, and shall not be
construed as, any admission of liability or wrongdoing of any kind by the Company or any of the
Releasees, and any such liability or wrongdoing is hereby denied by the Company on behalf of itself
and the other Releasees.
12. Non-Assignment/Claims for Attorneys’ Fees, Costs and Expenses. Employee
represents, warrants and agrees that Employee has not assigned, transferred, sold or hypothecated
any of the Released Claims. Employee understands and agrees that the aforesaid payments to him
include and encompass therein any and all claims with respect to attorneys’ fees, costs, and
expenses for or by any and all attorneys who have represented Employee or with whom Employee has
consulted or who have done anything in connection with the subject matter of this Agreement or any
and all claims released herein.
13. Agreement to Cooperate. Employee further covenants and agrees that Employee shall
cooperate with the Company in any pending or future matters, including without limitation any
litigation, investigation, or other dispute, in which Employee, by virtue of Employee’s prior
employment with the Company, has relevant knowledge or information. The Company will reimburse
Employee for all reasonable out-of-pocket expenses incurred in connection with such activity upon
submission of receipts or other supporting documentation in accordance with the then customary
practices of the Company.
14. [Intentionally omitted]
15. [Intentionally omitted]
-4-
16. Non-Disparagement. Except as otherwise required by law, each party agrees and
covenants that it has not made, nor shall he or it make, at any time following the Termination Date
any statement, written or verbal, directly or indirectly, expressly or implicitly, in any forum or
media, or take any other action, either directly or indirectly, in disparagement of the other party
hereto or any of the Releasees hereunder. Without limiting the foregoing, this Section 16
includes, but is in no way limited to, each party’s obligations not to communicate in any manner,
directly or indirectly, expressly or implicitly, any negative, offensive, rude, unflattering
comments or comments of a similar nature. Indirect communications include, but are not limited to,
comments, statements, writings or any other such expressions attributable to a party but which
originate from others, such as a spouse, friend, counsel, agent or representative.
17. Business Related Expenses. Employee acknowledges and agrees that any and all
business related expenses incurred by Employee, but not yet submitted for reimbursement, must be
submitted to the Company within four (4) weeks of the Termination Date. Employee further
acknowledges and agrees that the Company shall not be liable to Employee for any reimbursement
requests submitted after this time period (unless such expenses are reimbursable under Section 2 of
this Agreement in connection with Employee’s consulting services). The Company will pay all timely
reimbursement requests pursuant to Company policy.
18. Return of Company Property. Except as otherwise provided below, Employee agrees,
within two (2) weeks of the Termination Date, to return to the Company all property of the Company,
including but not limited to, all files, customer and prospective customer lists, management
reports, drawings, memoranda, forms, financial data and reports, and all other documents obtained
or created by Employee in connection with Employee’s employment with Company or service on the
Board of the Company (including all copies of the foregoing, and including all notes, records and
other materials of or relating to the Company or its customers) and all of the equipment and other
materials of the Company in Employee’s possession or under Employee’s control (including but not
limited to any computers, credit cards, telephones, office equipment, software or similar items),
and any and all other proprietary data or objects acquired through Employee’s employment with the
Company.
19. Confidentiality. Employee has, in the course of his employment with the Company
and service on its Board (and will in the course of the provision of any consulting services to the
Company during the Consulting Period), have access to confidential and proprietary data or
information belonging to the Company. Employee shall not at any time divulge or communicate to any
person (other than to a person bound by confidentiality obligations to the Company similar to those
contained in this Agreement) or use to the detriment of the Company, or for the benefit of any
other person such data or information. The phrase “confidential or proprietary data or
information” shall mean information not generally available to the public, including, but not
limited to, personnel information, financial information, customer lists, supplier lists, trade
secrets, secret processes, computer data and programs, pricing, marketing and advertising data.
Employee acknowledges and agrees that any confidential or proprietary information that Employee has
already acquired was in fact received in confidence in Employee’s fiduciary capacity with respect
to the Company.
20. Inventions and Patents. Employee agrees to assign all rights, ownership and
related privileges and benefits associated with inventions and patents to the Company.
-5-
Employee agrees that any inventions or patents obtained in association with ideas or concepts
initiated by Employee during his employment with the Company related to the Company’s business are
deemed to be Company property. This includes but is not limited to product ideas, changes or
improvements; process ideas, changes or improvements; pertinent intellectual property, or other
pertinent information.
NOTICE: Minnesota law exempts from this Agreement “an invention for which no equipment,
supplies, facility or trade secret information of the employer was used and which was developed
entirely on the Employee’s own time, and (1) which does not relate (a) directly to the business of
the employer or (b) to the employer’s actual or demonstrably anticipated research or development,
or (2) which does not result from any work performed by the Employee for the employer.”
21. Covenant Not to Compete. Employee hereby covenants and agrees that for a period
of one year following the Termination Date (the “Term”), Employee shall not be engaged within the
United States, either directly or indirectly, in any manner or capacity, whether as an advisor,
principal, agent, partner, officer, director, employee, member of an association, or otherwise, in
any business or activity which is competitive with the business being conducted by the Company or
its subsidiaries or affiliates on the Termination Date (a “Competitive Business”), or own
beneficially or of record, five percent or more of the outstanding stock of any class of equity
securities in any corporation, other business entity or business engaged in a Competitive Business.
In addition, during the Term, Employee shall not solicit, directly or indirectly, any then
current employee of the Company for employment or engagement in any capacity outside of the
Company, its subsidiaries or affiliates, or solicit any customers of the Company to change or
reduce in any way the amount of business that they do with the Company or to do business with a
competitor of the Company, its subsidiaries or affiliates.
22. Forfeiture of Payments. If Employee breaches any terms or conditions in this
Agreements, in addition to other remedies available to the Company under this Agreement or
otherwise, all payments and benefits described in this Agreement shall cease immediately except to
the extent required to be provided by the provisions of COBRA.
23. Arbitration/Dispute Resolution. The Company and Employee agree that prior to
commencing any legal action arising out of a dispute over provisions in this Agreement, the parties
shall first negotiate for a period of not less than 30 days in an effort to resolve the dispute.
If these efforts are not successful, then the parties shall submit to non-binding mediation
conducted by an independent third-party mediator in an effort to resolve the dispute, provided that
such mediation must be completed with in 60 days after the date on which it commences. Thereafter,
if the dispute remains unresolved, either party may commence legal action to resolve the dispute,
it being understood that, if mutually agreed, the parties may instead elect to submit the dispute
to binding arbitration. Any legal action arising under or in connection with this Agreement shall
be brought in federal or state court in Hennepin County, Minnesota, and the parties consent to
personal jurisdiction and venue in such courts.
24. Cooperation in Claims. [Intentionally Omitted].
-6-
25. Equitable Relief. Employee acknowledges that the services rendered by Employee to
the Company are and were of a special, unique, unusual and extraordinary character, which gives
them a peculiar value, the loss of which cannot reasonably or adequately be compensated in damages
in an action at law, and that a breach by Employee of any of the provisions contained in this
Agreement will cause the Company irreparable injury and damage. Employee further acknowledges that
Employee possesses unique skills, knowledge and ability and that any material breach of the
provisions of this Agreement would be extremely detrimental to the Company. By reason thereof,
each party shall be entitled, in addition to any other remedies they may have under this Agreement
or otherwise, to injunctive and other equitable relief to prevent or curtail any breach of this
Agreement by either party; provided, however, that no specification in this Agreement of a specific
legal or equitable remedy shall be construed as a waiver or prohibition against the pursuing of
other legal or equitable remedies in the event of a breach.
26. Attorneys’ Fees, Costs and Expenses. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing party will be
entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
27. Applicable Law. This Agreement has been entered into in and shall be governed by
and construed under the laws of the State of Minnesota without reference to the choice of law
principles thereof.
28. Severability. If any of the covenants of this Agreement is determined by any
court of competent jurisdiction to be unreasonable or unenforceable, in whole or in part, as
written, Employee hereby consents to and affirmatively requests that the court reform the covenant
so as to be reasonable and enforceable to the maximum extent permitted by law and that the court
enforce the covenant as so reformed. Subject to and without limitation of the foregoing, should
any covenant or provision of this Agreement be declared or determined by any court of competent
jurisdiction to be unenforceable or invalid for any reason, the validity of the remaining parts,
terms or provisions of this Agreement shall not be affected thereby and the invalid or
unenforceable part, term or provision shall be deemed not to be a part of this Agreement.
29. [Intentionally Omitted]
30. Third-party Beneficiaries. The Releasees other than the Company shall be
third-party beneficiaries of this Agreement for the limited purpose of enforcing the provisions of
Sections 8, 9, 10, 11, 12, and 16 hereof.
31. Modification. Except as provided in Section 28, no provision of this Agreement
may be changed, altered, modified, or waived except in writing signed by both parties or their duly
authorized representatives, which writing shall specifically reference this Agreement and the
provision that the parties intend to waive or modify. The waiver by either party of a breach of
any of the provisions of this Agreement shall not operate or be construed as a waiver of any
subsequent or simultaneous breach.
-7-
32. Assignability. Employee may not assign this Agreement, in whole or in part,
without the prior written consent of the Company, and any attempted assignment not in accordance
herewith shall be null and void and of no force or effect. This Agreement shall be binding on and
inure to the benefit of the Company and its respective successors and assigns.
33. Headings and Captions. The headings and captions used in this Agreement are for
convenience of reference only, and shall in no way define, limit, expand or otherwise affect the
meaning or construction of any provision of this Agreement.
34. Counterparts Acceptable. This Agreement may be executed in two or more
counterparts and by facsimile, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
35. Interpretation. No provision of this Agreement or any related document shall be
construed against or interpreted to the disadvantage of any party hereto by reason of such party’s
having or being deemed to have structured or drafted such provision.
36. Entire Agreement. Employee acknowledges and agrees that Employee has read and
fully understands the contents and the effect of this Agreement. Employee acknowledges and agrees
that Employee has had a reasonable opportunity and has been advised in writing to seek the advice
of an attorney as to such content and effect. Employee accepts each and all of the terms,
provisions, and conditions of this Agreement, and does so voluntarily and with full knowledge and
understanding of the contents, nature, and effect of this Agreement. Employee and the Company
acknowledge and agree that they are not relying on any representations, oral or written, other than
those expressly contained in this Agreement. Unless otherwise expressly provided herein, this
Agreement supersedes all prior agreements, proposals, negotiations, conversations, discussions and
course of dealing between Employee and the Company, including but not limited to the Employment
Agreement.
| /s/ Xxxxxxx X. Xxxxx | ||||||
| 5/25/06 | ||||||
| Employee | Date | |||||
| BioScrip, Inc. | ||||||
By:
|
/s/ Xxxxx X. Xxxxxx | 5/25/06 | ||||
| Date | ||||||
| Title: | EVP and General Counsel | |||||
-8-
