SEVERANCE AGREEMENT
Exhibit 10.1
SEVERANCE AGREEMENT (this “Agreement”) dated as of August 2, 2007, by and between BIOSCRIP,
INC., a Delaware corporation, with its principal place of business at 000 Xxxxxxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxx 00000 (hereinafter referred to as the “Company”), and Xxxxxxx X. Xxxxxxxxx,
residing at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxxxx, XX 00000 (hereinafter referred to as the
“Executive”).
WHEREAS, the Executive and the Company are parties to an employment offer letter dated as of
June 21, 2006 (the “Offer Letter”)
WHEREAS, pursuant to the terms of the Offer Letter the Executive and the Company entered into
a severance letter agreement dated as of that same date pursuant to which the Executive is entitled
to severance payments equal to 18 months of salary in the event of the termination of his
employment with the Company under certain circumstances (the “Severance Letter”);
WHEREAS, the Company wishes to modify Executive’s severance arrangement with the Company 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) any
restricted stock units (“Restricted Stock Units”) granted under any bonus program or otherwise
granted shall vest and be free from restrictions on transferability (other than restrictions on
transfer imposed under Federal and State securities laws); (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) any
Restricted Stock Units granted under any bonus program or otherwise granted shall vest and be free
from restrictions on transferability (other than restrictions on transfer imposed under Federal and
State securities laws); (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; (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 (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) all vested
and unvested
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options shall lapse and terminate immediately and may no longer be exercised; (iii)
any Restricted
Stock Units shall 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 other compensation or benefits hereunder on or after the
termination of employment, or any other rights hereunder.
2.1.3. The Executive may terminate his employment 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 and the termination is not covered by Sections 1, 2.2, or
2.3 (i.e. termination by the Executive without Good Reason) hereof, (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) any Restricted Stock
Units hereafter granted shall 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.
2.2.1. 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.
2.2.2. If the Company terminates the Executive’s employment and the termination is not covered
by Section 1, 2.1 or 2.3 (i.e. termination by the Company without Cause) hereof: (i) the Executive
shall receive Annual Salary and other benefits (including bonuses awarded but not yet paid) earned
and accrued under this 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
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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) any Restricted Stock Units granted under any bonus program or otherwise
granted shall vest and be free from restrictions on transferability (other than restrictions on
transfer imposed under Federal and State securities laws); (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) 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.
2.2.3. If the Executive terminates his employment for Good Reason and such termination is not
covered by Section 2.3 hereof (i.e. termination for Good Reason and not in connection with a Change
of Control), (i) the Executive shall receive Annual 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) the Executive shall receive for a period of 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 under any benefit program 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) any Restricted Stock Units granted under any bonus
program or otherwise granted shall vest and be free from restrictions on transferability (other
than restrictions on transfer imposed under Federal and State securities laws); (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) the Executive
shall have no further rights to any other
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compensation or benefits hereunder on or after the
termination of employment, or any other rights hereunder.
2.3. Severance upon a Termination after Change of Control.
2.3.1. For purposes of this Agreement, “Change of Control” means the occurrence of one or more
of the following: (i) a “person” or “group” within the means the meaning of sections 13(d) and
14(d) of the Securities and Exchange Act of 1934 (the “Exchange Act”) becomes the “beneficial
owner” (within the meaning of Rule l3d-3 under the Exchange Act) of securities of the Company
(including options, warrants, rights and convertible and exchangeable securities) representing 30%
or more of the combined voting power of the Company’s then outstanding securities in any one or
more transactions unless approved by at least two-thirds of the Board of Directors then serving at
that time; provided, however, that purchases by employee benefit plans of the Company and by the
Company or its affiliates shall be disregarded; or (ii) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or substantially all, of the
operating assets of the Company; or (iii) a merger or consolidation, or a transaction having a
similar effect, where (A) the Company is not the surviving corporation, (B) the majority of the
common stock of the Company is no longer held by the stockholders of the Company immediately prior
to the transaction, or (C) the Company’s common stock is converted into cash, securities or other
property (other than the common stock of a company into which the Company is merged), unless such
merger, consolidation or similar transaction is with a subsidiary of the Company or with another
company, a majority of whose outstanding capital stock is owned by the same persons or entities who
own a majority of the Company’s common stock at such time; or (iv) at any annual or special meeting
of stockholders of the Company at which a quorum is present (or any adjournments or postponements
thereof), or by written consent in lieu thereof, directors (each a “New Director” and collectively
the “New Directors”) then constituting a majority of the Company’s Board of Directors shall be duly
elected to serve as New Directors and such New Directors shall have been elected by stockholders of
the Company who shall be an (I) “Adverse Person(s)”; or (II) “Acquiring Person(s)” (as each of the
terms set forth in (I) and (II) hereof are defined in that certain Amended and Restated Rights
Agreement, dated as of December 3, 2002, between the Company and American Stock Transfer & Trust
Company, as Rights Agent).
2.3.2. If within the one (1) year period commencing upon any Change of Control, the Executive
is terminated by the Company or a successor entity and the termination is not covered by Section 1
or 2.1 (i.e. termination other than as a result of death, disability or for cause) hereof, or,
within such one (1) year period, the Executive elects to terminate his employment after the Company
or a successor entity materially reduces or changes the Executive’s authority, duties and
responsibilities, or assigns the Executive duties materially inconsistent with the Executive’s
position or positions with the Company or a successor entity immediately prior to such Change of
Control, (i) the Executive shall receive Annual Salary and other benefits (including bonuses
awarded or declared but not yet paid) earned and accrued under this 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 (A) for two
(2) years after termination of employment; 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) for two (2) years after termination of employment, such continuing coverage under
the benefit plans and programs the
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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 under any bonus program or
otherwise 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) any Restricted Stock Units previously or hereafter granted under any bonus program or
otherwise granted shall vest and be free from restrictions on transferability (other than
restrictions on transfer imposed under Federal and State securities laws); (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) 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. Severabilitv. 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:
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(i) If to the Company, to:
with a copy to:
King & Spalding, LLP
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx Xxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx Xxxxx
(ii) If to the Executive, to:
Xxxxxxx X. Xxxxxxxxx
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, 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.
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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 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.
[Signature Page Follows]
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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/ Xxxxxxx X. Xxxxxxxxx | ||||||
| Chief Executive Officer | ||||||||
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