EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into
by and between Apria Healthcare Group Inc. (the "Company") and
Xxxx X. Xxxxxxx (the "Executive"), as of the 1st day of April
1997.
I. EMPLOYMENT.
The Company hereby employs the Executive and the Executive
hereby accepts such employment, upon the terms and conditions
hereinafter set forth, from April 1, 1997, to and including
April 1, 1999. This Agreement is subject to renewal only as set
forth in Section VI below.
II. DUTIES.
A. The Executive shall serve during the course of his
employment as the Executive Vice President, Operations of the
Company, and shall have such other duties and responsibilities
as shall be determined from time to time by a Committee
consisting of the Chief Executive Officer, the President and
Chief Operating Officer and the Chief Financial Officer (the
"Operations Committee").
B. The Executive agrees to devote substantially all of
his time, energy and ability to the business of the Company.
Nothing herein shall prevent the Executive, upon approval of the
Board of Directors of the Company, from serving as a director or
trustee of other corporations or businesses which are not in
competition with the business of the Company or in competition
with any present or future affiliate of the Company. Nothing
herein shall prevent the Executive from investing in real estate
for his own account or from becoming a partner or a stockholder
in any corporation, partnership or other venture not in
competition with the business of the Company or in competition
with any present or future affiliate of the Company.
C. For the term of this Agreement, the Executive shall
report to the Operations Committee or its designee, provided,
however, that the Executive's annual performance review shall be
performed by the Chief Executive Officer in consultation with
the other members of the Operations Committee.
III. COMPENSATION.
A. The Company will pay to the Executive a base salary at
the rate of $215,000 per year for the first year and $250,000
per year for the second year starting April 1, 1998. Such salary
shall be payable in periodic installments in accordance with the
Company's customary practices. Amounts payable shall be reduced
by standard withholdings and other authorized deductions. In
the event that this Agreement is renewed pursuant to Section VI
hereof, the Executive's salary during any renewal term may be
further increased from time to time at the Company's discretion
as a result of the annual performance review process.
B. Annual Bonus, Incentive, Savings and Retirement Plans.
The Executive shall be entitled to participate in all annual
bonus, incentive, savings and retirement plans, practices,
policies and programs applicable generally to other executives
of the Company.
C. Welfare Benefit Plans. The Executive and/or his
family, as the case may be, shall be eligible for participation
in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company
(including, without limitation, medical, prescription, dental,
disability, salary continuance, group life, accidental death and
travel accident insurance plans and programs) to the extent
applicable generally to other executives of the Company.
D. Expenses. The Executive shall be entitled to receive
prompt reimbursement for all reasonable employment expenses
incurred by him in accordance with the policies, practices and
procedures as in effect generally with respect to other
executives of the Company.
E. Fringe Benefits. The Executive shall be entitled to
fringe benefits, including without limitation a continuation of
his current car allowance of $8,400 per year, in accordance with
the plans, practices, programs and policies as in effect
generally with respect to other executives of the Company.
F. Vacation. The Executive shall be entitled to paid
vacation in accordance with the plans, policies, programs and
practices as in effect generally with respect to other
executives of the Company.
G. Modifications, etc. The Company reserves the right
to modify, suspend or discontinue any and all of the above
plans, practices, policies and programs at any time without
recourse by the Executive so long as such action is taken
generally with respect to other similarly situated peer
executives and does not single out the Executive.
H. Stock Options. The Executive's stock options are
governed by separate written option agreements and the terms of
the Company's stock option plans. The Executive will not be
eligible for any further grants or awards of stock options until
after April 1, 1999.
IV. TERMINATION.
A. Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death. If the
Company determines in good faith that the Disability of the
Executive has occurred (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in
accordance with Section XIX of its intention to terminate the
Executive's employment. In such event, the Executive's
employment with the Company shall terminate effective on the
30th day after receipt of such notice by the Executive, provided
that, within the 30 days after such receipt, the Executive shall
not have returned to full-time performance of his duties. For
purposes of this Agreement, "Disability" shall mean a physical
or mental impairment which substantially limits a major life
activity of the Executive and which renders the Executive unable
to perform the essential functions of his position, even with
reasonable accommodation which does not impose an undue hardship
on the Company. The Company reserves the right, in good faith,
to make the determination of Disability under this Agreement
based upon information supplied by the Executive and/or his
medical personnel, as well as information from medical personnel
(or others) selected by the Company or its insurers.
B. Cause. The Company may terminate the Executive's
employment for Cause. For purposes of this Agreement, "Cause"
shall mean that the Company, acting in good faith based upon the
information then known to the Company, determines that the
Executive has engaged in or committed: willful misconduct;
theft, fraud or other illegal conduct; refusal or unwillingness
to substantially perform his duties (other than such failure
resulting from the Executive's Disability) after written demand
for substantial performance is delivered by the Company that
specifically identifies the manner in which the Company believes
the Executive has not substantially performed his duties;
insubordination; any willful act that is likely to and which
does in fact have the effect of injuring the reputation or
business of the Company; violation of any fiduciary duty;
violation of the Executive's duty of loyalty to the Company; or
a breach of any term of this Agreement. For purposes of this
paragraph, no act, or failure to act, on the Executive's part
shall be considered willful unless done or omitted to be done,
by him not in good faith and without reasonable belief that his
action or omission was in the best interest of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed
to have been terminated for Cause without delivery to the
Executive of a notice of termination signed by the Company's
Chief Executive Officer stating that, in his good faith opinion,
the Executive has engaged in or committed conduct of the nature
described in the second sentence of this paragraph, and
specifying the particulars thereof in detail.
C. Other than Cause or Death or Disability. The
Executive or the Company may terminate the Executive's
employment at any time, without Cause, by giving the other party
to this Agreement at least 30 days advance written notice of
such termination.
D. Obligations of the Company Upon Termination.
1. Death or Disability. If the Executive's employ
ment is terminated by reason of the Executive's death or
Disability, this Agreement shall terminate without further
obligations to the Executive or his legal representatives under
this Agreement, other than for (a) payment of the sum of (i) the
Executive's annual base salary through the date of termination
to the extent not theretofore paid, plus (ii) any earned
vacation pay, to the extent not theretofore paid (the sum of the
amounts described in clauses (i) and (ii) shall be hereinafter
referred to as the "Accrued Obligations"), which shall be paid
to the Executive or his estate or beneficiary, as applicable, in
a lump sum in cash within 30 days of the date of termination;
and (b) payment to the Executive or his estate or beneficiary,
as applicable, any amounts due pursuant to the terms of any
applicable welfare benefit plans.
2. Cause. If the Executive's employment is termi
nated by the Company for Cause, this Agreement shall terminate
without further obligations to the Executive other than for the
timely payment of the Accrued Obligations. If it is
subsequently determined that the Company did not have Cause for
termination under this Section IV-D-2, then the Company's
decision to terminate shall be deemed to have been made under
Section IV-D-3 and the amounts payable thereunder shall be the
only amounts the Executive may receive for his termination.
3. Other than Cause or Death or Disability.
(a) If, during the term of this Agreement (including
any renewal) the Company terminates the Executive's employment
for other than Cause or death or Disability, or if the Executive
terminates his employment hereunder with Good Reason (as defined
below), this Agreement shall terminate and the Executive shall
be entitled to receive a severance payment payable in one lump
sum upon the termination of his employment in an amount equal to
200% of his Annual Compensation, less any amounts required to be
withheld by applicable law, in exchange for a valid release of
all claims the Executive may have against the Company in a form
acceptable to the Company. Such payment shall constitute the
sole and entire obligation of the Company to provide any
compensation or benefits to the Executive upon termination,
except that the Company will also pay to the Executive any
earned but unused vacation time at the rate of pay in effect on
the date of the notice of termination.
(b) For purposes of this Section IV-D-3, the term
Annual Compensation means an amount equal to the Executive's
annual base salary at the rate in effect on the date on which
the Executive received or gave written notice of his
termination, plus the sum of (i) an amount equal to the average
of the Executive's two most recent annual bonuses, if any,
received under the Company's Incentive Compensation Plan prior
to the notice of termination, (ii) the Executive's annual car
allowance, and (iii) an amount determined by the Company from
time to time in its sole discretion to be equal to the average
annual cost for Company employees of obtaining medical, dental
and vision insurance under COBRA, which amount is hereby
initially determined to be $5,000 for 1997.
(c) For purposes of this Section IV-D-3, the term
Good Reason means:
(i) any reduction in the Executive's annual base
salary except for a general one-time "across-the-board" salary reduction
not exceeding ten percent (10%) which is imposed simultaneously
on all officers of the Company; or
(ii) the Company requires the Executive to be
based at an office location which will result in an increase of more
than thirty (30) miles in the Executive's one-way commute.
4. Exclusive Remedy. The Executive agrees that the
payments contemplated by this Agreement shall constitute the
exclusive and sole remedy for any termination of his employment
and the Executive covenants not to assert or pursue any other
remedies, at law or in equity, with respect to any termination
of employment.
V. ARBITRATION.
Any dispute or controversy arising under or in connection
with this Agreement or Executive's employment by the Company
shall be settled exclusively by arbitration, conducted before a
single neutral arbitrator in accordance with the American
Arbitration Association's National Rules for Resolution of
Employment Disputes as then in effect. Judgment may be entered
on the arbitrator's award in any court having jurisdiction;
provided, however, that the Company shall be entitled to seek a
restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation of the
provisions of Sections VII, VIII, IX, or X of this Agreement and
the Executive hereby consents that such restraining order or
injunction may be granted without the necessity of the Company's
posting any bond, and provided, further, that the Executive
shall be entitled to seek specific performance of his right to
be paid until the date of employment termination during the
pendency of any dispute or controversy arising under or in
connection with this Agreement. The fees and expenses of the
arbitrator shall be borne by the Company.
VI. RENEWAL.
This Agreement shall be automatically renewed for one
additional year each year after the expiration of the stated
term, unless either party gives notice to the other, in writing,
at least thirty (30) days prior to the expiration of this
Agreement (or any renewal) of its or his desire to terminate the
Agreement or modify its terms. In the event such a notice is
given and the parties are unable to agree on a mutually
acceptable position for the Executive to continue as part of the
Company's senior management, then on the date of expiration of
this Agreement (or any renewal) the Company will pay the
Executive the amount that would have been paid if there were a
termination of employment under Section IV-D-3. The Executive
agrees that, at the time of any such expiration, he will
consider acceptable either a continuation of the Executive Vice
President, Operations position or a return to his prior position
as the senior executive in charge of the Company's Western Zone,
in the event that the Company should offer him either of those
positions.
VII. ANTISOLICITATION.
The Executive promises and agrees that during the term of
this Agreement (including any renewal) and for a period of one
year thereafter, he will not influence or attempt to influence
customers of the Company or any of its present or future
subsidiaries or affiliates, either directly or indirectly, to
divert their business to any individual, partnership, firm,
corporation or other entity then in competition with the
business of the Company or any subsidiary or affiliate of the
Company.
VIII. NONCOMPETITION.
The Executive promises and agrees that for a period of one
year following termination of his employment he will not enter
business or work with or for any business, individual,
partnership, firm, corporation or other entity then in competi
tion with the business of the Company or any subsidiary or
affiliate of the Company.
IX. SOLICITING EMPLOYEES.
The Executive promises and agrees that, for a period of one
year following termination of his employment, he will not
directly or indirectly solicit any of the Company employees who
earned annually $50,000 or more as a Company employee during the
last six months of his or her own employment to work for any
other business, individual, partnership, firm, corporation, or
other entity.
X. CONFIDENTIAL INFORMATION.
A. The Executive, in the performance of his duties on
behalf of the Company, shall have access to, receive and be
entrusted with confidential information, including but not
limited to systems technology, field operations, reimbursement,
development, marketing, organizational, financial, management,
administrative, clinical, customer, distribution and sales
information, data, specifications and processes presently owned
or at any time in the future developed, by the Company or its
agents or consultants, or used presently or at any time in the
future in the course of its business that is not otherwise part
of the public domain (collectively, the "Confidential
Material"). All such Confidential Material is considered secret
and will be available to the Executive in confidence. Except in
the performance of duties on behalf of the Company, the
Executive shall not, directly or indirectly for any reason
whatsoever, disclose or use any such Confidential Material,
unless such Confidential Material ceases (through no fault of
the Executive's) to be confidential because it has become part
of the public domain. All records, files, drawings, documents,
notes, disks, diskettes, tapes, magnetic media, photographs,
equipment and other tangible items, wherever located, relating
in any way to the Confidential Material or otherwise to the
Company's business, which the Executive prepares, uses or
encounters during the course of his employment, shall be and
remain the Company's sole and exclusive property and shall be
included in the Confidential Material. Upon termination of this
Agreement by any means, or whenever requested by the Company,
the Executive shall promptly deliver to the Company any and all
of the Confidential Material, not previously delivered to the
Company, that may be or at any previous time has been in the
Executive's possession or under the Executive's control.
B. The Executive hereby acknowledges that the sale or
unauthorized use or disclosure of any of the Company's
Confidential Material by any means whatsoever and at any time
before, during or after the Executive's employment with the
Company shall constitute unfair competition. The Executive
agrees that he shall not engage in unfair competition either
during the time employed by the Company or any time thereafter.
XI. PARACHUTE LIMITATION.
Notwithstanding any other provision of this Agreement, the
Executive shall not have any right to receive any payment or
other benefit under this Agreement, any other agreement, or any
benefit plan if such right, payment or benefit, taking into
account all other rights, payments or benefits to or for the
Executive under this Agreement, all other agreements, and all
benefit plans, would cause any right, payment or benefit to the
Executive under this Agreement to be considered a "parachute
payment" within the meaning of Section 280G(b) (2) of the
Internal Revenue Code as then in effect (a "Parachute Payment").
In the event that the receipt of any such right or any other
payment or benefit under this Agreement, any other agreement, or
any benefit plan would cause the Executive to be considered to
have received a Parachute Payment under this Agreement, then the
Executive shall have the right, in the Executive's sole
discretion, to designate those rights, payments or benefits
under this Agreement, any other agreements, and/or any benefit
plans, that should be reduced or eliminated so as to avoid
having the right, payment or benefit to the Executive under this
Agreement be deemed to be a Parachute Payment.
XII. SUCCESSORS.
A. This Agreement is personal to the Executive and shall
not, without the prior written consent of the Company, be
assignable by the Executive.
B. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns and any
such successor or assignee shall be deemed substituted for the
Company under the terms of this Agreement for all purposes. As
used herein, "successor" and "assignee" shall include any
person, firm, corporation or other business entity which at any
time, whether by purchase, merger or otherwise, directly or
indirectly acquires the stock of the Company or to which the
Company assigns this Agreement by operation of law or otherwise.
XIII.WAIVER.
No waiver of any breach of any term or provision of this
Agreement shall be construed to be, nor shall be, a waiver of
any other breach of this Agreement. No waiver shall be binding
unless in writing and signed by the party waiving the breach.
XIV. MODIFICATION.
This Agreement may not be amended or modified other than by
a written agreement executed by the Executive and the Company's
Chairman and Chief Executive Officer or his successor.
XV. SAVINGS CLAUSE.
If any provision of this Agreement or the application
thereof is held invalid, such invalidity shall not affect any
other provisions or applications of the Agreement which can be
given effect without the invalid provisions or applications and,
to this end, the provisions of this Agreement are declared to be
severable.
XVI. COMPLETE AGREEMENT.
This Agreement constitutes and contains the entire
agreement and final understanding concerning the Executive's
employment with the Company and the other subject matters
addressed herein between the parties. It is intended by the
parties as a complete and exclusive statement of the terms of
their agreement. It supersedes and replaces all prior
negotiations and all agreements proposed or otherwise, whether
written or oral, concerning the subject matter hereof. Any
representation, promise or agreement not specifically included
in this Agreement shall not be binding upon or enforceable
against either party. This is a fully integrated agreement.
XVII. GOVERNING LAW.
This Agreement shall be deemed to have been executed and
delivered within the State of California and the rights and
obligations of the parties hereunder shall be construed and
enforced in accordance with, and governed by, by the laws of the
State of California without regard to principles of conflict of
laws.
XXXXX.XXXXXXXXXXXX.
In any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the
party was the drafter. The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect.
XIX. COMMUNICATIONS.
All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been
duly given if delivered or if mailed by registered or certified
mail, postage prepaid, addressed to the Executive at 00000
Xxxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxxx, Xxxxxxxxxx 00000 or
addressed to the Company at 0000 Xxxxxx Xxxxxx, Xxxxx Xxxx,
Xxxxxxxxxx 00000, Attention: Chief Executive Officer, with a
copy to the attention of the Senior Vice President, Human
Resources. Either party may change the address at which notice
shall be given by written notice given in the above manner.
XX. EXECUTION.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Photographic copies of such signed counterparts may be used in
lieu of the originals for any purpose.
XXI. LEGAL COUNSEL.
The Executive and the Company recognize that this is a
legally binding contract and acknowledge and agree that they
have each had the opportunity to consult with legal counsel of
their choice.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
APRIA HEALTHCARE GROUP INC. THE EXECUTIVE
By ________________________ ______________________
Xxxxxx X. Xxxxx Xxxx X. Xxxxxxx
Chairman and
Chief Executive Officer
