Exhibit 10.14
[Letterhead of Rotech Healthcare Inc.]
October 30, 2002
Xxxxx Xxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xx 00000
Re: Agreement with Respect to Rights Upon Termination of Employment
Dear Xxxxx:
Rotech Healthcare, Inc., a Delaware corporation (the "Company" or
"Rotech"), is pleased to offer you the following agreement with respect to your
rights upon the termination of your employment with the Company.
1. Upon the termination of employment by you for Good Reason or by the
Company without Cause (as those terms are defined below), the Company shall (a)
pay to you, with your final paycheck, any base salary or bonus earned by you but
not yet paid as of the date of the termination of your employment; (b) fully
reimburse you for all reimbursable expenses; (c) pay to you in a lump sum no
later than twenty (20) days after the termination of your employment, an amount
equal to the sum of (i) one hundred fifty percent (150%) of your annual base
salary (measured as of the time of the termination of your employment and
without mitigation due to any remuneration or other compensation earned by you
following such termination of employment), and (ii) an amount equal to the bonus
paid to you for performance in 2001 (excluding bankruptcy retention related
bonuses); and (d) continue your medical coverage under the Company's group
health plan in accordance with the Consolidated Omnibus Budget Reconciliation
Act ("COBRA") for period of eighteen (18) months from the date of the
termination of your employment by directly paying the monthly premiums on your
behalf during such period. Your entitlement to the severance pay and other
termination benefits provided for in this Paragraph 1 are conditioned upon your
(A) providing a general release in favor of Rotech, in a form approved by the
Company, of any and all claims arising out of, relating to or concerning your
employment or the termination of your employment with the Company; and (B)
material compliance with the restrictive covenants set forth in Paragraphs 4,5
and 6, below.
2. Wherever reference is made in this letter agreement to the termination
of your employment by the Company being with or without Cause, "Cause" shall
include, without limitation, the termination of your employment with the Company
due to the occurrence of one or more of the following events as determined by a
majority vote of the Board of Directors: (a) your conviction or your entry of a
plea of guilty or nolo contendere to any felony, (b) your engagement in conduct
constituting breach of fiduciary duty, willful misconduct or gross negligence
relating to the Company or the performance of your duties (including intentional
acts of employment discrimination or sexual harassment) or fraud which have a
significant adverse effect on the Company, (c) your willful failure to follow a
reasonable and lawful written directive of the Chief Executive Officer or the
Board of Directors (which shall be capable of
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000 - Xxxxxxx, Xxxxxxx 00000 - 000-000-0000
being performed by you with reasonable effort), (d) your deliberate and
continued failure to perform your material duties, and (e) your intentional
disparagement of the Company or any of its affiliate, subsidiary or parent
companies or any of their collective executives, shareholders, directors, or
officers in any written or oral communication; provided, however, that you shall
receive thirty (30) days' prior written notice that the Board of Directors
intends to meet to consider your termination for Cause and specifying the
actions allegedly constituting Cause.
3. For purposes of this letter agreement, "Good Reason" shall mean the
occurrence of one or more of the following events: (a) the Company's failure to
pay your base salary, earned bonus or additional earned compensation or its
failure to continue your benefits, perquisites or related benefits, (b) a
decrease in your base salary, (c) without your written consent, requiring you to
regularly report to work at a facility more than fifty (50) miles from the
location of your employment at the time of the execution of this letter
agreement, (d) without your written consent, the directing to you of any duties
or responsibilities which are materially inconsistent with your
responsibilities, positions and/or titles, (e) without your written consent, a
material reduction in your title, duties, positions or responsibilities, or (f)
without your written consent, the failure by the Company to continue in effect
any employee benefit or compensation plan including, but not limited to, any
life insurance plan, health insurance plan and accidental death or disability
plan in which you participate unless (1) such benefit or compensation plan, life
insurance plan, health insurance plan or related covenant, or accidental death
or disability plan or similar plan or benefit is replaced with a comparable plan
in which you will participate or which will provide you with comparable
benefits, or (2) the Company requests that you seek comparable coverage under
another such plan(s) and the Company reimburses you in full, on an after-tax
basis (taking into consideration all net Federal, State and local income taxes),
for such coverage. In the event you believe Good Reason to exist, then you must
provide the Company with written notice no later than ninety (90) days after
such event or condition you claim constitutes Good Reason occurs specifying the
bases for your belief that Good Reason exists. If the Company shall not have
cured or eliminated the event constituting Good Reason within thirty (30) days
after receipt of your written notice, upon expiration of such 30-day period,
your employment hereunder shall automatically be terminated.
4. By signing this letter, you acknowledge, confirm and agree that, given
your position as a member of the senior management team of Rotech, you will be
privy to and put in possession of certain confidential and proprietary
information regarding Rotech, including, but not limited to, plans, strategies,
financial information, business relationships, budgets, projections and
personnel information (collectively, "Confidential Information") and that the
disclosure or use by you of any such Confidential Information, other than
directly for the purposes of fulfilling your job requirements, would cause
material, substantial and irreparable damage to Rotech. Accordingly, you
acknowledge and confirm that you have a continuing duty of confidentiality to
Rotech and agree that you will hold, during the period of your employment and at
all times thereafter, in the utmost and strictest confidence and will not,
without Rotech's prior written permission, use or disclose (or act so as to
cause the use or disclosure of) any Confidential Information. This provision
shall survive the termination of your employment with the Company.
2
5. You further acknowledge and recognize the highly competitive nature of
the Company's business and that you will have the opportunity to develop
substantial relationships with existing and prospective clients, customers,
strategic partners and employees and representatives of the Company during the
course of and as a result of your employment as a member of senior management of
the Company. In light of the foregoing, you also covenant and agree, that for a
period of one (1) year following termination of your employment with Rotech,
whether voluntary or involuntary, you will not, directly or indirectly, on your
own behalf or on behalf of another person or entity, (a) be engaged in any
business (as a principal, partner, director, officer, agent, employee,
consultant or otherwise), or be financially interested in any entity or company,
that provides or performs any services that directly compete with Rotech, (b)
hire or engage, or attempt to hire or engage, on behalf of yourself or any other
person or entity, any person known by you to be a current employee, consultant
or representative of Rotech, or (c) intentionally or knowingly suggest, assist
in or influence a distributor, source, supplier, customer, client or contractor
of Rotech to sever his, her or its business relationship with, decrease in any
material or substantial respect its activity with, or intentionally or knowingly
do anything (whether by act of commission or omission) which would be adverse in
any material or substantial respect to the interests of Rotech. This provision
shall survive the termination of your employment with Rotech.
6. You further agree that at any time upon the request of the Company or at
the time of the termination of your employment for any reason, you will
immediately deliver to the Company (and will not keep in your possession,
recreate or deliver to anyone else) any and all Confidential Information or
other property or materials belonging to the Company, its successors or assigns.
7. You further acknowledge, and by your signature hereby confirm, that the
Company has agreed to provide you with the benefits and payments provided for
herein in consideration for your agreement to be bound by the restrictive
covenants contained in Paragraphs 4 through 6 of this letter agreement and that
such benefits serve as sufficient consideration therefore.
3
If the foregoing correctly sets forth our understanding, please sign two (2)
copies of this letter and return it to the undersigned, whereupon this letter
shall constitute a binding agreement between you and the Company.
Very truly yours,
Rotech Healthcare, Inc.
By: /s/ Xxx X. Xxxxxxx
Name: Xxx X. Xxxxxxx
Title: Interim Co-CEO & President
Accepted and Agreed:
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
4
