EXHIBIT 10.10
RESIGNATION AND GENERAL RELEASE AGREEMENT
THIS RESIGNATION AND GENERAL RELEASE AGREEMENT (this "Agreement"), made
February 12, 2002, by and between Xxxxxx X. Xxxxxx, an individual ("Executive"),
and Apria Healthcare Group Inc., a Delaware corporation ("Apria"), is a
resignation agreement which includes a general release of claims. In
consideration of the covenants undertaken and the releases contained in this
Agreement, Executive and Apria agree as follows:
1. Executive shall voluntarily resign from his position as an officer of
Apria and all of its affiliates and subsidiaries, including his position as the
Chief Executive Officer and as a Director of Apria, as well as from his
employment with Apria and its affiliates and subsidiaries in any other capacity,
by executing Exhibit A attached hereto, such resignation to be effective
immediately.
2. Apria shall pay or provide to Executive the following consideration:
(a) $2,606,354.00, representing an amount equal to the Contract
Balance, as such term is defined in Section IV-D-3(c) of the Employment
Agreement dated as of December 7, 2000, between Apria and Executive (the
"Employment Agreement"), subject to standard withholding for federal and
state taxes and paid in one lump sum within eight days of Executive's
execution of this Agreement;
(b) $1,303,177.00, representing an amount equal to the total payments
described in Section 3(b) of the Nondisclosure and Noncompetition Agreement
dated as of December 7, 2000, between Apria and Executive (the
"Nondisclosure Agreement"), subject to standard withholding for federal and
state taxes and payable in fifty-two (52) equal weekly installments in
accordance with Section 3(c) of the Nondisclosure Agreement;
(c) For a period of one year from the date hereof, Apria will provide
Executive with an appropriate office and associated services (such as
secretarial, photocopying, telephone and delivery) at a mutually acceptable
location, provided, however, that Apria shall not be required to spend more
than $50,000 to provide this benefit to Executive;
(d) Within 45 days of the date hereof, Executive shall submit
appropriate documentation of any unreimbursed business expenses incurred by
Executive prior to the date hereof in accordance with the Employment
Agreement. Apria shall reimburse such expenses within 20 days after
submission of such documentation;
(e) All of Executive's vested rights under retirement, 401(k), SERP or
similar benefit plans of any of Apria Releasee (as defined in Section 4 of
this Agreement), in the amounts and at the times provided for in such
plans;
(f) To the extent not theretofore paid or provided, Apria shall timely
pay or provide Executive any other amounts or benefits required to be paid
or provided or which Executive is eligible to receive under any plan,
program, policy, practice, contract or agreement of Apria and its
affiliated companies (such other amounts and benefits being hereinafter
referred to as "Other Benefits") in accordance with the terms of such plan,
program, policy, practice, contract or agreement; such Other Benefits to
include, without limitation or duplication, the Accrued Obligations as
defined in Section IV-D-1 of the Employment Agreement and all benefits
under Executive's outstanding stock option agreements which shall continue
in full force and effect in accordance with their terms; and
(g) An additional amount equal to the sum of $60,833.33 (constituting
one month's base compensation) plus $500.00 (for a total of $61,333.33).
No amount under this Section 2 shall be required to be paid by Apria before
the 8th day after Execution of this Agreement by Executive.
3. Executive agrees that, following the termination of his employment with
Apria, he will, at no cost to him, cooperate with any reasonable request Apria
may make f or information and assistance with respect to any matter involving
Executive during his period of employment.
4. Except for those obligations created by or arising out of this Agreement
for which receipt or satisfaction has not been acknowledged herein, and with the
exception of (a) rights to indemnity that Executive in his capacity as an
officer or director or consultant to Apria or its predecessors or any
subsidiaries or affiliates, past and present, of Apria or its predecessors
(collectively, including Apria, the "Apria Releasees") under provision of
Delaware law, the Certificate of Incorporation or Bylaws of any Apria Releasee,
or any indemnification agreement for the benefit of or between Executive and any
Apria Releasee and (b) any rights Executive may have under stock option plans or
agreements, retirement, 401(k), SERP or similar benefit plans of any Apria
Releasee, Executive on behalf of himself and his descendants, dependents, heirs,
executors, administrators, assigns and successors, and each of them, hereby
covenants not to xxx and fully releases and discharges the Apria Releasees, and
each of them, with respect to and from any and all claims, wages, demands,
rights, liens, agreements, contracts, covenants, actions, suits, causes of
action, obligations, debts, costs, expenses, attorneys' fees, damages,
judgments, orders and liabilities of whatever kind or nature in law, equity or
otherwise, whether now known or unknown, suspected or unsuspected, and whether
or not concealed or hidden, which he now owns or holds or has at any time
heretofore owned or held or may in the future hold as against any Apria
Releasee, arising out of or in any way connected to his consulting with,
employment by and/or director relationship with any Apria Releasee, or his
voluntary resignation as a director or employee or any other transactions,
occurrences, actions, claims or omissions or any loss, damage or injury
whatsoever, known or unknown, suspected or unsuspected, resulting from any act
or omission by or on the part of the Apria Releasees, or any of them, committed
or omitted prior to the date of this Agreement, including, without limiting the
generality of the foregoing, any claim under Title VII of the Civil Rights Act
of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, the Family and Medical Leave Act of 1993, the California Fair
Employment and Housing Act, the California Family Rights Act, or any claim for
notice pay, severance pay, bonus, sick leave, holiday pay, vacation pay, life
insurance, health or medical insurance or any other fringe benefit, workers'
compensation or disability.
5. Except for those obligations created by or arising out of this
Agreement, Apria, on behalf of itself and all Apria Releasees, hereby covenants
not to xxx and fully releases and discharges Executive with respect to and from
any and all claims, demands, rights, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, debts, costs, expenses,
attorneys' fees, damages, judgments, orders and liabilities of whatever kind or
nature in law, equity or otherwise, whether now known or unknown, suspected or
unsuspected, and whether or not concealed or hidden, which any Apria Releasee
now owns or holds or has at any time heretofore owned or held or may in the
future hold as against Executive, arising out of or in any way connected to
Executive's consulting with, employment by and/or director relationship with his
voluntary resignation as an employee or director from any Apria Releasee or any
other transactions, occurrences, actions, claims or omissions or any loss,
damage or injury whatsoever, known or unknown, suspected or unsuspected,
resulting from any act or omission by or on the part of Executive committed or
omitted prior to the date of this Agreement.
6. It is the intention of Executive and Apria in executing this Agreement
that the same shall be effective as a bar to each and every claim, demand and
cause of action hereinabove specified. In furtherance of this intention,
Executive and Apria hereby expressly waive any and all rights and benefits
conferred upon them, and each of them, by the provisions of SECTION 1542 OF THE
CALIFORNIA CIVIL CODE, and expressly consent that this Agreement shall be given
full force and effect according to each and all of its express terms and
provisions, including those related to unknown and unsuspected claims, demands
and causes of action, if any, as well as those relating to any other claims,
demands and causes of action hereinabove specified. SECTION 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR."
Executive and Apria both acknowledge that they or either of them may
hereafter discover claims or facts in addition to or different from those which
each now knows or believes to exist with respect to the subject matter of this
Agreement and which, if known or suspected at the time of executing this
Agreement, may have materially affected this settlement. Nevertheless, Executive
and Apria and each of them hereby waive any right, claim or cause of action that
might arise as a result of such different or additional claims or facts.
Executive and Apria and each of them acknowledge that they understand the
significance and consequence of such release and such specific waiver of SECTION
1542.
7. Executive expressly acknowledges and agrees that, by entering into this
Agreement, waiving any and all rights or claims that he may have arising under
the Age Discrimination in Employment Act of 1967, as amended, which have arisen
on or before the date of execution of this Agreement. Executive further
expressly acknowledges and agrees that:
(a) In return for this Agreement, he will receive compensation beyond
that which he was already entitled to receive before entering into this
Agreement;
(b) He was orally advised and are hereby advised in writing by this
Agreement to consult with an attorney before signing this Agreement;
(c) He was given a copy of this Agreement on February 12, 2002, and
informed that he had twenty-one days within which to consider this
Agreement; and
(d) He was informed that he has seven days following the date of
execution of this Agreement in which to revoke this Agreement.
8. Executive and the Apria Releasees shall keep confidential, and Apria
shall use its reasonable best efforts to cause the officers and directors of the
Apria Releasees to keep confidential, the fact or existence of this Agreement,
the terms and conditions of this Agreement, all communications made during the
negotiation of this Agreement, all facts and claims upon which this Agreement is
based (collectively referred to as the "Confidential Information"), and shall
not directly or indirectly, whether orally, in writing, by signal, gesture or
any other means, disclose such Confidential Information to any person or entity
(including, but not limited to, any current or former employee, agent, partner
or contractor of Apria or its affiliates, past or present) or in any way respond
to, participate in or contribute to, whether orally, in writing, by signal,
gesture or any other means, any inquiry, discussion, notice or publicity
concerning any aspect of the Confidential Information. The only exceptions to
the obligations imposed by this paragraph are that Executive may disclose
Confidential Information as required by law, or to (i) his medical, or health
care providers, but only such portion as essential for the provision of health
care services; (ii) pastoral counselors or psychotherapists, but only such
portion as essential for the provision of such counseling or therapy services;
(iii) professional accountants and tax advisers, but only such portion as
essential for the provision of such professional accounting or tax services; and
(iv) attorneys, but only such portion as essential for the provision of such
professional legal services; provided, however, that Executive shall be
permitted to make the disclosures permitted by the preceding clauses only if
before such disclosure is made, the person or entity that will be receiving the
disclosure is informed of and agrees to be bound by this confidentiality
provision. Apria may disclose Confidential Information as necessary to
effectuate the terms of this Agreement or as required by law. The parties agree
to the Press Release attached hereto as Exhibit B, and agree that such Press
Release may be issued on or after February 13, 2002. Nothing in this section
shall be construed to preclude Executive or Apria from complying with a lawful
court order or process requiring disclosure, written, oral or otherwise, of any
Confidential Information, provided that the party served gives immediate written
notice to the other by hand delivery at its or his business address, of such
court order or process and cooperates fully with and supports through all
reasonable means all efforts by the other to oppose any such disclosure of
Confidential Information. Executive and Apria agree that disclosure by either of
them of Confidential Information shall, at the option of the nondisclosing
party, constitute and shall be treated as a material breach of this Agreement.
In any arbitration alleging a breach of this section, the arbitrator shall have
the authority to award compensatory and/or punitive damages. Executive agrees
that he will not disparage in any manner any of the Apria Releasees and Apria,
on behalf of itself and all of the Apria Releasees, agrees that it will not, and
Apria shall use its reasonable best efforts to cause the officers and directors
of the Apria Releasees to not, disparage Executive in any manner.
9. Executive and Apria each warrant and represent that neither has
heretofore assigned or transferred to any person not a party to this Agreement
any released matter or any part or portion thereof and each shall defend,
indemnify and hold harmless the other from and against any claim (including the
payment of attorneys' fees and costs actually incurred whether or not litigation
is commenced) based on or in connection with or arising out of any such
assignment or transfer made, purported or claimed.
10. (a) All amounts payable under this Agreement or any other compensation
payable to, on behalf or for the benefit of Executive shall be subject to any
tax withholding required by law. Any such amounts required to be withheld from
any non-cash payment or from any payment made directly to a third party may be
withheld from cash otherwise payable to Executive hereunder. Executive shall pay
all taxes required by law to be paid by him as a result of the payments and
benefits provided hereunder.
(b) The provisions of Exhibit C are incorporated herein by this
reference.
11. This Agreement constitutes and contains the entire agreement and
understanding concerning Executive's employment and directorship, voluntary
resignation from the same and the other subject matters addressed herein between
the parties, and supersedes and replaces all prior negotiations and all
agreements proposed or otherwise, whether written or oral, concerning the
subject matters hereof, including without limiting the generality of the
foregoing, the Employment Agreement and all prior employment agreements between
Executive and Apria. This is an integrated document. Notwithstanding the
foregoing, the Nondisclosure Agreement remains in full force and effect, and it
is understood that the payments described in Section 2 hereof include all
compensation to which Executive is entitled under the Nondisclosure Agreement
and no further payments shall be made under the Nondisclosure Agreement.
12. Executive may revoke this Agreement in its entirety during the seven
days following execution of this Agreement by Executive. Any revocation of this
Agreement must be in writing and hand delivered to the General Counsel of Apria
during the revocation period.
13. If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of
this 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.
14. This Agreement has been executed and delivered within the State of
California, and the rights and obligation of the parties hereunder shall be
construed and enforced in accordance with, and governed by, the laws of the
State of California without regard to principles of conflict of laws.
15. Each party has cooperated in the drafting and preparation of this
Agreement. Hence, 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.
16. This Agreement may be executed in counterparts, and each counterpart,
when executed, shall have the efficacy of a signed original. Photographic copies
of such signed counterparts may be used in lieu of the originals for any
purpose.
17. Any dispute or controversy between Executive on the one hand, and Apria
(or any other Apria Releasee), on the other hand, in any way arising out of,
related to, or connected with this Agreement or the subject matter hereof, or
otherwise in any way arising out of, related to, or connected with Executive' s
employment with Apria or any Apria Releasee or the termination of Executive's
employment with Apria or any Apria Releasee, shall be resolved through final and
binding arbitration in Orange County, California, pursuant to California Civil
Procedure Code xx.xx. 1282-1284.2, with the exception of Sections 1283 and
1283.05. In the event of such arbitration, the prevailing party shall be
entitled to recover all reasonable costs and expenses incurred by such party in
connection therewith, including attorneys' fees. The nonprevailing party shall
also be solely responsible for all costs of the arbitration, including, but not
limited to, the arbitrator's fees, court reporter fees, and any and all other
administrative costs of the arbitration, and promptly shall reimburse the
prevailing party for any portion of such costs previously paid by the prevailing
party. Any dispute as to the reasonableness of costs and expenses shall be
determined by the arbitrator. Except as may be necessary to enter judgment upon
the award or to the extent required by applicable law, all claims, defenses and
proceedings (including, without limiting the generality of the foregoing, the
existence of the controversy and the fact that there is an arbitration
proceeding) shall be treated in a confidential manner by the arbitrator, the
parties and their counsel, and each of their agents, and employees and all
others acting on behalf of or in concert with them. Without limiting the
generality of the foregoing, no one shall divulge to any third party or person
not directly involved in the arbitration the contents of the pleadings, papers,
orders, hearings, trials, or awards in the arbitration, except as may be
necessary to enter judgment upon an award as required by applicable law. Any
court proceedings relating to the arbitration hereunder, including, without
limiting the generality of the foregoing, to prevent or compel arbitration or to
confirm, correct, vacate or otherwise enforce an arbitration award, shall be
filed under seal with the court, to the extent permitted by law.
18. No waiver of any breach of any term or provision of this Agreement
shall be construed to be, or 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.
19. All parties agree to cooperate fully and to execute any and all
supplementary documents and to take all additional actions that may be necessary
or appropriate to give full force to the basic terms and intent of this
Agreement and which are not inconsistent with its terms.
I have read the foregoing Agreement and accept and agree to the provisions
it contains and hereby execute it voluntarily with full understanding of its
consequences.
I declare under penalty of perjury under the laws of the State of
California that the foregoing is true and correct.
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement this February 12, 2002, at Orange County, California.
Executive
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Xxxxxx X.Xxxxxx
APRIA HEALTHCARE GROUP INC.
By
-------------------------------------
Xxxxxxxx X. Xxxxx
Chief Executive Officer
ENDORSEMENT
I, Xxxxxx X. Xxxxxx, hereby acknowledge that I was given twenty-one days to
consider the foregoing Agreement and voluntarily chose to sign this Agreement
prior to the expiration of the twenty-one day period.
I declare under penalty of perjury under the laws of the State of
California that the foregoing is true and correct.
EXECUTED this 12th day of February, 2002, at Orange County, California.
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Xxxxxx X. Xxxxxx
EXHIBIT A
RESIGNATION
XXXXXX X. XXXXXX
000 XXXXXXXX
XXXX XX XXXX, XXXXXXXXXX 00000
February 12, 2002
Apria Healthcare Group Inc.
00000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Gentlemen:
This is to advise you that, effective today, I hereby voluntarily resign my
position as the Chief Executive Officer and as a Director of Apria Healthcare
Group Inc. (the "Company"), and my employment in any other capacity with the
Company and its subsidiaries and affiliates.
Sincerely yours,
---------------------------------------
Xxxxxx X. Xxxxxx
EXHIBIT B
PRESS RELEASE
EXHIBIT C
EXCISE TAX
A. In the event that any amount or benefit that may be paid or otherwise
provided to or in respect of Executive by or on behalf of Apria or any
affiliate, whether pursuant to this Agreement or otherwise (collectively,
"Covered Payments"), is or may become subject to the tax imposed under Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code") (or any
successor provision or any comparable provision of state, local or foreign law)
("Excise Tax"), Apria will pay to Executive a "Reimbursement Amount" equal to
the total of: (A) any Excise Tax on the Covered Payments, plus (B) any Federal,
state, and local income taxes, employment and excise taxes (including the Excise
Tax) on the Reimbursement Amount, plus (C) the product of any deductions
disallowed for Federal, state or local income tax purposes because of the
inclusion of the Reimbursement Amount in Executive's income multiplied by the
Executive's combined Federal, state, and local income tax rate for the calendar
year in which the Reimbursement Amount is includible in Executive's taxable
income, plus (D) any interest, penalties or additions to tax imposed under
applicable law in connection with the Excise Tax or the Reimbursement Amount,
plus (E) any reasonable out-of-pocket costs incurred by Executive in connection
with any of the foregoing. For purposes of this Exhibit C, Executive will be
deemed to pay (1) Federal income taxes at the highest applicable marginal rate
of Federal income taxation applicable to individuals for the calendar year in
which the Reimbursement Amount is includible in executive's taxable income and
(2) any applicable state and local income taxes at the highest applicable
marginal rate of taxation applicable to individuals for the calendar year in
which such Reimbursement Amount is includible in Executive's taxable income, net
of the maximum reduction in Federal income taxes which could be obtained from
the deduction of such state or local taxes if paid in such year (determined
without regard to limitations on deductions based upon the amount of Executive's
adjusted gross income). Except to the extent provided in Section C below, this
provision is intended to put Executive in the same position as Executive would
have been had no Excise Tax been imposed upon or incurred as a result of any
Payment.
B. [Intentionally left blank]
C. Notwithstanding the foregoing provisions of this Section A, if Apria
determines that, absent this sentence, Executive is entitled to a Reimbursement
Amount, but that the portion of the Covered Payments that would be treated as
"parachute payments" under Code Section 280G ("Covered Parachute Payments") does
not exceed 103% of the greatest amount of Covered Parachute Payments that could
be paid to Executive such that the receipt of such Covered Parachute Payments
would not give rise to any Excise Tax (the "Safe Harbor Amount"), then no
Reimbursement Amount shall be paid to Executive (unless for any reason Executive
is determined to be subject to the Excise Tax after application of the balance
of this sentence, in which case the full Reimbursement Amount shall be paid),
and the Covered Parachute Payments payable under this Agreement shall be reduced
so that the Covered Parachute Payments, in the aggregate, are reduced to the
Safe Harbor Amount. For purposes of reducing the Covered Parachute Payments to
the Safe Harbor Amount, only amounts payable under this Agreement shall be
reduced. If the reduction of the amounts payable under this Agreement would not
result in a reduction of the Covered Parachute Payments to the Safe Harbor
Amount, no amounts payable under this Agreement or otherwise shall be reduced
pursuant to this Section C. Apria shall notify Executive of any intent to reduce
the amount of any Covered Payments in accordance with this Section C (which
notice, if practicable, shall be given prior to the occurrence of an event that
would give rise to a Covered Parachute Payment), and Executive shall have the
right to designate which of the Covered Payments shall be reduced and to what
extent, provided that Executive may not so elect to the extent that, in the
determination of counsel to Apria, such election would cause Executive to be
subject to the Excise Tax.
D. The determination of whether an event described in Code Section
280G(b)(2)(A)(i) has occurred, the amount of any Reimbursement Amount and/or the
amounts described in Section C above shall be made initially by an accounting
firm mutually acceptable to Apria and Executive; provided, however, that nothing
herein shall limit Executive's right to payment of the Reimbursement Amount in
the event it is determined that any of such initial determinations was
incorrect.
E. Executive shall promptly notify Apria in writing of any claim by any
taxing authority that, if successful, would require the payment by Apria of a
Reimbursement Amount; provided, however, that failure by Executive to give such
notice promptly shall not result in a waiver or forfeiture of any of Executive's
rights under this Exhibit C except to the extent of actual damages suffered by
Apria as a result of such failure. If Apria notifies Executive in writing within
15 days after receiving such notice that it desires to contest such claim (and
demonstrates to the reasonable satisfaction of Executive its ability to pay any
resulting Reimbursement Amount), Executive shall:
1. give Apria any information reasonably requested by Apria relating to
such claim;
2. take such action in connection with contesting such claim as Apria shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
selected by Apria that is reasonably acceptable to Executive;
3. cooperate with Apria in good faith in order effectively to contest such
claim; and
4. permit Apria to participate in any proceedings relating to such claim;
provided, however, that Apria's actions do not unreasonably interfere with or
prejudice Executive's disputes with the taxing authority as to other issues; and
provided, further, that Apria shall bear and pay on an after-tax and as-incurred
basis, all attorneys fees, costs and expenses (including additional interest,
penalties and additions to tax) incurred in connection with such contest and
shall indemnify and hold Executive harmless, on an after-tax and as-incurred
basis, for all resulting taxes (including, without limitation, income and excise
taxes), interest, penalties and additions to tax.
