RESTATED EMPLOYMENT
AGREEMENT
THIS RESTATED
EMPLOYMENT AGREEMENT (this “Agreement”) is entered into
as of November 29, 2006, by and between BioScrip, Inc.,
formerly MIM Corporation, (the “Company”), and Richard
H. Friedman (“Executive”).
WHEREAS , the Company and Executive are parties to a
certain Employment Agreement dated December 1, 1998 (the
“Original Agreement”);
WHEREAS, the parties amended the Original Agreement on
October 11, 1999, December 31, 2001, August 9, 2004,
October 28, 2004, and June 13, 2006 in various
particulars to reflect certain changed circumstances to
Executive’s employment; and
WHEREAS, the parties now wish to set forth in this
Agreement all of the amended terms to the Original Agreement and to
restate the terms and conditions of Executive’s employment
with the Company.
NOW,
THEREFORE, in
consideration of the mutual covenants set forth herein and other
valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound,
restate their agreement as follows:
1.
Term . Effective as of June 1, 2006 (the
“Effective Date”), the Company hereby agrees to employ
Executive, and Executive hereby accepts such employment, for the
period retroactively commencing on the Effective Date and
continuing through and including May 31, 2008, as Chief
Executive Officer, President and Chairman of the Board of Directors
of the Company (the “Board”) unless sooner terminated
in accordance with the provisions of Section 4 or
Section 5 (the period during which the Executive is employed
hereunder, including any extensions or renewals thereof, being
hereinafter referred to as the “Term”). In the event
this Agreement is not renewed upon expiration of the Term, such
non-renewal shall be deemed a termination of Executive’s
employment without cause and Executive shall be entitled to receive
the termination benefits set forth in Section 5.2(b) of this
Agreement.
2.
Duties and Location . Executive, in his capacity as
Chief Executive Officer, President and Chairman of the Board, shall
faithfully perform for the Company the duties of said office and
position and such other duties of an executive, managerial, or
administrative nature as shall be specified and designated from
time to time by the Board, to whom Executive shall directly report.
The Executive shall devote all of his business time and effort to
the performance of his duties hereunder, and shall be employed in
Elmsford, New York , subject to travel from time to time as
deemed necessary or appropriate.
3.1
Salary . The Company shall pay Executive during the Term
an initial base salary at the rate of $737,811 per annum (the
“Annual Salary”), in accordance with the
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customary
payroll practices of the Company applicable to senior executives,
in installments not less frequently than monthly.
3.2
Benefits — In General . In accordance with
policies applicable to all Company employees with respect to
benefits contribution, Executive shall be permitted during the Term
to participate in the group life, hospitalization or disability
insurance plans, health programs, pension and profit sharing plans,
salary reviews, and similar benefits (other than bonuses and stock
options or other equity-based compensation, which are provided for
under Section 3.3 and 3.4 hereof, or severance, displacement
or other similar benefits) which are of a type available from time
to time to other 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.
3.3
Specific Benefits . During the Term, Executive shall be
entitled to receive a bonus each calendar year, payable in cash in
accordance with, and subject to the terms and conditions of the
Company’s then applicable short- and long-term bonus or other
incentive (each, a “Bonus Program”). Compensation shall
be set at a maximum of 60% (the “Maximum Bonus
Percentage”) of Executive’s Annual Salary payable
subject to, and in accordance with the terms and provisions of the
Bonus Program and shall be payable within ten (10) days of the
completion of the audited financial results of the Company. The
payment of all bonus payments made to Executive hereunder shall be
subject to the limitations set forth in Section 3.7
hereof.
3.4 Grant
of Option . In addition to all prior equity grants made to
Executive, Executive shall be entitled to receive on the first
business day of each new year, subject to applicable law
(i) options (“Options”) to purchase 200,000 shares
of the common stock, par value $0.0001 per share, of the Company
(“Common Stock”), under the Plan, at a price per share
equal to the closing stock price on the last trading day
immediately prior to each January 1 during the Term (subject to
applicable law relating to incentive stock options in the case of
grants thereof); or (ii) subject to the terms and conditions
of any applicable plan(s) and agreement(s), such number of shares
of restricted stock as determined by establishing the value of the
Options as determined under the Black-Sholes option valuation
methodology using variables consistent with the Company’s
past practice, divided by the closing stock price for the Common
Stock on the trading day immediately prior to each January 1 during
the Term. Options in excess of the number permitted to receive ISO
treatment under Section 422 of the Code shall not be qualified
as ISO’s and shall be treated as non-qualified stock options
(“NQSO’s”). The Options shall be subject to the
terms and conditions of the Plan and any stock option agreement
between the parties. After such grant, Executive shall be eligible
for additional grants of options, if any, as recommended by the
Company’s Compensation Committee.
3.5
Vacation . Executive shall be entitled to vacation of 20
business days per calendar year, to be accrued and available in
accordance with the policies applicable to senior executives of the
Company generally.
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3.6
Expenses . The Company shall pay or reimburse Executive
ordinary and reasonable out-of-pocket expenses actually incurred
(and, in the case of reimbursement, paid) by Executive during the
Term in the performance of Executive’s services under this
Agreement, including, but not limited to, business related travel
and/or entertainment expenses; provided, that Executive submits
proof of such expenses, with the properly completed forms and
supporting receipts and other documentation as prescribed from time
to time by the Company, in accordance with the policies applicable
to senior executives of the Company generally. The Company shall
directly pay the attorneys’ fees of Wechsler & Cohen,
LLP, 17 State Street, 15 th Floor, New York, New York 10004, Tax
Identification No. 13-3805383, up to a maximum of $10,000,
incurred in connection with the negotiation of this
Agreement.
3.7
Shareholder Approval . Notwithstanding any provision
herein to the contrary, to the extent that any compensation that
would be payable to Executive hereunder (but for the operation of
this Section 3.7 would not be deductible for Federal tax
purposes by the Company as a result of the limitations of Section
162(m) of the Internal Revenue Code of 1986, as amended, as
determined by the Company’s tax counsel or independent public
accountants (“nondeductible compensation”), then such
nondeductible compensation shall not be payable by the Company or
paid by the Company in the taxable year of the Company in which
such payment otherwise would be required (but for the operation of
this Section 3.7) to be made under the Agreement or any other
agreement entered into between the Company and Executive to
effectuate the provisions hereof, but, instead, shall be deferred
to and become payable in the next subsequent taxable year of the
Company in which such compensation would be deductible for Federal
tax purposes by the Company taking into account the limitations of
Section 162(m).
4.
Termination upon Death or Disability .
4.1
Termination upon Death . If Executive dies during the
Term, the obligations of the Company to or with respect to
Executive shall terminate in their entirety except as otherwise
provide under this Section 4. Upon death, within thirty days:
(i) the Executive’s estate or beneficiaries shall be
entitled to receive any Annual Salary and other benefits (including
bonuses awarded or declared but not yet paid) earned and accrued
under Sections 3.1, 3.2 and/or 3.3 of this Agreement prior to
the date of termination and reimbursement for expenses incurred
prior to the date of termination as set forth in Section 3.6
hereof; (ii) the Executive’s estate or beneficiaries
shall be entitled to receive a pro rata bonus for the year
in which such death occurred; (iii) all unvested options shall
immediately vest which, together with all fully vested and
exercisable Options granted under Section 3.4 hereof or
elsewhere and held by Executive, may be exercised by his estate for
a period of one (1) year from and after the date of
Executive’s death; (iv) all unvested restricted stock
granted to Executive shall immediately vest; (v) to the extent
possible, Executive’s beneficiaries and/or estate 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; and (vi) Executive’s estate and
beneficiaries shall
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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 4.1, it is
expressly understood and agreed that nothing in the foregoing
clause (iv) 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
contemplated by Section 3.2 hereof after such time as
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).
4.2
Termination upon Disability . If Executive by virtue of
ill health or other disability is unable to perform substantially
and continuously the duties assigned to him for more than 180
consecutive or non-consecutive calendar days out of any consecutive
twelve-month period, the Company shall have the right, to the
extent permitted by law, to terminate the employment of Executive
upon notice in writing to Executive; provided that the Company will
have no right to terminate Executive’s employment if, in the
opinion of a qualified physician reasonably acceptable to the
Company, it is reasonably certain that Executive will be able to
resume Executive’s duties on a regular full-time basis within
30 days of the date Executive receives notice of such
termination. Upon termination of employment by virtue of
disability, within thirty days: (i) the Executive shall be
entitled to receive any Annual Salary and other benefits (including
bonuses awarded or declared but not yet paid) earned and accrued
under Sections 3.1, 3.2 and/or 3.3 of this Agreement prior to
the date of termination and reimbursement for expenses incurred
prior to the date of termination as set forth in Section 3.6
hereof; (ii) the Executive shall receive a pro rata
bonus under Section 3.3 for the year in which such disability
occurred; (iii) all unvested options shall immediately vest
which, together with all fully vested and exercisable Options
granted under Section 3.4 hereof or elsewhere and held by
Executive, may be exercised by Executive for a period of one
(1) year from and after the date of Executive’s
disability; (iv) all unvested restricted stock granted to
Executive shall immediately vest; (v) if Executive’s
disabilities shall continue for a period of six (6) months
after his termination under this Section 4.2, Executive shall
receive for a period for two (2) years after termination of
employment: (A) the Annual Salary that Executive was receiving
at the time of such termination of employment, less the gross
proceeds paid to Executive on account of Social Security or other
similar benefits and Company provided long-term disability
insurance, payable in accordance with Section 3.2 hereof; and
(B) such continuing coverage under the benefit plans and
programs Executive would have received under Section 3.2
hereof as would have applied in the absence of such termination; 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 contemplated
in Section 3.2 hereof after such time as Executive becomes
entitled to coverage under the benefit plans and programs of
another employer or
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recipient of
Executive’s services (and provided, further, that such
entitlement shall be determined without regard to any individual
waivers or other arrangements); ; (v) to the extent possible,
Executive’s beneficiaries and/or estate 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; and (vii) 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.
5.
Certain Terminations of Employment .
5.1
Termination for “Cause;” Termination of Employment
by Executive Without Good Reason .
(a) For purposes
of this Agreement, “Cause” shall mean:
(i) Executive’s conviction of a felony or a crime of
moral turpitude; (ii) Executive’s material violation of
Executive’s primary duties or responsibilities to the Company
which constitute willful misconduct or willful dereliction of duty,
or the material breach of the covenants contained in Section 6
hereof; or (iii) Executive’s other material breach of
this Agreement which breach shall have continued unremedied for ten
(10) days after written notice by the Company to Executive
specifying such material breach.
(b) The Company
may terminate Executives employment hereunder for Cause. If the
Company terminates the Executive for Cause, within thirty days:
(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 as set forth in Section 3.6); (ii) all vested
and unvested options shall lapse and terminate immediately and may
no longer be exercised; (iii) all unvested restricted stock
shall be forfeited; and (iv) 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.
(c) 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 Executive terminates
his employment and the termination is not covered by
Section 4, 5.2, or 5.3: (i) 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 as set forth in Section 3.6);
(ii) all fully vested and exercisable options granted under
Section 3.4 hereof and held by Executive may be exercised by
Executive for a period of 30 days from and after the date of
Executive’s effective date of termination; (iii) all
unvested
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restricted
stock shall be forfeited; and (iv) 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.
5.2
Termination Without Cause; Termination for Good Reason
.
(a) 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 30 days following written notice
thereof by Executive to the Company:
(i) the material
reduction of or change in Executive’s reporting lines,
title(s), authority, duties or responsibilities, or the assignment
to Executive of duties materially inconsistent with
Executive’s position or positions with the
Company;
(ii) the
relocation of Executive’s more than 50 miles from its current
location, unless such relocation was with your consent;
(iii) the
reduction in Executive’s Annual Salary or the Maximum Bonus
Percentage (it being acknowledged and agreed that the Maximum Bonus
Percentage is 60%
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