SEVERANCE
AGREEMENT (this “Agreement”) dated as of
November 13, 2008, by and between BIOSCRIP, INC., a Delaware
corporation, with its principal place of business at 100 Clearbrook
Road, Elmsford, New York 10523 (hereinafter referred to as the
“Company”), and Richard M. Smith (hereinafter referred
to as the “Executive”).
WHEREAS, the
Executive and the Company are parties to an employment offer letter
dated as of November 13, 2008 (the “Offer
Letter”)
WHEREAS, pursuant
to the terms of the Offer Letter the Company agreed to enter into
this Agreement in order to provide Executive with the severance
payment protection upon termination of 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 unless such longer period is set forth in the grant agreement
evidencing the Options; (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 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
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 termination due to disability unless such longer
period is set forth in the grant agreement evidencing the Options;
(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 disability 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, and at the same cost
to Executive, if any, 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.
Notwithstanding the foregoing, if and only to the extent that
Executive’s disability is a trigger for the payment of
deferred compensation, as defined in Section 409A of the Code,
“disability” shall have the meaning set forth in
Section 409A(a)(2)(C) of the Code.
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, provided as
to any termination pursuant to Section 2.1.1(iii), a majority
of the Compensation Committee of the Board of Directors (or any
successor committee thereto) shall first approve such
“Cause” termination before the Company effectuates such
a termination.
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
2
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 unvested options
shall lapse and terminate immediately and may no longer be
exercised; (iii) any unvested 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 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 unless such longer period is set forth in the grant
agreement evidencing the Options; (iii) any unvested
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 hereof:
(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 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, and at the same cost to
Executive, if any, in each case to the
3
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) outstanding unvested Options previously or hereafter
granted to the Executive and held by the Executive shall vest and
become immediately exercisable and all Options held by the
Executive on the effective date of termination 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 unless such
longer period is set forth in the grant agreement evidencing the
Options; (iv) 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;
(v) 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) as of the date of the
Executive’s effective date of termination; (vi) 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 as of the date of the
Executive’s effective date of termination; and (vii) 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) the
Exe
|
