Exhibit 10.2
SEVERANCE AGREEMENT
     SEVERANCE AGREEMENT (this “Agreement”) dated as of November 30,2010, 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 David W. Froesel, Jr., residing at 9060 Whisperinghill
Drive, Cincinnati, OH 45242 (hereinafter referred to as the “Executive”).
     WHEREAS, the Executive and the Company are parties to an employment offer
letter dated as of November 29, 2010 (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 (but expressly excluding therefrom
grants of stock conditioned upon the achievement of performance or other
financial measurements that have not met, “Stock Grants”) to Executive under any
bonus program that are subject to forfeiture shall become non- forfeitable and
shall be fully vested and transferable; (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; and (vi) all unvested stock appreciation rights (“SARs”) shall
immediately vest at the then current value (i.e., the difference between (A) the
fair market value of one share of the Company’s Common Stock as of the date such
SAR is exercised minus (B) the initial stock price specified in the SAR
certificate) and shall be paid in cash notwithstanding any provision to- the
contrary set forth in the SAR certificate or the Company’s Amended and Restated
2008 Equity Incentive Plan (the “Plan”). 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

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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 one (1) year 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, but in any event 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 salary continuation under
subsection (v) above or coverage under such benefit plans and programs after
such time as the Executive becomes entitled to salary or 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); (vi) all
unvested SARs shall immediately vest at the then current value (i.e., the
difference between (A) the fair market value of one share of the Company’s
Common Stock as of the date such SAR is exercised minus (B) the initial stock
price specified in the SAR certificate) and shall be paid in cash
notwithstanding any provision to the contrary set forth in the SAR certificate
or the Plan; 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. 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.

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     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 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 and
SARs 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.
     2.2 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 or 2.2 hereof, (i) the Executive shall
receive the 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; (vi) all unvested SARs shall immediately vest at the then
current value (i.e., the difference between (A) the fair market value of one
share of the Company’s Common Stock as of the date such SAR is exercised minus
(B ) the initial stock price specified in the SAR certificate) and shall be paid
in cash notwithstanding any provision to the contrary set forth in the SAR
certificate or the Plan; and (vi) 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

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     2.3 Termination Without Cause; Termination for Good Reason.
     2.3.1 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; or (ii) a reduction in the Executive’s then current Annual Salary
without the Executive’s consent; or (iii) within two (2) years of the date of
this Agreement, Executive (A) shall be required to relocate more than 50 miles
from his residence in Cincinnati, OH, or (B) is prohibited from working one
business day per week in the Cincinnati, OH vicinity.
     2.3.2 If the Company terminates the Executive’s employment and the
termination is not covered by Section 1 or 2.1 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 one (1) year 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, in installments not less frequently than monthly,
(B) such continuing coverage under the benefit plans and programs the Executive
would have received in the absence of such termination, provided, however,
continuation of health insurance coverage under such benefit plans and programs
shall only be provided in accordance with subparagraph (C); and (C) upon proper
election by the Executive, his spouse or children, COBRA Continuation Coverage
for himself, his spouse and his children at a rate equal to what is paid for
such coverage by active employees of the Company; 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 salary continuation or coverage under
such benefit plans and programs after such time as the Executive becomes
entitled to salary or 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 90 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; ;
(vii) all unvested SARs shall immediately vest at the then current value (i.e.,
the

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difference between (A) the fair market value of one share of the Company’s
Common Stock as of the date such SAR is exercised minus (B ) the initial stock
price specified in the SAR certificate) and shall be paid in cash
notwithstanding any provision to the contrary set forth in the SAR certificate
or the Plan; (viii) 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. For the purpose of this Agreement, the term COBRA
Continuation Coverage means healthcare continuation coverage rights which must
be made available to the Executive pursuant to Code section 4980B, or any other
similar or corresponding state or federal legislation.
     2.3.3 If the Executive terminates his employment for Good Reason and such
termination is not covered by Section 2.3.2 hereof, (i) the Executive shall
receive Annual Salary and other benefits (including bonuses awarded 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) the Executive shall receive for a period
of one (1) 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 extent that the Executive is
eligible under the terms of such plans or programs, and, in the event the
Executive is not eligible under the terms of plans or programs providing
healthcare coverage to senior executives of the Company generally, then, upon
proper election by the Executive, his spouse or children, COBRA Continuation
Coverage for himself; his spouse and his children at a rate equal to what is
paid for such coverage by active employees of the Company; 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) all outstanding unvested Options previously or hereafter granted to the
Executive under any benefit program shall vest and become immediately
exercisable 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); (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; (vii) all unvested SARs shall
immediately vest at the then current value (i.e., the difference between (A) the
fair market value of one share of the Company’s Common Stock as of the date such
SAR is exercised minus (B ) the initial stock price specified in the SAR
certificate) and shall be paid in cash notwithstanding any provision to the
contrary set forth in the SAR certificate or the Plan; and (viii) the Executive
shall have no

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further rights to any other compensation or benefits hereunder on or after the
termination of employment, or any other rights hereunder.
     3. Other Provisions
     3.1 To the extent applicable, it is intended that this Agreement comply
with the provisions of Section 409A in accordance with the provisions below:

  a)   The Agreement will be administered and interpreted in a manner consistent
with this intent, and any provision that would cause the Agreement to fail to
satisfy Section 409A will have no force and effect until amended to comply
therewith (which amendment may be retroactive to the extent permitted by
Section 409A). In addition, the parties shall cooperate fully with one another
to ensure compliance with Section 409A, including, without limitation, adopting
amendments to arrangements subject to Section 409A and operating such
arrangements in compliance with Section 409A.

  b)   Notwithstanding any other provision of the Agreement to the contrary, to
the extent any payment or benefit to be paid or provided to Executive pursuant
to the Agreement as a result of the termination of his employment constitutes
“non- qualified deferred compensation” subject to Section 409A, such payment or
benefit shall be paid or provided to the Executive under the Agreement at such
time as the Executive would be considered to have incurred a “separation from
service” from the Company within the meaning of Section 409A (without regard to
whether such “separation from service” comes before, after or coincides with his
termination of employment). For purposes of clarification, this paragraph shall
not cause a forfeiture of any payment or benefits on the part of Executive, but
shall only act as a delay until such time as a “separation from service” occurs.

  c)   Notwithstanding any other provisions of the Agreement to the contrary, if
any amount (including imputed income) to be paid to Executive pursuant to the
Agreement as a result of Executive’s termination of employment is “deferred
compensation” subject to Section 409A, and if Executive is a “specified
employee” (as defined under Section 409A) as of the termination date, then, to
the extent necessary to avoid the imposition of additional tax or other
penalties under Section 409A, the payment of benefits, if any, scheduled to be
paid by the Company to Executive hereunder during the first six-month period
following the date of employment termination shall not be paid until the date
which is the first business day which comes six months and a one day after the
date the Executive has incurred a “separation from service” within the meaning
of Section 409A. Any deferred compensation payments delayed in accordance with
the terms of this Section shall be paid in a lump sum on the first day following
such six-month and one day period.

  d)   With respect to items eligible for reimbursement under the terms of the
Agreement, (i) the amount of such expenses eligible for reimbursement in any
taxable year shall not affect the expenses eligible for reimbursement in another

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      taxable year, (ii) no such reimbursement may be exchanged or liquidated
for another payment or benefit, and (iii) any reimbursements of such expenses
shall be made no later than the end of the calendar year following the calendar
in which the related expenses were incurred, except, in each case, to the extent
that the right to reimbursement does not provide for a “deferral of
compensation” within the meaning of Section 409A.

  e)   It is intended that each installment of payments and benefits provided
under the Agreement shall be treated as a separate identified payment for
purposes of Section 409A. Neither the Company nor Executive shall have the right
to accelerate or defer the delivery of any such payments or benefits except to
the extent specifically permitted or required by Section 409A.

  f)   The Company agrees to act in good faith under this Section 3.1 based on
the guidance available from the Treasury Department and Internal Revenue Service
respecting the proper interpretation of Section 409A, but nothing in this
Section 3.1 shall constitute, or be construed as, a covenant by the Company that
no payment will be made or benefit will be provided which will be subject to
taxation under Section 409A or as a guarantee or indemnity by the Company with
respect to the tax consequences to any such payment or benefit.

     3.2 Severability. If it is determined that any of the provisions of this
Agreement, or any part thereof, is invalid or unenforceable, the remainder of
the provisions of this Agreement shall not thereby be affected and shall be
given full effect, without regard to the invalid portions thereof.
     3.3 Enforceability; Jurisdictions. Any controversy or claim arising out of
or relating to this Agreement or the breach of this Agreement that is not
resolved by Executive and the Company (or its subsidiaries or affiliates, where
applicable) shall be submitted to arbitration in New York, New York in
accordance with New York law and the procedures of the American Arbitration
Association. The determination of the arbitrator(s) shall be conclusive and
binding on. the Company (or its subsidiaries or affiliates, where applicable)
and Executive and judgment may be entered on the arbitrator(s)’ award in any
court having jurisdiction. The cost of any arbitration hereunder shall be borne
by the Company.
     3.4 Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission or,
if mailed, five days after the date of deposit in the United States mails as
follows:

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  (i)   If to the Company, to:
 
       
 
      BioScrip, Inc.
 
      100 Clearbrook Road
 
      Elmsford, New York 10523
 
      Attention: General Counsel
 
       
 
      with a copy to:
 
       
 
      Littler Mendelson650 California Street
 
      20th Floor
 
      San Francisco, CA 94108-2693
 
      Attention: Scott D. Rechtschaffen
 
       
 
  (ii)   If to the Executive, to:
 
       
 
      David W. Froesel, Jr.
 
      9060 Whisperinghill Drive
 
      Cincinnati, OH 45242
 
       
 
      with a copy to:
 
       
 
      Dinsmore & Shohl LLP
 
      255 E. Fifth Street, Suite 1900
 
      Cincinnati, Ohio 45202
 
      Attention: J. Michael Cooney, Esq.

Any such person may by notice given in accordance with this Section 3.4 to the
other parties hereto designate another address or person for receipt by such
person of notices hereunder.
     3.5 Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto.
     3.6 Waivers and Amendments. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any such right, power or privilege nor
any single or partial exercise of any such right, power or privilege, preclude
any other or further exercise thereof or the exercise of any other such right,
power or privilege.
     3.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPALS
OF CONFLICTS OF LAW.
     3.8 Assignment. This Agreement, and the Executive’s rights and obligations
hereunder, may not be assigned by the Executive; any purported assignment by the
Executive in

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violation hereof shall be null and void. In the event of any sale, transfer or
other disposition of all or substantially all of the Company’s assets or
business, whether by merger, consolidation or otherwise, the Company may assign
this Agreement and its rights hereunder.
     3.9 Withholding. The Company shall be entitled to withhold from any
payments or deemed payments any amount of tax withholding required by law.
     3.10 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors, permitted assigns,
heirs, executors and legal representatives.
     3.11 Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original but all such counterparts together shall constitute one and the same
instrument. Each counterpart may consist of two copies hereof each signed by one
of the parties hereto.
     3.12 Survival. Anything contained in this Agreement to the contrary not
withstanding, the provisions hereof shall survive any termination of the
Executive’s employment hereunder.
     3.13 Headings. The headings in this Agreement are for reference only and
shall not affect the interpretation of this Agreement.
     3.14 Supersedes Prior Agreements. Upon execution and delivery of this
Agreement, this Agreement shall supersede in its entirety any and all prior
agreements with respect to the Company’s and the Executive’s respective rights
and obligations upon the termination of the Executive’s employment with the
Company.
     IN WITNESS WHEREOF, the parties hereto have signed their names as of the
day and year first above written.
BIOSCRIP, INC.

              By:  /s/ Barry A. Posner     /s/ David W. Froesel, Jr.  
 
          Barry A. Posner,     David W. Froesel, Jr.   Executive Vice President
       

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