Exhibit 10.2
CONFIDENTIALITY, NON-COMPETITION AND SEVERANCE PAY AGREEMENT
     This CONFIDENTIALITY, NON-COMPETITION AND SEVERANCE PAY AGREEMENT is made
as of June 18, 2007 by and between AMERICAN HOMEPATIENT, INC., a Delaware
corporation (hereinafter the “Company”), and JAMES P. REICHMANN, a resident of
the State of Georgia (the “Employee”).
     WHEREAS, the Company has agreed to employ the Employee, either directly or
through a wholly owned subsidiary; and
     WHEREAS, a condition of the Employee’s employment with the Company is his
execution of a confidentiality, non-competition and severance pay agreement.
     NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements made herein, the parties, intending to be legally bound hereby, agree
as follows:
     1. Non-Compete and Confidentiality.
          A. The Employee will, with reasonable notice during or after his
employment with the Company, furnish information as may be in his possession and
cooperate with the Company as may reasonably be requested in connection with any
claims or legal actions in which the Company is or may become a party.
          B. The Employee recognizes and acknowledges that all information
pertaining to the affairs, business, clients, customers or other relationships
of the Company is confidential and is a unique and valuable asset of the
Company. Access to and knowledge of this information are essential to the
performance of the Employee’s duties. The Employee will not during his
employment with the Company (the “Period of Employment”) or after, except to the
extent reasonably necessary in the performance of his duties, give to any
person, firm, association, corporation or governmental agency any information
concerning the affairs, business, clients, customers or other relationships of
the Company except as required by law. The Employee will not make use of this
type of information for his own purposes or for the benefit of any person or
organization other than the Company. The Employee will also use his best efforts
to prevent the disclosure of this information by others. All records, memoranda,
etc. relating to the business of the Company whether made by the Employee or
otherwise coming into his possession are confidential and will remain the
property of the Company. Upon termination of employment, Employee will
immediately deliver to Company all materials, including but not limited to
documents, discs, computer software and copies thereof, containing confidential
and/or proprietary information of Company, whether compiled or created by
Employee or furnished to him.
          C. Employee will not, either during the Period of Employment or at any
time thereafter, use (except for the sole benefit of Company) or disclose to
others any proprietary, secret or confidential information, knowledge or data of
the Company or its affiliates.
          D. During the Period of Employment and thereafter, the Employee will
not use his status with the Company to obtain loans, goods or services from
another organization on

 

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terms that would not be available to him in the absence of his relationship to
the Company. During the Period of Employment and for a twelve (12) month period
following termination of such employment for any reason, (i) the Employee will
not make any statements or perform any acts intended to advance the interest of
any existing or prospective competitor of the Company in any way that will
injure the interests of the Company; and (ii) the Employee will not directly or
indirectly own or hold any “Proprietary Interest” in or be employed by or
receive compensation from any party engaged in the same or any similar business
within fifty (50) miles of any location of the Company upon the date of
termination of employment. During the Period of Employment and for a twelve
(12) month period following termination of such employment for any reason,
(i) the Employee will not solicit any client of the Company or discuss with any
client of the Company or any employee of the Company any information or the
operation of any business intended to compete with the Company; and (ii) the
Employee will not, directly or indirectly, hire any current or future employee
of the Company, even if such individual is no longer employed by the Company, or
solicit or encourage any such employee to leave the employ of the Company.
Notwithstanding the foregoing, beginning twelve (12) months after his
termination of employment with the Company for any reason, Employee may hire a
past employee of the Company so long as such past employee has not been so
employed for at least six (6) months. For the purposes of this Agreement,
“Proprietary Interest” means legal or equitable ownership, whether through stock
holdings or otherwise, of a debt or equity interest (including options,
warrants, rights and convertible interests) in a business firm or entity, or
ownership of more than 5% of any class of equity interest in a publicly-held
company. The Employee acknowledges that the covenants contained herein are
reasonable as to geographic and temporal scope.
          E. The Employee acknowledges that his breach or threatened or
attempted breach of any provision of this Agreement would cause irreparable harm
to the Company not compensable in monetary damages and that the Company shall be
entitled, in addition to all other applicable remedies, to a temporary and
permanent injunction and a decree for specific performance of the terms of this
Agreement without being required to prove damages or furnish any bond or other
security.
          F. For purposes of Sections 1, 4, 5, 6, and 7 of this Agreement, the
term “Company” refers to American HomePatient, Inc., a Delaware corporation, and
each corporation, limited liability company, partnership, joint venture or other
business entity in which American HomePatient, Inc. directly or indirectly has a
more than 5% ownership interest.
     2. Severance Pay in the Event of Termination or Other Occurrence
          A. In the event there is a “Change in Control” of the ownership of the
Company, and the Company within twelve (12) months following such Change in
Control, (i) terminates Employee’s employment (ii) without Employee’s consent
reduces Employee’s salary or (iii) without Employee’s consent requires Employee
to relocate somewhere other than the greater Nashville, Tennessee area or the
greater Atlanta, Georgia area, then, immediately following termination described
in (i) above, or upon Employee’s resignation following any of the occurrences
described in (ii) and (iii) above, Employee shall be entitled to receive as a
severance payment in a lump sum an amount equal to (150%) of his annual base
salary (not including incentive compensation or benefits), as in effect at the
time of such termination or resignation, plus (150%) of the annual incentive
compensation Employee received for

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performance during Company’s immediately preceding fiscal year or his annual
incentive bonus potential for the first fiscal year of employment, whichever is
greater, multiplied by a fraction, the numerator of which is the total number of
full calendar months during which Employee was employed by Company during
Company’s current fiscal year prior to such termination or resignation and the
denominator of which is twelve (12), plus the product of Employee’s then current
monthly vehicle allowance, if any, (exclusive of gasoline and oil expense
reimbursement) as in effect at the time of such termination or resignation,
multiplied by eighteen (18). In addition, any earned but unpaid base salary,
unpaid incentive compensation from prior years, and accrued vacation will be
paid. The Company will also pay the COBRA premium attributable to Employee’s
medical and dental insurance benefits as such benefits were in effect
immediately prior to termination or resignation pursuant to this Section 2(A),
with payments beginning on the first day of the calendar month immediately
following the date of termination or resignation and continuing until the
earlier of (i) eighteen (18) months after the date of termination or
resignation, or (ii) the date on which Employee is eligible to receive, as an
employee, independent contractor or agent, medical and/or dental insurance
benefits from a third party. The Company will deduct from the lump sum severance
payment to the Employee the standard employee deduction for medical/dental
insurance as in effect on the date of termination or resignation pursuant to
this Section 2(A) for up to an eighteen (18) month period. If Employee elects to
discontinue COBRA for any reason before expiration of the eighteen (18) month
period and notifies the Company of the same in writing, the Company will
thereafter refund to the Employee that portion of the deduction not attributable
to the COBRA premium actually paid. Further, any stock options granted to the
Employee will be fully vested upon a Change of Control, whether or not the
Employee is terminated or resigns pursuant to this Section 2(A), notwithstanding
any previously stated vesting restrictions but subject to expiration or
termination pursuant to the governing stock option plan.
          B. A “Change in Control” shall be deemed to have occurred if (i) a
tender offer shall be made and consummated for the ownership of more than 50% of
the outstanding voting securities of the Company, (ii) the Company shall be
merged or consolidated with another corporation and as a result of such merger
or consolidation less than 50% of the outstanding voting securities of the
surviving or resulting corporation shall be owned in the aggregate by the former
shareholders of the Company, as the same shall have existed immediately prior to
such merger or consolidation, (iii) the Company shall sell all or substantially
all of its assets to another corporation that is not a wholly-owned subsidiary,
or (iv) a person, within the meaning of Section 3(a)(9) or of Section 13 (d)(3)
(as in effect on the date hereof) of the Securities and Exchange Act of 1934
(“Exchange Act”), shall acquire more than 50% of the outstanding voting
securities of the Company (whether directly, indirectly, beneficially or of
record). For purposes hereof, ownership of voting securities shall take into
account and shall include ownership as determined by applying the provisions of
Rule 13d-3(d)(1)(i) (as in effect on the date hereof) pursuant to the Exchange
Act.
          C. Termination Without Cause Not Accompanied by a Change in Control.
In the event that Company terminates Employee’s employment without cause (and
such termination does not trigger the provisions of Section 2(A)), Employee
shall be entitled to receive as a severance payment in a lump sum upon such
termination an amount equal to (i) his annual base salary (not including
incentive compensation or benefits), as in effect at the time of termination,
plus (ii) the annual incentive compensation Employee received for performance
during Company’s immediately preceding fiscal year, multiplied by a fraction,
the numerator of which

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is the total number of full calendar months during which Employee was employed
by Company during Company’s current fiscal year prior to termination and the
denominator of which is twelve (12), plus Employee’s then current monthly
vehicle allowance, if any, (exclusive of gasoline and oil expense reimbursement)
as in effect at the time of termination multiplied by twelve (12). Employee will
also be entitled to any earned but unpaid base salary, unpaid incentive
compensation from prior years, and accrued vacation. The Company will pay the
COBRA premium attributable to Employee’s medical and dental insurance benefits
as such benefits were in effect immediately prior to termination, with payments
beginning on the first day of the calendar month immediately following the date
of termination and continuing until the earlier of (i) twelve (12) months after
the date of termination, or (ii) the date on which Employee is eligible to
receive, as an employee, independent contractor or agent, medical and/or dental
insurance benefits from a third party. The Company will deduct from the
severance payment to the Employee the standard employee deduction for
medical/dental insurance as in effect on the date of termination for up to a
twelve (12) month period. If Employee elects to discontinue COBRA for any reason
before expiration of the twelve (12) month period and notifies the Company of
the same in writing, the Company will thereafter refund to the Employee that
portion of the deduction not attributable to the COBRA premium actually paid.
Further, any stock options granted to the Employee will be fully vested upon a
termination under this Section 2(C), notwithstanding any previously stated
vesting restrictions but subject to expiration or termination pursuant to the
governing stock option plan. Termination without cause shall not include
termination as a result of the following: termination for “cause”, resignation
by Employee, or Employee’s death or disability. “Cause” shall mean
(i) engagement by Employee in insubordination, malfeasance or misconduct, (ii) a
charge or conviction of a felony offense or conviction of a misdemeanor
involving moral turpitude brought against Employee, or (iii) a material breach
by Employee of his obligations under this Agreement. Notwithstanding the above,
it is the intent of the Company at all times to comply with the Americans With
Disabilities Act, the Family and Medical Leave Act and any other applicable
federal and state employment laws.
     3. Compliance Programs. The Employee will at all times while employed with
the Company comply fully with the Company’s “Guidelines of Company Policies and
Conduct” and any other compliance program, as such programs may be amended from
time to time, and acknowledges that his obligations under such programs as an
employee are contractual in nature.
     4. General Release. Employee hereby fully and forever releases the Company,
its successors, assigns, affiliates, insurers, officers, directors, employees
and agents, from any and all liability, causes of action, suits, damages, claims
and demands whatsoever that Employee may have and that arise from or relate in
any way to his employment with the Company or the conduct of the Company’s
business through the date hereof.
     5. Covenant Not to Sue. Employee covenants that he will not initiate or
bring any proceeding, suit, claim or administrative proceeding against Company,
its affiliates, agents, employees, officers, directors, successors and assigns,
arising out of or in any way related to his employment by the Company or the
conduct of the Company’s business prior to the date hereof. Employee further
covenants that he will not, without the Company’s prior written consent unless
required to do so by means of a valid court order or subpoena, cooperate with
any person in the institution or prosecution of any such proceeding, suit, claim
or investigation brought, initiated or conducted by any person against the
Company, its affiliates, agents, employees, officers,

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directors, successors and assigns. Employee further covenants that he will
notify the Company immediately in the event he is contacted by any person
regarding any pending or contemplated proceeding, suit, claim or investigation
involving the Company, its affiliates, agents, employees, officers, directors,
successors and assigns.
     6. Agreement is Voluntary and Knowing. Employee acknowledges he understands
the terms and conditions of this Agreement. Employee has had the opportunity to
discuss thoroughly all aspects of this Agreement with Employee’s legal counsel
and has been advised to do so by Company. Employee is voluntarily entering into
this Agreement, of his own free will, free of any coercion, pressure or duress.
He is knowingly releasing Company in accordance with the terms contained herein.
Employee further acknowledges that he is receiving consideration beyond anything
of value to which he is already entitled. Employee will have up to twenty-one
(21) days in which to consider this Agreement. After the execution of this
Agreement, Employee will have an additional seven (7) days to revoke this
Agreement. Therefore, this Agreement will become final on the eighth (8th) day
after Employee has executed it. Notwithstanding anything to the contrary stated
in this Agreement, the Company will not be required to make any payments or
provide any benefits or other consideration to the Employee until this Agreement
becomes final pursuant to the provisions of this Section 7.
     7. Final Settlement. The parties declare that each has carefully read this
Agreement, as amended, that each has reviewed its terms with each one’s
respective counsel, and that each agrees to it for the purpose of making a full
and final adjustment and resolution of the matters addressed herein. Nothing in
this Agreement is to be construed as an admission of any kind by either the
Employee or the Company.
     8. No Employment For a Term / At Will Status. Employee acknowledges and
agrees that this Agreement shall not entitle Employee to employment for any
fixed term and that Employee may be terminated at any time, with or without
cause, subject to the Company’s obligations set forth herein.
     8. Successors and Assigns. The provisions hereof shall inure to the benefit
of and be binding upon the permitted successors and assigns of the parties
hereto.
     9. Non-Assignability by the Employee. The rights and obligations of the
Employee hereunder are not assignable.
     10. Governing Law. This Agreement shall be interpreted under, subject to
and governed by the laws of the State of Tennessee and all questions concerning
its validity, construction, and administration shall be determined in accordance
thereby.
     11. Waivers. The waiver of a breach by either party of a term or provision
of this Agreement, at any time or times, shall not be deemed or construed to be
a waiver of any subsequent breach or breaches of the same or of any other terms
or provisions of this Agreement at any time or times.
     12. Invalidity. The invalidity or unenforceability of any provision of this
Agreement shall not affect any other provision hereof, and this Agreement shall
be construed in all respects as if such invalid or unenforceable provision was
omitted. Furthermore, in lieu of such illegal,

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invalid or unenforceable provision there shall be added automatically as a part
of this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
     13. Exclusiveness. This Agreement, together with the offer letter dated
June 12, 2007, (the “Offer Letter”), constitutes the entire understanding and
agreement between the parties with respect to the employment or severance
arrangements of the Employee and supersedes any and all other agreements, oral
or written, between the parties other than the Offer Letter. In the event of a
direct conflict between this Agreement and the Offer Letter, this Agreement
shall control. No waiver, modification, or amendment to this Agreement shall be
valid unless the same be reduced to writing and signed by the parties hereto.
     14. Modification. This Agreement may not be modified or amended except in
writing signed by the parties. No term or condition of this Agreement will be
deemed to have been waived except in writing by the party charged with waiver. A
waiver shall operate only as to the specific term or condition waived and will
not constitute a waiver for the future or act on anything other than that which
is specifically waived.
     15. Arbitration. Any dispute among the parties hereto shall be settled by
arbitration in Nashville, Tennessee, in accordance with the rules then in effect
of the American Arbitration Association and judgment upon the award rendered may
be entered in any court having jurisdiction thereof.
     16. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been made when mailed
first-class postage prepaid by registered mail, return receipt requested, or
when delivered by hand, overnight delivery service or confirmed facsimile
transmission, to the following:
          A. If to the Company, at Suite 400, 5200 Maryland Way, Brentwood,
Tennessee 37027, Attention: President and Chief Executive Officer, or at such
other address as may have been furnished to the Employee by the Company in
writing; or
          B. If to the Employee, at 1322 Garrick Way, Marietta, GA 30068 or such
other address as may have been furnished to the Company by the Employee in
writing.
     17. Consolidation, Merger or Sale of Assets. Nothing in this Agreement
shall preclude the Company from consolidating or merging into or with, or
transferring all or substantially all of its assets to, another individual,
entity, or business that assumes this Agreement and all obligations of the
Company hereunder.

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

            “COMPANY”

AMERICAN HOMEPATIENT , INC.
      By:         /s/ Frank Powers       Its:         Executive Vice President,
COO      

            “EMPLOYEE”
           /s/ James P. Reichmann       JAMES P. REICHMANN           

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