exv10w1






Exhibit 10.1




EXECUTION VERSION




SEPARATION AGREEMENT




     This Separation Agreement (“Agreement”) is entered into by and between BioScrip, Inc.
(together with its successors and assigns, the “Company”) and Richard H. Friedman (“Executive”)
effective on the date Executive signs this Agreement;



     WHEREAS, the Company and Executive (each a “Party” and together, the “Parties”) entered into
an employment agreement dated May 30, 2008 (the “Employment Agreement”); and



     WHEREAS, the term of the Employment Agreement is (absent any extensions) scheduled to end on
May 31, 2011; and



     WHEREAS, the Company and Executive have agreed that Executive will (notwithstanding the terms
of the Employment Agreement) resign as an officer and as an employee of the Company effective
December 31, 2010; and



     WHEREAS, the Company and Executive have agreed that Executive will (notwithstanding such
resignation) continue as a member of the Company’s Board of Directors (the “Board”) and will
continue to serve as the Chairman of the Board;



     NOW, THEREFORE, for such consideration as the Company and Executive hereby declare full and
adequate, the Company and Executive, each intending to be legally bound, agree as follows:




	1.	 	Employment Agreement.






	 	a.	 	2010. The Company and Executive agree that (except as expressly set
forth in § 2 and § 4 of this Agreement) all of the terms and conditions and respective
right and obligations set forth in the Employment Agreement shall remain in full force
and effect until 11:59 pm eastern time on December 31, 2010.
	 
	 	b.	 	After 2010. The Company and Executive agree that after 2010: (1)
section 6 and sections 7.1, 7.2, and 7.3 of the Employment Agreement shall remain in
full force and effect in accordance with the terms of such sections, the terms of which
are hereby incorporated as part of this Agreement, and (2) sections 1 through 5 of the
Employment Agreement shall have no further force or effect.






	2.	 	Separation. Executive and the Company agree that by signing this Agreement the
Executive’s employment with the Company shall terminate effective 11:59 pm eastern time on
December 31, 2010 and that neither Party has any right to revoke or rescind such agreement
with respect to such termination.
	 
	3.	 	Board Membership. The Company and Executive agree that Executive will continue to
serve as a member of the Board, and as the Chairman of the Board, until (i) he resigns or is
removed from such positions in accordance with the By-Laws of the Company, or (ii) the
expiration of his current term on the Board if (x) his nomination for another term is not
approved by the Board or its Nominating Committee, or (y) he is not elected to




 









 












	 	 	another term by the stockholders of the Company. However, the Company and Executive agree
that the level of services which Executive will be expected to provide to the Company after
2010 as a member of the Board and as Chairman of the Board will not exceed the level at
which his termination of employment will constitute a “separation from service” from the
Company under § 409A of the Internal Revenue Code of 1986, as amended (the “Code”) on
December 31, 2010.
	 
	4.	 	Payments and Benefits.






	 	a.	 	General. The Company and Executive agree that the payments and
benefits described in this § 4 are in lieu of any payments or benefits otherwise due or
payable under section 5 of the Employment Agreement, and Executive irrevocably waives
any right he otherwise might have to any payments or benefits otherwise due or payable
under section 5 of the Employment Agreement.
	 
	 	b.	 	Cash Severance. The Company and Executive acknowledge and agree that






	 	i.	 	the amount of Executive’s cash severance (less applicable tax
withholdings) under this Agreement shall equal the cash severance which would
have been payable under section 5.4(a) of the Employment Agreement (i.e.,
$1,700,000) if there was no extension of Executive’s initial term under the
Employment Agreement;
	 
	 	ii.	 	except as provided in § 4(b)(3), such cash severance shall be
paid in approximate equal installments in accordance with the Company’s
standard payroll schedule for salaried employees over the two year period
ending December 31, 2012, as described in section 5.2(b)(iv) of the Employment
Agreement for a termination of employment by the Company without “Cause”;
	 
	 	iii.	 	Executive is a “specified employee” within the meaning of §
409A of the Code, so that (absent his death) the installment payments described
in section 5.2(b)(iv) of the Employment Agreement will be delayed until the
earlier of (x) Tuesday, July 5, 2011, which is at least six months and one day
following Executive’s “separation from service” and (y) the date of his death;
and
	 
	 	iv.	 	the payment made on July 5, 2011 (or on the date of his death,
if earlier) will include (without interest) all of the payments that (but for
Executive’s status as a “specified employee”) would have been paid in
accordance with the Company’s standard payroll schedule for salaried employees
during the period that starts on January 1, 2011 and ends on June 30, 2011.






	 	c.	 	Options and Restricted Stock Grants.






	 	i.	 	Each of Executive’s outstanding options to purchase Company
stock will vest 100%, and thus become fully exercisable, on December 31, 2010.




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	 	ii.	 	The deadline for Executive to exercise each of his vested
options to purchase Company stock following his termination of employment will
be extended to the earlier of (x) May 31, 2012 and (y) the last day on which he
would have had the right to exercise the option if there had been no
termination of his employment.
	 
	 	iii.	 	Executive’s right to his outstanding restricted stock grant
evidenced by the Stock Grant Certificate dated May 30, 2008 and his outstanding
restricted stock grant evidenced by the Stock Grant Certificate dated April 29,
2008 (together, the “Restricted Stock Grants”) will vest to the extent, if any,
that the related performance requirements for vesting are established through
the Company’s independent audit process to have been satisfied for the year
ended December 31, 2010 (as determined in the ordinary course consistent with
past practice, but on no less favorable a basis than the basis then or
thereafter applied to any other holder of a grant approved by the Company’s
compensation committee and evidenced by any Stock Grant Certificates dated
April 29, 2008 during the term of those certificates (which expire by their
respective terms on December 31, 2013)). The Company also acknowledges and
agrees that, for purposes of determining whether such performance requirements
for vesting have been satisfied, EBITDAO (as defined in the Restricted Stock
Grants) shall be determined without reduction for any restructuring charge
incurred during the fourth quarter of the 2010 calendar year in accordance with
generally accepted accounting principles.






	 	d.	 	Health Care Continuation Coverage.






	 	i.	 	If Executive timely elects COBRA coverage for Executive (or, if
applicable, for Executive and any of his COBRA eligible dependents) under the
Company’s group health plan in which he participates on December 31, 2010, the
Company will (subject to § 4(d)(4)(A)) reimburse Executive (on an after tax
basis) for the COBRA coverage premiums he pays for such coverage, and each such
reimbursement (subject to § 4(d)(4)(B)) will be made no later than sixty (60)
days after the date that a premium is paid by Executive.
	 
	 	ii.	 	If Executive’s right to COBRA coverage ends before December 31,
2012, the Company at Executive’s election will continue (subject to §
4(d)(4)(C)) to make the equivalent of COBRA coverage available to Executive
(or, if applicable, to Executive and any of his COBRA eligible dependents)
through December 31, 2012 subject to Executive (subject to § 4(d)(4)(A)) paying
an amount each month to the Company equal to the applicable monthly premium for
COBRA coverage. The Company will (subject to § 4(d)(4)(A)) reimburse Executive
for such payments, and each reimbursement will be made no later than sixty (60)
days after the date that a payment is made for such coverage.




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	 	iii.	 	If Executive desires health care continuation coverage after
December 31, 2012, the Company at Executive’s election will continue (subject
to § 4(d)(4)(C)) to make the equivalent of COBRA coverage available to
Executive (or, if applicable, to Executive and any of his COBRA eligible
dependents) through June 30, 2014 subject to Executive continuing to pay an
amount each month to the Company equal to the then applicable monthly premium
for COBRA coverage.
	 
	 	iv.	 	a) If the Company reasonably determines that the Company can
pay the premiums called for under § 4(d)(1) and § 4(d)(2) directly on behalf of
Executive without subjecting such premium payments to tax under § 409A of the
Code, then the Company will make such premium payments on Executive’s behalf in
lieu of reimbursing Executive for making such premium payments.






	 	b)	 	If the Company reasonably determines that no
reimbursement can be made under § 4(d)(1) before July 5, 2011 without
subjecting such reimbursement to tax under § 409A of the Code, all
reimbursements for the period which starts on January 1, 2011 and ends
on June 30, 2011 will be aggregated and made on Tuesday, July 5, 2011.
	 
	 	c)	 	If the Company reasonably determines that the
Company cannot provide continued coverage under the Company’s group
health plan, the Company for the period described in § 4(d)(2) will
reimburse Executive (on an after tax basis) for the cost to purchase
comparable coverage, subject to a cap based on the corresponding COBRA
coverage premium for COBRA coverage under the Company’s group health
plan, and the Company’s only obligation under § 4(d)(3) shall be to use
reasonable efforts to locate an alternative source of healthcare
coverage for Executive.






	 	e.	 	Earned but Unpaid Salary, Bonus and Expense Reimbursements. The
Company will pay Executive any earned but unpaid salary due for the period ending
December 31, 2010, in accordance with customary payroll practices of the Company, and
will pay Executive any annual bonus for the 2010 calendar year that becomes payable by
reason of the attainment of the pre-established performance goal (without any exercise
of negative discretion). The Company shall also reimburse Executive, in accordance
with the Company’s standard policy for expense reimbursements, for any expenses
incurred on or before December 31, 2010, on or before March 15, 2011 if Executive
timely files an expense reimbursement claim for such expenses.
	 
	 	f.	 	Other Payments and Benefits. Executive as a result of his termination
of employment on December 31, 2010 will be eligible to receive such payments and
benefits which are due or payable in the ordinary course upon or following a
termination of an employee’s employment under the Company’s plans, programs





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	 	 	 	and policies on the same basis and subject to the same terms and conditions as other
similarly-situated employees or officers of the Company are eligible to receive such
payments and benefits; provided, however, to the extent there is any duplication of
benefits under § 4 of this Agreement and any benefits under such employee benefit
plans, programs and policies, Executive hereby waives his rights to any benefits
under such employee benefit plans, programs and policies. Without limiting the
foregoing, the Company acknowledges and agrees that Executive is entitled to (i) his
health savings account, which is fully vested and non-forfeitable; (ii) payment for
his accrued but unused vacation days, as of December 31, 2010; (iii) full
participation in any matching or other employer contributions to the Company’s
401(k) plan for the 2010 calendar year (regardless of when such contributions are
actually made); and (iv) indemnification, and advancement of legal fees and
expenses, in accordance with the Company’s current bylaws.
	 
	 	g.	 	The Company will reimburse Executive for his attorney fees and charges incurred
in connection with the implementation and negotiation of this Agreement (such
reimbursement not to exceed $5,000), no later than 30 days after presentation of an
invoice, with appropriate back-up, for such fees and charges.






	5.	 	Mutual Release.






	 	a.	 	Release by Executive. Executive, on behalf of himself and his heirs,
executors, administrators and legal representatives (collectively, the “Releasors”)
hereby irrevocably and unconditionally releases and forever discharges the Company and
its subsidiaries and affiliates (collectively, the “Releasees”) from (and indemnifies
them against) any and all claims, actions, causes of action, rights, judgments,
obligations, damages, demands, accountings or liabilities of whatever kind or
character, whether known or unknown, whether now existing or hereafter arising, at law
or in equity, that the Releasors may have, may have had, or may hereafter have, and
that are based in whole or in part on facts existing prior to the date of this
Agreement (collectively, “Claims”), including without limitation any Claims based on
Title VII of the Civil Rights Act of 1964; the Americans With Disabilities Act; the
Fair Labor Standards Act; the Equal Pay Act; the Family and Medical Leave Act; the
Employee Retirement Income Security Act of 1974 (except as to claims pertaining to
vested benefits under employee benefit plans maintained by the Releasees); the New York
State and New York City Human Rights Laws, the New York Labor Law; the Occupational
Safety and Health Act; the Worker Adjustment and Retraining Notification Act; the
National Labor Relations Act; the Immigration Reform and Control Act; any common law,
public policy, contract (whether oral or written, express or implied) or tort law; and
any other local, state, federal or foreign law, regulation or ordinance, and that arise
out of, or relate to, Executive’s employment with, or services for, the Company or any
of its affiliates, or the termination of such employment or services; provided,
however, that this paragraph shall not release (i) Executive’s rights arising under or
preserved by this Agreement, or (ii) Executive’s rights as a shareholder of the




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	 	 	 	Company or (iii) any claims based on any act or omission of a Releasee which
constitutes willful misconduct, gross negligence or fraud.
	 
	 	b.	 	Release by Company. The Company, on behalf of itself and the Releasees
and each of their respective officers, directors, employees, shareholders and agents,
hereby releases, acquits and forever discharges Executive and the Releasors from (and
indemnifies them against) any and all claims, causes of actions, demands, suits, costs,
expenses and damages of whatever kind or character, whether known or unknown, whether
now existing or hereafter arising, at law or in equity, that any Releasee may have, may
have had, or may hereafter have, and that are based in whole or in part on facts
existing prior to the date of this Agreement, and that arise out of, or relate to, the
Executive’s employment with, or services for, the Company or any of its affiliates, or
the termination of such employment or services, provided, however, that this paragraph
shall not release (i) the Company’s rights arising under or preserved by this
Agreement, (ii) any claims based on any act or omission of Executive which constitutes
willful misconduct, gross negligence or fraud or a violation of any applicable statute
or regulation or (iii) any claims to the extent that the release of such claims would
be inconsistent with a Releasees’ obligations or Executive’s obligations under
applicable law.






	6.	 	Miscellaneous






	 	a.	 	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), other
than those arising under section 6 of the Employment Agreement, to the extent necessary
for the Company (or its subsidiaries or affiliates, where applicable) to avail itself
of the rights and remedies provided under section 6.2 of the Employment Agreement,
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 (and its subsidiaries or
affiliates, where applicable) and Executive, and judgment may be entered on the
arbitrator(s)’ award in any court having jurisdiction.
	 
	 	b.	 	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:






	 	(i)	 	If to the Company, to:
	 
	 	 	 	BioScrip, Inc.
	 		 	100 Clearbrook Road
	 	 	 	Elmsford, New York 10523
	 	 	 	Fax: (914) 460-1661
	 	 	 	Attention: General Counsel




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	 	 	 	with a copy to:






	 	 	 	King & Spalding LLP
	 		 	1185 Avenue of the Americas
	 	 	 	New York, New York 10036-4003
	 	 	 	Fax: (212) 556-2222
	 	 	 	Attention: Richard A. Cirillo






	 	(ii)	 	If to the Executive, to:
	 
	 	 	 	Richard H. Friedman
	 		 	35 Cherry Lawn Blvd.
	 	 	 	New Rochelle, NY 10804






	 	 	 	with a copy to:






	 	 	 	Morrison Cohen LLP
	 		 	909 Third Avenue
	 	 	 	New York, New York 10022
	 	 	 	Fax: 212-735-8708
	 	 	 	Attention: Robert M. Sedgwick






	 	c.	 	Entire Agreement. This Agreement (and the arrangements described
herein) contains the entire agreement between the Company and Executive with respect to
the subject matter hereof and supersedes all prior agreements, written or oral, with
respect to the subject matter hereof.
	 
	 	d.	 	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 that expressly identifies the applicable provision and that is signed by the
Company and Executive 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.
	 
	 	e.	 	Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.




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	 	f.	 	Assignment. Except as provided in this § 6(f), neither Party’s rights
or obligations under this Agreement may be assigned by such Party, and any purported
assignment by either Party in 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. In the event of Executive’s death or a
judicial determination of his incompetence, references in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiaries, estate, executors,
or other legal representative(s).
	 
	 	g.	 	Withholding. The Company shall be entitled to withhold from any
payments or deemed payments any amount of tax withholding required by law, but with
respect to bonus compensation shall only withhold federal taxes at the bonus, or
supplemental rate, to the extent permitted by law.
	 
	 	h.	 	Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Company and Executive and their respective successors, permitted
assigns, heirs, executors and legal representatives.
	 
	 	i.	 	Counterparts. This Agreement may be executed by the Company and
Executive 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 either
the Company or Executive.
	 
	 	j.	 	Headings. The headings in this Agreement are for reference only and
shall not affect the interpretation of this Agreement.





     IN WITNESS WHEREOF, the Company and Executive have signed their names on the date set forth
below their signature.



	 	 	 	 	 	 	 	 	 

	EXECUTIVE:	 	 	 	THE COMPANY,	 	 
	 	 	 	 	BIOSCRIP, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Richard H. Friedman
 


	 	 	 	By:
	 	/s/ Barry A. Posner
 

	 	 
	Richard H. Friedman

	 	 	 	 	 	Barry A. Posner	 	 
	Dated: November 1, 2010

	 	 	 	 	 	EVP & General Counsel	 	 
	 

	 	 	 	 	 	Dated: November 1, 2010	 	 







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