EXHIBIT 10.1

EXECUTIVE SEVERANCE AGREEMENT

This Executive Severance
Agreement (this Agreement) is made as of this 23rd day of April, 2004, between
Apria Healthcare Group Inc., a Delaware corporation (the Company), and Amin I.
Khalifa (the Executive).

RECITALS

A.       
          It is the desire of the Company to retain the services of the Executive and to
          recognize the Executives contribution to the Company.

B.       
          The Company and the Executive wish to set forth certain terms and conditions of
          Executives employment.

C.       
          The Company wishes to provide to the Executive certain benefits in the event
          that his employment is terminated by the Company without cause or in the event
          that he terminates employment for Good Reason (as defined below), in order to
          encourage the Executives performance and continued commitment to the
          Company.

NOW, THEREFORE, in
consideration of the foregoing and of the respective covenants and agreements set forth
below, the parties hereto agree as follows:

1.       
          Positions and Duties. The Executive shall serve in such positions and
          undertake such duties and have such authority as the Company, through its Chief
          Executive Officer, shall assign to the Executive from time to time in the
          Companys sole and absolute discretion. The Company has the right to change
          the nature, amount or level of authority and responsibility assigned to the
          Executive at any time, with or without cause. The Company may also change the
          title or titles assigned to the Executive at any time, with or without cause.
          The Executive agrees to devote substantially all of his working time and efforts
          to the business and affairs of the Company. The Executive further agrees that he
          shall not undertake any outside activities which create a conflict of interest
          with his duties to the Company, or which, in the judgment of the Board of
          Directors of the Company, interfere with the performance of the Executives
          duties to the Company.

2.       
          Compensation and Benefits.

(a)       
          Salary. The Executives salary shall be such salary as the Company
          assigns to him from time to time in accordance with its regular practices and
          policies. The parties to this Agreement recognize that the Company may, in its
          sole discretion, change such salary at any time.

(b)       
          Bonus. The Executive shall be entitled to participate in the Executive
          Bonus Plan or such other bonus plans applicable to his position as may be in
          effect from time to time. The parties to this Agreement recognize that such
          bonus plans may be amended and/or terminated by the Company at any time without
          the consent of the Executive.

(c)       
          Expenses. During the term of the Executives employment, the
          Executive shall be entitled to receive reimbursement for all reasonable and
          customary expenses incurred by the Executive in performing services for the
          Company in accordance with the Companys reimbursement policies as they may
          be in effect from time to time. The parties to this Agreement recognize that
          such policies may be amended and/or terminated by the Company at any time
          without the consent of the Executive.

(d)       
          Other Benefits. The Executive shall be entitled to participate in all
          employee benefit plans, programs and arrangements of the Company (including,
          without limitation, stock option plans or agreements and insurance, retirement
          and vacation plans, the deferred compensation plan and any other programs and
          arrangements), in accordance with the terms of such plans, programs or
          arrangements as they shall be in effect from time to time during the period of
          the Executives employment. The parties to this Agreement recognize that
          the Company may terminate or modify such plans, programs or arrangements at any
          time without the consent of the Executive.

3.       
          Grounds for Termination. The Executives employment may be
          terminated on any of the following grounds:

(a)       
          Without Cause. The Executive or the Company may terminate the
          Executives employment at any time, without cause, by giving the other
          party to this Agreement at least 30 days advance written notice of such
          termination.

(b)       
          Death. The Executives employment hereunder shall terminate upon his
          death.

(c)       
          Disability. If, as a result of the Executives incapacity due to
          physical or mental illness, the Executive shall have been unable to perform the
          essential functions of his position, even with reasonable accommodation that
          does not impose an undue hardship on the Company, on a full-time basis for the
          entire period of six (6) consecutive months, and within thirty (30) days after
          written notice of termination is given (which may occur before or after the end
          of such six-month period), shall not have returned to the performance of his
          duties hereunder on a full-time basis (a disability), the Company
          may terminate the Executives employment hereunder.

(d)       
          Cause. The Company may terminate the Executives employment
          hereunder for cause. For purposes of this Agreement, cause shall
          mean that the Company, acting in good faith based upon the information then
          known to the Company, determines that the Executive has engaged in or committed:
          willful misconduct; theft, fraud or other illegal conduct; refusal or
          unwillingness to substantially perform his duties (other than such failure
          resulting from the Executives disability) after written demand for
          substantial performance is delivered by the Company that specifically identifies
          the manner in which the Company believes the Executive has not substantially
          performed his duties; insubordination; any willful act that is likely to and
          which does in fact have the effect of injuring the reputation or business of the
          Company; violation of any fiduciary duty; violation of the Executives duty
          of loyalty to the Company; violation of the Code of Ethical Business Conduct; or
          a breach of any term of this Agreement. For purposes of this Section 3(d), no
          act, or failure to act, on the Executives part shall be considered willful
          unless done or omitted to be done, by him not in good faith and without
          reasonable belief that his action or omission was in the best interest of the
          Company. Notwithstanding the foregoing, the Executive shall not be deemed to
          have been terminated for cause without delivery to the Executive of a notice of
          termination signed by the Companys Chief Executive Officer or President
          stating that, in the good faith opinion of the officer signing such notice, the
          Executive has engaged in or committed conduct of the nature described above in
          the second sentence of this Section 3(d), and specifying the particulars thereof
          in detail.

4.       
          Payments upon Termination.

(a)       
          Without Cause or with Good Reason. In the event that the Executives
          employment is terminated by the Company for any reason other than death,
          disability or cause as defined in Section 3 (b), (c) and (d) of this Agreement,
          or in the event that the Executive terminates his employment hereunder with Good
          Reason, the Executive shall be entitled to receive severance pay in an aggregate
          amount equal to 100% of his Annual Compensation, which shall be paid in periodic
          installments in accordance with the Companys customary practice over a
          period of one (1) year, less any amounts required to be withheld by applicable
          law, in exchange for a valid release of all claims the Executive may have
          against the Company in a form acceptable to the Company. The Company will also
          pay to the executive any earned but unused vacation time at the rate of pay in
          effect on the date of the notice of termination.

(b)       
          Annual Compensation. For purposes of this Section 4, the term
          Annual Compensation means an amount equal to the Executives
          annual base salary at the rate in effect on the date on which the Executive
          received or gave written notice of his termination, plus the sum of (i) an
          amount equal to the average of the Executives two most recent annual
          bonuses, if any, received prior to the notice of termination, (ii) the
          Executives annual car allowance, if any, and (iii) an amount determined by
          the Company from time to time in its sole discretion to be equal to the average
          annual cost for Company employees of obtaining medical, dental and vision
          insurance under COBRA, which amount is hereby initially determined to be
          $10,000. The following rules shall apply solely for purposes of calculating
          Annual Compensation under this Agreement in the event the Executive has been
          employed by the Company for a period which does not include two full annual
          bonus cycles.

|(i) |  | In the event the Executives annual bonus for either of the two years in
          question was a prorated bonus due to the Executive having worked a partial year,
          the Executives prorated bonus or bonuses shall be recalculated to reflect
          the bonus the Executive would have received had the Executive worked for the
          entire year.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) |  | In the event the Executive has been employed by the Company for less than one
                    year and has not yet received an annual bonus, then the Executives average
                    annual bonus shall be deemed to be 80% of the Executives annual base
                    salary rate as of the date of the Executives employment with the Company.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(iii) |  | In the event the Executive has been employed for less than two full annual bonus
                    cycles and only one annual bonus has been calculated for the Executive, then the
                    amount of that annual bonus shall be deemed to be the average of the
                    Executives annual bonuses.
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(c)       
          Good Reason. For purposes of this Section 4, the term
          Good Reason means:

|(i) |  | any reduction in the Executives annual base salary, except for a general
               one-time across-the-board salary reduction not exceeding ten percent
               (10%) which is imposed simultaneously on all corporate officers of the Company; or
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(ii) |  | the Company requires the Executive to be based at an office location which will
               result in an increase of more than thirty (30) miles in the Executives
               one-way commute.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(d)       
          Release of all Claims. The Executive understands and agrees that the
          Companys obligation to pay the Executive severance pay under this
          Agreement is subject to the Executives execution of a valid written waiver
          and release of all claims which the Executive may have against the Company
          and/or its successors in a form acceptable to the Company in its sole and
          absolute discretion.

(e)       
          Death, Disability or Cause. In the event that the Executives
          employment is terminated due to death, disability or cause, the Company shall
          not be obligated to pay the Executive any amount other than earned unused
          vacation, reimbursement for business expenses incurred prior to his termination
          and in compliance with the Companys reimbursement policies, and any unpaid
          salary for days worked prior to the termination.

5.       
          Successors; Binding Agreement.

(a)       
          The Company will require any successor (whether direct or indirect, by purchase,
          merger, consolidation or otherwise) to all or substantially all of the business
          and/or assets of the Company, to expressly assume and agree to perform this
          Agreement in the same manner and to the same extent that the Company would be
          required to perform it if no such succession had taken place. Failure of the
          Company to obtain such assumption and agreement prior to the effectiveness of
          any such succession shall be a breach of this Agreement and shall entitle the
          Executive to compensation from the Company in the same amount and on the same
          terms as he would be entitled to hereunder if he terminated his employment for
          Good Reason, except that for purposes of implementing the foregoing, the date on
          which any such succession becomes effective shall be deemed the date of
          termination. As used in this Agreement, Company shall mean the
          Company as herein before defined and any successor to its business and/or assets
          as aforesaid which executes and delivers the agreement provided for in this
          Section 5 or which otherwise becomes bound by all the terms and provisions of
          this Agreement by operation of law.

(b)       
          This Agreement and all rights of the Executive hereunder shall inure to the
          benefit of and be enforceable by the Executives personal or legal
          representatives, executors, administrator, successors, heirs, distributees,
          devisees and legatees. If the Executive should die while any amounts would still
          be payable to him hereunder if he had continued to live, all such amounts,
          unless otherwise provided herein, shall be paid in accordance with the terms of
          this Agreement to the Executives devisee, legatee, or other designee or,
          if there be no such designee, to the Executives estate.

6.       
          Notices. For the purposes of this Agreement, notices, demands and all
          other communications provided for in this Agreement shall be in writing and
          shall be deemed to have been duly given when delivered or (unless otherwise
          specified) mailed by United States certified or registered mail, return receipt
          requested, postage prepaid, addressed as follows:

If
to the Executive:

Amin
I. Khalifa    4 Little Pond    Laguna
Niguel, CA 92677

If
to the Company:

Apria
Healthcare Group Inc.    26220 Enterprise Court
    Lake Forest, California 92630    Attention:
Chief Executive Officer

With a copy to the attention of: Senior Vice President,
Human Resources or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

7.       
          Antisolicitation. The Executive promises and agrees that, during the
          period of his employment by the Company and for a period of one year thereafter,
          he will not influence or attempt to influence customers of the Company or any of
          its present or future subsidiaries or affiliates, either directly or indirectly,
          to divert their business to any individual, partnership, firm, corporation or
          other entity then in competition with the business of the Company, or any
          subsidiary or affiliate of the Company.

8.       
          Noncompetition. The Executive promises and agrees that, during the period
          of his employment by the Company and for a period of one year thereafter, he
          will not enter business or work with or for any business, individual,
          partnership, firm, corporation or other entity then in competition with the
          business of the Company or any subsidiary or affiliate of the Company.

9.       
          Soliciting Employees. The Executive promises and agrees that, for a
          period of one year following termination of his employment, he will not,
          directly or indirectly solicit any of the Company employees who earned annually
          $50,000 or more as a Company employee during the last six months of his or her
          own employment to work for any other business, individual, partnership, firm,
          corporation, or other entity.

10.       
          Confidential Information.

(a)       
          The Executive, in the performance of his duties on behalf of the Company, shall
          have access to, receive and be entrusted with confidential information,
          including but not limited to systems technology, field operations,
          reimbursement, development, marketing, organizational, financial, management,
          administrative, clinical, customer, distribution and sales information, data,
          specifications and processes presently owned or at any time in the future
          developed, by the Company or its agents or consultants, or used presently or at
          any time in the future in the course of its business that is not otherwise part
          of the public domain (collectively, the Confidential Material). All
          such Confidential Material is considered secret and will be available to the
          Executive in confidence. Except in the performance of duties on behalf of the
          Company, the Executive shall not, directly or indirectly for any reason
          whatsoever, disclose or use any such Confidential Material, unless such
          Confidential Material ceases (through no fault of the Executives) to be
          confidential because it has become part of the public domain. All records,
          files, drawings, documents, notes, disks, diskettes, tapes, magnetic media,
          photographs, equipment and other tangible items, wherever located, relating in
          any way to the Confidential Material or otherwise to the Companys
          business, which the Executive prepares, uses or encounters during the course of
          his employment, shall be and remain the Companys sole and exclusive
          property and shall be included in the Confidential Material. Upon termination of
          this Agreement by any means, or whenever requested by the Company, the Executive
          shall promptly deliver to the Company any and all of the Confidential Material,
          not previously delivered to the Company, that may be or at any previous time has
          been in the Executives possession or under the Executives control.

(b)       
          The Executive hereby acknowledges that the sale or unauthorized use or
          disclosure of any of the Companys Confidential Material by any means
          whatsoever and at any time before, during or after the Executives
          employment with the Company shall constitute unfair competition. The Executive
          agrees he shall not engage in unfair competition either during the time employed
          by the Company or any time thereafter.

11.       
          Parachute Limitation. Notwithstanding any other provision of this
          Agreement, the Executive shall not have any right to receive any payment or
          other benefit under this Agreement, any other agreement, or any benefit plan if
          such right, payment or benefit, taking into account all other rights, payments
          or benefits to or for the Executive under this Agreement, all other agreements,
          and all benefit plans, would cause any right, payment or benefit to the
          Executive under this Agreement to be considered a parachute payment
          within the meaning of Section 280G(b)(2) of the Internal Revenue Code as then in
          effect (a Parachute Payment). In the event that the receipt of any
          such right or any other payment or benefit under this Agreement, any other
          agreement, or any benefit plan would cause the Executive to be considered to
          have received a Parachute Payment under this Agreement, then the Executive shall
          have the right, in the Executives sole discretion, to designate those
          rights, payments or benefits under this Agreement, any other agreements, and/or
          any benefit plans, that should be reduced or eliminated so as to avoid having
          the right, payment or benefit to the Executive under this Agreement be deemed to
          be a Parachute Payment.

12.       
          Modification and Waiver. No provisions of this Agreement may be modified,
          waived or discharged unless such waiver, modification or discharge is agreed to
          in writing signed by the Executive and the Chief Executive Officer or the
          President of the Company. No waiver by either party hereto at any time of any
          breach by the other party hereto of, or compliance with, any condition or
          provision of this Agreement to be performed by such other party shall be deemed
          a waiver of similar or dissimilar provisions or conditions at the same or at any
          prior or subsequent time. No agreements or representations, oral or otherwise,
          express or implied, with respect to the subject matter hereof have been made by
          either party which are not set forth expressly in this Agreement. The validity,
          interpretation, construction and performance of this Agreement shall be governed
          by the laws of the State of California without regard to its conflicts of law
          principles.

13.       
          Validity. The invalidity or unenforceability of any provision or
          provisions of this Agreement shall not affect the validity or enforceability of
          any other provision of this Agreement, which shall remain in full force and
          effect.

14.       
          Counterparts. This Agreement may be executed in one or more counterparts,
          each of which shall be deemed to be an original but all of which together will
          constitute one and the same instrument.

15.       
          Arbitration. Any dispute or controversy arising under or in connection
          with this Agreement or Executives employment by the Company shall be
          settled exclusively by arbitration, conducted before a single neutral arbitrator
          in accordance with the American Arbitration Associations National Rules
          for Resolution of Employment Disputes as then in effect. Judgment may be entered
          on the arbitrators award in any court having jurisdiction; provided,
          however, that the Company shall be entitled to seek a restraining order or
          injunction in any court of competent jurisdiction to prevent any continuation of
          any violation of the provisions of Sections 7, 8, 9 or 10 of this Agreement and
          the Executive hereby consents that such restraining order or injunction may be
          granted without the necessity of the Companys posting any bond, and
          provided, further, that the Executive shall be entitled to seek specific
          performance of his right to be paid until the date of employment termination
          during the pendency of any dispute or controversy arising under or in connection
          with this Agreement. The fees and expenses of the arbitrator shall be borne by
          the Company.

16.       
          Entire Agreement. This Agreement sets forth the entire agreement of the
          parties hereto in respect of the subject matter contained herein and supersedes
          all prior agreements, promises, covenants, arrangements, communications,
          representations or warranties, whether oral or written, by any officer, employee
          or representative of any party hereto; and any prior agreement of the parties
          hereto in respect of the subject matter contained herein is hereby terminated
          and canceled.

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IN WITNESS WHEREOF, the
parties have executed this Agreement on the date and year first above written.

| |                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | APRIA HEALTHCARE GROUP INC.
 By:____________________________________ Name: Lawrence M.  Higby
Title: President and Chief Executive Officer
EXECUTIVE By:____________________________________
Name:    Amin I. KhalifaTitle:   Chief Financial Officer