exv10w32



 



Exhibit
10.32

APRIA HEALTHCARE GROUP INC.

2008 EXECUTIVE BONUS PLAN



This document sets forth the terms of the 2008 Executive Bonus Plan (the “Plan”) of Apria
Healthcare Group Inc. (the “Company”).




Operation of the Plan





Potential Bonus. The Company’s Chief Executive Officer, President and Chief Operating
Officer and Executive Vice Presidents, as well as the officers of Coram, Inc. designated by
the Compensation Committee of the Company’s Board of Directors (the “Committee”) as
participating in the Plan, may be eligible to receive a bonus under the Plan (the “bonus
opportunity”). The target aggregate bonus opportunity for any such participant under the
Plan is equal to 100% of the participant’s annualized rate of base salary as in effect on
January 1, 2008 (the participant’s “2008 rate of base salary”), and the maximum aggregate
bonus opportunity for any such participant under the Plan is equal to 150% of the
participant’s 2008 rate of base salary.




Components of Potential Bonus and their Relative Weights. The portion of a participant’s
bonus opportunity that is actually paid out will depend upon the achievement of Company and
individual performance goals established for calendar 2008; provided that the bonus
opportunity for one or more participants may be based entirely on Company performance (with
no individual goals). Company performance will be determined based on the actual level of
the Company’s [confidential financial performance measures omitted] (each, a “Company
performance measure”) for calendar 2008 compared to the target level of such Company
performance measures for 2008 (as set forth below). For purposes of the Plan, all of such
Company performance measures will be determined on a consolidated basis in accordance with
generally accepted accounting principles as applied in the Company’s financial reporting.
Individual performance will be determined based on the actual level of achievement of
individual performance goals (each, an “individual performance measure”) for calendar 2008
(as set forth in the participant’s individual award notice). The “weighting” between
Company performance measures and individual performance measures for each participant are
set forth in the participant’s individual award notice. Specific weightings and individual
performance measures may vary from participant to participant. The form of individual
participant award notice is attached hereto as Schedule A.




For each Company performance measure (and, if applicable and so provided in the applicable
bonus opportunity, for one or more individual performance measures), there is a minimum
performance goal that must be achieved (a “threshold”) in order for a bonus to be payable
with respect to that performance measure, a target performance goal (a “target”) that must
be achieved for the bonus to be paid at the target level with respect to that performance
measure, and a maximum performance goal (a “maximum”) that must be achieved for the bonus to
be paid at the maximum level with respect to that performance measure. If the threshold
level for a particular performance measure is not met, no bonus will be payable with respect
to



 









 






that performance measure. If the target level for a particular measure is met, then 100% of
the portion of the participant’s bonus opportunity that is payable with respect to that
performance measure will be payable, subject to the other terms and conditions of the Plan.
Except as provided in the following paragraph, if the maximum level for a particular measure
is met or exceeded, then 150% of the portion of the participant’s bonus opportunity that is
payable with respect to that performance measure will be payable, subject to the other terms
and conditions of the Plan.




If the Company or the individual, as applicable, meets or exceeds the threshold level for a
particular performance measure but does not meet the target or maximum level for that
measure, then the portion of the bonus opportunity that will be payable with respect to that
performance measure will be determined by linear interpolation with (i) 50% of the portion
of the bonus opportunity payable with respect to the performance measure for achievement at
the threshold level, (ii) 100% of the portion of the bonus opportunity payable with respect
to the performance measure for achievement at the target level and (iii) 150% of the portion
of the bonus opportunity payable with respect to the performance measure for achievement at
the maximum level. Notwithstanding the foregoing, even if the actual achievement levels of
the      *      performance measures are in excess of the target
levels for those measures, the payment of the bonus opportunity payable with respect to
those measures shall not exceed the target levels unless actual achievement of
the      *      measure meets or exceeds the      *      target level.




The threshold, target and maximum levels for each Company performance measure are set forth
in the following chart:



	 	 	 	 	 	 	 
	Threshold, Target and Maximum Levels for Performance Measures
	[confidential financial performance measures omitted]
	Weighting

	 	*
	 	*
	 	*
	Threshold Level

	 	*
	 	*
	 	*
	Target Level

	 	*
	 	*
	 	*
	Maximum Level

	 	*
	 	*
	 	*







The portion of a participant’s bonus opportunity that is to be determined based on
Company performance will be allocated among the three Company performance measures in
proportion to the weighting indicated in the table above with respect to each performance
measure.



Payment Terms





Award Payment and Timing. As soon as administratively practicable after the Company’s
audited financial statements for 2008 have been prepared, the Committee will determine
whether and the extent to which bonuses are payable pursuant to the Plan. No payment shall
be made with respect to the Plan unless





 




			
	*	 	Performance measure omitted.





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and until the Committee has certified, by resolution or other appropriate action in writing,
that the amount of any such bonus has been accurately determined in accordance with the
terms, conditions and limits of the Plan and that the applicable performance condition(s)
were, in fact, satisfied at the applicable level(s). To the extent a participant is
entitled to a bonus under the Plan, such bonus shall be paid promptly following such
determination by the Committee and in no event before January 1, 2009 or later than December
31, 2009.




Payment shall be made in cash; provided, however, that as to a participant who, at the time
the Committee makes its bonus determination as to that participant, is subject to but is not
then in compliance with the applicable target level of Company stock ownership required
pursuant to the Company’s Stock Ownership Requirements for Senior Executive Officers (the
“Requirements”), the Committee shall pay up to one-half of the participant’s bonus that
would otherwise be paid in cash in Company common stock (with the balance paid in cash). In
the event of any stock payment and subject to adjustment pursuant to Section 7.1 of the Plan
(adjustments for stock splits and similar changes in capitalization), the number of shares
to be delivered to the participant shall equal (1) the portion (expressed as a cash amount)
of the participant’s bonus to be paid in the form of Company common stock, divided by (2)
the fair market value (as such term is defined in the Plan) of a share of Company common
stock on the date such bonus determination is made by the Committee, and rounded down to the
nearest whole share (with any fractional share amount to be settled in cash). Any such
shares so delivered (or such lesser portion of such shares as is required to bring the
participant into compliance with the applicable target level of Company stock ownership
required pursuant to the Requirements) shall be retained by the participant to satisfy the
Requirements for so long as the participant is subject to the Requirements.



Other Rules





Termination of Employment Rules. Except as provided below, a participant must be employed
by the Company or one of its affiliates or subsidiaries on the date that bonus payments are
actually made under the Plan in order to be eligible to receive a bonus under the Plan
(subject to the achievement of the applicable performance measures), and a participant will
have no right to a Plan bonus (or any partial bonus) if the participant’s employment
terminates or is terminated (regardless of the reason, whether with or without cause) prior
to the time that bonuses are paid under the Plan.




In the event that, subsequent to June 30, 2008 but prior to the date in 2009 that bonus
payments are made, a participant’s employment with the Company or one of its affiliates is
terminated by the Company or the affiliate that employs the participant other than for Cause
(as defined below) and other than on account of the participant’s death or Disability (as
defined below), the participant will be entitled to a bonus under the Plan equal to (1) the
bonus the participant would have received under the Plan had the participant remained
employed with the Company or one of its affiliates through the time that bonuses are
actually paid under the Plan, multiplied by (2) a fraction, the numerator of which is the
number of calendar days in



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2008 that occurred prior to the termination of the participant’s employment and the
denominator of which is 365. Payment of the bonus will be made at the same time as the
payment of Plan bonuses generally.




For purposes of the Plan, “Cause” and “Disability” shall have the respective meanings
assigned to such terms in the participant’s Executive Severance Agreement or Employment
Agreement.




Change in Control Event. Notwithstanding anything to the contrary in the Plan, in the event
a Change in Control Event (as defined below) occurs in 2008, the Plan will immediately
terminate upon the event, and a participant who is employed by the Company or one of its
affiliates immediately prior to such event will be entitled to a bonus under the Plan equal
to (1) the participant’s target bonus opportunity, multiplied by (2) a fraction, the
numerator of which is the number of calendar days in 2008 that occurred prior to the Change
in Control Event and the denominator of which is 365. In such event, Plan bonuses
(including any pro-rated bonus to a terminated participant who is entitled to a bonus
pursuant to the foregoing termination of employment rules) will be paid entirely in cash on
the effective date of the Change in Control Event. For purposes of the Plan, the term
“Change in Control Event” means a Change in Control Event as defined in the Company’s 2003
Performance Incentive Plan that also qualifies as either (1) a “change in the ownership or
effective control” of the Company or (2) a change “in the ownership of a substantial portion
of the assets” of the Company within the meaning of Section 409A of the Internal Revenue
Code (“Section 409A”).




Code Section 409A. It is intended that any amounts payable under the Plan and the Company’s
exercise of authority or discretion hereunder shall either be exempt from or comply with
Section 409A so as not to subject any participant to payment of any interest or additional
tax imposed under Section 409A. Notwithstanding any provision of the Plan to the contrary,
if the participant is a “specified employee” (within the meaning of Treasury Regulation
Section 1.409A-1(i)) and the participant is entitled to payments in connection with his or
her separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)),
the participant shall not be entitled to any payments upon a separation from service until
the earlier of (1) the date which is six (6) months after the participant’s separation from
service with the Company for any reason other than death, or (2) the date of the
participant’s death. Any amounts otherwise payable to the participant in connection with
the participant’s separation from service that are not so paid by reason of the preceding
sentence shall be paid as soon as practicable (and in no event more than 30 days) after the
date that is six (6) months after the participant’s separation from service (or, if earlier,
the date of the participant’s death). The provisions of this paragraph shall only apply if,
and to the extent, required to comply with Section 409A.




No Assignment. The rights, if any, of a participant or any other person to any payment or
other benefits under the Plan may not be assigned, transferred, pledged, or encumbered
except by will or the laws of descent or distribution.



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Taxation. Bonus payments will be taxed as ordinary income (wages) in the year of payment.
All payments will be subject to required income, employment and other tax withholdings and
any other authorized deductions. Without limiting the generality of the preceding sentence,
in the event any bonus is paid in a combination of cash and Company common stock, the
Company may reduce the amount of cash otherwise payable by the amount of such tax
withholdings and any other authorized deductions on the total amount otherwise payable
(including the portion to be paid in Company common stock).




Amendment. The Committee reserves the right to amend and/or terminate the Plan at any time
and in any manner, with or without notice; provided, however, that the consent of a
participant will be required to the extent such amendment or termination materially and
adversely affects the participant’s rights under the Plan. Adjustments pursuant to the
“Adjustment” section below shall not require participant consent. No amendment shall be
binding upon the Company unless approved by the Committee and set forth in writing.




No Fiduciary Relationship. Nothing contained in the Plan and no action taken pursuant to
the provisions of the Plan shall create or be construed as creating a trust or any kind of
fiduciary relationship between the Company and any of its affiliates, or the Committee, on
one hand, and any participant or any other person on the other hand.




No Right to Bonus or Continued Employment. Nothing contained in the Plan or any related
document constitutes an employment or service commitment by the Company (or any affiliate),
affects an employee’s status as an employee at will who is subject to termination without
cause, confers upon any participant any right to remain employed by or in service to the
Company (or any affiliate), or interferes in any way with the right of the Company (or any
affiliate) to terminate a participant’s employment or to change the participant’s
compensation or other terms of employment at any time. The Plan does not constitute a
contract and does not confer upon any person any right to receive a bonus or any other
payment or benefit. There is no commitment or obligation on the part of the Company (or any
affiliate) to continue any bonus plan (similar to the Plan or otherwise) in any future
fiscal year.




Administration. The Committee shall administer the Plan, select participants for the Plan,
determine the applicable performance measures, relative weights of those measures, specific
performance goals, and bonus opportunities, determine performance and the extent to which
any applicable goals have been satisfied, determine whether any bonus is actually payable
under the Plan and, subject to the express limitations of the Plan, the amount of each
bonus, and determine the time or times at which and the form and manner in which bonuses
will be paid. The Committee shall have the authority to construe and interpret the Plan and
any agreement or other document relating to the Plan. All actions taken and all
interpretations and determinations made by the Company in respect of the Plan shall be
conclusive and binding on all persons and shall be given the maximum deference permitted by
law. Bonuses under the Plan are granted pursuant to



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Section 5.2 of the Company’s 2003 Performance Incentive Plan (the “Stock Plan”) and are
intended to qualify as “performance-based compensation” within the meaning of Section 162(m)
of the Internal Revenue Code (“Section 162(m)”). The Plan will be construed in accordance
with the applicable provisions of the Stock Plan and Section 162(m) and any applicable
regulations thereunder.




Agreements Regarding Noncompetition and Nonsolicitation. Notwithstanding anything else
contained herein to the contrary, the right of any current or former participant in the Plan
to a bonus or with respect to any bonus that is payable or has, at the relevant time,
previously been paid pursuant to the Plan to the participant is subject to the terms and
conditions of the participant’s “Noncompetition and Nonsolicitation Agreement” with the
Company (or any similar or successor agreement, as applicable), including any such agreement
that may be entered into after the effective date of the Plan (the participant’s
“Noncompetition and Nonsolicitation Agreement”). The Plan is one of the participant’s
Incentive Compensation Plans as defined in such Noncompetition and Nonsolicitation
Agreement. By accepting any bonus payment made pursuant to the Plan, the participant
affirms his or her representations, covenants and agreements set forth in his or her
Noncompetition and Nonsolicitation Agreement and agrees that his or her rights with respect
to such payment are and shall continue thereafter to be subject to such Noncompetition and
Nonsolicitation Agreement.




Adjustments. The Committee shall, to the extent it determines appropriate in order to
preserve the intended incentives, adjust the performance thresholds, targets and maximum
levels to mitigate the unbudgeted impact of material, unusual or nonrecurring gains and
losses, accounting changes or other extraordinary events not foreseen at the time the
targets were established, including without limitation the effects of any unbudgeted changes
in government reimbursement rates, [sensitive competitive information deleted].
Notwithstanding the foregoing, the Committee will not make any change or adjustment under
the Plan to the extent it would cause Plan bonuses to cease to qualify as “performance-based
compensation” within the meaning of Section 162(m). No adjustments may be made on or
following the occurrence of a Change in Control Event, except by the Committee as
constituted immediately prior to such Change in Control Event within a reasonable period of
time following the occurrence of such Change in Control Event.



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Schedules A and B contain sensitive competitive information

and have been omitted from this filing.





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