Item 5.02. Departure of Directors or
Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Chief Executive Officer and Election of Director
Effective upon the consummation of the
Transaction, Dan Greenleaf, the Chief Executive Officer of Home Solutions prior to the closing of the Transaction, was named President
and Chief Executive Officer of the Company and was elected to the Company’s Board of Directors. Mr. Greenleaf, age 51, has
over two decades of relevant experience in senior leadership positions in the healthcare industry, including having served as the
Chairman and Chief Executive Officer of Home Solutions since 2013. Prior to joining Home Solutions, Mr. Greenleaf served as President
and Chief Executive Officer of Coram Specialty Infusion Services from 2008 to 2013. The Company has agreed that Mr. Greenleaf will
serve on the Company’s Board of Directors during such time as he remains Chief Executive Officer.
Mr. Greenleaf will receive a base salary
of $725,000 and will be eligible for an annual cash bonus. His target bonus will be 100% of his salary, with a performance-based
payout opportunity of between 0 and 200% of target based on goals to be determined by the Compensation Committee of the Company’s
Board of Directors (the “Committee”). His 2016 bonus will be pro-rated. Mr. Greenleaf will also be entitled to an annual
long-term incentive grant of $1,100,000 (at target), with the first award to be delivered in the form of stock options and performance
restricted stock units (“PRSUs”). The PRSUs will vest at the end of a three-year performance period based on achievement
of EBITDA and annual stock price growth measures to be determined by the Committee, with a payout opportunity of 0 to 200% of target.
Mr. Greenleaf will also receive a $25,000 annual discretionary reimbursement for non-reimbursable expenses. The Company expects
to enter into an employment agreement with Mr. Greenleaf in the coming weeks.
Appointment of Chief Operating Officer
On September 9, 2016, the Company appointed David Evans, 53,
as Senior Vice President and Chief Operating Officer of the Company. Mr. Evans joined the Company in February 2009 and has served
as the Company’s Senior Vice President, Strategic Operations. Prior to joining the Company, Mr. Evans was Chief Financial
Officer and Secretary of Byram Healthcare Centers, Inc., a provider of medical supplies and pharmacy items to long-term chronic
patients, from August 2006 to July 2008. From June 2003 to August 2006, Mr. Evans was the Corporate Vice President, Strategic Operations
of Option Care, Inc., a home infusion and specialty pharmaceutical company.
Departure of Executive Officers
Richard M. Smith, President and Chief Executive Officer of the
Company prior to the consummation of the Transaction, has stepped down from the position of President and Chief Executive
Officer of the Company effective upon consummation of the Transaction. It is anticipated that Mr. Smith will be named Vice Chairman
of our Board of Directors effective December 1, 2016, for which service he will receive the same compensation paid to other non-employee
directors. On September 9, 2016, the Company and Mr. Smith entered into a First Amendment to Amended and Restated Employment Agreement,
which provides that Mr. Smith will remain an employee of the Company until November 30, 2016. The foregoing description of the
Amended and Restated Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the
full text of the Amended and Restated Employment Agreement, which is filed as Exhibit 10.1 hereto.
On September 6, 2016, Brian Stiver and the Company agreed that
he would step down from his position as Senior Vice President, Sales and Marketing of the Company effective December 30, 2016.
Amendment of Certain Equity Agreements
On September 8, 2016, the Company entered into amendments to
its Non-Qualified Stock Option Agreements with respect to options to purchase shares of the Company’s common stock issued
pursuant to the Company’s 2008 Equity Incentive Plan (the “2008 Plan”) with each of Jeffrey M. Kreger, David
Evans, and Brian Stiver (each, an “Amended Stock Option Agreement”). The Amended Stock Option Agreements provide that
if the executive is terminated without Cause (as defined in any offer letter or employment agreement between the Company and the
executive) prior to March 31, 2017, any unvested portion of the executive’s options granted pursuant to the 2008 Plan will
immediately vest and be exercisable until the end of the earlier of (a) the second anniversary of the executive’s termination
of employment with the Company or (b) the expiration date of the applicable option, in the same manner as if a change of control
had occurred immediately before the executive’s actual termination of employment.
On September 8, 2016, the Company also entered into an amendment
to the Stock Grant Certificate under the BioScrip/CHS 2006 Equity Incentive Plan with Mr. Stiver (the “Restricted Stock Amendment”).
The Restricted Stock Amendment provides that if Mr. Stiver’s employment with the Company is terminated without Cause (as
defined in any offer letter or employment agreement between the Company and Mr. Stiver) prior to March 31, 2017, any unvested and
non-forfeited shares of restricted stock held by Mr. Stiver shall fully vest.
In light of Mr. Stiver’s announced December 30, 2016 departure
date, the Company expects that the Amended Stock Option Agreement and the Restricted Stock Amendment will result in Mr. Stiver’s
options and restricted stock fully vesting upon his departure.
The foregoing descriptions of the Amended Stock Option Agreements
and the Restricted Stock Amendment do not purport to be complete and are qualified in their entirety by reference to the full text
of the Form of Amended Stock Option Agreement and the Restricted Stock Amendment, which are filed herewith as Exhibits 10.2 and
10.3, respectively.