OWENS & MINOR, INC. Officer Severance Policy Terms
Exhibit 10.1
OWENS & MINOR, INC.
Officer Severance Policy Terms
| Provisions | Descriptions | |
| Purpose | Establish a formal executive severance policy in lieu of the Company’s general severance policy for officers of Owens & Minor, Inc. that provides more appropriate and competitive levels of severance and eliminates the need for negotiated additional severance amounts | |
| Severance Event | Involuntary termination not for cause or resignation at the request of the Company | |
| Severance Payment | One month of salary plus average monthly bonus for each year of service, subject to minimums and maximums as follows:
• SVPs and above: 9-month minimum and 18-month maximum
• VPs: 6-month minimum and 12-month maximum
Average monthly bonus is lower of actual amount earned over last three completed years or target | |
| Pay for Year of Termination | Base salary through termination date and pro rata bonus following year-end based on actual corporate performance and number of months worked during the year | |
| Timing of Payments | Lump sum paid within 30 days of termination date
• Unless payment is deemed deferred compensation subject to IRC Section 409A and the officer is then a “specified employee” as defined in Section 409A, in which case payment will be delayed for 6 months after date of termination | |
| Equity Awards | According to the respective award agreements
• Pre-April 2005 option awards:
• Unvested options forfeited, unless participant is over age 55 with more than 10 years’ service, in which case vesting accelerates with a two-year exercise period
• Vested options have a one year exercise period | |
| Provisions | Descriptions | |
| • Pre-April 2005 restricted stock awards:
• Pro rata monthly vesting | ||
| Equity Awards (cont’d) |
• Post-April 2005 option awards:
• No vesting acceleration
• Vested options have a one-year exercise period
• Post-April 2005 restricted stock awards:
• Pro rata monthly vesting | |
| Health and Welfare Benefits | Continued in similar manner as active employees for the severance period (i.e., benefits are continued through end of last month of severance with COBRA eligibility thereafter) or until alternate employment | |
| Retirement Benefits | No additional age, service or pay credit provided | |
| Prerequisites | The following prerequisites will be provided during the severance period or until alternate employment:
• Outplacement services provided by the company (6 months maximum)
• Tax preparation and financial counseling consistent with benefits provided to actively employed corporate officers | |
| Restrictive Covenants | Non-compete, non-solicitation (employees and customers) and non-interference apply for the greater of the severance period or one year; confidentiality applies indefinitely
• Violation of any one of the restrictive covenants will cause forfeiture of unexercised options, cessation of benefits and perquisites and possible legal action by the Company
Release from claims against the Company arising out of employment | |
| Provisions | Descriptions | |
| Dispute Resolution | Arbitration
• Reasonable legal fees if separated officer prevails in arbitration proceeding to enforce severance rights |
