CORAM HEALTHCARE CORP
EMPLOYEE RETENTION INCENTIVE AGREEMENT - MARABITO
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<TYPE>EX-10.1
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<FILENAME>d05467exv10w1.txt
<DESCRIPTION>EMPLOYEE RETENTION INCENTIVE AGREEMENT - MARABITO
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                                                                    EXHIBIT 10.1

            CORAM KEY EMPLOYEE RETENTION INCENTIVE PROGRAM AGREEMENT

                  This Key Employee Retention Program Agreement ("Agreement") is
made and effective as of the Effective Date, as defined below, by and between
Coram, Inc. (the "Company") and Allen Marabito (the "Participant").

                  WHEREAS, the Company and its parent, Coram Healthcare
Corporation ("CHC"), filed for relief under Chapter 11 of Title 11 of the United
States Code in the United States Bankruptcy Court for the District of Delaware
(the "Bankruptcy Court") which cases are jointly administered under In re Coram
Healthcare Corporation, Case No. 00-3299 (MFW)(Jointly Administered) and are
intending to complete their financial restructuring and reorganization through a
plan or plans of reorganization (the "Plan(s) of Reorganization"); and

                  WHEREAS, Arlin M. Adams was appointed Chapter 11 Trustee for
the Company and CHC (the "Trustee") which appointment was approved by the
Bankruptcy Court on March 7, 2002; and

                  WHEREAS, the Company and the Trustee desire to enter into this
Agreement to retain the Participant through the successful completion of the
Plan(s) of Reorganization and Participant is willing to remain in such
employment by the Company in consideration of the payments to be made by the
Company, upon the terms and conditions herein provided;

                  NOW THEREFORE, in consideration of the mutual promises and
agreements contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement, intending to be legally bound,
hereby agree as follows:

SECTION 1. SERVICES OF PARTICIPANT.

                  Throughout his or her employment by the Company, the
Participant shall devote his or her full time and attention to performing the
duties and responsibilities of his or her current position in accordance with
his or her job description and as assigned by his or her supervisor, the Trustee
or the Trustee's designated executive officer. Such duties shall include
providing his or her assistance in connection with the completion of the
contemplated Plan(s) of Reorganization as may be requested by the Company from
time to time.

SECTION 2. EFFECTIVE DATE.

                  The "Effective Date" shall be the date that an Order of the
Bankruptcy Court approving the Company's 2003 Key Employee Retention Program
("KERP") and payments provided for therein becomes final.

SECTION 3. KERP COMPENSATION.

                  (a) The Participant shall be entitled to receive compensation
in the amount of $380,000.00 pursuant to the terms and conditions of the KERP
and this Agreement, subject to the approval by the Bankruptcy Court (the
"Compensation") and, if so approved, fifty percent (50%) of the Compensation
shall be paid by the Company on the Effective Date or as soon as practicable
thereafter. The Company shall pay the remainder of the Compensation on the
earlier

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date (the "Second Payment Date") of (i) sixty (60) days after the effective date
of the Plan(s) of Reorganization and (ii) December 31, 2003; provided, however,
that if the Participant ceases to be employed by the Company before the Second
Payment Date due to his or her voluntary termination or his or her being
terminated by the Company "for cause", then the Participant shall be obligated
to return to the Company, immediately upon the date of his or her termination,
the full amount of the Compensation (less applicable federal, state and local
taxes withheld) which had been paid to Participant to date. If the Participant
ceases to be employed by the Company before the Second Payment Date for any
reason other than as set forth in the foregoing sentence, the Participant shall
remain entitled to receive the Compensation payable hereunder.

                  (b) For the purpose of this Agreement, "for cause" shall mean
(i) commission of a willful act of dishonesty in the course of Participant's
duties which injures the Company or CHC, (ii) conviction by a court of competent
jurisdiction of a crime constituting a felony or conviction in respect of any
act involving fraud, dishonesty, or moral turpitude which relates to
Participant's duties, (iii) Participant's continued, habitual intoxication or
performance under the influence of controlled substances during working hours,
and (iv) unjustifiable failure by Participant to perform his or her duties which
injures the Company, CHC or their respective affiliates.

SECTION 4. CONFIDENTIALITY.

                  (a) The Participant agrees not to disclose the terms and
conditions of this Agreement. The Participant may, however, disclose this
Agreement to the Participant's immediate family, legal counsel, tax advisor, and
tax authorities as necessary, provided that they agree not to disclose the terms
and conditions to anyone.

                  (b) For purposes of this Section 4, "Confidential Information"
shall mean all confidential and proprietary technical, business and financial
information of the Company, CHC and their respective affiliates, including, but
not limited to, marketing and financial information, personnel, sales and
statistical data, plans for future development, computer programs, information
and knowledge pertaining to products and services offered, trade secrets,
proprietary information, advertising, sales methods and systems, sales and
profit figures, customer and client lists, and relationships between the Company
or CHC and their respective affiliates, customers, clients, suppliers and others
who have business dealings with the Company or CHC and their respective
affiliates, information with respect to various techniques, procedures,
processes and methods and any other information acquired, used or developed by
Participant while employed by the Company.

                  (c) Participant recognizes and acknowledges that by reason of
his or her employment by and service to the Company, he or she has had and will
continue to have access to Confidential Information. Participant acknowledges
that such Confidential Information is a valuable and unique asset and agrees
that he or she will not, either while employed by the Company or thereafter, use
any Confidential Information for his or her own benefit or the benefit of others
or disclose any Confidential Information to any person, firm or company not
connected with the Company for any reason whatsoever except (i) as his or her
duties as an employee may require, (ii) as authorized in writing by the Trustee,
or if no Trustee is serving, by the Board of Directors of the Company, or (iii)
to the extent necessary to comply with law or the valid order

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of a court of competent jurisdiction, in which event Participant shall notify
the Company and CHC as promptly as practicable (and, in any event, prior to
making such disclosure). Participant shall use his or her best efforts to
prevent any such disclosure by others.

                  (d) Notwithstanding the foregoing, Participant shall be
relieved of his or her responsibilities under this Section 4 with respect to any
Confidential Information (i) which is in the public domain through no fault of
Participant or (ii) which the Participant can demonstrate by clear and
convincing evidence was legally obtained from a third party which did not learn
it, directly or indirectly, from Participant or any other person bound to
maintain the confidentiality thereof or the Company. All documents, magnetic
media and other materials containing Confidential Information made or compiled
by or made available to Participant during the course of his or her employment,
and all copies thereof, are and shall be the property of the Company and shall
be delivered to the Company by Participant immediately upon the termination of
his or her employment.

                  (e) The obligations under this Section 4 shall remain in
effect and be binding upon the Participant following termination of the
Participant's employment for any reason whatsoever.

SECTION 5. AGREEMENT NOT TO SOLICIT EMPLOYEES.

                  During the Participant's employment with the Company and for a
period of one (1) year following the termination of such employment for any
reason whatsoever, provided the Company is not in breach or default hereof, the
Participant shall not directly or indirectly, contact, solicit, divert, take
away or hire, or attempt to contact, solicit, divert, take away or hire, any
employees of the Company, CHC or their affiliates.

SECTION 6. AGREEMENT NOT TO SOLICIT COMPANY CLIENTS.

                  During the Participant's employment with the Company and for a
period of one (1) year following the termination of such employment for any
reason whatsoever, provided the Company is not in breach or default hereof, the
Participant shall not directly or indirectly, contact, solicit, divert, take
away or attempt to contact, solicit, divert, or take away any Client. "Client"
shall mean any person, corporation, partnership, entity or legal organization to
whom the Company, CHC or their affiliates sold their services or products or
solicited to sell their services or products during the twelve (12) months prior
to the termination of Participant's employment.

SECTION 7. AGREEMENT NOT TO COMPETE.

                  (a) Participant acknowledges that he or she is an executive,
director or a manager for the Company and as such, has worked closely with
information which represents vital trade secrets and Confidential Information of
the Company, CHC and their affiliates. Participant further acknowledges that,
should Participant perform work or services for a Competing Business, as defined
below, (in any capacity including, but not limited to, as an employee, officer,
agent, consultant or independent contractor), Participant necessarily would rely
on or inevitably disclose such information. As a result, Participant agrees
that, during the

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Participant's employment and for a period of one (1) year following the
termination of such employment due to his or her voluntary termination or his or
her being terminated by the Company "for cause", the Participant shall not
(except with the prior written consent of the Trustee, or if no Trustee is
serving, of the Company), within the Restricted Territory, as defined below,
either directly or indirectly, on Participant's own behalf or in the service or
on behalf of others, as an employee, officer, agent, consultant, or independent
contractor, or in any other capacity which involves duties and responsibilities
similar to those the Participant has undertaken for the Company, engage in any
Competing Business. If Participant's employment is terminated involuntarily by
the Company and such termination is without "for cause", then the covenant set
forth in this Section 7(a) shall terminate upon the effective date of such
employment termination.

                  (b) As used in this Agreement, "Restricted Territory" means
the geographic region over which the Participant has responsibility as of the
date of Participant's termination. As used in this Agreement, "Competing
Business" means any business organization of whatever form engaged in any
business or enterprise which in whole or in part is the same as, or
substantially the same as, the business of the Company, CHC or their affiliates.

SECTION 8. SEVERABILITY.

                  If, at the time of enforcement of Sections 4, 5, 6, and/or 7
herein a court shall hold that the duration, scope or area restrictions stated
herein are unreasonable under circumstances then existing, the parties agree
that the maximum duration, scope or area reasonable under such circumstances
shall be substituted for the stated duration, scope or area and that the court
shall be allowed to revise the restrictions contained herein to cover the
maximum period, scope and area permitted by law.

SECTION 9. NOT A CONTRACT OF EMPLOYMENT.

                  BY PARTICIPANT'S SIGNATURE BELOW, SUBJECT TO PARAGRAPH 12,
PARTICIPANT ACKNOWLEDGES THAT EMPLOYMENT WITH THE COMPANY IS AT-WILL, MEANING
THE PARTICIPANT OR THE COMPANY MAY TERMINATE THAT EMPLOYMENT RELATIONSHIP AT ANY
TIME WITHOUT NOTICE, CAUSE, OR ANY SPECIFIC DISCIPLINARY PROCEDURES. NOTHING IN
THIS AGREEMENT OR ANY OTHER POLICY, PRACTICE, PROCEDURE, OR BENEFIT OF THE
COMPANY CONSTITUTES AN EXPRESS OR IMPLIED CONTRACT, GUARANTEE, PROMISE, OR
COVENANT OF EMPLOYMENT FOR A SPECIFIED TERM OR FOR TERMINATION ONLY FOR CAUSE.

SECTION 10. GOVERNING LAW/VENUE.

                  This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Colorado. Jurisdiction and venue
over any dispute involving the enforcement or construction of this Agreement
shall be in the United States District Court for the District of Colorado,
Denver District Court, or the Bankruptcy Court.

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SECTION 11. BINDING AGREEMENT.

                  Participant may not assign this Agreement, and any attempted
assignment shall be void and of no force or effect. This Agreement shall be
effective as of the date hereof and shall be binding upon and inure to the
benefit of the Participant, Participant's heirs, personal and legal
representatives, or guardians. The obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon any successor
and assign of the Company. The rights of the Company, CHC and their affiliates
under this Agreement shall inure to the benefit of any successors and assigns
and the Trustee and his successors and assigns.

SECTION 12. ENTIRE AGREEMENT.

                  This Agreement supersedes any and all prior arrangements,
understandings or agreements, whether written or oral, including (i) the
Management Incentive Plan for fiscal year 2002, and (ii) any other employee
retention or incentive plans. However, this Agreement is not intended to
supersede any other written agreements between the parties with respect to the
employment of the Participant or the terms or conditions set forth therein.

SECTION 13. AMENDMENTS.

                  This Agreement may not be amended or modified except by a
written instrument signed by the Company and the Participant and approved by the
Trustee.

SECTION 14. NOTICES.

                  Any notices provided for by this Agreement shall be sufficient
if in writing and shall be deemed given when hand delivered or sent by
registered or certified mail to the Participant at the last residence address
Participant has filed in writing with the Company or, in the case of the
Company, with its Legal Department at the Denver, Colorado corporate offices,
with a copy to the Trustee c/o Schnader Harrison Segal & Lewis, LLP, 1600 Market
Street, Suite 3600, Philadelphia, Pennsylvania 19103-7286.

SECTION 15. WITHHOLDING.

                  All payments made by the Company to the Participant under this
Agreement shall be subject to applicable federal, state and local tax
withholding and 401(k) withholding.

                        [THIS SPACE INTENTIONALLY BLANK]

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IN WITNESS WHEREOF, the parties knowingly and voluntarily have executed, sealed
and delivered this Key Employee Retention and Incentive Program Agreement as of
                         the date first above written.



PARTICIPANT                                   CORAM, INC.


By: /s/ ALLEN MARABITO                        By: /s/ VITO PONZIO, JR.
    ------------------                            -----------------------------
     Allen Marabito                           Name:  Vito Ponzio, Jr.
                                              Title: Senior Vice President,
                                                     Human Resources



                                              APPROVED BY:

                                              ARLIN M. ADAMS, Chapter 11 Trustee


                                              By: /s/ JOSEPH J. DEVINE
                                                  -----------------------------
                                                  Joseph J. Devine,
                                                  Attorney for the Trustee

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                                    Rider to

                     CORAM KEY EMPLOYEE RETENTION INCENTIVE
                         PROGRAM AGREEMENT ("AGREEMENT")


         Reference is made to the Agreement between Coram, Inc. and Allen J.
Marabito. All terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Agreement.

         For purposes of clarifying Section 12 of the Agreement, but without
limitation thereof, the parties acknowledge and agree that the Agreement
supersedes and is in lieu of the Participant's Employment Agreement, dated
November 30, 1999 with CHC, with respect to any contractual rights or claims to
a bonus payable under Section 3(b) of such Employment Agreement for the year
2002 or under CHC's Management Incentive Plan for 2002, which rights or claims
are hereby released by Participant. Participant reserves all rights to claim
balances due under CHC's Management Incentive Plan for 2001. The Trustee
reserves the right to award any additional performance bonuses to Participant
for the years 2002 and 2003 at his sole discretion and subject to Bankruptcy
Court approval, if necessary.

         IN WITNESS WHEREOF, the parties knowingly and voluntarily have
executed, sealed and delivered this Rider to Key Employee Retention and
Incentive Program Agreement as of the Effective Date of the Agreement.


PARTICIPANT                                  CORAM, INC.


By: /s/ ALLEN MARABITO                       By: /s/ VITO PONZIO, JR.
    ------------------------                     -------------------------------
    Allen J. Marabito                        Name: Vito Ponzio, Jr.
                                             Title: Senior Vice President,
                                                    Human Resources



                                             APPROVED BY:

                                             ARLIN M. ADAMS, Chapter 11 Trustee


                                             By: /s/ JOSEPH J. DEVINE
                                                 -------------------------------
                                                 Joseph J. Devine,
                                                 Attorney for the Trustee








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