APRIA HEALTHCARE GROUP INC
EXHIBIT 10.20
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>EXHIBIT 10.20
<TEXT>

                                                                   Exhibit 10.20

                              EMPLOYMENT AGREEMENT
                              --------------------

     This Employment  Agreement (the "Agreement") is entered into by and between
Apria Healthcare Group Inc. (the "Company") and John C. Maney (the "Executive"),
as of December 7, 2000, effective as of January 1, 2000.

I.   EMPLOYMENT.
     ----------

     The Company hereby  employs the Executive and the Executive  hereby accepts
such employment,  upon the terms and conditions  hereinafter set forth. The term
of the employment will continue until the termination of Executive's  employment
by reason of his written resignation,  termination by the Company for any reason
by written  notice of  termination,  or death,  provided  that for  purposes  of
Section IV-D-3,  the "Expiration Date" shall initially be December 31, 2001, and
shall be extended one (1) day for each day of the Executive's  employment during
the term of this Agreement  until the  Executive's  employment is terminated for
any reason.  For instance,  if the  Executive's  employment  with the Company is
terminated on January 1, 2001, the  Expiration  Date shall be December 31, 2002.
The Executive's  employment may be terminated at any time by written notice from
the Executive to the Company or from the Company to the Executive, in the manner
provided in Section XVI hereof.

II.  DUTIES.
     ------

     The Executive shall serve during the course of his employment as an
Executive  Vice  President  and the  Chief  Financial  Officer  of the  Company,
reporting to the Chief  Executive  Officer.  The Executive  shall 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 provided such duties and  responsibilities are the types
of  duties  that  would  ordinarily  be  assigned  to a person  with  employment
experience  and a position  comparable to that of the  Executive.  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 in 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.

III. COMPENSATION.
     ------------

     A. The  Company  will pay to the  Executive  a base  salary  at the rate of
$350,000  per year.  Such salary  shall be payable in periodic  installments  in
accordance  with the Company's  customary  practices.  Amounts  payable shall be
reduced  by  standard   withholdings  and  other  authorized   deductions.   The
Executive's  salary may be increased  from time to time at the discretion of the
Company, provided, however, that such increase shall not be less than 5% for the
calendar years 2000, 2001 and 2002.

     B. Annual Bonus,  Incentive,  Savings and Retirement  Plans.  The Executive
shall be entitled to  participate  in all annual bonus,  incentive,  savings and
retirement plans,  practices,  policies and programs applicable generally to the
Chief Executive  Officer of the Company,  including  without  limitation (i) the
Company's Incentive  Compensation Plan, (ii) the Company's target incentive plan
for the two years  ended  December  31,  2000,  and (iii) the  Company's  401(k)
Savings Plan.

     C. Welfare Benefits Plans. The Executive and/or his family, as the case may
be, shall be eligible for  participation in and shall receive all benefits under
welfare benefit plans, practices,  policies and programs provided by the Company
(including,  without  limitation,  medical,  prescription,  dental,  disability,
salary continuance,  group life,  accidental death and travel accident insurance
plans and programs) to the extent  applicable  generally to other  executives of
the Company.  The Company  reserves the right to modify,  suspend or discontinue
any and all of the above  plans,  practices,  policies  and programs at any time
without recourse by the Executive so long as such action is taken generally with
respect to other similarly  situated peer executives and does not single out the
Executive.

     D.   Expenses.   The  Executive   shall  be  entitled  to  receive   prompt
reimbursement  for  all  reasonable  employment  expenses  incurred  by  him  in
accordance  with the policies,  practices and procedures as in effect  generally
with respect to other executives of the Company.  Such employment  expenses will
include,  but are not limited to,  reasonable  costs to maintain the Executive's
California CPA license and the related continuing education requirements.

     E. Fringe  Benefits.  The Executive  shall be entitled to fringe  benefits,
including without  limitation (i) a car allowance of $8,400 per year, payable in
periodic installments in accordance with the Company's customary practices, (ii)
reasonable access to the Company's  independent  auditors for personal financial
planning,  (iii) reasonable travel and entertainment expenses of the Executive's
spouse,  on an  actually  incurred  basis when  necessary  in  conjunction  with
participation in Company events, and (iv) such other benefits in accordance with
the plans,  practices,  programs and policies as may be in effect generally with
respect to the Chief Executive Officer of the Company.


     F. Vacation. The Executive shall be entitled to four weeks of paid vacation
annually, to be available and prorated monthly during the term of this Agreement
and otherwise to be consistent with the vacation policy and practice  applicable
to other executives of the Company.


     G. Stock Options. The provisions in Section 2-G of the employment agreement
between the Executive and the Company dated as of October 19, 1998, shall remain
in full force and effect.


IV.  TERMINATION.
     -----------

     A.  Death  or  Disability.   The  Executive's  employment  shall  terminate
automatically  upon the  Executive's  death.  If the Company  determines in good
faith  that the  Disability  of the  Executive  has  occurred  (pursuant  to the
definition of Disability set forth below),  it may give to the Executive written
notice in  accordance  with  Section  XVII if its  intention  to  terminate  the
Executive's  employment.  In such event,  the  Executive's  employment  with the
Company shall  terminate  effective on the 30th day after receipt of such notice
by the  Executive,  provided  that,  within the 30 days after such receipt,  the
Executive  shall not have returned to full-time  performance of his duties.  For
purposes  of this  Agreement,  "Disability"  shall  mean a  physical  or  mental
impairment which substantially limits a major life activity of the Executive and
which  renders the Executive  unable to perform the  essential  functions of his
position,  even with  reasonable  accommodation  which  does not impose an undue
hardship on the Company.  The Company reserves the right, in good faith, to make
the  determination  of Disability  under this Agreement  based upon  information
supplied by the Executive and/or his medical  personnel,  as well as information
from medical personnel (or others) selected by the Company or its insurers.

     B. Cause.  The Company may terminate the Executive's  employment 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;  failure to substantially  perform his duties (other than
such failure  resulting  from the  Executive's  Disability)  for a 30-day period
after written  demand for  substantial  performance  is delivered by the Company
that  specifically  refers to this  paragraph and 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;
or a breach of any material  term of this  Agreement  for a 30-day  period after
written  notification  is delivered by the Company that  specifically  refers to
this  paragraph  and  identifies  the manner in which the Company  believes  the
Executive has breached a material term of this  Agreement.  For purposes of this
paragraph,  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
Chairman  of the Board  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 in the second sentence of this  paragraph,  and specifying the
particulars thereof in detail.

     C. Other than Cause or Death or  Disability.  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, subject to the provisions of this Agreement.

     D. Obligations of the Company Upon Termination.


     1. Death or  Disability.  If the  Executive's  employment  is terminated by
     reason  of the  Executive's  death  or  Disability,  this  Agreement  shall
     terminate  without  further  obligations  to the  Executive  or  his  legal
     representatives under this Agreement, other than for (a) payment of the sum
     of (i) the  Executive's  base  salary  through the date of  termination  of
     employment  to the  extent  not  theretofore  paid,  plus  (ii) any  earned
     vacation  pay, to the extent not  theretofore  paid (the sum of the amounts
     described in clauses (i) and (ii) shall be  hereinafter  referred to as the
     "Accrued Obligations"),  which shall be paid to the Executive or his estate
     or beneficiary,  as applicable, in a lump sum in cash within 30 days of the
     date of termination of employment;  and (b) payment to the Executive or his
     estate or beneficiary,  as applicable,  (i) any amounts due pursuant to the
     terms of any applicable welfare benefit plans; (ii) obligations pursuant to
     the terms of any outstanding stock option agreements; and (iii) obligations
     under the Company's 401(k) Savings Plan.

     2. Cause.  If the  Executive's  employment is terminated by the Company for
     Cause,  this Agreement shall terminate  without further  obligations to the
     Executive other than for the timely payment of the Accrued Obligations.  If
     it is  subsequently  determined  that the  Company  did not have  Cause for
     termination  under this  Section  IV-D-2,  then the  Company's  decision to
     terminate  shall be deemed to have been made under  Section  IV-D-3 and the
     amounts  payable  thereunder  shall be the only amounts the  Executive  may
     receive for his termination.

     3. Other than Cause or Death or Disability.

     (a) If, during the term of this Agreement,  (i) the Company  terminates the
     Executive's employment for other than Cause or death or Disability, or (ii)
     the Executive  terminates  his  employment  hereunder  with Good Reason (as
     defined  below),  the  Executive's   employment  shall  terminate  and  the
     Executive shall be entitled to receive the following:

     (1) an amount equal to the Contract  Balance (as defined below) in one lump
     sum upon such termination of his employment; and

     (2) the Accrued Obligations as of the date of termination of employment.

     Any payment made pursuant to this Section IV-D-3(a) shall be reduced by all
     amounts  required to be withheld by applicable  law, and shall only be made
     in  exchange  for a valid  release  of all claims  the  Executive  may have
     against the Company in a form acceptable to the Company. Such payment shall
     constitute  the sole and entire  obligation  of the  Company to provide any
     compensation  or benefits to the  Executive  upon  termination,  except for
     obligations under the Company's 401(k) Savings Plan,  obligations  pursuant
     to the terms of any outstanding stock option agreements,  and the Company's
     obligations to make payments  required to be made under any other incentive
     compensation plan .

     (b) The term "Good Reason" means:


         (i) if the  Executive's  annual base  salary is  reduced,  except for a
         general one-time  "across-the-board" salary reduction not exceeding ten
         percent  (10%) which is imposed  simultaneously  on all officers of the
         Company provided,  however, that the minimum salary increases described
         in Section  III. A. shall  continue to apply to any such  reduced  base
         salary; or

         (ii) if 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; or

         (iii) if the Company does not permit the Executive to continue to serve
         as the Chief Financial  Officer or another mutually  acceptable  senior
         executive position; or

         (iv) if a Change of  Control of the  Company  occurs  and,  at any time
         concurrent with or during the six-month period following said Change of
         Control,  the Executive shall have sent to the Chief Executive  Officer
         of the Company a written  notice  terminating  his employment on a date
         specified in said notice.

     (c) The term  "Contract  Balance"  means an amount equal to the annual base
     salary and car allowance that Executive  would have earned from the Company
     had  Executive  continued  his  employment  from the  date the  Executive's
     employment  terminated  through the Expiration Date (i.e.,  base salary and
     car allowance for two (2) years), using the rate of base salary and the car
     allowance  in effect on the date on which the  Executive  received  or gave
     written  notice of his  termination,  plus an amount equal to two (2) times
     the sum of (i) an amount  equal to the average of the  Executive's  two (2)
     most recent annual bonuses,  if any, received under the Company's Incentive
     Compensation  Plan prior to such notice of termination,  and (ii) 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 annual amount is
     hereby initially determined to be $10,000.

     (d) A "Change of Control" shall be deemed to have occurred if:


         (i) any  "person," as such term is used in Sections  13(d) and 14(d)(2)
         of the Securities Exchange Act of 1934, as amended (the "1934 Act") is,
         becomes or enters a contract to become, the "beneficial owner," as such
         term is used in Rule 13d-3  promulgated under the 1934 Act, directly or
         indirectly,  of securities  representing  twenty-five  percent (25%) or
         more of the voting common stock of the Company;

         (ii)  all or  substantially  all  of the  business  of the  Company  is
         disposed of, or a contract is entered to dispose of all of the business
         of the Company pursuant to a merger, consolidation other transaction in
         which  (a)  the  Company  is not  the  surviving  company  or  (b)  the
         stockholders of the Company prior to the transaction do not continue to
         own at least sixty percent (60%) of the surviving corporation; or

         (iii) the Company is materially or completely liquidated.

     Notwithstanding clause (i) above, a "Change of Control" shall not be deemed
     to have occurred  solely  because a person shall be, become or enter into a
     contract to become the beneficial  owner of 25% or more, but less than 40%,
     of the  voting  common  stock  of the  Company,  if and for so long as such
     person is bound by, and in  compliance  with,  a contract  with the Company
     providing that such person may not nominate,  vote for, or select more than
     a minority of the directors of the Company.  The exception  provided by the
     preceding  sentence  shall  cease to apply with  respect to any person upon
     expiration, waiver, or non-compliance with any such contract, by which such
     person was bound.

     (e) In the event the Executive initiates  arbitration pursuant to Section V
     to enforce his rights to any  payments  under this Section  IV-D-3,  or the
     Company  seeks to withhold  or reduce any such  payments  for any  reasons,
     then:

         (i) the burden of proving  that the  Executive  is not entitled to such
         payments shall be on the Company;


         (ii) The Company  shall pay all expenses  incurred by the  Executive in
         prosecuting  or defending  any such  proceeding as they are incurred by
         the  Executive  in advance of the final  disposition  of such  dispute,
         together with any tax liability incurred by the Executive in connection
         with the receipt of such amounts;  provided,  however, that the payment
         of such expenses  incurred in advance of the final  disposition of such
         proceeding  shall be made  only  upon  delivery  to the  Company  of an
         undertaking,  by or on behalf of the Executive, to repay all amounts so
         advanced to the extent the arbitrator in such  proceeding so determines
         as provided in Section V; and

         (iii) All such payments required under this Agreement shall continue to
         be made on the dates  provided  herein  without any offsets,  claims or
         charges of any kind whatsoever being asserted by the Company, except in
         the event a final determination  pursuant to the arbitration provisions
         of Section V has been rendered and such determination provides that the
         Company is entitled to assert any such offset,  claim or charge against
         the Executive.

     4. Exclusive Remedy. The Executive agrees that the payments contemplated by
this  Agreement  shall   constitute  the  exclusive  and  sole  remedy  for  any
termination  of his  employment  and the  Executive  covenants  not to assert or
pursue any other remedies,  at law or in equity, with respect to any termination
of employment.


V.   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.  Such arbitration  shall be conducted in
Orange  County,  California,  and the  arbitrator  shall be a resident of Orange
County,  California  or of a county  contiguous  to Orange  County,  California.
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 VI, VII,
or  VIII  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  arbitrator's  order  shall
specify,  based on the outcome of the  arbitration,  whether the Executive shall
repay any of the Executive's  expenses  theretofore paid by the Company pursuant
to Section IV-D-3(e)(ii). The fees and expenses of the arbitrator shall be borne
by the Company.

VI.  ANTISOLICITATION.
     ----------------

     The  Executive  promises and agrees that during the term of this  Agreement
(including  any  renewal) 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.

VII. 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 of her own  employment  to work for any other
business, individual, partnership, firm, corporation, or other entity.

VIII.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,
reimbursements,  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 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 that he shall
not engage in unfair  competition either during the time employed by the Company
or any time thereafter.

IX.  EXCISE TAX.
     ----------

     A. In the event that any amount or  benefit  that may be paid or  otherwise
provided to or in respect of the Executive by or on behalf of the Company or any
affiliate,  whether  pursuant  to this  Agreement  or  otherwise  (collectively,
"Covered  Payments"),  is or may become subject to the tax imposed under Section
4999 of the  Internal  Revenue  Code of 1986,  as amended  (the  "Code") (or any
successor provision or any comparable  provision of state, local or foreign law)
("Excise Tax"), the Company will pay to the Executive a  "Reimbursement  Amount"
equal to the total of: (A) any Excise Tax on the Covered Payments,  plus (B) any
Federal,  state, and local income taxes,  employment and excise taxes (including
the  Excise  Tax) on the  Reimbursement  Amount,  plus  (C) the  product  of any
deductions disallowed for Federal, state or local income tax purposes because of
the inclusion of the Reimbursement  Amount in the Executive's  income multiplied
by the Executive's  combined  Federal,  state, and local income tax rate for the
calendar year in which the Reimbursement Amount is includible in the Executive's
taxable  income,  plus (D) any  interest,  penalties or additions to tax imposed
under  applicable  law in  connection  with the Excise Tax or the  Reimbursement
Amount, plus (E) any reasonable out-of-pocket costs incurred by the Executive in
connection  with any of the  foregoing.  For purposes of this Section IX-A,  the
Executive  will be  deemed  to pay  (1)  Federal  income  taxes  at the  highest
applicable  marginal rate of Federal income  taxation  applicable to individuals
for the calendar  year in which the  Reimbursement  Amount is  includible in the
Executive's  taxable income and (2) any applicable  state and local income taxes
at the highest  applicable  marginal rate of taxation  applicable to individuals
for the calendar  year in which such  Reimbursement  Amount is includible in the
Executive's taxable income, net of the maximum reduction in Federal income taxes
which could be obtained  from the deduction of such state or local taxes if paid
in such year (determined  without regard to limitations on deductions based upon
the  amount of the  Executive's  adjusted  gross  income).  Except to the extent
provided in Section  IX-C below,  this  provision is intended to put Employee in
the same  position  as Employee  would have been had no Excise Tax been  imposed
upon or incurred as a result of any Payment.

     B. The payment of a Reimbursement Amount under this Section IX shall not be
conditioned upon the Executive's termination of employment.

     C.  Notwithstanding  the foregoing  provisions of this Section IX-A, if the
Company  determines that,  absent this sentence,  the Executive is entitled to a
Reimbursement Amount, but that the portion of the Covered Payments that would be
treated as  "parachute  payments"  under Code Section 280G  ("Covered  Parachute
Payments")  does not exceed  103% of the  greatest  amount of Covered  Parachute
Payments  that  could be paid to the  Executive  such that the  receipt  of such
Covered  Parachute  Payments  would not give rise to any  Excise  Tax (the "Safe
Harbor  Amount"),  then no  Reimbursement  Amount shall be paid to the Executive
(unless for any reason  Executive is  determined to be subject to the Excise Tax
after  application  of the  balance  of this  sentence,  in which  case the full
Reimbursement  Amount shall be paid), and the Covered Parachute Payments payable
under this Agreement shall be reduced so that the Covered Parachute Payments, in
the aggregate,  are reduced to the Safe Harbor Amount.  For purposes of reducing
the Covered Parachute  Payments to the Safe Harbor Amount,  only amounts payable
under this Agreement  shall be reduced.  If the reduction of the amounts payable
under this  Agreement  would not result in a reduction of the Covered  Parachute
Payments to the Safe Harbor Amount,  no amounts  payable under this Agreement or
otherwise  shall be reduced  pursuant to this Section  IX-C.  The Company  shall
notify the Executive of any intent to reduce the amount of any Covered  Payments
in accordance  with this Section IX-C (which notice,  if  practicable,  shall be
given  prior to the  occurrence  of an event  that  would give rise to a Covered
Parachute Payment), and Executive shall have the right to designate which of the
Covered  Payments  shall  be  reduced  and to what  extent,  provided  that  the
Executive may not so elect to the extent that, in the  determination  of counsel
to the Company,  such  election  would cause the  Executive to be subject to the
Excise Tax.

     D.  The  determination  of  whether  an  event  described  in Code  Section
280G(b)(2)(A)(i) has occurred, the amount of any Reimbursement Amount and/or the
amounts described in Section IX-C above shall be made initially by an accounting
firm mutually  acceptable to the Company and the Executive;  provided,  however,
that  nothing  herein  shall  limit  the  Executive's  right to  payment  of the
Reimbursement  Amount in the  event it is  determined  that any of such  initial
determinations was incorrect.

     E. The Executive  shall promptly notify the Company in writing of any claim
by any taxing  authority  that, if successful,  would require the payment by the
Company  of a  Reimbursement  Amount;  provided,  however,  that  failure by the
Executive  to give  such  notice  promptly  shall  not  result  in a  waiver  or
forfeiture of any of the Executive's  rights under this Section IX except to the
extent of actual damages suffered by the Company as a result of such failure. If
the Company  notifies the  Executive in writing  within 15 days after  receiving
such  notice  that it  desires to contest  such claim (and  demonstrates  to the
reasonable  satisfaction  of the  Executive  its  ability  to pay any  resulting
Reimbursement Amount), the Executive shall:

     1. give the Company any  information  reasonably  requested  by the Company
relating to such claim;

     2. take such action in connection with contesting such claim as the Company
shall  reasonably  request  in  writing  from time to time,  including,  without
limitation,  accepting  legal  representation  with  respect to such claim by an
attorney selected by the Company that is reasonably acceptable to the Executive;

     3. cooperate with the Company in good faith in order effectively to contest
such claim; and

     4. permit the Company to  participate in any  proceedings  relating to such
claim;

provided, however, that the Company's actions do not unreasonably interfere with
or prejudice  the  Executive's  disputes  with the taxing  authority as to other
issues;  and  provided,  further,  that  the  Company  shall  bear and pay on an
after-tax  and  as-incurred  basis,  all  attorneys  fees,  costs  and  expenses
(including  additional  interest,  penalties  and  additions to tax) incurred in
connection  with  such  contest  and  shall  indemnify  and hold  the  Executive
harmless,  on an  after-tax  and  as-incurred  basis,  for all  resulting  taxes
(including,  without limitation,  income and excise taxes), interest,  penalties
and additions to tax.

X.   SUCCESSORS.
     ----------

     A. This Agreement is personal to the Executive and shall not, without prior
written consent of the Company, be assignable by the Executive.


     B. This  Agreement  shall inure to the  benefit of and be binding  upon the
Company,   its  subsidiaries  and  its  successors  and  assigns  and  any  such
subsidiary,  successor or assignee shall be deemed  substituted  for the Company
under the terms of this Agreement for all purposes. As used herein,  "successor"
and  "assignee"  shall include any person,  firm,  corporation or other business
entity which at any time, whether by purchase, merger or otherwise,  directly or
indirectly  acquires  the stock of the Company or to which the  Company  assigns
this Agreement by operation of law or otherwise.

XI.  WAIVER.
     ------

     No waiver of any breach of any term or provision of this Agreement shall be
construed to be, nor shall be, a waiver of any other  breach of this  Agreement.
No waiver shall be binding unless in writing and signed by the party waiving the
breach.

XII. MODIFICATION.
     ------------

     This  Agreement  may not be  amended  or  modified  other than by a written
agreement executed by the Executive and the Company's Chairman.

XIII.SAVINGS CLAUSE.
     --------------

     If any  provision  of this  Agreement  or the  application  thereof is held
invalid, such invalidity shall not affect any other provisions or application of
the  Agreement  which  can be given  effect  without  the  valid  provisions  or
applications  and, to this end, the provisions of this Agreement are declared to
be severable.

XIV. COMPLETE AGREEMENT.
     ------------------

     This  Agreement  constitutes  and contains the entire  agreement  and final
understanding  concerning the  Executive's  employment  with the Company and the
other subject matters  addressed  herein between the parties.  It is intended by
the  parties  as a  complete  and  exclusive  statement  of the  terms  of their
agreement.  It supersedes and replaces all prior negotiations and all agreements
proposed or otherwise,  whether  written or oral,  concerning the subject matter
hereof. Any  representation,  promise or agreement not specifically  included in
this Agreement  shall not be binding upon or  enforceable  against either party.
This is a fully integrated agreement. Except as provided herein, the Executive's
prior employment agreement with the Company is no longer in effect.

XV.  GOVERNING LAW.
     -------------

     This Agreement  shall be deemed to have been executed and delivered  within
the State of California and the rights and obligations of the parties  hereunder
shall be construed and enforced in accordance with, and governed by, the laws of
the State of California without regard to principles of conflicts of laws.

XVI. CONSTRUCTION.
     ------------

     In any  construction  to be made of this  Agreement,  the same shall not be
construed  against  any party on the basis that the party was the  drafter.  The
captions of this Agreement are not part of the provisions  hereof and shall have
no force or effect.

XVII.COMMUNICATIONS.
     --------------

     All notices,  requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if  delivered  by hand or
by courier,  or if mailed by  registered  or certified  mail,  postage  prepaid,
addressed to the  Executive  c/o Law Offices of Michael J.  Genovese at 2123 San
Joaquin Hills Road, Newport Beach, California, 92660 or addressed to the Company
at 3570 Hyland Avenue,  Costa Mesa,  California  92626,  Attention:  Senior Vice
President and General  Counsel,  with a copy to the attention if the Senior Vice
President, Human Resources. Either party may change the address at which notices
shall be given by written notice given in the above manner.

XVIII.EXECUTION.
      ---------

     This Agreement may be executed in one or more  counterparts,  each of which
shall be deemed an original,  but all of which together shall constitute one and
the same instrument.  Xerographic copies of such signed counterparts may be used
in lieu of the originals for any purpose.

IX.  LEGAL COUNSEL.
     -------------

     The  Executive  and the Company  recognize  that this is a legally  binding
contract and  acknowledge  and agree that they have each had the  opportunity to
consult with legal counsel of their choice.

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the date first above written.

APRIA HEALTHCARE GROUP INC.                    THE EXECUTIVE

By: ____________________________               _______________________________
    Philip L. Carter                           John C. Maney
    Chief Executive Officer
</TEXT>
</DOCUMENT>
