EXHIBIT 10.a
CONFIDENTIAL
EMPLOYMENT AGREEMENT
AGREEMENT dated as of July 1, 1998, by and between OXFORD HEALTH PLANS,
INC. (the "Corporation"), having a principal office in Norwalk, Connecticut, and
Xxxxx X. Xxxx (the "Employee").
WHEREAS, the Board of Directors of the Corporation (the "Board") has
approved and authorized the Corporation's entry into this Agreement with the
Employee; and
WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions for the continued employment relationship of the
Corporation and the Employee
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Corporation and the Employee agree as follows:
1. Employment. The Employee is employed as Vice President of
Sales of the Corporation beginning April 1, 1998 (the "Effective Date"). As Vice
President of Sales the Employee shall render executive, policy and other
management services to the Corporation of the type customarily performed by
persons serving in a similar executive officer capacity, subject to the powers
by law vested in the Board and in the Corporation's stockholders. The Employee
shall report to the President of the Corporation and shall perform such other
related duties as the President of the Corporation may from time to time
reasonably direct or request. The Employee shall be a full time employee of the
Corporation.
The Employee shall perform his duties and responsibilities under this
Agreement
CONFIDENTIAL
faithfully, diligently and to the best of the Employee's ability, and in
compliance with all applicable laws and the Corporation's Certificate of
Incorporation and Bylaws, as they may be amended from time to time.
2. Term. The initial term of employment under this
Agreement shall be for a period of two (2) years commencing on the
Effective Date (the "Term"). This Agreement shall be extended
automatically for two (2) additional years on the second anniversary
date of the Effective Date and on each second anniversary of the
Effective Date thereafter, unless either the Corporation or the
Employee gives contrary written notice to the other not less than three
(3) months in advance of such anniversary of the Effective Date.
References herein to the Term shall refer both to such initial term and
such successive terms. Upon a "Change in Control" (as defined in
Section 7(a)) of the Corporation, the Term shall be extended to two (2)
years from the date of such Change in Control, unless notice to
terminate the Term has been properly provided prior to the date of such
Change in Control, and such Change in Control date shall be treated as
the Effective Date for purposes of renewals of this Agreement. The Term
shall end upon the termination of the Employee's employment under this
Agreement.
3. Compensation. (a) Base Salary. The Corporation agrees
to pay the Employee during the Term an annual base salary ("Base
Salary") of $275,000. The Base Salary shall be reviewed at least
annually during the Term by the Board, and the Employee shall receive
such increases in Base Salary, if any, as the Compensation Committee of
the Board (the "Committee") in its absolute discretion may determine,
together with such performance or merit increases, if any, as the
Committee in its absolute discretion may determine. Participation with
respect to discretionary bonuses, retirement and other employee benefit
plans and fringe benefits shall not reduce the Base Salary payable to
the Employee under this Section 3. The Base Salary shall be payable to
the Employee in equal installments in conformity with the Corporation's
normal payroll periods.
(b) Bonus. During the Term, the Employee shall be eligible to
receive an annual performance bonus (in an amount no greater than 100 %
of the earned Base Salary for the year in which such performance is
measured) consistent with the Corporation's management incentive
program, as recommended by the President and approved by the Committee
and the Chief Executive Office and the Chairman of the Corporation;
provided however, that in July of 1998 the Employee shall receive
$100,000 which constitutes a portion of the total annual bonus due to
the Employee in 1998.
(c) Options. Upon the execution by the Employee of this
Agreement, the Corporation shall grant the Employee an option to
acquire 50,000 shares of the Corporation's common stock pursuant to the
terms and conditions of the Corporation's 1991 Stock Option Plan (the
"Plan"), at an exercise price equal to the fair market value of such
common stock at the close of business on the date of grant, vesting in
four equal annual installments over the four years from date of grant.
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4. Withholding Obligation. The Corporation shall have
the ability to withhold compensation otherwise due to the Employee
under this Agreement any federal income tax, Federal Insurance
Contribution Act tax, Federal Insurance Contribution Act tax, Federal
Unemployment Act tax, or other amounts required to be withheld from
compensation from time to time under the Internal Revenue Code of 1986,
as amended (the "Code"), or under any state or municipal laws or
regulations.
5. Fringe Benefits.
(a) Vacations and Leave. During the Term, the
Employee shall be eligible to accrue 23 select days per calendar year
or such longer period as the Committee may approve. The Employee shall
schedule the timing of paid select time in a reasonable manner. The
Employee shall also be eligible for such other leave, with or without
compensation, as shall be mutually agreed upon by the Committee and the
Employee.
(b) Participation in Retirement and Employee Benefit
Plans. During the Term, the Employee shall be eligible to participate
in the Corporation's 1991 Stock Option Plan, annual incentive
compensation plan, the Oxford Specialty Holdings, Inc. 1996 Equity
Incentive Compensation Plan and any other plan of the Corporation or
its subsidiaries relating to stock options, stock appreciation, stock
purchases, pension, thrift, profit sharing, group life insurance,
Manulife coverage, medical coverage, education or other retirement or
employee benefits that the Corporation may adopt for the benefit of its
executive employees. The employee will contribute to the cost of
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benefits at the Employee rate.
(c) Disability. If the Employee shall become disabled
or incapacitated during the Term to the extent that he is unable to
perform his duties and responsibilities hereunder, he shall be eligible
to receive disability benefits, of the type currently provided to him,
or, if more favorable to the Employee, benefits of the type provided
for other executive employees in similar positions with the
Corporation.
(d) Death. If the Employee shall die during the Term,
the Corporation shall pay to such person as the Employee has designated
in a notice filed with the Corporation, or, if no such notice is filed,
to his estate, in substantially equal monthly installments, from the
date of his death for a period of three (3) months, an amount equal to
the Employee's Base Salary as of his date of death.
(e) Other Benefits. During the Term, the Employee
shall be eligible to participate in any other fringe benefits which are
or may become applicable to the Corporation's executive employees,
including a car allowance of $750.00 per month, a reasonable expense
account, and any other benefits which are commensurate with the duties
and responsibilities to be performed by the Employee under this
Agreement.
6. Termination of Employment. The Employee's employment
hereunder may be terminated under the circumstances set forth in
paragraphs (a) through (e) below:
(a) Death. The Employee's employment hereunder shall
terminate upon his death.
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(b) Disability. If, as a result of the Employee's
incapacity due to physical or mental illness, the Employee shall have
been absent from his duties hereunder on a full-time basis for the
entire period of six (6) consecutive months, and within thirty (30)
days after written Notice of Termination is given (which may occur
before or after the end of such six (6) month period) shall not have
returned to the performance of his duties hereunder on a full-time
basis, the Corporation may terminate the Employee's employment
hereunder for "Disability".
(c) Cause. The Corporation may terminate the
Employee's employment hereunder for Cause or without Cause. Except as
provided in Section 7(b) hereof following a Change in Control,
termination for Cause shall mean termination because the Employee (i)
engages in the following conduct in connection with his employment with
the Corporation: personal dishonesty, willful misconduct, breach of
fiduciary duty involving personal profit, breach of a restrictive
covenant against competition, disclosure of confidential information of
the Corporation, consistent intentional failure to perform stated
duties after notice, or (ii) willfully violates any law, rule, or
regulation (other than traffic violations or similar offenses), which
willful violation materially impacts the Employee's performance of his
duties to the Corporation.
(d) Good Reason. The Employee may terminate his
employment hereunder with or without Good Reason; provided, however,
that the Employee agrees not to terminate his employment hereunder
(other than for Good Reason or for Retirement) during the ninety-day
period following a Change in Control. Except as
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provided in Section 7(c) hereof following a Change in Control, for
purposes of this Agreement "Good Reason" shall mean any (i) removal of
the Employee from, or failure to re-appoint the Employee to, his
position as Vice President of Sales, except in connection with
termination of the Employee for Cause, or (ii) requirement that the
Employee report to someone other than the President or Chief Executive
Officer of the Corporation, or (iii) failure by the Corporation to
comply with Section 3 hereof in any material respect. For purposes of
this Agreement, "Good Reason" shall not exist until after Employee has
given the Company notice of the applicable event within 90 days of such
event and which is not remedied within 30 days after receipt of written
notice from Employee specifically delineating such claimed event and
setting forth Employee's intention to terminate employment if not
remedied; provided, that if the specified event cannot reasonably be
remedied within such 30-day period and the Company commences reasonable
steps within such 30-day period to remedy such event and diligently
continues such steps thereafter until a remedy is effected, such event
shall not constitute "Good Reason" provided that such event is remedied
within 60 days after receipt of such written notice.
(e) Retirement. For purposes of this Agreement,
"Retirement" shall mean termination of the Employee's employment by
either the Employee (other than for Good Reason) or the Corporation
(other than for Cause) on or after the Employee's normal retirement age
under the terms of the Corporation's pension plan (or, any other
tax-qualified plan, if no pension plan exists); provided, that,
following a Change in
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Control such normal retirement age may not be reduced for purposes of
this Agreement without the consent of the Employee.
(f) Date of Termination. For purposes of this
Agreement, "Date of Termination" means (1) the effective date on which
the Employee's employment by the Corporation terminates as specified in
a Notice of Termination by the Corporation or the Employee, as the case
may be, or (2) if the Employee's employment terminates by reason of
death, the date of death of the Employee. Notwithstanding the previous
sentence, (i) if the Employee's employment is terminated for Disability
(as defined in Section 6(b)), then such Date of Termination shall be no
earlier than thirty (30) days following the date on which a Notice of
Termination is received, and (ii) if the Employee's employment is
terminated by the Corporation other than for Cause, then such Date of
Termination shall be no earlier than thirty (30) days following the
date on which a Notice of Termination is received.
(g) Payment Upon Termination. Upon any termination of
employment hereunder, the Corporation shall pay the Employee, within
ten (10) days following his Date of Termination, a lump sum cash amount
equal to the sum of (i) the Employee's unpaid Base Salary through the
Date of Termination, (ii) any bonus payments which have become payable
(other than deferred amounts), to the extent not theretofore paid, and
(iii) any vacation pay owed with respect to accrued, but unused,
vacation.
(h) Termination Without Cause, For Good Reason or
Upon Failure to Renew. In addition to the payments set forth in Section
6(g) hereof, in the event
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that the Employee's employment with the Corporation terminates either
(1) prior to a Change in Control or (2) following the two-year period
immediately subsequent to a Change in Control (including as a result of
a notice of non-renewal of the Term by the Corporation provided during
such two-year period), in each case as a result of (i) a termination by
the Employee for Good Reason, (ii) a termination by the Corporation
without Cause (other than for Retirement or Disability) or (iii) notice
by the Corporation of non-renewal of the Term (other than for
Retirement), then the Corporation shall pay to the Employee an amount
equal to the sum of the Base Salary earned by the Employee from the
Corporation and its subsidiaries during the twelve-month period
immediately preceding the Employee's Date of Termination, plus the
annual bonus earned by the Employee from the Corporation and its
subsidiaries in respect of the fiscal year immediately preceding the
Employee's Date of Termination; provided, however, that such annual
bonus amount is not less than 100% of the Base Salary earned by the
Employee from the Corporation and its subsidiaries during the
twelve-month period immediately preceding the Employee's Date of
Termination. Such an amount shall be paid in twelve (12) equal monthly
installments in conformity with the Corporation's normal payroll
periods. In addition, the Corporation agrees to pay the Manulife
premium for the remaining portion of the calendar year following the
Employee's Date of Termination. Furthermore, the Corporation shall pay
the Employee for any accrued, but unused select time in accordance with
the Corporation's normal benefit policies and procedures.
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(i) Consulting Arrangement. In the event that the
Employee's employment with the Corporation terminates as a result of
(i) termination by the Employee for Good Reason (under sections 6(d) or
Section 7(c)), as applicable or (ii) a termination by the Corporation
without Cause (under either Section 6(c) or 7(b)), as applicable (other
than for Retirement or Disability), the Employee shall serve as a
consultant to the Corporation until the first anniversary of the
Employee's Date of Termination (the "Consulting Period"). During the
Consulting Period, the Employee shall be reasonably available for
consultation with the Corporation by telephone or in person at the
Corporation's principle executive office. Performance of consulting
services shall be scheduled on a reasonable notice and in such a manner
so as not to significantly interfere with other business activities of
the Employee. In addition, during the Consulting Period, (x) the
employee shall be permitted to continue to participate in the
Corporation's group health plan (provided that if the Employee cannot
continue to participate in such plan, the Corporation shall provide
such benefit on the same after-tax basis as if continue participation
had been permitted), and (y) service as a consultant during the
Consulting Period shall be treated as service with the Corporation for
purposes of determining the vested percentage of stock options and
other equity awards granted to the Employee by the Corporation as of
the Date of Termination. During the Consulting Period, the Corporation
shall pay the Employee a fee for any days on which consulting services
are performed by the Employee, at a per diem rate equal to the quotient
obtained by dividing the rate of the Employee's base
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annual salary as of the Date of Termination by 260.
7. Termination of Employment Following a Change in
Control.
(a) Change in Control Defined. For purposes of this Agreement,
a "Change in Control" shall be deemed to have taken place if:
(i) any "person" (as defined below) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934 (the "Exchange Act")), directly or
indirectly, of securities of the Corporation representing 30% or
more of the total voting power represented by the Corporation's then
outstanding voting securities;
(ii) a change in the composition of the Board of
Directors of the Corporation occurs, as a result of which fewer than
two-thirds (2/3) of the incumbent directors are directors who either
(A) had been directors of the Corporation on the "look-back date"
(as defined below) or (B) were elected, or nominated for election,
to the Board of Directors of the Corporation with the affirmative
votes of at least a majority of the directors who had been directors
of the Corporation on the "look-back date" and who were still in
office at the time of the election or nomination;
(iii) the stockholders of the Corporation approve
a merger or consolidation of the Corporation with any other
corporation, other than a merger or consolidation which would result
in the voting securities of the Corporation outstanding immediately
prior thereto continuing to represent (either by remaining
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outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the total voting power represented
by the voting securities of the Corporation or such surviving entity
outstanding immediately after such merger or consolidation; or
(iv) the stockholders of the Corporation approve
(A) a plan of complete liquidation of the Corporation or (B) an
agreement for the sale or disposition by the Corporation of all or
substantially all of the Corporation's assets.
For purposes of paragraph (a)(i), the term "person" shall have the
same meaning as when used in sections 13(d) and 14(d) of the
Exchange Act, but shall exclude (1) a trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation
or of a parent or subsidiary of the Corporation or (2) a corporation
owned directly or indirectly by the stockholders of the Corporation
in substantially the same proportions as their ownership of the
common stock of the Corporation. For purposes of paragraph (a)(ii),
the term "look-back date" shall mean the later of (A) the date
twenty-four (24) months prior to the change in the composition of
the Board and (B) the Effective Date. Any other provision of this
Section 7(a) notwithstanding, the term "Change in Control" shall not
include either of the following events, if undertaken at the
election of the Corporation:
(x) a transaction, the sole purpose of
which is to change the state of the
Corporation's incorporation; or
(y) a transaction, the result of which
is to sell all or
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substantially all of the assets of
the Corporation to another
corporation or entity (the
"surviving entity"); provided that
the voting power represented by the
surviving entity's securities (or
other equity interests) is owned
directly or indirectly by the
stockholders of the Corporation
immediately following such
transaction in substantially the
same proportions as their ownership
of the voting power represented by
the Corporation's common stock
immediately preceding such
transaction; and provided, further,
that the surviving entity expressly
assumes this Agreement.
Notwithstanding anything in this Agreement to the contrary, if
the Employee's employment terminates prior to a Change in Control, and
the Employee reasonably demonstrates that such termination was at the
request or suggestion of a third party who has indicated an intention
or taken steps reasonably calculated to effect a Change in Control (a
"Third Party"), then for all purposes of this Agreement, the date of a
Change in Control shall mean the date immediately prior to the date of
such termination of employment.
(b) Cause. During the two-year period following a Change in
Control, "Cause" shall mean (i) the willful and continued failure of
the Employee to substantially perform his duties with the Corporation
(other than any such failure
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resulting from the Employee's incapacity due to physical or mental
illness or any such failure subsequent to the Employee being delivered
a notice of termination without Cause by the Corporation or delivering
a notice of termination for Good Reason to the Corporation) after a
written demand for substantial performance is delivered to the Employee
by the Board which specifically identifies the manner in which the
Board believes that the Employee has not substantially performed the
Employee's duties, or (ii) the willful engaging by the Employee in
illegal conduct or gross misconduct which is demonstrably and
materially injurious to the Corporation or its subsidiaries. For
purpose of this paragraph (b), no act or failure to act by the Employee
shall be considered "willful" unless done or omitted to be done by the
Employee in bad faith and without reasonable belief that the Employee's
action or omission was in the best interests of the Corporation or its
affiliates. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board, based upon the
advice of counsel for the Corporation, shall be conclusively presumed
to be done, or omitted to be done, by the Employee in good faith and in
the best interests of the Corporation. Cause shall not exist unless and
until the Corporation has delivered to the Employee a copy of a
resolution duly adopted by two-thirds (2/3) of the entire Board at a
meeting of the Board called and held for such purpose (after reasonable
notice to the Employee and an opportunity for the Employee, together
with counsel, to be heard before the Board), finding that in the good
faith opinion of the Board an event set forth in clause (i) or (ii) has
occurred and specifying the particulars thereof in
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detail. Following a Change in Control, the Corporation must notify the
Employee of any event constituting Cause within ninety (90) days
following the Corporation's knowledge of its existence or such event
shall not constitute Cause under this Agreement.
(c) Good Reason. During the two-year period following a
Change in Control, "Good Reason" shall mean, without the Employee's
express written consent, the occurrence of any of the following events:
(1) (i) the assignment to the Employee of any duties or
responsibilities (including reporting responsibilities) inconsistent
in any material and adverse respect with the Employee's duties and
responsibilities with the Corporation immediately prior to such
Change in Control (including any diminution of such duties or
responsibilities such as not retaining the Vice Preside of Sales
role); provided, however, that Good Reason shall not be deemed to
occur upon a change in duties or responsibilities that is solely and
directly a result of the Corporation no longer being a publicly
traded entity, and does not involve any other event set forth in
this paragraph (c), or (ii) a material and adverse change in the
Employee's reporting responsibilities (such as not reporting
directly to the President), titles or offices (other than membership
on the Board) with the Corporation as in effect immediately prior to
such Change in Control;
(2) a reduction by the Corporation in the Employee's rate
of annual
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Base Salary or annual bonus opportunity (including any adverse
change in the formula for such annual bonus target) as in effect
immediately prior to such Change in Control or as the same may be
increased from time to time thereafter;
(3) any requirement of the Corporation that the Employee
(i) be based anywhere more than thirty (30) miles from the office
where the Employee is located at the time of the Change in Control
or (ii) travel on the Corporation's business to an extent
substantially greater than the travel obligations of the Employee
immediately prior to such Change in Control;
(4) the failure of the Corporation to (i) continue in
effect any employee benefit plan, compensation plan, welfare benefit
plan or material fringe benefit plan in which the Employee is
participating immediately prior to such Change in Control, or the
taking of any action by the Corporation which would adversely affect
the Employee's participation in or reduce the Employee's benefits
under any such plan, unless the Employee is permitted to participate
in other plans providing the Employee with substantially equivalent
aggregate benefits (at substantially comparable cost with respect to
welfare benefit plans), or (ii) provide the Employee with paid
vacation in accordance with the most favorable plans, policies,
programs and practices of the Corporation and its affiliated
companies as in effect for the Employee immediately prior to such
Change in Control; or
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(5) the failure of the Corporation to obtain the
assumption agreement from any successor as contemplated in Section
11(a) hereof.
Any event or condition described in Section 7(c)(1) through
(4) which occurs prior to a Change in Control, but with respect to
which the Employee is able to reasonably demonstrate was at the request
or suggestion of a Third Party, shall constitute Good Reason following
a Change in Control for purposes of this Agreement (as if a Change in
Control had occurred immediately prior to the occurrence of such event
or condition) notwithstanding that it occurred prior to the Change in
Control. An isolated, insubstantial and inadvertent action taken in
good faith and which is remedied by the Corporation promptly after
receipt of notice thereof given by the Employee shall not constitute
Good Reason. The Employee's right to terminate employment for Good
Reason shall not be affected by the Employee's incapacity due to mental
or physical illness and the Employee's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any event
or condition constituting Good Reason. Following a Change in Control,
the Employee must provide notice of termination of employment within
ninety (90) days of the Employee's knowledge of an event constituting
Good Reason or such event shall not constitute Good Reason under this
Agreement.
(d) In addition to the payments set forth in Section 6(g)
above, in the event the Employee's employment with the Corporation
terminates within two (2) years following a Change in Control either
(i) by the Corporation without Cause (other
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than for Retirement or Disability) or (ii) by the Employee for Good
Reason, then the Corporation shall (1) pay to the Employee, within ten
(10) days following the Employee's Date of Termination, a lump sum cash
amount equal to two (2) times the sum of (i) the highest annual rate of
Base Salary of the Employee during the 3-year period immediately
preceding the Employee's Date of Termination and (ii) the highest
annual bonus earned by Employee in respect of the three (3) fiscal
years of the Corporation immediately preceding the year in which the
Employee's Date of Termination occurs (provided, that if the Employee
has not been employed by the Corporation for such three-fiscal-year
period, the greater of (x) the target annual bonus (without regard to
any reduction that would give rise to Good Reason) for the year in
which the Employee's Date of Termination occurs and (y) the amount
otherwise determined under this clause (ii) without regard to this
parenthetical), provided, however, that such annual bonus amount shall
not be less than 100% of the Base Salary earned by the Employee from
the Corporation and its subsidiaries during the twelve-month period
immediately preceding the Employee's Date of Termination, (2) cause
each option to immediately vest and become exerciseable in full, and
(3) continue to provide, for a period of two (2) years following the
Date of Termination, the Employee (and the Employee's dependents if
applicable) with the same level of medical, dental, accident,
disability and life insurance benefits (including Manulife benefits),
upon substantially the same terms and conditions (including cost of
coverage to the Employee) as existed immediately prior to the
Employee's Date of
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Termination (or, if more favorable to the Employee, as such benefits
and terms and conditions existed immediately prior to the Change in
Control); provided, that, if the Employee cannot continue to
participate in the Corporation plans providing such benefits, the
Corporation shall otherwise provide such benefits on the same after-tax
basis as if continued participation had been permitted. Notwithstanding
the foregoing, in the event the Employee becomes reemployed with
another employer and becomes eligible to receive welfare benefits from
such employer, the welfare benefits described herein shall be secondary
to such benefits during the period of the Employee's eligibility, but
only to the extent that the Corporation reimburses the Employee for any
increased cost and provides any additional benefits necessary to give
the Employee the benefits hereunder.
8. Covenants Not to Compete; Confidentiality.
(a) The Employee covenants that if he voluntarily terminates
his employment with the Corporation prior to the end of the term of
this Agreement, unless such termination either is approved by the Board
or is within the two-year period following a Change in Control, he
shall not, for a period of one (1) year following such Date of
Termination:
(1) engage or be interested, whether alone or together with or
on behalf or through any other person, firm, association, trust,
venture, or corporation, whether as sole proprietor, partner,
shareholder, agent, officer, director, employee, adviser,
consultant, trustee, beneficiary or otherwise, in any business
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principally and directly engaged in the operation of health
maintenance organizations or the health insurance business or in the
management of specialty medical care through case rate contracting;
which business operates in a geographic area in which, at the time
of such termination of employment, the Corporation is conducting
business or plans to conduct business (a "competing business");
(2) assist others in conducting any competing business;
(3) directly or indirectly recruit or induce or hire any
person who is an employee of the Corporation or any of its
subsidiaries, or solicit any of the Corporation's customers, clients
or providers; or
(4) own any capital stock or any other securities of, or have
any other direct or indirect interest in, any entity which owns or
operates a competing business, other than the ownership of (i) less
than five percent (5%) of any such entity whose stock is listed on a
national securities exchange or traded in the over-the-counter
market and which is not controlled by the Employee or any affiliate
of the Employee or (ii) any limited partnership interest in such an
entity.
Nothing contained in this section, however, shall prohibit the
Employee from taking any of the actions set forth in clause (1), (2),
(3) or (4) above if (i) the Employee's employment has been terminated
other than for Cause, or (ii) the Employee has terminated employment
for Good Reason.
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(b) In the event that the Employee breaches or threatens to
breach any of the terms of this Section 8, the Employee acknowledges
that the Corporation's remedy at law would be inadequate and that the
Corporation shall be entitled to an injunction restraining the Employee
from committing or continuing such breach.
(c) Notwithstanding anything in this Agreement to the
contrary, the provisions of the Confidentiality and Non-Competition
Agreement dated as of May 31, 1995 between the Employee and the Company
(the "Non-Competition Agreement") shall be unaffected by the terms of
this Agreement.
9. Payment Obligation Absolute. Except with respect to
continued welfare benefits under Section 7(d), the Corporation's
obligation to pay the Employee the compensation and other benefits
provided herein shall be absolute and unconditional and shall not be
affected by an circumstances, including, without limitation, any
set-off, counterclaim, recoupment, defense or other right which the
Corporation may have against the Employee. All amounts payable by the
Corporation hereunder shall be paid without notice or demand.
10. Notice.
(a) For purposes of this Agreement, all notices and other
communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given when delivered or five (5) days
after deposit in the United States mail, certified and return receipt
requested, postage prepaid, addressed as follows:
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If to the Employee:
Xxxxx X. Xxxx
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
If to the Corporation:
Oxford Health Plans, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Secretary
or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of change
of address shall be effective only upon receipt.
(b) A written notice (a "Notice of Termination") of the
Employee's Date of Termination by the Corporation or the Employee, as
the case may be, to the other, shall (i) indicate the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employee's employment
under the provision so indicated and (iii) specify the Date of
Termination. The failure by the Employee or the Corporation to set
forth in such notice any particular fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any
right of the Employee or the Corporation hereunder or preclude the
Employee or the Corporation from asserting such fact or circumstance in
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enforcing the Employee's or the Corporation's rights hereunder.
11. Cooperation.
During the Term and thereafter, the Employee hereby agrees to
reasonably cooperate with the Corporation in respect of all legal
proceedings, regulatory inquiries and related matters that are in
progress as of the Effective Date, or that may subsequently be filed
that arise in respect of and/or are in connection with any activities
of the Corporation during the term of the Employee's employment with
the Corporation.
12. D&O Insurance and Indemnification.
During the Term and thereafter, the Corporation shall continue
to provide the Employee with no less favorable director and officer
indemnification and insurance coverage than such coverage in effect
from time to time for the director's and officers of the Corporation,
subject to the availability of such insurance at a reasonable cost to
the Corporation, and provided further that such director and officer
insurance need not be provided for a period longer than six (6) years
from the Employee's Date of Termination.
13. General Provisions.
(a) No Assignments. This Agreement is personal to each of the
parties hereto. Neither party may assign or delegate any of his or its
rights or obligations hereunder without first obtaining the written
consent of the other party; provided, however, that the Corporation
agrees that concurrently with any merger or sale of
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assets which would constitute a Change in Control hereunder, it will
cause any successor or transferee unconditionally to assume, by written
instrument delivered to the Employee (or is beneficiary or estate), all
of the obligations of the Corporation hereunder. Failure of the
Corporation to obtain such assumption prior to the effectiveness of any
such merger or sale of assets shall be a breach of the Agreement and
shall constitute Good Reason hereunder and shall entitle the Employee
to compensation and other benefits from the Corporation in the same
amount and on the same terms as the Employee would be entitled
hereunder if the Employee's employment were terminated following a
Change in Control under Section 7(d) hereof. For the purposes of
implementing the forgoing, the date on which any such merger or sale of
assets becomes effective shall be deemed the date Good Reason occurs,
and shall be the Date of Termination if requested by the Employee.
Notwithstanding the foregoing, this Agreement shall inure to the
benefit of and be enforceable by the Employee's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee shall die while
any amounts would be payable to the Employee hereunder had the Employee
continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to such
person or persons appointed in writing by the Employee to receive such
amounts or, if no person is so appointed, to the Employee's estate.
(b) Indemnification of Employee. In the event the employment
of the
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Employee is terminated by the Corporation without Cause or by the
Employee for Good Reason hereof and the Corporation fails to make
timely payment of the amounts then owed to the Employee under this
Agreement, The Employee shall be entitle to indemnification for all
reasonable costs (as such costs are incurred), including attorneys'
fees and disbursements, incurred by the Employee in taking action to
collect such amounts or otherwise to enforce this Agreement, plus
interest on all such amounts at the annual rate of one percent above
the prime rate (defined as the base rate on corporate loans at large
U.S. money center commercial banks as published by the wall Street
Journal), compounded monthly, for the period from the time payment is
due until payment is made to the Employee. The Employee shall also be
entitled to interest (at the rate described in the immediately
preceding sentence) on such reasonable costs incurred from the date the
Employee delivers a receipt to the Corporation for such costs until the
date they are reimbursed to the Employee. Such indemnification and
interest shall be in addition to all rights to which the Employee is
otherwise entitled under this Agreement.
(c)) Entire Agreement; Amendments or Additions; Action by
Board. This Agreement contains the entire agreement between the parties
hereto with respect to the transactions contemplated hereby and
supersedes all prior oral and written agreements, memoranda,
understandings and undertakings between the parties hereto relating to
the subject matter hereof, except that the terms and conditions of the
confidentiality and Non-Competition Agreement shall be unaffected by
the provisions
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of this Agreement. No amendments or additions to this Agreement shall
be binding unless in writing and signed by both parties. The prior
approval by a two-thirds (2/3) affirmative vote of the full Board shall
be required in order for the Corporation to authorize any amendments or
additions to this Agreement, to give any consents or waivers of
provisions of this Agreement, or to take any other action under this
Agreement including any termination of the employment of the employee
with or without Cause. For purposed of Board approval with respect
hereto, if the Employee is also a director of the Corporation, he shall
abstain from acting on matters pertaining to the Agreement and shall
not be counted as a Board member for purposes of the two-thirds (2/3)
requirement.
(d) Governing Law. This Agreement shall be governed by the
laws of the State of Connecticut as to all matters, including but not
limited to, matters of validity, construction, effect and practice.
(e) Arbitration. Except with respect to injunctive relief
under Section 8(b) hereof, any dispute or controversy under this
Agreement shall be settled exclusively by arbitration in Norwalk,
Connecticut by three (3) arbitrators in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be
entered on the arbitration award in any court having jurisdiction. The
Corporation shall bear all costs and expenses arising in connections
with any arbitration proceeding pursuant to this Section 11(e).
(f) Employment with Subsidiaries. Employment with the
Corporation
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for purposes of this Agreement shall include employment with any
subsidiary of the Corporation.
(g) Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof.
(h) Section Headings. The section headings used in this
Agreement are included solely for convenience and shall not affect, or
be used in connection with, the interpretation of this Agreement.
(i) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original and
all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
OXFORD HEALTH PLANS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------
Xxxxxxx Xxxxxxxx, President
Dated: 7/6/98
/s/ XXXXX X. Xxxx Dated: 7/1/98
-----------------
Xxxxx X. Xxxx
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