AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this "AMENDMENT"), effective as of
February 1, 1998, is entered into by and between Avatex Corporation, a Delaware
corporation formerly known as FoxMeyer Health Corporation (the "COMPANY"), and
Abbey X. Xxxxxx ("EXECUTIVE").
The Company and Executive hereby agree that this Amendment amends the
Employment Agreement dated and effective as of February 27, 1995 by and between
the Company and Executive (the "AGREEMENT"), as follows:
1. All references in the Agreement to FoxMeyer Health Corporation shall
be deemed to be references to Avatex Corporation.
2. Section 2 of the Agreement is hereby amended by changing the date
specified therein as the initial expiration date of the Agreement to January 31,
2001.
3. Section 3 of the Agreement is hereby amended by adding the following
to the end of such section:
Nothing in this Agreement shall prohibit Executive from engaging,
directly or indirectly, in activities with other companies, ventures
or investments in any capacity whatsoever, including without
limitation serving as an officer or director of one or more
corporations or entities, provided only that such activities do not
unreasonably impede Executive's performance of his duties for the
Company. In the event Executive serves another corporation or entity
in the capacity as an officer or director, Executive shall be entitled
to retain any compensation and other benefits he may receive in such
capacity, irrespective of whether the Company invests or otherwise
holds an interest in such other corporation or entity.
4. Section 4(a) of the Agreement is hereby amended by changing the
minimum monthly base salary specified in the first sentence therein to
$39,583.33.
5. Section 5(c)(iii) of the Agreement is hereby amended by adding the
following to the end of such section:
provided, however, that this subsection shall not apply to any act of
Executive that was taken pursuant to resolutions or other matters
approved, adopted or ratified by the Company's Board of Directors;
6. Section 5(d)(1) of the Agreement is hereby deleted in its entirety and
replaced with the following:
(i) the Executive shall be entitled to receive a one-time lump sum
payment equal to one hundred fifty percent (150%) times the full
amount of any Monthly Base Salary and cash bonus awards that otherwise
would have been earned by him during the full term of this Agreement,
as extended pursuant to the second sentence of Section 2 of the
Agreement. The computation of the cash bonus awards will be
determined in the same manner that they would have been computed by
the Company prior to Executive's termination, but in no event will
that amount be less than the highest amount paid in any one of the
prior three (3) years;
7. The phrase "for the period applicable" in Section 5(d)(4) of the
Agreement shall be deleted and replaced with the phrase "for the period
described in Section 5(d)(1) above, the Executive shall be entitled to receive".
8. New Sections 5(d)(5) and (6) of the Agreement are hereby added to the
Agreement as follows:
(5) for the period described in Section 5(d)(1) above, the Company
shall continue to pay to or for the benefit of Executive an allocated
percentage of his office overhead, including salaries of personnel and
other expenses, at substantially the same location and on
substantially the same terms and conditions in effect on the date of
such Termination Without Just Cause; and
(6) the Company shall immediately pay in full (at a discount for
present value or otherwise) all premiums, or shall make provisions
reasonably satisfactory to Executive (which may include payment into
escrow or otherwise) for payment in full of all premiums, payable by
the Company for life insurance policies applicable to Executive in
existence as of February 1, 1998, on substantially the same terms and
conditions as presently contained in such policies.
9. The paragraph immediately preceding Section 6 of the Agreement is
hereby deleted in its entirety and replaced with the following paragraph:
Without in any way limiting the generality of what may be deemed
to constitute a Termination Without Just Cause hereunder, it is hereby
agreed that if (i) any "person" (as such term is defined in Section
13(d) of the Securities Exchange Act of 1934) is or becomes the
beneficial owner, directly or indirectly, of either (x) thirty-five
percent (35%) of the Company's outstanding shares of common stock or
(y) securities of the Company representing thirty-five percent (35%)
of the combined voting power of the Company's then outstanding voting
securities, or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board
of Directors of the Company cease, at any time after the beginning of
such period, for any reason to constitute a majority of the Board of
Directors of the Company, unless each new director was nominated or
the election of such director was ratified by at least two-thirds of
the directors still in office who were directors at the beginning of
such two-year period, then Executive shall have the right to elect to
treat such event as constituting a Termination Without Just Cause
hereunder.
10. Section 6 of the Agreement is hereby deleted in its entirety and
replaced with the following:
6. Executive shall be entitled to all of the rights and benefits set
forth in the Indemnification Agreement dated as of October 23, 1997
between the Company and Executive.
11. Section 7(a) of the Agreement is hereby deleted in its entirety and
replaced with the following:
(a) Executive acknowledges that during the course of the performance
of his services for the Company he will acquire confidential and
proprietary information with respect to the Company's business
operations (the "CONFIDENTIAL INFORMATION"). Executive agrees that
during the term of this Agreement and thereafter, Executive shall not
divulge any Confidential Information to any person, directly or
indirectly, except to the Company, its directors, officers, agents and
representatives and its subsidiaries and affiliated companies, or as
may reasonably be necessary in connection with his duties on behalf of
the Company or unless required by law.
12. Sections 8 and 10 of the Agreement, and the references to Section 8
contained in Sections 9 and
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11 of the Agreement, are hereby deleted in their entirety as moot.
13. The second sentence of Section 12 of the Agreement is hereby deleted
in its entirety and replaced with the following:
If the Company prevails on all issues in such litigation and is
thereby permitted to implement a Termination with Just Cause of
Executive's employment, then Executive agrees to reimburse to the
Company all such fees and costs.
14. Section 14(a) of the Agreement is hereby deleted in its entirety and
replaced with the following:
a. if to the Company:
Avatex Corporation
Attention: Senior Vice President
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
15. A new Section 24 is hereby added to the Agreement as follows:
24. TAX ADJUSTMENT PAYMENTS. If all or any portion of the amount
payable to Executive under this Agreement (together with all other
payments of cash or property, whether pursuant to this Agreement or
otherwise, including without limitation the issuance of options or
option shares or the granting of, exercise or termination of options
therefor) constitutes "excess parachute payments" within the meaning
of Section 280G of the Internal Revenue Code of 1986, as amended, (the
"CODE") that are subject to the excise tax imposed by Section 4999 of
the Code (or any similar tax or assessment), the amounts payable
hereunder shall be increased to the extent necessary to place
Executive in the same after-tax position as he would have been in had
no such tax assessment been imposed on any such payment paid or
payable to Executive under this Agreement or any other payment
Executive may receive in connection therewith. The determination of
the amount of any such tax or assessment and the incremental payment
required hereby in connection therewith shall be made by an accounting
firm employed by Executive within thirty (30) calendar days after such
payment, and the incremental payment shall be made within thirty (30)
calendar days after such determination has been made. If, after the
date upon which the payment required hereby has been made, it is
determinated (pursuant to final regulations or published rulings of
the Internal Revenue Service, final judgment of a court of competent
jurisdiction, Internal Revenue Service audit assessment or otherwise)
that the amount of excise or other similar tax or assessment payable
by Executive is greater than the amount initially so determined, the
Company shall pay Executive an amount equal to the sum of (i) such
additional excise or other tax, (ii) any interest, fines and penalties
resulting from such underpayment, and (iii) an amount necessary to
reimburse Executive for any income, excise or other tax assessment
payable by Executive with respect to the amounts specified in items
(i) and (ii) above, and the reimbursement provided by this clause
(iii), in the manner described above in this Section 24. Payment
thereof shall be made within ten (10) business days after the date
upon which such subsequent determination is made. The Company may
review Executive's calculation of any payments made pursuant to this
Section 24 and object to the calculation, and Executive shall refund
to the Company any overpayments resulting from an incorrect or
estimated
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calculation.
16. Except as expressly provided in this Amendment, all other terms and
conditions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment effective on
the date and year first above written.
AVATEX CORPORATION --------------------------------
Abbey X. Xxxxxx
By:
-----------------------------
Xxxxxx X. Xxxxxx
Co-Chief Executive Officer
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