Exhibit 10.8a
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
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This First Amendment dated as of September 27, 1996 is to the
Employment Agreement between Value Health, Inc. (the "Company") and Xxxx X.
Xxxxxxx (the "Executive"), dated as of March 1, 1994 ("Employment Agreement").
W I T N E S S E T H
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WHEREAS, the Company and the Executive desire to amend the Employment
Agreement as follows, as permitted under Section 13 of the Employment Agreement:
1. Section 7 of the Employment Agreement is hereby deleted and the
following is added in its place:
7. Termination After a Strategic Transaction. In the event of a
"Strategic Transaction" of the Company (as defined in Section
16 of this Agreement), if, within twenty-four (24) months
following the closing of such Strategic Transaction (or at
any time prior thereto but in contemplation thereof): (i) the
Executive is terminated without cause; (ii) the Executive is
not retained in an executive position of responsibility,
authority and compensation comparable in all material
respects to the position of the Executive immediately prior
to the Strategic Transaction; (iii) the Executive does not
retain all rights and privileges accorded under this
Agreement as a result of the Strategic Transaction; (iv) the
Executive terminates his employment with the Company due to
either a material reduction in responsibility, authority or
compensation, or a requirement that the Executive relocate,
each on account of the Strategic Transaction; then the
Executive shall receive within five (5) business days
following the date of termination, a lump sum payment (less
all amounts required to be withheld and deducted) equal to
2.5 times the sum of the Executive's then current base
compensation and annual performance bonus at the target level
for the year in which such termination occurs, and the
Executive shall be deemed to have been terminated without
cause for purposes of Section 6. In addition, in the event of
a termination of the Executive in accordance with the
preceding sentence: (i) the Executive shall receive the same
health benefits available to Company executives, upon the
same terms and conditions and at the same cost to the
Executive, for the lesser of one (1) year from the date of
termination or the first day of the first month in which the
Executive obtains new employment providing health benefits
coverage; and (ii) unvested stock options or stock awards
granted to the Executive under the 1991 Stock Plan shall
become fully vested as of the termination date.
2. Section 16 is hereby added to the Employment Agreement to read in
its entirety as follows:
16. Strategic Transaction. A Strategic Transaction shall be
deemed to occur if at any time during the term of this
Agreement any of the following events occur:
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(i) The Company is merged, consolidated or
reorganized into or with another
corporation or other legal person, and as
a result of such merger, consolidation or
reorganization, less than 50% of the
combined voting power of the then-
outstanding securities of such corporation
or person immediately after such
transaction are held in the aggregate by
the holders of Voting Stock (as that term
is hereafter defined) of the Company
immediately prior to such transaction;
(ii) The Company sells or otherwise transfers
all or substantially all of its assets to
any other corporation or other legal
person, and as a result of such sale or
transfer, less than 50% of the combined
voting power of the then-outstanding
voting securities of such corporation or
person are held in the aggregate by the
holders of Voting Stock of the Company
immediately prior to such sale;
(iii) There is a report filed on Schedule 13D or
Schedule 14D-1 (or any successor schedule,
form or report), each as promulgated
pursuant to the Securities Exchange Act of
1934 (the "Exchange Act"), disclosing that
any person as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act) has become the
beneficial owner (as the term "beneficial
owner" is defined under Rule 13d-3 or any
successor rule or regulation promulgated
under the Exchange Act) of securities
representing 20% or more of the combined
voting power of the then-outstanding
securities of the Company entitled to vote
generally in the election of members of
the Board of Directors of the Company
("Voting Stock");
(iv) The Company files a report or proxy
statement with the Securities and Exchange
Commission pursuant to the Exchange Act
disclosing in response to Form 8-K or
Schedule 14A (or any successor schedule,
form or report or item therein) that a
strategic transaction of the Company has
or may have occurred or will or may occur
in the future pursuant to any then-
existing contract or transaction;
(v) If during the period of two (2)
consecutive years individuals who at the
beginning of any such period constitute
the members of the Board of Directors of
the Company (the "Directors") cease for
any reason to constitute at least a
majority thereof unless the election, or
the nomination for election by the
Company's shareholders, of each Director
first elected during such period was
approved by a vote of at least two-thirds
of the Directors then still in office who
were Directors at the beginning of any
such period (excluding for this purpose
the election of any new Director in
connection with an actual or threatened
election of proxy contest);
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(vi) The Company: (i) sells at least 85% of
the assets or outstanding stock of a
subsidiary to an unrelated party (or
completes a transaction having a
similar effect), (ii) distributes all
or substantially all of the common
stock of a subsidiary as a dividend to
stockholders of the Company; or (iii)
sells voting stock of a subsidiary in
an underwritten public offering.
3. Section 3 of the Employment Agreement is hereby amended by
replacing the first sentence thereof with the following:
The Company shall pay the Executive base
compensation for his services at an annual rate
of $250,000.
4. Section 3 of the Employment Agreement is hereby further
amended by adding the following at the end thereof:
Within two (2) weeks after closing of the first
Strategic Transaction, the Executive shall be
awarded an additional discretionary bonus
determined by the Chief Executive Officer of the
Company, that shall be no less than $1,500,000.
5. Section 17 is hereby added to the Employment Agreement to
read in its entirety as follows:
17. Indemnification. If there is a final
determination that any portion of the amounts
payable to the Executive under the Employment
Agreement constitutes an "excess parachute
payment" as such term is used in Section 280G and
4999 of the Internal Revenue Code, then the
Company shall pay to the Executive an additional
sum such that after all taxes applicable to the
receipt of such amount have been subtracted
therefrom, the remaining amount will equal the
sum of the amount of the tax imposed with respect
to the "excess parachute payment", plus any
interest and penalties thereon.
6. The Employment Agreement, except as herein amended, is
hereby ratified, confirmed and approved in all respects.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
Agreement as of the date written above.
Signed on behalf of
Value Health, Inc.
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Signed by Xxxx X. Xxxxxxx
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