EXHIBIT 10.9A
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 Xxxxxxx X. Xxxx (the
"Executive"), dated as of September 2, 1995 ("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
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:
(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;
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(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);
(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 $240,000.
4. Section 3 of the Employment Agreement is hereby further amended by
adding the following at the end thereof:
Within two (2) weeks after the 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 $1,000,000.
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
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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.
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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 Xxxxxxx X. Xxxx
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