Exhibit 10.9(b)
AMENDMENT TO
EMPLOYMENT AND NONCOMPETITION AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AND NONCOMPETITION AGREEMENT is made and
entered into this 17 day of July, 2002, to be effective as provided in Section
8 below (the "Effective Date"), by and between PlanVista Corporation, a Delaware
corporation (f/k/a HealthPlan Services Corporation) and certain of its
subsidiaries as set forth in the Employment Agreement defined below (hereinafter
collectively called the "Employer") and Xxxxxxx X. Xxxxxx (hereinafter called
"Employee").
WHEREAS, the Employer and Employee entered into that certain Employment and
Noncompetition Agreement dated as of June 1, 2000 (as amended on January 30,
2001) (collectively, the "Employment Agreement"); and
WHEREAS, Employer and Employee desire to further amend said Employment
Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. The parties to this Employment Agreement shall be PlanVista Corporation,
as Employer, and Xxxxxxx X. Xxxxxx, as Employee, and any references to
subsidiaries of PlanVista Corporation as set forth in the original Employment
Agreement dated as of June 1, 2000 are hereby deleted.
2. Section 2 of the Employment Agreement is hereby deleted in its entirety
and the following substituted therefor:
"2. Term. Subject to the provisions of resignation and termination as
hereinafter provided, the term of this Agreement shall commence on the
Effective Date and shall terminate on December 31, 2005."
3. Section 5(b) of the Employment Agreement is hereby amended by inserting
a new subsection (v) as set forth below:
"(v) a grant, pursuant to the provisions of Employer's 2002 Employee
Stock Option Plan, of stock options (the "New Options") to purchase 140,000
shares of Employer's common stock (determined on the basis of the
outstanding shares of common stock of the Employer after the reverse stock
split which was approved at the Company's 2002 annual meeting of
shareholders). The New Options shall be granted at the offering price to
the public in the public offering of the Employer's common stock pursuant
to the registration statement filed with the Securities Exchange Commission
on August 1, 2001 as amended May 24, 2002 and subsequently thereafter (the
"Recapitalization Offering"). These options will vest according to the
following vesting schedule:
Time Vesting
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Percent of Options Vesting Event
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15% December 31, 2002, if Employee remains
continuously employed until that date
15% December 31, 2003, if Employee remains
continuously employed until that date
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15% December 31, 2004, if Employee remains
continuously employed until that date
15% December 31, 2005, if Employee remains
continuously employed until that date
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Accelerated Vesting
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Percent of Options Vesting Vesting Event
-------------------------- -------------
10% December 31, 2002, if and only if,
Employer's Adjusted EBITDA (as defined
below) equals or exceeds $7,000,000 for
the third and fourth quarters of the
Employer's 2002 calendar year.
10% Any calendar year end on or before
December 31, 2006 in which the
Employer's Adjusted EBITDA (as defined
below) equals or exceeds $17,000,000 for
the calendar year then ended (the "$17
Million EBITDA Vesting Event"), provided
that only one $17 Million EBITDA Vesting
Event may cause the vesting of this 10%.
Accordingly, once this threshold is
attained, attaining it in subsequent
years shall not cause further vesting.
10% Any calendar year end on or before
December 31, 2006 in which the
Employer's Adjusted EBITDA (as defined
below) equals or exceeds $20,000,000 for
the calendar year then ended (the "$20
Million EBITDA Vesting Event"), provided
that only one $20 Million EBITDA Vesting
Event may cause the vesting of this 10%.
Accordingly, once this threshold is
attained, attaining it in subsequent
years shall not cause further vesting.
Balance of any Any calendar year end on or before
unvested options December 31, 2006 in which the
Employer's Adjusted EBITDA (as defined
below) equals or exceeds $25,000,000 for
the calendar year then ended.
* More than one different vesting event
may occur in any given year.
** If Employee is terminated as a result of
Employee's death or disability, during a
calendar year, the Employee will be
entitled to immediate vesting of the
time vesting options (but not the
accelerated vesting options ) which
would have vested at the end of the
Calendar year in which the event
occurred as if he was still employed on
such date.
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For purposes of the foregoing determinations, Adjusted EBITDA is
defined as earnings before interest, taxes, depreciation, and amortization
for the year then ended determined in accordance with Generally Accepted
Accounting Principles except that in determining earnings for this purpose,
there will be no deduction from revenue for any
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compensation charge attributable to the vesting of options, and there will
be no deduction for expenses associated with (i) the Recapitalization
Offering (ii) the debt restructure between the Employer and its senior
lenders which occurred on April 12, 2002 or (iii) any litigation in which
the Employer is involved ( the foregoing being referred to as "Disregarded
Expenses"). Additionally, the EBITDA targets listed above shall be adjusted
to reflect the projected impact of any business combination involving
Employer which may occur prior to the vesting event with such adjustments
to be determined by adding to the prospective EBITDA targets the EBITDA of
any such business combined with the business of the Employer for the 12
months preceding the acquisition).
The Employee shall have six months from the date of any termination of
Employee's employment other than for Cause or as a result of death or
Permanent Disability to exercise any vested New Options. If Employee is
terminated for Cause, the New Options shall terminate immediately. If
Employee's employment is terminated by Death or Permanent Disability,
Employee shall have six (6) months from the date of such termination to
exercise any vested Options. All New Options shall be subject to the terms
of the 2002 Employee Stock Option Plan and the Employee shall enter into a
standard stock option agreement containing the foregoing terms and other
customary provisions for options issued under the 2002 Stock Option Plan."
4. Section 6 of the Employment Agreement is hereby amended by deleting
subsection (a) and substituting the following therefor:
"(a) The foregoing notwithstanding, this Agreement is not to be
considered an agreement for a fixed term or as a guarantee of continuing
employment. Accordingly, subject to the provisions of Section 7 hereof,
Employee's employment may be terminated by Employer with or without Cause
(as defined below) upon immediate written notice to Employee at any time
during the term of this Agreement. Additionally, Employee's employment
shall automatically terminate upon his death or upon a determination that
he is Permanently Disabled (as defined below). Employee may resign as an
officer and, if applicable, director and terminate his employment at any
time upon 30 days' written notice to Employer. In the event that such
termination is by the Employer for Cause or by the Employee other than as a
result of a Constructive Termination Event (as defined below), Employee
shall be paid the bi-weekly portion of his Annual Base Salary then due
through the date of such termination and shall be entitled to no salary
from that date forward and to only those benefits which Employer is
required by law to provide to Employee. In the event that the Employee dies
of becomes Permanently Disabled, the Employee shall be paid all accrued
salary and benefits up to the date of death or determination of Permanent
Disability, as the case may be, shall be entitled to have all outstanding
options (other than New Options) which are not then vested vest, and shall
further be entitled to receive the proceeds of any life insurance policy or
disability policy maintained by the Employer for the Employee's benefit.
The Employer shall use it best efforts to maintain a term life insurance
policy on the life of Employee, the beneficiaries of which shall be named
by the Employee, with a death benefit of at least 1 million dollars and a
disability policy covering the Employee which has a benefit which will pay
upon permanent disability a benefit of at least $15,000 per month during
the period of Permanent Disability as defined in the policy. Upon any
termination, Employee shall immediately return any and all property and
records belonging to Employer which are in Employee's possession and shall
vacate Employer's offices in a prompt and professional manner. In addition
to the foregoing, upon termination of Employee's employment with Employer
for any reason, Employee shall resign promptly as an officer and, if
applicable, director of Employer and any subsidiary or parent of Employer
unless Employer indicates in writing to Employee its desire that Employee
retain any such position. In the event of
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a termination by the Employer without Cause, or in the event that the
Employee terminates his employment as a result of a Constructive
Termination Event, Employee shall be entitled solely to (y) the Severance
Benefits provided in Section 7, and (z) immediate vesting of all unvested
options, rights and benefits under any stock option plan in which Employee
has an unvested interest, except that only fifty percent (50%) of the New
Options which at that time are unvested shall vest immediately. The
foregoing notwithstanding, in the event of any termination of Employee's
employment whether or not for Cause or by reason of Employee's death or
Permanent Disability, Employee shall be entitled to receive all benefits
which are accrued, vested and earned up to the termination date under the
terms of any existing benefit plans such as the vested balance of the
Employee's account under any retirement or benefit plan such as the vested
balance of the employee's account under any retirement or deferred
compensation plan and any benefits which are legally required to be
provided after termination such as COBRA benefits (the "Legally Earned or
Required Benefits")."
5. Section 7 of the Employment Agreement is hereby amended by deleting it
in its entirety and substituting the following therefor:
"7. Severance Benefits.
(a) If during the term of this Agreement, Employee's employment is
terminated (i) by the Employer other than for Cause, as defined below, or
(ii) by the Employee as a result of the occurrence of a Constructive
Termination Event, as defined below, which has not been cured by the
Employer within 30 days of receipt of written notice from the Employee that
such event has occurred, then upon the occurrence of such event Employer
shall pay to the Employee (or the Employee's estate in the event of death
after termination), as a severance benefit and in complete satisfaction of
any and all claims which Employee may have against Employer or its
affiliates, officers, directors or employees as a result of this Agreement
or his previous employment by Employer, an amount which is equal to (y) one
(1) times Employee's Annual Base Salary plus (z) the average annual bonus
earnings of the Employee determined by adding the annual bonus earnings for
the Employee over the previous three immediately past completed calendar
years and dividing the result by three (the "Initial Severance Benefit").
Additionally, for so long as the Employer does not waive the provisions of
Section 8(a), if Employee has not commenced employment with a new employer
within twelve (12) months after a termination by Employer without Cause or
by Employee as a result of a Constructive Termination Event, then for each
month after the twelfth month during which such Employee remains unemployed
and bound by the provisions of Section 8(a) from the twelfth and through
the twenty-fourth month after such termination, Employer shall pay
additional severance equal to 1/12th of the Initial Severance Benefit (the
"Supplemental Severance Benefit"); however, no more than twelve (12) such
payments shall be payable. Each Supplemental Severance Benefit payment
shall be made by the 10th of the next month after the month to which it
relates and no such payments shall be made for the month in which the
Employee accepts employment with another employer or Employer waives the
provisions of Section 8(a) or any month thereafter. Additionally, Employer
shall not be obligated to pay any severance benefit until Employee (or
Employee's personal representative in the event of Employee's death) has
delivered to Employer a complete and unconditional release, in form
reasonably satisfactory to Employer, releasing Employer from any and all
claims which Employee may have against Employer as a result of any
occurrence during Employee's employment and including, but not limited to,
any claim for wrongful termination (the "Employee Release"). The foregoing
notwithstanding, the Employee Release shall not release the Employer from
any of its post termination obligations under this Agreement or under any
employee benefit plan of
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the Employer. The Initial Severance Benefit shall be paid within ten (10)
days following the effective date of such termination or the delivery of
the foregoing release, whichever is the last to occur. As used in this
Agreement:
(A) the term "Cause" means (i) the Employee's violation of his
fiduciary duty to the Employer, (ii) gross or willful failure by the
Employee to perform the duties of Employee's position, (iii) the
Employee's habitual unexcused absence over an extended period, (iv)
embezzlement or misappropriation of Employer funds by the Employee, or
(v) the Employee's conviction of a felony;
(B) the term "Permanent Disability" means the permanent mental or
physical inability of the Employee to perform with reasonable
accommodation the essential duties of Employee's position as existing
on the date of this Agreement which condition causes the Employee to
be unable to perform the duties of his office for a period of six
months in any twelve-month period; and
(C) the term "Constructive Termination Event" means action by the
Employer which is directed at the Employee specifically and not at all
employees generally and which has the effect of significantly reducing
the Employee's compensation, employment responsibilities, or
authority, or the nonpayment by Employer of compensation due and owing
to the Employee under this Agreement, which has not been cured by the
Employer within 30 days of receipt of written notice from the Employee
that such nonpayment has occurred.
(b) Following Employer's termination of Employee's employment for any
reason other than Cause or Employee's termination of his employment as a
result of a Constructive Termination Event during the term of this
Agreement, Employer shall maintain in full force and effect, for the
Employee's continued benefit until the earlier of (i) the date when no more
Initial Severance Benefit payments and Supplemental Severance Benefit
payments are payable, or (ii) the Employee's commencement of full time
employment with a new employer, all life insurance, medical, dental, health
and accident, and disability plans, programs or arrangements of the
Employer in which the Employee participated on the date of termination,
provided that the Employee's continued participation is possible under the
general terms and provisions of such plans and programs. In the event that
such continued participation is not possible, the Employer shall obtain and
pay for comparable individual coverage for the Employee.
(c) The expiration of the term of this Agreement shall constitute a
termination of Employee's employment by Employer without Cause for purposes
of this Agreement, including Section 6 hereof."
6. Section 8 of the Employment Agreement is hereby amended by deleting
subsection (a) in its entirety and substituting the following therefor:
"(a) For a period equal to the term of this Agreement and two years
after the termination of employment for any reason, without the written
consent of the Employer, Employee shall not either directly or indirectly
engage (whether for his own account or as a partner, joint venturer,
employee, consultant, agent, contractor, officer, director or shareholder
or otherwise) in any business within the United States which delivers
preferred provider organization or claims repricing services on behalf of
health care payors or networks; provided, however, that the foregoing shall
not be deemed to prohibit Employee from purchasing and owning securities of
a company traded on a national securities exchange or on the Nasdaq
National Market with which Employee has
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no relationship so long as such ownership does not exceed 2% of the
outstanding stock of such company."
7. Section 13 of the Employment Agreement is hereby amended by deleting the
name and address of Employer and substituting the following therefor:
If to Employer: PlanVista Corporation
0000 Xxx Xxxxx Xxxx.
Xxxxx 000
Xxxxx, XX 00000
Attention: General Counsel
With a copy to: Xxxxx X. Xxxxx, Esq.
Xxxxxx White Xxxxx Banker P.A.
000 Xxxx Xxxxxxx Xxxx., Xxxxx 0000
Xxxxx, XX 00000
8. This Amendment to Employment and Noncompetition Agreement shall only
become effective upon the closing of the Recapitalization Offering on or before
August 30, 2002 (the "Effective Date"). In the event the Recapitalization
Offering is not closed on or before this date, this Amendment to Employment and
Noncompetition Agreement shall be null and void.
9. Except as set forth in this Amendment to Employment and Noncompetition
Agreement, all terms and conditions of the Employment Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
Employment and Noncompetition Agreement the day and year first above written.
PLANVISTA CORPORATION, on behalf of itself
and its subsidiaries listed in the
Employment Agreement dated as of June 1,
2000
By: /s/ Xxxx X. Race
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Xxxx X. Race
Its: Chairman of the Compensation Committee
"EMPLOYER"
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
"EMPLOYEE"
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