Exhibit 10.5a
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 Xxxxxx X.
Xxxxxxxxxx (the "Executive"), dated as of September 1, 1993 ("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 14 of the Employment Agreement:
1. Section 8 of the Employment Agreement is hereby deleted and the
following is added in its place:
8. Termination After a Strategic Transaction. In the event of a
"Strategic Transaction" of the Company (as defined in Section
17 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 3
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 7. In addition, in the event of
a termination of the Executive in accordance with the
preceding sentence, 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.
2. Section 17 is hereby added to the Employment Agreement to read in
its entirety as follows:
17. 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 4 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 $682,500.
4. Section 18 is hereby added to the Employment Agreement to read in
its entirety as follows:
18. Indemnification. If there is a final determination
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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.
5. 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 Xxxxxx X. Xxxxxxxxxx
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