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EXHIBIT 10.25
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT is made and entered into
as of June 24, 1999, by and between xxxXXX.xxx, inc. (the "Corporation") and
Xxxxxxx X. Xxxxxxx ("Employee").
WITNESSETH:
WHEREAS, the Corporation changed its name from PPO Management
Solutions, Inc. to xxxXXX.xxx, inc.
WHEREAS, the Corporation and Employee have entered into that certain
Employment Agreement dated as of January 1, 1998 (the "Agreement");
WHEREAS, the Corporation desires to retain Employee and Employee
desires to remain with Corporation;
WHEREAS, the Employee shall be instrumental in the development of new
technology for the Corporation and the trade secrets relating thereto;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and other good and valuable consideration hereinafter recited
the Corporation and Employee agree as follows:
1. SALARY AND BONUS. Section 4 of the Agreement shall be amended to
read in its entirely as follows:
"4. (a) Base Salary. Except as set forth in Section (4(c), the
Corporation shall pay to Employee, and Employee agrees to accept as full
consideration for his employment, $11,666.67 per month during the term of this
Agreement, payable in two equal installments each month, subject to all
withholdings (i) required by federal, state or local law and (ii) pursuant to
any agreement with Employee. If (a) the Corporation shall cease to exist or
operate prior to the expiration of this Agreement and (b) Employee is not an
employee of MedicalControl, Inc. or any of its subsidiaries or any successor in
interest to the Corporation after the merger into the other entity or sale of
the Corporation to the other entity, the Corporation shall be fully liable for
the lesser of (i) all payments and provisions due under this Section 4 for the
remaining term of this Agreement or (ii) one year of Employee base salary at the
time of termination.
(b) Retention Bonus. Employee shall be granted as of June 24, 1999 an
option to purchase 110,000 shares of MedicalControl, Inc. ("MedicalControl")
common stock (as adjusted from time to time and including all options that may
be granted by the Corporation or MedicalControl after June 24, 1999, the
"Incentive Options"). Upon a Change of Control (as hereinafter defined),
Employee, at his election no later than one (1) business day of the Change of
Control, shall either (i) keep the Incentive Options, (ii) exercise the
Incentive Options and sell the stock received in the exercise of the Incentive
Options (the "Option Shares") or (iii) if the aggregate exercise price of the
Incentive Options is greater than the aggregate market value of the Option
Shares, cancel the Incentive Options. If Employee elects to exercise the
Incentive Options and sell the Option Shares, or cancel the Incentive Options,
the Corporation shall pay Employee $400,000 within ten (10) business days of a
Change of Control in, at the option of the Corporation, cash or securities of a
publicly traded corporation (securities of a publicly traded corporation defined
as capital stock acquired by MedicalControl or its shareholders in a Change of
Control) less any and all amounts Employee received through the sale of the
Option Shares (if any) (the "Retention Bonus"). If Employee elects to keep the
Incentive Options, no Retention Bonus will be paid. If Employee sells the Option
Shares, Employee shall use best efforts to obtain the best price for the Option
Shares. If the Corporation or MedicalControl does not timely pay the Retention
Bonus due to Employee, interest will accrue on such unpaid portion at a rate of
the lesser of (i) 10% per annum or (ii) the maximum allowable rate. This
subsection (b) shall be null and void if, other than with the written consent of
the Corporation, Employee
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seeks other employment during the term of this Agreement, including without
limitation, forwarding his resume to any person or entity, interviewing with any
person or entity or discussions with any person or entity regarding employment.
The Corporation acknowledges that recruiters and other companies may contact
Employee from time to time with employment opportunities. In such cases,
Employee will inform such person or entity that he is not seeking other
employment at this time. For the purposes of this Agreement, a "Change of
Control" shall be deemed to have occurred if any one or more of the following
have occurred:
(i) Any "person", including a "group" as determined in
accordance with Section 13(d)(3) of the Securities Exchange Act of 1934
and the Rules and Regulations promulgated thereunder, other than X.
Xxxx Xxxx or his heirs, The Answer Partnership Ltd. or any corporation
or partnership owned or controlled by X. Xxxx Xxxx or his heirs, is or
becomes, through one or a series of related transactions or through one
or more intermediaries, the beneficial owner, directly or indirectly,
of securities of MedicalControl representing 51% or more of the
combined voting power of MedicalControl's then outstanding securities;
or
(ii) As a direct result of, or in direct connection with, any
tender offer or exchange offer, merger or other business combination,
sale of assets or contested election, or any combination of the
foregoing transaction (a "Transaction"), the persons who were Directors
of MedicalControl before the Transaction shall cease to constitute a
majority of the Board of Directors of MedicalControl or any successor
to MedicalControl; or
(iii) MedicalControl is merged or consolidated with another
corporation and as a result of such merger or consolidation less than
40% of the outstanding voting securities of the surviving or resulting
corporation shall then be owned in the aggregate by the former
shareholders of MedicalControl, other than (i) any party to such merger
or consolidation, or (ii) any affiliates of any such party; or
(iv) The Corporation is merged or consolidated with another
corporation and as a result of such merger or consolidation less than
40% of the outstanding voting securities of the surviving or resulting
corporation shall then be owned in the aggregate by MedicalControl or
the former shareholders of MedicalControl, other than (i) any party to
such merger or consolidation, or (ii) any affiliates of any such party;
or
(v) A tender offer or exchange offer is made and consummated
for the ownership of securities of MedicalControl representing 51% or
more of the combined voting power of MedicalControl's then outstanding
voting securities; or
(vi) MedicalControl transfers all or substantially all of the
assets of MedicalControl or the Corporation or all of the capital stock
of the Corporation, to another corporation that is not a wholly owned
corporation (directly or indirectly) of MedicalControl.
(c) Upon Employee's election, which shall be given to MedicalControl in
writing prior to December 15, 1999, all option agreements between
MedicalControl, Inc. and Employee granted prior to June 1, 1999 shall be amended
to accelerate vesting so that such options will be 100% vested as of January 1,
2000. In consideration for such early vesting, Employee's base salary shall
decrease from $11,666.67 per month to $8,333.34 per month from January 1, 2000
until June 30, 2000. On July 1, 2000, Employee's base salary shall return to
$11,666.67 per month.
(d) Section 4(b) and 4(c) of the Agreement are subject to the approval
of the compensation committee of MedicalControl before August 30, 1999 and the
Board of Directors of the Corporation. If such approval is not received and the
payment set forth in Section 4(b) is not made to Employee by MedicalControl or
the Corporation, X. Xxxx Xxxx or his estate shall be wholly responsible to make
such payment to Employee. The Agreement is executed by Xx. Xxxx only for the
purposes of this Section 1(d)."
2. TERM. Section 5 of the Agreement shall be amended to read in its
entirely as follows:
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"5. Term. This Agreement shall remain in full force and effect until
June 30, 2002."
3. BINDING EFFECT. The Agreement is hereby ratified and confirmed and
shall remain and continue in full force and effect in accordance
with its original terms and provisions, except as specifically amended hereby.
4. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one document.
5. CONFLICT OF LAWS. This Amendment shall be governed by the laws of
the State of Texas without giving effect to its conflict of law provisions.
IN WITNESS WHEREOF, the parties have executed this First Amendment to
Employment Agreement as of the date first written above.
xxxXXX.xxx, inc.
By:/s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx, President
and Chief Executive Officer
/s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
/s/ X. XXXX XXXX
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X. Xxxx Xxxx
