AMENDMENT OF EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit
10.2
AMENDMENT OF EXECUTIVE
EMPLOYMENT AGREEMENT
This
Amendment of Executive Employment Agreement is entered into as of December 31,
2008 by and between Centene Corporation, a Delaware corporation, together with
its successors and assigns permitted under this Agreement, and Xxxxxxx X.
Xxxxxxxx (the “Executive”).
WHEREAS,
the parties entered into that certain Executive Employment Agreement dated as of
November 8, 2004 (“Agreement”); and
WHEREAS,
the parties desire to amend the Agreement in order to reflect the application of
provisions of Section 409A of the Internal Revenue Code of 1986, as amended
(“Code”).
NOW
THEREFORE, the parties hereto agree as follows:
1. Unless
the context indicates otherwise, capitalized terms used and not defined in this
Amendment shall have the respective meanings assigned thereto by the
Agreement.
2. Section
3(g) is amended to insert a new sentence at the end thereof, as
follows:
Such
expense reimbursements shall be made not later than the end of the calendar year
following the calendar year in which the expenses were incurred.
3. Section
4(f) is amended to read in its entirety as follows:
“(f) The
terms “Date of Termination” and termination of employment, when referring to the
event and time of termination of the employment of Executive with the Employer
shall mean separation from service with the Employer and its affiliates
(generally 50% common control with the Employer), as defined in IRS regulations
under Section 409A of the Code (generally, a decrease in the performance of
services to no more than 20% of the average for the preceding 36-month period,
and disregarding leave of absences up to six months where there is a reasonable
expectation the Executive will return).”
4. The
initial paragraph of Section 5 is amended to insert a new fourth sentence to
read as follows:
“Accrued
Obligations shall be paid promptly following the Date of Termination, but in no
event later than March 15th of the calendar year commencing after the Date of
Termination.”
5. Section
5(a)(v) is amended by adding the following proviso at the end
thereof:
“provided
that, such bonus shall be paid no later than March 15th of the
calendar year commencing after the Date of Termination;”
6. Section
5(b)(v) is amended by adding the following proviso at the end
thereof:
“provided
that, such bonus shall be paid no later than March 15th of the
calendar year commencing after the Date of Termination;”
7. Section
5(d)(i) is amended to delete the proviso clause at the end thereof so that the
subsection reads as follows:
“(i) Employer shall pay to
the Executive in a lump sum in cash within 30 days after the Date of Termination
the sum of (A) the maximum amount the Executive could have earned as a Target
Bonus for the year of termination if all goals and targets for payment were
achieved, prorated based upon a fraction, the numerator of which is the number
of full and partial months which elapse between the first date of the fiscal
year to which such bonus relates and the Date of Termination, and the
denominator of which is 12, and (B) Executive’ Accrued Obligations not
theretofore paid;”
8. Section
5(d)(ii) is amended to delete the proviso clause from the final sentence thereof
so that it reads as follows:
“The
amount determined in the preceding sentence shall be payable in cash in
substantially equal installments pursuant to Employer’s payroll practices as in
effect from time to time over the remainder of the Term;”
9. Section
5(e) is amended to read as follows:
“(e) Release. Any
and all amounts payable and benefits or additional rights provided pursuant to
Section 5(d) of this Agreement beyond Accrued Obligations shall only be
payable if the Executive delivers to Employer, and Employer executes and
delivers to the Executive, a general release of all claims of the Executive
occurring up to the release date in the form of Exhibit C hereto (with such
changes therein as may be necessary to make it valid and encompassing under
applicable law) within twenty-one (21) days of presentation thereof by Employer
to the Executive: provided such presentation is delivered to Executive in
writing within ten days after the Date of Termination.”
10. Section 5
is amended by adding new subsection 5(f) at the end thereof, as
follows:
“(f) At
any time the Employer is obligated under this Agreement to provide medical
insurance coverage to Executive or his dependents that is not reasonably
available in the form of an insurance arrangement exempt from Section 105(h) of
the Internal Revenue Code (or its successor), the Employer may provide such
coverage under its self-insured plan by permitting the Executive to pay the full
cost of such coverage and reimbursing Executive for such costs with
an appropriate tax gross up, so that Executive will not incur any net after-tax
cost for the coverage the Employer is obligated to provide.
11. Section 5
is amended by adding new subsection 5(g) at the end thereof, as
follows:
“(g) Notwithstanding
anything in the foregoing to the contrary, if the Executive is a “specified
employee” of the Employer (as defined in Treasury Regulation Section
1.409A-1(i)) on the Date of Termination, amounts that would otherwise have been
paid during the six (6)-month period immediately following the Date of
Termination shall be paid on the first regular payroll date immediately
following the six (6)-month anniversary of the Date of
Termination.”
12. Section
6(c) is amended to insert a new sentence at the end thereof, as
follows:
“A
Gross-Up Payment shall be paid to the Executive no later than the end of the
calendar year next following the calendar year in which the Employer remits the
related taxes.”
13. Section 9
is amended to insert a new sentence at the end thereof, as follows:
“Such
expense reimbursements shall be made not later than the end of the calendar year
following the calendar year in which the expenses were incurred.”
14. Section
12 is amended to insert a new sentence at the end thereof, as
follows:
“Such
reimbursements shall be made not later than the end of the calendar year
following the calendar year in which the expenses were incurred.”
15. A
new Section 17 is added to the Agreement to read as follows:
“17. Section
409A. To the extent applicable, it is intended that this
Agreement shall comply with the provisions of Section 409A of the Code, and this
Agreement shall be construed and applied in a manner consistent with this
intent. In the event that any payment or benefit under this Agreement
is determined by the Employer to be in the nature of a deferral of compensation,
the Employer and the Executive hereby agree to take such actions, not otherwise
provided herein, as may be mutually agreed between the parties to ensure that
such payments comply with the applicable provisions of Section 409A of the Code
and the Treasury Regulations thereunder. To the extent that any
payment or benefit under this Agreement is modified by reason of this Section
17, it shall be modified in a manner that complies with Section 409A and
preserves to the maximum possible extent the economic costs or value thereof (as
applies) to the respective parties (determined on a pre-tax
basis).”
16. Section
4(a) of the Restricted Stock Unit Agreements initially attached as Exhibit A and
Exhibit B is hereby amended by replacing the language “the January 15 following
the year in which the Grantee’s employment terminates” with “the January 15
following the year in which the Grantee’s Date of Termination, as defined in the
Executive Employment Agreement dated November 8, 2004, as amended in 2008,
occurs.”
The
Agreement is affirmed, ratified and continued, as amended hereby.
IN
WITNESS WHEREOF, the parties hereto have signed their names as of the day and
year first written above.
| XXXXXXX X. XXXXXXXX | CENTENE CORPORATION | ||
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/s/
XXXXXXX X. XXXXXXXX
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By:
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/s/
XXXXXX X. XXXXXXX
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Its:
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LEAD
DIRECTOR
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