EXHIBIT 10(a)
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this "Amendment")
dated as of December 1, 1996, by and between OrNda HealthCorp, a Delaware
corporation (the "Company"), and Xxxxxxx X. Xxxxx (the "Executive").
WHEREAS, the Company and the Executive executed a certain Employment
Agreement (the "Employment Agreement") dated as of May 1, 1996, relating to
Executive's employment with the Company;
WHEREAS, pursuant to the Employment Agreement the Executive currently
serves as Executive Vice President and Chief Operating Officer of the Company
and has served in such capacity since August, 1995;
WHEREAS, the Company has entered into that certain Agreement and Plan of
Merger (the "Merger Agreement"), dated as of October 16, 1996, pursuant to which
a wholly owned subsidiary of Xxxxx Healthcare Corporation ("Tenet") will be
merged with and into the Company, at which time the Company will become a wholly
owned subsidiary of Xxxxx (the "Merger") and the approval of the Merger by the
Company's stockholders will constitute a "Change of Control" under and as
defined in the Employment Agreement;
WHEREAS, to induce the Executive to remain in the employment of the
Company at least during the transition period beginning October 16, 1996 and
ending with the effective time of the Merger , the Company wishes to amend the
Employment Agreement in order to prepay prior to December 31, 1996 to Executive
a portion of the severance compensation that would be later due to Executive
under the Employment Agreement following Executive's qualifying termination from
employment with the Company after a "Change of Control," as such term is defined
in the Employment Agreement.
WHEREAS, the Compensation Committee (the "Compensation Committee") of
the Company's Board of Directors (the "Board") has approved and authorized the
Company's entry in this Amendment with the Executive.
NOW, THEREFORE, the parties agree as follows:
I.
The following new Section 26 is added to the Employment Agreement:
"26. The Advance. On or prior to December 31, 1996, the
Company will make a lump sum cash payment to Executive (the
"Advance") in an amount equal to $2,130,000 (the "Advance"), as an
advance payment of a portion of the benefits that are payable to
Executive under Section ll(d)(ii) of this Agreement in the event of a
Change in Control of Company and the
subsequent termination of Executive's employment under the
circumstances described in Section 11(d). In the event of the
termination of Executive's employment under the circumstances
described in Section 11(d) of this Agreement, the lump sum cash payment
to which Executive will then be entitled under Section 11(d)(ii) of
this Agreement in connection with such termination will be reduced by
an amount equal to the Advance and will otherwise be paid to Executive
in accordance with Section 11(d)(iv) of this Agreement. In the event
that (x) the merger of a wholly-owned subsidiary of Xxxxx
Healthcare Corporation ("Tenet") into the Company (the "Merger") is not
consummated on or prior to August 1, 1997 (the "Expiration Date") or (y)
Executive's employment is not terminated under the circumstances
described in Section 11(d) of this Agreement prior to the first
anniversary of the effective time of the Merger (the "First
Anniversary"), Executive's base salary, annual and long-term incentive
compensation bonuses, stock option compensation, severance payments and
other compensation will be reduced by an aggregate amount equal to the
Advance in such manner and in such increments as Company or the
surviving corporation in the Merger (the "Surviving Corporation"), as
the case may be, deems appropriate; provided, however, that in the event
Executive's employment is terminated by Executive without Good Reason or
by Xxxxx, Company or the Surviving Corporation for "cause" (as defined
in this Agreement), Executive shall repay to Company within ten (10)
business days following the date of such termination of employment an
amount equal to the excess, if any, of (a) the amount of the Advance
over (b) the aggregate amount by which the Executive's base salary,
annual and long-term incentive compensation bonuses, stock option
compensation, severance payments and other compensation have been
reduced as provided above. In addition, the Company agrees to take such
reasonable actions as may be necessary to preserve the deductibility
under section 162(m) of the Internal Revenue Code of the Advance,
including (without limitation) by terminating Executive's employment
with or position as an executive officer of Company prior to the
effective time of the Merger (Executive hereby agreeing to approve and
cooperate with any such requested termination), provided that no such
action will be taken that would adversely affect Executive's entitlement
to the severance benefits provided under Section 11(d)(ii) of this
Agreement or preclude the acceleration of the exercisability of
Executive's employee stock options pursuant to the terms of Company's
1994 Management Equity Plan.
II.
In all other respects the Employment Agreement is hereby ratified and
confirmed.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
December 16, 1996, but effective as of the date first above written.
ORNDA HEALTHCORP
BY: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Senior Vice President
THE EXECUTIVE
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
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