EXHIBIT 10.22
FORM OF
AMENDMENT TO EMPLOYMENT AGREEMENT
[EXECUTIVE]. of ______________ ("Employee"), and OMNICARE, INC., a
Delaware corporation with its principal place of business in Covington, Kentucky
(the "Company"), hereby agree as follows:
1. Recitals
(a) The Company and Employee are parties to an Employment Agreement
dated as of ________ (the "Employment Agreement").
(b) The Employment Agreement may be amended by a written instrument
signed by both parties.
2. Amendments
(a) Section 3.5 of the Employment Agreement is hereby amended by
deleting the last sentence thereof, which limits aggregate payments thereunder
to an amount that does not constitute an excess parachute payment, and by
designating the first paragraph thereof as subsection (a).
(b) Section 3.5 of the Employment Agreement is hereby amended by adding
new subsections (b), (c), and (d), to read in their entirety as follows:
"(b) In the event that the Company, following a change in
control, shall commit a material breach of its
obligations hereunder, and the Company shall not have
remedied such breach within thirty (30) days after
receipt of written notice from Employee specifying
the nature of such breach, Employee shall have the
right and option to treat such breach as a
termination of his employment by the Company pursuant
to Section 3.4. The parties agree that, for purposes
of this Section 3.5, a material breach by the Company
shall mean :
(i) the assignment to Employee of any duties
inconsistent with his position, authority or
responsibilities as contemplated by Section
1.1 hereof, or any action by the Company
that results in a diminution in such
position, authority or responsibilities
(excluding for these purposes an isolated
and insubstantial action not taken in bad
faith and which is remedied by the Company
promptly after receipt of notice thereof
given by Employee);
(ii) any requirement that Employee report to any
person other than the President or the Board
of Directors of the Company;
(iii) any failure by the Company to comply with
the compensation and benefits provisions of
Section 2 hereof; and
(iv) the relocation of the Company's principal
executive offices to a location more than 30
miles from its current location in
Covington, Kentucky.
In addition, Employee may terminate his employment
voluntarily for any reason within the 120-day period
following the occurrence of the Change in Control
and, Section 3.6 to the contrary notwithstanding,
shall have the right and option to treat such
voluntary termination as a termination of his
employment by the Company pursuant to Section 3.4.
(c) For purposes of this Agreement, a "change in control"
of the Company shall mean the occurrence of one of
the following events: (i) any Person becomes a
beneficial owner, directly or indirectly, of
securities of the Company representing 20% or more of
the combined voting power of the Company's then
outstanding securities; (ii) the merger or
consolidation of the Company with or into another
entity (or other similar reorganization), whether or
not the Company is the surviving corporation, in
which the stockholders of the Company immediately
prior to the effective date of such transaction own
less than 50% of the voting power in the surviving
entity; (iii) the sale or other disposition of all or
substantially all of the assets of the Company, or a
complete liquidation or dissolution of the Company;
or (iv) during any period of two consecutive years,
individuals who at the beginning of such period
constitute the Board of Directors of the Company
cease for any reason to constitute at least a
majority of such Board of Directors, unless the
nomination for the election by the Company's
stockholders of each new director was approved by a
vote of at least one-half of the persons who were
directors at the beginning of the two-year period.
For purposes of this definition, a "Person" shall
mean any individual, firm, company, partnership,
other entity or group, but excluding the Company, its
affiliates, any employee benefit plan maintained by
the Company, or an underwriter temporarily holding
securities pursuant to an offering of such
securities.
For purposes of this definition, a Person shall be
deemed the "beneficial owner" of any securities (i)
which such Person or any of its Affiliates or
Associates beneficially owns, directly or indirectly;
or (ii) which such Person or any of its Affiliates or
Associates, has directly or indirectly, (1) the right
to acquire (whether such right is exercisable
immediately or only
after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (2) the right
to vote pursuant to any agreement, arrangement or
understanding; or (iii) which are beneficially owned,
directly or indirectly, by any other Person with
which such Person or any of its Affiliates or
Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding,
voting or disposing of any securities.
For purposes of this definition, the terms
"Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations promulgated by the
Securities and Exchange Commission under the
Securities Exchange Act of 1934.
(d) The remedy provided for in this Section 3.5 shall be
in addition to and not in limitation of any other
remedies which would otherwise exist as a matter of
law."
(c) Section 3 of the Employment Agreement is hereby amended by adding a
new Section 3.7 to read in its entirety as follows:
"Section 3.7 Parachute Tax Indemnity.
(a) If it shall be determined that any amount, right or
benefit paid, distributed or treated as paid or
distributed by the Company or any of its affiliates
to or for Employee's benefit (whether paid or payable
or distributed or distributable hereunder or
otherwise, including, without limitation, in
connection with a change in control of the Company,
but determined without regard to any additional
payments required under this Section 3.7) (a
"Payment") would be subject to the excise tax imposed
by Section 4999 of the Code, or any interest or
penalties are incurred by Employee with respect to
such excise tax (such excise tax, together with any
such interest and penalties, collectively, the
"Excise Tax"), then Employee shall be entitled to
receive an additional payment (a "Gross-Up Payment")
in an amount such that after payment by Employee of
all federal, state and local taxes (including any
interest or penalties imposed with respect to such
taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, Employee retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.
(b) All determinations required to be made under this
Section 3.7, including whether and when a Gross-Up
Payment is required, the amount of such Gross-Up
Payment and the assumptions to be utilized in
arriving at such determination, shall be made by a
nationally recognized accounting firm as shall be
designated jointly by Employee and the Company (the
"Accounting Firm"), which shall be permitted to
designate an independent counsel to advise it for
this purpose. The Accounting Firm shall provide
detailed supporting calculations both to the Company
and Employee within 15 business days of the receipt
of notice from Employee or the Company that there has
been a Payment, or such earlier time as is requested
by the Company. All fees and expenses of the
Accounting Firm and its legal counsel shall be paid
by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 3.7, shall be paid by the
Company to Employee (or to the Internal Revenue
Service on Employee's behalf) within five days of the
receipt of the Accounting Firm's determination. All
determinations made by the Accounting Firm shall be
binding upon the Company and Employee. As a result of
the uncertainty regarding the application of Section
4999 of the Code hereunder, it is possible that the
Internal Revenue Service may assert that an Excise
Tax is due that was not included in the Accounting
Firm's calculation of the Gross-Up Payments (an
"Underpayment"). In the event that the Company
exhausts its remedies pursuant to this Section 3.7
and Employee thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has
occurred and any additional Gross-Up Payments that
are due as a result thereof shall be promptly paid by
the Company to Employee (or to the Internal Revenue
Service on Employee's behalf).
(c) Employee shall notify the Company in writing of any
claim by the Internal Revenue Service that, if
successful, would require the payment by the Company
of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten
business days after Employee receives written
notification of such claim and shall apprise the
Company of the nature of such claim and the date on
which such claim is requested to be paid. Employee
shall not pay such claim prior to the expiration of
the 30-day period following the date on which it
gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes
with respect to such claim is due). If the Company
notifies Employee in writing prior to the expiration
of such period that it desires to contest such claim,
Employee shall: (i) give the Company all information
reasonably requested by the Company relating to such
claim; (ii) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including,
without limitation, accepting legal representation
with respect to such claim by an attorney selected by
the Company and reasonably acceptable to Employee and
ceasing all efforts to contest such claim; (iii)
cooperate with the Company in good faith in order to
effectively contest such claim; and (iv) permit the
Company to participate in any proceeding relating to
such claim; provided, however, that the Company shall
bear and pay directly all reasonable costs and
expenses (including additional interest and
penalties) incurred in connection with such contest
and shall indemnify and hold
Employee harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result
of such representation and payment of costs and
expense. Without limiting the foregoing provisions of
this Section 3.7, the Company shall control all
proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and
all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct
Employee to pay the tax claimed and xxx for a refund
or contest the claim in any permissible manner, and
Employee agrees to prosecute such contest to a
determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine and
direct; provided, however, that if the Company
directs Employee to pay such claim and xxx for a
refund, the Company shall advance the amount of such
payment to Employee, on an interest-free basis, and
shall indemnify and hold Employee harmless, on an
after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect
thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such
advance; and further provided that any extension of
the statute of limitations relating to payment of
taxes for Employee's taxable year with respect to
which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore,
the Company's control of the contest shall be limited
to issues with respect to which a Gross-Up Payment
would be payable hereunder and Employee shall be
entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the Employee's receipt of an amount
advanced by the Company pursuant to this Section 3.7,
Employee becomes entitled to receive any refund with
respect to such claim, Employee shall promptly pay to
the Company the amount of such refund (together with
any interest paid or credited thereon after taxes
applicable thereto). If, after Employee's receipt of
an amount advanced by the Company pursuant to this
Section 3.7, a determination is made that Employee
shall not be entitled to any refund with respect to
such claim and the Company does not notify Employee
in writing of its intent to contest such denial of
refund prior to the expiration of 30 days after the
Company's receipt of notice of such determination,
then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
(e) The provisions of this Section 3.7 shall survive the
expiration of Employee's term of employment
hereunder."
(d) Article 6 is hereby amended by adding a new Section 6.12 reading as
follows:
"Section 6.12 No Mitigation or Offset. Employee shall not be
required to seek other employment or to reduce any severance benefit payable to
him under Section 3 hereof, and no such severance benefit shall be reduced on
account of any compensation received by Employee from the Company or any other
employment. The Company's obligations to Employee hereunder, including, without
limitation, any obligation to provide severance benefits, shall not be subject
to set-off or counterclaim in respect of any debts or liabilities of Employee to
the Company."
3. General
Except as specifically amended herein, the Employment Agreement will
remain in full force and effect in accordance with its original terms,
conditions, and provisions.
IN WITNESS WHEREOF, the parties have duly executed this amendatory
agreement as of February 25, 2000.
OMNICARE, INC.
By:
__________________________________ ____________________________________
