Exhibit 10.7a
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 Xxxxx X.
Xxxxxxx (the "Executive"), dated as of September 8, 1995 ("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 13 of the Employment Agreement:
1. Section 7 of the Employment Agreement is hereby deleted and the
following is added in its place:
7. Termination After a Strategic Transaction. In the event of a
"Strategic Transaction" of the Company (as defined in Section
16 of this Agreement), if, within twenty-four (24) months
following 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 6. In addition, in the event of
a termination of the Executive in accordance with the
preceding sentence: (i) 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; and (ii) unvested stock options or stock awards
granted to the Executive under the 1991 Stock Plan shall
become fully vested as of the termination date.
2. Section 16 is hereby added to the Employment Agreement to read in
its entirety as follows:
16. 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 3 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 $350,000.
4. Section 17 is hereby added to the Employment Agreement to read in
its entirety as follows:
17. 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 Xxxxx X. Xxxxxxx
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