AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
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This Amendment No. 1 to Employment Agreement (the "Amendment") is made and
entered into this 12th day of January, 1999, by and between Concentra Managed
Care, Inc., a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxx
("Executive").
WITNESSETH:
WHEREAS, the Company and Executive have entered into a certain Employment
Agreement, dated as of April 21, 1997 (the "Employment Agreement"); and
WHEREAS, the Company and Executive now desire to enter into this Amendment
for the purpose of making certain amendments to the Employment Agreement deemed
necessary and desirable and in the best interests of the Company and Executive,
all as more fully described herein; and
WHEREAS, the members of the Option and Compensation Committee of the
Company's Board of Directors have heretofore approved the execution and delivery
of this Amendment;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
Executive hereby agree as follows:
1. Termination by Executive. Subsection 5(d) of the Employment Agreement is
hereby amended to read in its entirety as follows:
"(d) Termination by Executive. Subject to the provisions of
Section 7(c), and at his option, Executive may terminate his employment
hereunder (1) for Good Reason and/or for Additional Reason, or (2) if
his health should become impaired to an extent that makes the continued
performance of his duties hereunder hazardous to his physical or mental
health or his life.
For purposes of this Agreement, the termination of Executive's
employment hereunder by Executive because of the occurrence of any one
or more of the following events shall be deemed to have occurred for
"Good Reason":
(A) a material change in the nature or scope of
Executive's authorities, status, powers, functions,
duties, responsibilities, or reporting relationships
that is determined by Executive in good faith to be
adverse to those existing before such change;
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(B) any removal by the Company of Executive from, or any
failure to reelect Executive to, the positions
indicated in Section 1 hereof except in connection
with termination of Executive's employment for Cause
or disability;
(C) a reduction in Executive's Base Salary or any other
failure by the Company to comply with Section 3
hereof that is not consented to or approved by
Executive;
(D) the relocation of Executive's office at which he is
to perform his duties and responsibilities hereunder
to a location outside of the Boston, Massachusetts,
metropolitan area, or a materially adverse alteration
in the office space within which Executive is to
perform his duties and responsibilities hereunder or
in the secretarial and administrative support
provided to Executive; or
(E) a failure by the Company or any subsidiary or
affiliate of the Company to comply with any other
material term or provision hereof or of any other
written agreement between Executive and the Company
or any such subsidiary or affiliate.
For purposes of this Agreement, the termination of Executive's
employment hereunder by Executive because of the occurrence of any one
or more of the following events within one (1) year following a Change
in Control (as defined in the Concentra Managed Care, Inc. 1997
Long-Term Incentive Plan) of the Company which takes place on or before
December 31, 1999, shall be deemed to have occurred for "Additional
Reason":
(A) the removal of Executive from the position of Chief
Financial Officer or a material change in the nature
or scope of any of Executive's authorities, status,
powers, functions, duties, or responsibilities that
is generally an essential function of such position
and which is determined by Executive in good faith to
be adverse to those existing before such change;
(B) a reduction in Executive's Base Salary or any other
failure by the Company to comply with Section 3
hereof that is not consented to or approved by
Executive;
(C) the relocation of Executive's office at which he is
to perform his duties and responsibilities hereunder
to a location outside of the Boston, Massachusetts,
metropolitan
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area, or a materially adverse alteration in the
office space within which Executive is to perform his
duties and responsibilities hereunder or in the
secretarial and administrative support provided to
Executive; or
(D) a failure by the Company or any subsidiary or
affiliate of the Company to comply with any other
material term or provision hereof or of any other
written agreement between Executive and the Company
or any such subsidiary or affiliate."
2. Compensation Upon Termination or Failure to Renew. Section 6 of the
Employment Agreement is hereby amended by adding the following subsection (f) at
the end of such Section 6:
"(f) Additional Reason. If Executive shall terminate his
employment for Additional Reason, as well as for Good Reason, then, in
addition to and not in lieu of any other amounts payable by the Company
to Executive whether pursuant to Section 6(d) or otherwise (it being
the intention of the parties that, upon the occurrence of an event or
events described in the definition or "Good Reason" and "Additional
Reason" in Section 5(d), Executive may terminate this Agreement for
Good Reason and for Additional Reason), then the Company shall pay
Executive as additional severance pay, on or before the fifth day
following the Date of Termination, a lump sum in cash equal to
Executive's full annual Base Salary at the rate in effect at the time
the Notice of Termination is given (for a total of two (2) times
Executive's full annual Base Salary when combined with amounts payable
pursuant to Section 6(d)(B)).
In addition, (x) the Company shall make payments of premiums
as necessary to cause Executive and Executive's spouse and children
under age twenty-five (25) to continue to be covered by the medical and
dental insurance as in effect at and as of the Date of Termination (or
to provide as similar coverage as possible for the same premiums if the
continuation of existing coverage is not permitted) for one (1) year in
addition to the one (1) year provided for under Section 6(d) (for a
total of two (2) years) after the Date of Termination, in each case to
the extent such coverage is available."
3. Other Provisions Relating to Termination. Subsections 7(b) and 7(c)
of the Employment Agreement are hereby amended to read in their entirety as
follows:
"(b) Date of Termination. For purposes of this Agreement,
"Date of Termination" shall mean: (1) if Executive's employment is
terminated by his death, the date of his death; (2) if Executive's
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employment is terminated because of a disability pursuant to Section
5(b), then thirty (30) days after Notice of Termination is given
(provided that Executive shall not have returned to the performance of
his duties on a full-time basis during such thirty (30) day period);
(3) if Executive's employment is terminated by the Company for Cause or
by Executive for Good Reason and/or for Additional Reason, then,
subject to Sections 7(c) and 7(d), the date specified in the Notice of
Termination; (4) if the Company gives Executive notice pursuant to
Section 1 prior to any anniversary of the date hereof that the Term of
this Agreement shall not be automatically extended for an additional
year on any such anniversary date, the date upon which the Term
expires; and (5) if Executive's employment is terminated for any other
reason, the date on which a Notice of Termination is given.
(c) Good Reason and/or Additional Reason. Upon the occurrence
of an event described in clauses (A) through (E) of the definition of
"Good Reason" in Section 5(d), and/or upon the occurrence of an event
described in clauses (A) through (D) of the definition of "Additional
Reason" in Section 5(d), Executive may terminate his employment
hereunder for Good Reason and/or Additional Reason, as applicable,
within one hundred eighty (180) days thereafter by giving a Notice of
Termination to the Company to that effect. If the effect of the
occurrence of the event giving rise to Good Reason and/or Additional
Reason under Section 5(d) may be cured, the Company shall have the
opportunity to cure any such effect for a period of thirty (30) days
following receipt of Executive's Notice of Termination. If the Company
fails to cure any such effect, the termination for Good Reason and/or
Additional Reason shall become effective on the date specified in
Executive's Notice of Termination. If Executive does not give such
Notice of Termination to the Company, then this Agreement will remain
in effect; provided, however, that the failure of Executive to
terminate this Agreement for Good Reason and/or Additional Reason shall
not be deemed a waiver of Executive's right to terminate his employment
for Good Reason and/or Additional Reason upon the occurrence of a
subsequent event described in Section 5(d) in accordance with the terms
of this Agreement."
4. No Change. Except as expressly modified hereby, the Employment
Agreement shall continue in effect unchanged.
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IN WITNESS WHEREOF, the Company and Executive have executed this
Amendment on and as of the date first set forth above.
THE COMPANY:
CONCENTRA MANAGED CARE, INC.
By:___________________________
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
EXECUTIVE:
_______________________________
Xxxxxx X. Xxxxx
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