EXHIBIT 10.1
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 26th day of December, 1996, by and between OccuSystems, Inc.,
a Delaware corporation (the "Company"), and Xxxx X. Xxxxxxx ("Executive").
WITNESSETH:
WHEREAS, the Company and Executive have entered into a certain Employment
Agreement, dated as of May 15, 1995 (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. Compensation Upon Termination or Failure to Renew Prior to a Change in
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Control of the Company. Section 6 of the Employment Agreement is hereby amended
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to read in its entirety as follows:
"6. Compensation Upon Termination or Failure to Renew Prior to a
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Change in Control of the Company. Prior to the occurrence of a Change in
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Control of the Company, Executive shall be entitled to the following
compensation from the Company upon the termination of his employment or
upon the Company's delivery of notice pursuant to Section 1 that the Term
of this Agreement shall not following any anniversary of the date hereof be
automatically extended for an additional year.
(a) Death. If Executive's employment shall be terminated by
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reason of his death, the Company shall pay to such person as shall have
been designated in a notice filed with the Company prior to Executive's
death, or, if no such person shall be designated, to his estate as a death
benefit, his Base Salary to the date of his death in addition to any
payments Executive's spouse, beneficiaries, or estate may be entitled to
receive pursuant to any pension or employee benefit plan or other
arrangement or life insurance policy maintained by the Company. In
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addition, the Company shall make payments of premiums to continue the
medical and dental insurance coverage of Executive's spouse and children
under age twenty-five (25) as in effect at and as of the date of
Executive's death (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 after the date of Executive's death, in each case to the
extent such coverage is available.
(b) Disability. During any period that Executive fails to
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perform his material managerial duties and responsibilities hereunder as a
result of incapacity due to physical or mental illness, Executive shall
continue to receive his Base Salary and any bonus payments until
Executive's employment is terminated pursuant to Section 5(b) hereof or
until Executive terminates his employment pursuant to Section 5(d)(2)
hereof, whichever first occurs. After such termination, the Company shall
pay to Executive, on or before the fifth day following the Date of
Termination (as hereinafter defined) his Base Salary to the Date of
Termination. In addition, 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 after the Date of
Termination, in each case to the extent such coverage is available.
(c) Cause. If Executive's employment shall be terminated for
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Cause, the Company shall pay Executive his Base Salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given. Such payments shall fully discharge the Company's obligations
hereunder.
(d) Breach by the Company, for Good Reason, or Upon Failure to
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Renew. If (1) in breach of this Agreement, the Company shall terminate
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Executive's employment (it being understood that a purported termination of
Executive's employment by the Company pursuant to any provision of this
Agreement that is disputed and finally determined not to have been proper
shall be a termination by the Company in breach of this Agreement), or (2)
Executive shall terminate his employment for Good Reason, or (3) the
Company shall give 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,
then the Company shall pay Executive:
(A) his Base Salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given;
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(B) in lieu of any further salary payments to Executive for
periods subsequent to the Date of Termination, the Company shall
pay as severance pay to Executive 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; and
(C) all benefits payable under the terms of any employee benefit
plan or other arrangement as of the Date of Termination.
In addition, 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 after the Date of
Termination, in each case to the extent such coverage is available.
(e) Mitigation. Executive shall not be required to mitigate
the amount of any payment provided for in this Section 6 by seeking other
employment or otherwise, nor shall the amount of any payment provided for
in this Section 6 be reduced by any compensation earned by Executive as the
result of employment by another employer after the Date of Termination, or
otherwise."
2. Compensation Upon Termination or Failure to Renew After a Change in
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Control of the Company. Section 7 of the Employment Agreement is hereby amended
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to read in its entirety as follows:
"7. Compensation Upon Termination or Failure to Renew After a
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Change in Control of the Company.
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(a) Compensation. If, after the occurrence of a Change in
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Control of the Company, Executive's employment is terminated by the Company
or by Executive, as the case may be, for any of the reasons described in
Section 5 above or the Company delivers notice pursuant to Section 1 that
the Term of this Agreement shall not following any anniversary of the date
hereof be automatically extended for an additional year, then Executive
shall be entitled to (1) the same compensation benefits from the Company as
set forth in Section 6 above to which he would have been entitled if the
termination of his employment had occurred prior to the occurrence of a
Change in Control of the Company plus (2) in the event the termination
occurs
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as described in either Section 6(d)(1) or 6(d)(2) above or notice is
given as described in Section 6(d)(3) above, then Executive shall be
entitled to the following additional benefits:
(A) on or before the fifth day following the Date of
Termination, the Company shall pay to Executive 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 (it being understood and
agreed that the combined effect of the provisions of Section 6(d)(B)
and this Section 7(a)(A) is to pay to Executive two times such Base
Salary); provided, however, that the amount of cash paid pursuant to
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this Section 7(a)(A) plus the value of any other compensation paid to
Executive, pursuant to this Agreement or otherwise, as a result of the
termination of Executive's employment that is subject to the
provisions of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), shall in no event exceed $100 less than 3.00
times Executive's Annualized Includable Compensation (within the
meaning of section 280G(d)(1) of the Code), and the amount of the
Company's cash payment to Executive under this Section 7(a)(A) shall
be adjusted accordingly to achieve this result; notwithstanding the
provisions of this Section 7(a)(A), nothing contained in this Section
7(a)(A) shall be construed to imply that any payments to the Executive
other than pursuant to this Section 7(a)(A) are subject to the
provisions of Section 280G of the Code;
(B) the Company shall maintain in full force and effect, for the
continued benefit of Executive, Executive's spouse, and Executive's
minor children, as applicable, for a two-year period beginning upon
the Date of Termination, all employee benefit plans and other
arrangements (including medical and dental insurance coverage) as in
effect and in which such persons were entitled to participate
immediately prior to the Date of Termination, provided that the
continued participation of such persons is possible under the general
terms and provisions of such plans and arrangements. However, in no
event shall this paragraph be construed to reduce the duration or
benefits derived from any such plans or arrangements that otherwise
would extend beyond such two-year period. If the participation of any
of such persons in any such plan or arrangement is barred, the Company
shall arrange to provide such person with benefits substantially
similar to those which such persons would otherwise have been entitled
to receive under such plans and arrangements from which such
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persons' continued participation is barred. At the end of the period
of coverage, Executive shall have the option to have assigned to him
at no cost and with no apportionment of prepaid premiums any
assignable insurance policy owned by the Company which relates
specifically to him; and
(C) the Company shall pay all other damages to which Executive
may be entitled as a result of the termination of his employment under
this Agreement, including all legal fees and expenses incurred by him
in contesting or disrupting any such termination or in seeking to
obtain or enforce any right or benefit provided by this Agreement in
accordance with, and as contemplated by, Section 11 hereof.
(b) Mitigation. Executive shall not be required to mitigate the
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amount of any payment provided for in this Section 7 by seeking other
employment or otherwise, nor shall the amount of any payment provided for
in this Section 7 be reduced by any compensation earned by Executive as the
result of employment by another employer after the Date of Termination, or
otherwise."
3. Other Provisions Relating to Termination. Section 8(b) of the
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Employment Agreement is hereby amended to read in its entirety as follows:
"(b) Date of Termination. For purposes of this Agreement, "Date of
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Termination" shall mean: (1) if Executive's employment is terminated by his
death, the date of his death; (2) if Executive's 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, then, subject to
Sections 8(c) and 8(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."
4. No Change. Except as expressly modified hereby, the Employment
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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: EXECUTIVE:
OCCUSYSTEMS, INC.
By: /s/Xxxx X. Xxxxxxx
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Xxxxxxx X.Xxxx, M.D. Xxxx X. Xxxxxxx
Chairman
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