Exhibit 10.60
Amendment No. 1 to Employment Agreement
This Amendment No. 1 (this "Amendment") to Employment Agreement is
entered into as of October 11, 1999 by and between MIM Corporation, a Delaware
corporation (the "Company"), and Xxxxxxx X. Xxxxxxxx ("Executive").
WHEREAS, the Company and Executive entered into an Employment Agreement
dated as of December 1, 1998 (the "Original Agreement");
WHEREAS, certain compensation provisions in the Original Agreement were
subject to stockholder approval pursuant to Section 3.8 of the Original
Agreement;
WHEREAS, the Company included a proposal (the "Proposal") in its proxy
statement dated as of July 2, 1999 with respect to its 1999 Annual Meeting of
Stockholders ("Annual Meeting") in order to obtain stockholder approval of the
relevant compensation provisions of the Original Agreement;
WHEREAS, the Company submitted the Original Agreement to stockholders
for approval primarily to ensure the deductibility for Federal tax purposes of
compensation payable to Executive under the Original Agreement in accordance
with Section 162(m) of the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder;
WHEREAS, with the consent of Executive, the Company withdrew the
Proposal from consideration at the Annual Meeting based upon, among other
things, an insufficient number of shares necessary to approve the Proposal being
voted by proxy prior to the Meeting;
WHEREAS, therefore, the stockholder approval condition precedent set
forth in Section 3.8 will not be satisfied by December 31, 1999 and,
accordingly, the compensation provisions of the Original Agreement subject to
such condition may be ineffective; and
WHEREAS, in light of the withdrawal of the Proposal, the Company and
Executive have agreed to amend the Original Agreement on the terms and
conditions set forth herein so as (a) not to deprive Executive of the benefit of
(i) certain forms of incentive compensation granted in the Original Agreement
and (ii) certain other compensation payable to Executive upon the occurrence of
certain events, including termination, all as more fully described in the
Original Agreement and (b) to ensure on behalf of the Company the deductibility
for Federal tax purposes of any compensation payable to Executive under the
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Original Agreement and all
references to the "Agreement" in the Original Agreement and herein
shall hereafter mean the Original Agreement as amended by this
Amendment.
2. Section 3.8 of the Original Agreement is hereby deleted in its
entirety and shall be deemed to be of no further force or effect from
and after the date hereof, and shall be replaced by the following:
"Notwithstanding any provision herein to the contrary, to the extent
that any compensation that would be payable to Executive hereunder
(but for the operation of this Section 3.8) would not be deductible
for Federal tax purposes by the Company as a result of the limitations
of Section 162(m) of the Internal Revenue Code of 1986, as amended, as
determined by the Company's tax counsel or independent public
accountants ("nondeductible compensation"), then such nondeductible
compensation shall not be payable by the Company or paid by the
Company in the taxable year of the Company in which such payment
otherwise would be required (but for the operation of this Section
3.8) to be made under the Agreement or any other agreement entered
into between the Company and Executive to effectuate the provisions
hereof, but, instead, shall be deferred to and become payable in the
next subsequent taxable year of the Company in which such compensation
would be deductible for Federal tax purposes by the Company taking
into account the limitations of Section 162(m)."
3. The proviso of Section 3.9 of the Original Agreement is hereby deleted
in its entirety and shall be deemed to be of no further force or
effect from and after the date hereof.
4. Section 3.3(a) of the Original Agreement is hereby amended to add a
new sentence to the end of the paragraph as follows: "The payment of
all bonus payments made to Executive hereunder shall be subject to the
limitations set forth in Section 3.8 hereof."
5. Section 3.3(b) of the Original Agreement is hereby deleted in its
entirety and replaced with the following: "Upon execution and delivery
of this Agreement, Executive shall be granted and shall be entitled to
receive 200,000 Performance Units under the Company's Amended and
Restated 1996 Stock Incentive Plan ("Plan"), subject to the terms and
conditions of the Plan and a definitive Performance Unit Agreement to
be negotiated and entered into by the parties."
6. Section 3.3(c) of the Original Agreement is hereby deleted in its
entirety.
7. Section 3.4 of the Original Agreement is hereby deleted in its
entirety and replaced with the following: "Upon execution and delivery
of this
8. Agreement, the Executive shall be granted and shall be entitled to
receive options ("Options") to purchase 250,000 shares of the common
stock, par value $0.0001 per share, of the Company ("Common Stock"),
under the Company's Amended and Restated 1996 Stock Incentive Plan, at
a price per share equal to $2.37 per share in the case of ISO's (as
defined below), being 110% of the closing sales price per share of the
Common Stock, and $2.16 per share in the case of NQSO's (as defined
below), being the closing sales price per share of the Common Stock,
in each case, on the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") on October 8, 1999, the date on
which the Company's Compensation Committee granted the Executive these
Options. The Options shall, to the extent permitted by Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), be
qualified as incentive stock options ("ISO's"). Options in excess of
the number permitted to receive ISO treatment under Section 422 of the
Code shall not be qualified as ISO's and shall be treated as
non-qualified stock options ("NQSO's"). Subject to Sections 4 and 5
hereof and the applicable stock option award agreement (i) 83,333 of
such Options shall vest and become exercisable on each of the first
and second anniversaries of the date thereof, and (ii) the remaining
83,334 Options shall vest and become exercisable, on the third
anniversary of the date hereof. The Options shall be subject to the
terms and conditions of the Plan and a definitive stock option
agreement to be negotiated and entered into by the parties."
9. Section 4.1 of the Original Agreement is hereby amended by deleting
clause (iv) in its entirety and renumbering clause (v) as clause (iv);
in addition, the cross reference to clause (v) in the last sentence of
Section 4.1 shall be amended to cross reference to clause (iv).
10. Section 4.2 of the Original Agreement is hereby amended by deleting
clause (iv) in its entirety and renumbering clauses (v) and (vi) as
clauses (iv) and (v) respectively; in addition, the cross reference to
clause (v) in the proviso of clause (v) (now (iv)) shall be amended to
cross reference to clause (iv).
11. Section 5.1(b) of the Original Agreement is hereby amended by deleting
clause (ii) in its entirety and renumbering clauses (iii), (iv) and
(v) as clauses (ii), (iii) and (iv) respectively.
12. Section 5.1(c) of the Original Agreement is hereby amended by deleting
clause (iii) in its entirety and replacing it with the following "all
Performance Units shall lapse and terminate immediately; and"
13. Section 5.2(b) of the Original Agreement is hereby amended by deleting
clause (v) in its entirety and renumbering clause (vi) as clause (v).
14. Section 5.2(c) of the Original Agreement is hereby amended by deleting
clause (v) in its entirety and renumbering clause (vi) as clause (v).
15. Section 5.3(b) of the Original Agreement is hereby amended by deleting
clause (v) in its entirety and renumbering clause (vi) as clause (v).
16. Section 7.4(i) of the Original Agreement is hereby amended to delete
the address block for Xxxxxx & Xxxxx under the heading "with a copy
to" and to replace it with the following:
King & Spalding
1185 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
17. The parties agree to enter into an Amended and Restated Employment
Agreement on the terms and conditions set forth in the Original
Agreement as modified by this Amendment. Upon execution and delivery,
the Amended and Restated Employment Agreement will replace and
supercede the Original Agreement and this Amendment.
18. Except as modified hereby, the Agreement shall remain unmodified and
in full force and effect.
19. This Amendment shall be construed in accordance with, and its
interpretation shall otherwise be governed by, the laws of the State
of New York, without giving effect to otherwise applicable principles
of conflicts of law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date set forth above.
MIM CORPORATION
By:/s/ Xxxxx X. Xxxxxx
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Its: Vice President and General Counsel
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/s/ Xxxxxxx X. Xxxxxxxx
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Executive
