Exhibit 10.10(b)
AMENDMENT TO
EMPLOYMENT AND NONCOMPETITION AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AND NONCOMPETITION AGREEMENT is made and
entered into this 17 day of July, 2002, to be effective as provided in Section
8 below (the "Effective Date"), by and between PlanVista Corporation, a Delaware
corporation and certain of its subsidiaries as set forth in the Employment
Agreement as defined below (hereinafter collectively called the "Employer") and
Xxxxxxx X. Xxxxxx (hereinafter called "Employee").
WHEREAS, the Employer and Employee entered into that certain
Employment and Noncompetition Agreement dated as of June 1, 2001 (the
"Employment Agreement"); and
WHEREAS, Employer and Employee desire to further amend said Employment
Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. The parties to this Employment Agreement shall be PlanVista
Corporation, as Employer, and Xxxxxxx X. Xxxxxx, as Employee, and any references
to subsidiaries of PlanVista Corporation as set forth in the original Employment
Agreement dated as of June 1, 2001 are hereby deleted.
2. Section 2 of the Employment Agreement is hereby deleted in its
entirety and the following substituted therefor:
"2. Term. Subject to the provisions of resignation and
termination as hereinafter provided, the term of this Agreement shall
commence on the Effective Date and shall terminate on December 31,
2005."
3. Section 5(b) of the Employment Agreement is hereby amended by
inserting a new subsection (iv) as set forth below:
"(iv) a grant, pursuant to the provisions of Employer's 2002
Employee Stock Option Plan, of stock options (the "New Options") to
purchase 140,000 shares of Employer's common stock (determined on the
basis of the outstanding shares of common stock of the Employer after
the reverse stock split which was approved at the Company's 2002
annual meeting of shareholders). The New Options shall be granted at
the offering price to the public in the public offering of the
Employer's common stock pursuant to the registration statement filed
with the Securities Exchange Commission on August 1, 2001 as amended
May 24, 2002 and subsequently thereafter (the "Recapitalization
Offering"). These options will vest according to the following vesting
schedule:
Time Vesting
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Percent of Options Event
Vesting
15% December 31, 2002, if Employee remains continuously
employed until that date
15% December 31, 2003, if Employee remains continuously
employed until that date
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15% December 31, 2004, if Employee remains continuously
employed until that date
15% December 31, 2005, if Employee remains continuously
employed until that date
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Accelerated Vesting
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Percent of Options Vesting Event
Vesting
10% December 31, 2002, if and only if,
Employer's Adjusted EBITDA (as defined
below) equals or exceeds $7,000,000 for the
third and fourth quarters of the Employer's
2002 calendar year.
10% Any calendar year end on or before December
31, 2006 in which the Employer's Adjusted
EBITDA (as defined below) equals or exceeds
$18,000,000 for the calendar year then
ended (the "$18 Million EBITDA Vesting
Event"), provided that only one $18 Million
EBITDA Vesting Event may cause the vesting
of this 10%. Accordingly, once this
threshold is attained, attaining it in
subsequent years shall not cause further
vesting.
10% Any calendar year end on or before December
31, 2006 in which the Employer's Adjusted
EBITDA (as defined below) equals or exceeds
$21,000,000 for the calendar year then
ended (the "$21 Million EBITDA Vesting
Event"), provided that only one $21 Million
EBITDA Vesting Event may cause the vesting
of this 10%. Accordingly, once this
threshold is attained, attaining it in
subsequent years shall not cause further
vesting.
Balance of any Any calendar year end on or before December
unvested options 31, 2006 in which the Employer's Adjusted
EBITDA (as defined below)equals or exceeds
$25,000,000 for the calendar year then
ended.
* More than one different vesting event may
occur in any given year.
** If Employee is terminated as a result of
Employee's death or disability during a
calendar year, the Employee will be
entitled to immediate vesting of the time
vesting options (but not the accelerated
vesting options) which would have vested at
the end of the calendar year in which the
event occurred as if he was still employed
on such date.
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For purposes of the foregoing determinations, Adjusted EBITDA is
defined as earnings before interest, taxes, depreciation, and
amortization for the year then ended determined in accordance with
Generally Accepted Accounting Principles except that in determining
earnings for this purpose, there will be no deduction from revenue for
any compensation charge attributable to the vesting of options, and
there will be no deduction for expenses associated with (i) the
Recapitalization Offering (ii) the debt restructure
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between the Employer and its senior lenders which occurred on April
12, 2002 or (iii) any litigation in which the Employer is involved (
the foregoing being referred to as "Disregarded Expenses").
Additionally, the EBITDA targets listed above shall be adjusted to
reflect the projected impact of any business combination involving
Employer which may occur prior to the vesting event with such
adjustments to be determined by adding to the prospective EBITDA
targets the EBITDA of any such business combined with the business of
the Employer for the 12 months preceding the acquisition.
The Employee shall have six months from the date of any
termination of Employee's employment other than for Cause or as a
result of death or Permanent Disability to exercise any vested New
Options. If Employee is terminated for Cause, the New Options shall
terminate immediately. If Employee's employment is terminated by Death
or Permanent Disability, Employee shall have six (6) months from the
date of such termination to exercise any vested options. All New
Options shall be subject to the terms of the 2002 Employee Stock
Option Plan and the Employee shall enter into a standard stock option
agreement containing the foregoing terms and other customary
provisions for options issued under the 2002 Stock Option Plan."
4. Section 6 of the Employment Agreement is hereby amended by deleting
subsection (a) and substituting the following therefor:
"(a) The foregoing notwithstanding, this Agreement is not to be
considered an agreement for a fixed term or as a guarantee of
continuing employment. Accordingly, subject to the provisions of
Section 7 hereof, Employee's employment may be terminated by Employer
with or without Cause (as defined below) upon immediate written notice
to Employee at any time during the term of this Agreement.
Additionally, Employee's employment shall automatically terminate upon
his death or upon a determination that he is Permanently Disabled (as
defined below). Employee may resign as an officer and, if applicable,
director and terminate his employment at any time upon 30 days'
written notice to Employer. In the event that such termination is by
the Employer for Cause or by the Employee other than as a result of a
Constructive Termination Event (as defined below), Employee shall be
paid the bi-weekly portion of his Annual Base Salary then due through
the date of such termination and shall be entitled to no salary from
that date forward and to only those benefits which Employer is
required by law to provide to Employee. In the event that the Employee
dies or becomes Permanently Disabled, the Employee shall be paid all
accrued salary and benefits up to the date of death or determination
of Permanent Disability, as the case may be, shall be entitled to have
all outstanding options (other than New Options) which are not then
vested vest, and shall further be entitled to receive the proceeds of
any life insurance policy or disability policy maintained by the
Employer for the Employee's benefit. The Employer shall use its best
efforts to maintain a term life insurance policy on the life of
Employee, the beneficiaries of which shall be named by the Employee,
with a death benefit of at least 1 million dollars and a disability
policy covering the Employee which has a benefit which will pay upon
permanent disability a benefit of at least $15,000 per month during
the period of Permanent Disability as defined in the policy. Upon any
termination, Employee shall immediately return any and all property
and records belonging to Employer which are in Employee's possession
and shall vacate Employer's offices in a prompt and professional
manner. In addition to the foregoing, upon termination of Employee's
employment with Employer for any reason, Employee shall resign
promptly as an officer and, if applicable, director of Employer and
any subsidiary or parent of Employer unless Employer indicates in
writing to Employee its desire that Employee retain any such position.
In the event of a termination by the Employer without Cause, or in the
event that the Employee terminates his employment as a result of a
Constructive Termination Event, Employee
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shall be entitled solely to (y) the Severance Benefits provided in
Section 7, and (z) immediate vesting of all unvested options, rights
and benefits under any stock option plan in which Employee has an
unvested interest, except that only fifty percent (50%) of the New
Options which at that time are unvested shall vest immediately. The
foregoing notwithstanding, in the event of any termination of
Employee's employment whether or not for Cause or by reason of
Employee's death or Permanent Disability, Employee shall be entitled
to receive all benefits which are accrued, vested and earned up to the
termination date under the terms of any existing benefit plans such as
the vested balance of the Employee's account under any retirement or
benefit plan such as the vested balance of the employee's account
under any retirement or deferred compensation plan and any benefits
which are legally required to be provided after termination such as
COBRA benefits (the "Legally Earned or Required Benefits")."
5. Section 7 of the Employment Agreement is hereby amended by deleting
it in its entirety and substituting the following therefor:
"7. Severance Benefits.
(a) If during the term of this Agreement, Employee's employment
is terminated (i) by the Employer other than for Cause, as defined
below, or (ii) by the Employee as a result of the occurrence of a
Constructive Termination Event, as defined below, which has not been
cured by the Employer within 30 days of receipt of written notice from
the Employee that such event has occurred, then upon the occurrence of
such event Employer shall pay to the Employee (or the Employee's
estate in the event of death after termination), as a severance
benefit and in complete satisfaction of any and all claims which
Employee may have against Employer or its affiliates, officers,
directors or employees as a result of this Agreement or his previous
employment by Employer, an amount which is equal to (y) one (1) times
Employee's Annual Base Salary plus (z) the average annual bonus
earnings of the Employee determined by adding the annual bonus
earnings for the Employee over the previous three immediately past
completed calendar years and dividing the result by three (the
"Initial Severance Benefit"). Additionally, for so long as the
Employer does not waive the provisions of Section 8(a), if Employee
has not commenced employment with a new employer within twelve (12)
months after a termination by Employer without Cause or by Employee as
a result of a Constructive Termination Event, then for each month
after the twelfth month during which such Employee remains unemployed
and bound by the provisions of Section 8(a) from the twelfth and
through the twenty-fourth month after such termination, Employer shall
pay additional severance equal to 1/12th of the Initial Severance
Benefit (the "Supplemental Severance Benefit"); however, no more than
twelve (12) such payments shall be payable. Each Supplemental
Severance Benefit payment shall be made by the 10th of the next month
after the month to which it relates and no such payments shall be made
for the month in which the Employee accepts employment with another
employer or Employer waives the provisions of Section 8(a) or any
month thereafter. Additionally, Employer shall not be obligated to pay
any severance benefit until Employee (or Employee's personal
representative in the event of Employee's death) has delivered to
Employer a complete and unconditional release, in form reasonably
satisfactory to Employer, releasing Employer from any and all claims
which Employee may have against Employer as a result of any occurrence
during Employee's employment and including, but not limited to, any
claim for wrongful termination (the "Employee Release"). The foregoing
notwithstanding, the Employee Release shall not release the Employer
from any of its post termination obligations under this Agreement or
under any employee benefit plan of the Employer. The Initial Severance
Benefit shall be paid within ten (10) days following
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the effective date of such termination or the delivery of the
foregoing release, whichever is the last to occur. As used in this
Agreement:
(A) the term "Cause" means (i) the Employee's
violation of his fiduciary duty to the Employer, (ii) gross or
willful failure by the Employee to perform the duties of
Employee's position, (iii) the Employee's habitual unexcused
absence over an extended period, (iv) embezzlement or
misappropriation of Employer funds by the Employee, or (v) the
Employee's conviction of a felony;
(B) the term "Permanent Disability" means the
permanent mental or physical inability of the Employee to
perform with reasonable accommodation the essential duties of
Employee's position as existing on the date of this Agreement
which condition causes the Employee to be unable to perform
the duties of his office for a period of six months in any
twelve-month period; and
(C) the term "Constructive Termination Event" means
action by the Employer which is directed at the Employee
specifically and not at all employees generally and which has
the effect of significantly reducing the Employee's
compensation, employment responsibilities, or authority, or
the nonpayment by Employer of compensation due and owing to
the Employee under this Agreement, which has not been cured by
the Employer within 30 days of receipt of written notice from
the Employee that such nonpayment has occurred.
(b) Following Employer's termination of Employee's employment for
any reason other than Cause or Employee's termination of his
employment as a result of a Constructive Termination Event during the
term of this Agreement, Employer shall maintain in full force and
effect, for the Employee's continued benefit until the earlier of (i)
the date when no more Initial Severance Benefit payments and
Supplemental Severance Benefit payments are payable, or (ii) the
Employee's commencement of full time employment with a new employer,
all life insurance, medical, dental, health and accident, and
disability plans, programs or arrangements of the Employer in which
the Employee participated on the date of termination, provided that
the Employee's continued participation is possible under the general
terms and provisions of such plans and programs. In the event that
such continued participation is not possible, the Employer shall
obtain and pay for comparable individual coverage for the Employee.
(c) The expiration of the term of this Agreement shall constitute
a termination of Employee's employment by Employer without Cause for
purposes of this Agreement, including Section 6 hereof."
6. Section 8 of the Employment Agreement is hereby amended by deleting
subsection (a) in its entirety and substituting the following therefor:
"(a) For a period equal to the term of this Agreement and two
years after the termination of employment for any reason, without the
written consent of the Employer, Employee shall not either directly or
indirectly engage (whether for his own account or as a partner, joint
venturer, employee, consultant, agent, contractor, officer, director
or shareholder or otherwise) in any business within the United States
which delivers preferred provider organization or claims repricing
services on behalf of health care payors or networks; provided,
however, that the foregoing shall not be deemed to prohibit Employee
from purchasing and owning securities of a company traded on a
national securities exchange or on the Nasdaq National Market with
which Employee has
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no relationship so long as such ownership does not exceed 2% of the
outstanding stock of such company."
7. Section 13 of the Employment Agreement is hereby amended by
deleting the address of Employer and substituting the following therefor:
If to Employer: PlanVista Corporation
0000 Xxx Xxxxx Xxxx.
Xxxxx 000
Xxxxx, XX 00000
Attention: General Counsel
With a copy to: Xxxxx X. Xxxxx, Esq.
Xxxxxx White Xxxxx Banker P.A.
000 Xxxx Xxxxxxx Xxxx., Xxxxx 0000
Xxxxx, XX 00000
8. This Amendment to Employment and Noncompetition Agreement shall
only become effective upon the closing of the Recapitalization Offering on or
before August 30, 2002 (the "Effective Date"). In the event the Recapitalization
Offering is not closed on or before this date, this Amendment to Employment and
Noncompetition Agreement shall be null and void.
9. Except as set forth in this Amendment to Employment and
Noncompetition Agreement, all terms and conditions of the Employment Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
Employment and Noncompetition Agreement the day and year first above written.
PLANVISTA CORPORATION, on behalf of itself
and its subsidiaries listed in the
Employment Agreement dated as of June 1,
2001
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Its: Chairman and Chief Executive Officer
"EMPLOYER"
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
"EMPLOYEE"
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