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June 26, 1998
Xxxx Xxxxxxxx
00 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Dear Xxxx:
This letter agreement (the "Agreement") will confirm our decision regarding
certain additional compensation arrangements with Oxford Health Plans, Inc. (the
"Corporation") and clarify your roles and responsibilities in connection with
your continued employment with the Corporation.
On March 30, 1998, the Corporation granted you 200,000 options to acquire common
stock of the Corporation ("Options"), and subject to the approval of certain
amendments to the Corporation's 1991 Stock Option Plan (the "Plan") by the
Corporation's stockholders at the Corporation's 1998 Annual Meeting (the
"Meeting"), an additional 100,000 Options to be granted on the date of the
Meeting, in each case under the terms and conditions of the Plan. In the event
that the Corporation's stockholders fail to approve such Amendments, the
Corporation shall make a mutually acceptable alternative compensation
arrangement, providing comparable economic value to you.
Upon your execution of this Agreement, the Corporation will provide you with a
loan of $750,000, bearing the lowest interest permitted by federal law to avoid
the imputation of income; provided, that the principal and interest of such loan
will be forgiven if you remain employed with the Corporation through March 1,
1999; provided, further, that the full amount of the outstanding principal and
interest shall be due and payable in full on your employment termination date,
in the event your employment with the Corporation is terminated by the
Corporation for Cause or by you without Good Reason (each as defined in your
employment agreement with the Corporation, dated as of August 14, 1996, and
amended as of February 23, 1998, (the "Employment Agreement")) anytime prior to
March 1, 1999. However, should your employment be terminated without Cause by
the Corporation, or if you should die prior to March 1, 1999, the repayment of
the $750,000 loan with interest will be waived.
Your annual compensation and bonus under the Employment Agreement will be as
recommended by me and approved by the Compensation Committee of the Board of
Directors. In addition, during the Term of your employment (as defined in the
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Employment Agreement) and thereafter, the Corporation shall continue to provide
you with no less favorable director and officer indemnification and insurance
coverage than such coverage in effect from time to time for the directors and
officers of the Corporation, subject to the availability of such insurance at a
reasonable cost to the Corporation, and provided further that such director and
officer insurance need not be provided for a period longer than 6 years
following your Date of Termination (also as defined in your Employment
Agreement).
In exchange for the above special option grants, and loan, you hereby
acknowledge your understanding (i) of the new organizational structure of the
Corporation, including the fact that you now report to the Chief Executive
Officer of the Corporation and (ii) that you will have new responsibilities
focusing on external constituencies (including but not limited to
Accounts/Sales, Provider Relationships, and the representation of the
Corporation as President to outside parties).
By signing below, you hereby agree and consent to the above changes, and
acknowledge that such changes shall not give you "Good Reason" (as defined in
the Employment Agreement) to terminate your employment with the Corporation.
Sincerely,
Xxxxxx X. Xxxxxx
Chief Executive Officer
Agreed and accepted:
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Xxxx Xxxxxxxx
Date:
