Exhibit 10.1
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
This AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT, dated as of September 17,
1996 (the "Amendment"), is made by and between FHP International Corporation, a
Delaware corporation (the "Company") and ________________ (the "Executive"), for
the purpose of amending the EMPLOYMENT AGREEMENT between them dated as of the
_____ day of ________________, 1996 (the "Employment Agreement"). Defined terms
not defined herein shall have the meanings assigned to them in the Employment
Agreement.
WHEREAS, the Company has entered into the Agreement and Plan of
Reorganization dated as of August 4, 1996 among the Company, PacifiCare Health
Systems, Inc., a Delaware corporation, N-T Holdings, Inc., a Delaware
corporation ("PacifiCare Holding"), and certain other persons, as amended and
restated by the Amended and Restated Agreement and Plan of Reorganization among
them dated as of September 17, 1996 (as so amended, the "Reorganization
Agreement"); and
WHEREAS, the Company desires the benefits of the continued services of the
Executive before and after the Effective Date, and the Executive is willing to
render such services, pursuant and subject to the terms and conditions of the
Employment Agreement as amended hereby; and
WHEREAS, Section 4.8(b) of the Reorganization Agreement permits the
Employment Agreement to be amended as provided herein.
NOW, THEREFORE, in consideration of the promises and the covenants and
agreements contained herein, the parties hereto agree as follows:
1. AMENDMENT TO EMPLOYMENT AGREEMENT. The Employment Agreement is hereby
amended by revising Section 11(c) of the Employment Agreement to read as
follows:
"(c) PROVIDED THAT (i) on or before the Effective Date the Executive
shall have executed and delivered to the Company a Covenant Not to Compete
during the Employment Period in the form of EXHIBIT "A" hereto, (ii) within
30 days after the Date of Termination the Executive shall have executed and
delivered to the Company a Settlement and Release Agreement in the form of
EXHIBIT "B" hereto in the manner specified therein, and (iii) if and for so
long as he or she may have been requested to do so (but not beyond the end
of the Employment Period), the Executive shall have served as a director of
the Company or any corporation controlling, controlled by or under common
control with the Company, on terms and conditions no less favorable than
apply to other directors of such corporation except that such service shall
be without compensation, THEN: If the Executive's employment is terminated
other than voluntarily or for Cause, Death or Disability prior to the end
of the Employment
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Period, each of the Executive's outstanding Option Rights which shall not
otherwise have become exercisable shall become exercisable in such manner
and at such times as the Option Right would have become exercisable if the
Executive had not terminated employment and shall remain exercisable until
the earlier of the date which is 90 days following the date on which the
Option Right first becomes exercisable or the original expiration date of
the Option Right. Calculation of the number of Options Rights that become
immediately exercisable under Section 11(a) shall be made independently of
this Section 11(c)."
2. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the internal laws of the State of Delaware.
3. NO OTHER AMENDMENTS. The Agreement, as amended by this Amendment, is
and shall continue to be in full force and effect and is hereby in all respects
ratified and confirmed. Except as expressly provided herein, nothing in this
Amendment shall waive or be deemed to waive or modify any rights or obligations
of any of the parties under the Agreement.
4. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which will be deemed to be an original but all of which
together will constitute but one instrument.
IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the
date first above mentioned.
FHP International Corporation,
a Delaware corporation
By:____________________________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Title: President and Chief Executive Officer
_______________________________________________
Executive
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COVENANT NOT TO COMPETE
This COVENANT NOT TO COMPETE, dated as of September 17, 1996 (the
"Agreement"), is made by and between FHP International Corporation, a Delaware
corporation (the "Company"), and ________________ ("Executive"). Defined terms
not defined herein shall have the meanings assigned to them in the Employment
Agreement or the Reorganization Agreement (as defined below).
WHEREAS, as of the Effective Time, the Company shall have merged pursuant
to the Amended and Restated Agreement and Plan of Reorganization dated as of
September 17, 1996 (the "Reorganization Agreement") among the Company,
PacifiCare Health Systems, Inc., a Delaware corporation, N-T Holdings, Inc., a
Delaware corporation ("PacifiCare Holding"); and
WHEREAS, as of the Effective Time and pursuant to the Company Merger, all
stock of the Company held by Executive has been converted into stock of
PacifiCare Holding and certain other consideration, and all Company Options
held by Executive have been replaced by Exchange Options, in accordance with the
provisions of the Reorganization Agreement; and
WHEREAS, the Company desires the benefits of the continued services of the
Executive after the Effective Time, and the Executive is willing to render such
services, pursuant and subject to the terms and conditions of the Employment
Agreement; and
WHEREAS, Executive desires the benefits of Section 11(c) of the Employment
Agreement and in consideration thereof desires to execute and deliver this
Agreement in accordance therewith.
NOW, THEREFORE, in consideration of the promises and the covenants and
agreements contained herein, the parties hereto agree as follows:
1. COVENANT NOT TO COMPETE. Until the earlier of the expiration of the
Employment Period or the expiration of 30 days following Executive's Date
of Termination without execution and delivery by Executive of a Settlement
and Release Agreement as provided in Section 11(c) of the Employment
Agreement, Executive shall not, directly or indirectly, as principal,
employee, agent, independent contractor, proprietor, partner, or otherwise,
operate, own, manage, control, or participate in conducting the same
business in the same cities and counties as carried on by the Company in
the State of California at the Effective Time, if in so doing Executive
personally carries on activities substantially the same in all material
respects as the activities carried on by Executive as an officer and
employee of the Company at the Effective Time.
2. REASONABLENESS OF COVENANT. Executive has carefully considered the nature
and extent of the restrictions upon Executive and the rights and remedies
conferred upon Company under this Agreement, and hereby acknowledges and
agrees that such
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covenants are reasonable, are designed to prevent irreparable damage to
Company, are required to protect Company's legitimate interests, and do
not confer a benefit upon Company disproportionate to the detriment of
Executive.
3. NO WAIVER. No waiver of any of the provisions herein shall be valid unless
in writing signed by the party against whom such claimed waiver is sought
to be enforced, nor shall a failure to enforce any right hereunder
constitute a continuing waiver of the notice or a waiver of any other right
hereunder. The failure of the Company at any time or from time to time to
require performance of any of Executive's obligations hereunder shall in no
manner affect the Company's right to enforce any provision of this
Agreement at a subsequent time.
4. SEVERABILITY. In the event that any provision or portion of this Agreement
be found by a court of competent jurisdiction to be invalid or
unenforceable, this Agreement shall be deemed to be amended so as to delete
only the invalid or unenforceable provision, or the invalid or
unenforceable portion thereof, and the remaining provisions hereof shall
remain in full force and effect.
5. SUCCESSORS. This Agreement shall inure to the benefit of, and be binding
upon the parties, their heirs, executors, administrators, successors and
assigns.
6. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the law of the State of California, without reference to
principles of conflicts of laws.
7. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which will be deemed to be an original but all of
which together will constitute but one instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above mentioned.
FHP INTERNATIONAL CORPORATION
By:_______________________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
President and Chief Executive Officer
__________________________________________
Executive
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SETTLEMENT AGREEMENT AND RELEASE
This SETTLEMENT AGREEMENT AND RELEASE ("Agreement") is entered into by and
between ________________ ("Executive") and FHP International Corporation, a
Delaware corporation (the "Company"), pursuant to the EMPLOYMENT AGREEMENT
between them dated as of the _____ day of __________, 1996, as amended (the
"Employment Agreement").
WHEREAS, the employment of Executive by the Company terminated
__________________ (the "Termination Date"); and
WHEREAS, Executive desires the benefits of Section 11(c) of the Employment
Agreement and in consideration thereof desires to execute and deliver this
Agreement in accordance therewith.
NOW, THEREFORE, in consideration of the promises and the covenants and
agreements contained herein, the parties hereto agree as follows:
1. RELEASE. In consideration of the above, the sufficiency of which
Executive hereby acknowledges, and subject to the proviso hereinafter set forth,
Executive hereby agrees not to ▇▇▇ and fully, finally, completely and generally
releases, absolves and discharges the Company, its predecessors, successors,
subsidiaries, parents, related companies and business concerns, affiliates,
partners, trustees, directors, officers, agents, attorneys, servants,
representatives and employees, past and present, and each of them (hereinafter
collectively referred to as "Releasees") from any and all claims, demands,
liens, agreements, contracts, covenants, actions, suits, causes of action,
grievances, arbitrations, unfair labor practice charges, wages, vacation
payments, severance payments, obligations, commissions, overtime payments,
Workers' Compensation claims, debts, profit sharing or bonus claims, expenses,
damages, judgments, orders and/or liabilities of whatever kind or nature in law,
equity or otherwise, whether known or unknown to Executive, which Executive now
owns or holds or has at any time owned or held as against Releasees, or any of
them ("Claims"), including specifically but not exclusively and without limiting
the generality of the foregoing, any and all Claims arising out of or in any way
connected to Executive's employment with or separation of employment from
Executive including any Claims based on contract, tort, wrongful discharge,
fraud, breach of fiduciary duty, attorneys' fees and costs, discrimination in
employment, any and all acts or omissions in contravention of any federal or
state laws or statutes (including but not limited to federal or state securities
laws and the Racketeer Influenced and Corrupt Organizations Act), and any right
to recovery based on state or federal age, sex, pregnancy, race, color, national
origin, marital status, religion, veteran status, disability, sexual
orientation, medical condition, union affiliation or other anti-discrimination
laws, including, without limitation, Title VII, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, the National Labor
Relations Act, and the California Fair Employment and Housing Act, all as
amended, whether such claim be based upon an action
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filed by Executive or by a governmental agency; PROVIDED, HOWEVER, the
foregoing release shall not affect or diminish any rights of Executive under
the Employment Agreement or in respect of vested employee benefits. "Vested
employee benefits" means any and all rights of Executive under or in respect
of (i) any employee benefit plan of the Company or any corporation or other
entity which controlling, controlled by or under common control with the
Company or that is a Releasee ("Affiliated Company"), (ii) any option or
other agreement relating to any right or interest of Executive in any stock
or other securities of the Company or any Affiliated Company, (iii) salary or
wages payable for services rendered before the Termination Date, (iv)
reimbursement for business expenses or other amounts for which Executive is
entitled to reimbursement by the Company immediately before the Termination
Date, or (v) indemnification as an agent.
(a) Executive acknowledges and agrees that neither anything in this
Agreement or the offer, execution, delivery, or acceptance thereof shall be
construed as an admission of any kind by the Company, and this Agreement shall
not be admissible as evidence in any proceeding except to enforce this
Agreement.
(b) It is the intention of Executive in executing this instrument
that it shall be effective as a bar to each and every claim, demand, grievance
and cause of action hereinabove specified as being released. In furtherance of
this intention, Executive hereby expressly consents that this Agreement shall be
given full force and effect according to each and all of its express terms and
provisions, including those relating to unknown and unsuspected claims, demands
and causes of action, if any, as well as those relating to any other claims,
demand and causes of action hereinabove specified, and elects to assume all
risks for claims that now exist in Executive's favor, known or unknown, that are
released under this Agreement. Executive acknowledges that Executive may
hereafter discover facts different from, or in addition to, those Executive now
knows or believes to be true with respect to the claims, demands, liens,
agreements, contracts, covenants, actions, suits, causes of action, wages,
obligations, debts, expenses, damages, judgments, orders and liabilities herein
released, and agrees the release herein shall be and remain in effect in all
respects as a complete and general release as to all matters released herein,
notwithstanding any such different or additional facts.
(c) If any provision of this Agreement or application thereof is held
invalid, the invalidity shall not affect other provisions or applications of the
Agreement which can be given effect without the invalid provision or
application. To this end, the provisions of this Agreement are severable.
(d) Executive represents and warrants that Executive has not
heretofore assigned or transferred or purported to assign or transfer to any
person, firm or corporation any claim, demand, right, damage, liability, debt,
account, action, cause of action, or any other matter herein released.
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(e) NOTICE TO EXECUTIVE: The law requires that Executive be advised
and the Company hereby advises Executive to consult with an attorney and discuss
this Agreement before executing it. Executive acknowledges that the Company has
provided to Executive at least 21 days within which to review and consider this
Agreement before signing it. If Executive decides not to use the full 21 days,
then Executive knowingly and voluntarily waives any claims that Executive was
not in fact given that period of time or did not use the entire 21 days to
consult an attorney and/or consider this Agreement. Executive acknowledges that
Executive may revoke this Agreement for up to seven calendar days following
Executive's execution of this Agreement and that it shall not become effective
or enforceable until the revocation period has expired. Executive further
acknowledges and agrees that such revocation must be in writing addressed to the
Company as follows: FHP International Corporation, ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: President, and received by the Company as so addressed
not later than midnight on the seventh day following execution of this Agreement
by Executive. If Executive so revokes this Agreement, the Agreement shall not
be effective or enforceable and Executive will not receive the benefits
described above. If Executive does not revoke this Agreement in the time frame
specified above, the Agreement shall become effective at 12:00:01 on the eighth
day after it is signed by Executive.
(f) Executive represents that Executive has read and understood the
foregoing Agreement, has been advised to and has had the opportunity to discuss
it with anyone he or she desires, including an attorney of his or her own
choice, and Executive accepts and agrees to the terms of this Agreement,
acknowledges receipt of a copy of the same and the sufficiency of the benefits
described above, and hereby executes this Agreement voluntarily and with full
understanding of its consequences.
PLEASE READ CAREFULLY. THIS AGREEMENT CONTAINS A GENERAL RELEASE OF
ALL KNOWN AND UNKNOWN CLAIMS.
Date:_____________ , 199__ Executive:
____________________________
Date:_____________ , 199__ FHP International Corporation
By:_____________________________
Its:____________________________
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