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EXHIBIT 10.20
FIRST AMENDMENT
TO EMPLOYMENT AGREEMENT
This First Amendment to the Employment Agreement effective as of January 1,
2000, (this "Amendment") is entered into by and between Advance Paradigm, Inc.
(the "Company") and John H. Sattler (the "Employee").
WHEREAS, the Company and Employee (collectively, the "Parties") entered
into that certain Employment Agreement effective as of November 14, 1996 (the
"Agreement");
WHEREAS, the Parties now desire to amend the Agreement to change the
Employee's compensation, add certain restrictive covenants and extend the term
of the Agreement;
NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency is hereby acknowledged, the parties
hereby agree to the following:
1. SECTION 2. TERM. The term provision set forth in Section 2 of the
Agreement is hereby amended and restated in its entirety as follows:
"The employment of Employee shall commence on the Effective Date and
shall end on December 31, 2002 (the "Term")."
2. SECTION 3. COMPENSATION. The compensation provisions set forth in
Sections 3(a) and 3(b) of the Agreement are hereby amended and restated
in their entirety as follows:
"(a) Salary. Employee shall receive annual salary of Two Hundred
Fifteen Thousand dollars ($215,000) ("Base Salary"), to be
paid in biweekly installments in accordance with the Company's
salary payment practices in effect from time to time for
senior managers of the Company. The Base Salary may be
reviewed by the Board from time to time to determine the
amount of any increases.
(b) Bonus Payments. Employee will be entitled to participate in
the Company's incentive compensation plan for an annual bonus
based on the Company's audited financial performance for the
fiscal year as well as Employee's individual contribution to
the Company. The performance criteria used to calculate the
Employee's Annual Bonus during the Employment Period shall be
determined by the Employer and will be established with a
targeted bonus of 50% of Employee's Salary per annum. Any
Annual Bonus payable with respect to a fiscal year shall be
subject to the approval of the Compensation Committee of the
Board of Directors and shall be paid in accordance with the
Employer's normal payroll practices."
3. SECTION 18. RESTRICTIONS ON COMPETITIVE EMPLOYMENT. A new Section 18 is
hereby added to the Agreement as follows:
"During the term of Employee's employment and for the twelve-month
period following termination of Employee's employment, except with the
express written consent of the Board of Directors or the Chief
Executive Officer of the Company, Employee will not,
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become engaged in, render services to, permit Employee's name to be
used in connection with, own, manage, operate, control, be employed by,
participate in, consult with, or be connected in any manner, whether as
an officer, director, employee, agent, consultant, stockholder (other
than as the holder of less than 2% of the aggregate outstanding shares
of a class of equity securities publicly traded on a national
securities exchange or quotation system) or other capacity with the
ownership, management, operation or control of, any business or
enterprise engaged or about to become engaged in the Business of the
Company. The Business of the Company includes, but is not limited to,
all those products and services that are presently or hereafter
marketed by the Company, or that are in the development stage at the
time of termination of Employee's employment and are actually marketed
by the Company and/or it affiliates thereafter, as well as, the
following businesses: (i) the third party prescription drug claims
processing business; (ii) the organization and administration of retail
pharmacy networks; (iii) the design, development or marketing of or
consulting as to, prescription drug benefit plans; (iv) the provision
of mail service pharmacy; (v) the collection, analysis and/or sale of
data relating to prescription drug utilization; (vi) formulary
management and rebate administration services; (vii) disease state
management, case management or demand management services and (viii)
any other business in which the Company and/or any of its affiliates is
then engaged."
4. EXHIBIT A. FRINGE BENEFITS
The following section is hereby added to Exhibit A:
1. (c) Employee shall be granted an incentive option (the "Option") to
purchase 30,000 shares of the Common Stock (the "Shares") of the
Company. The Option shall be subject to approval by the Company's Board
of Directors and granted pursuant to the provisions of the Company's
Amended and Restated Incentive Stock Option Plan. The Option shall vest
and become exercisable as to 20% of the shares on each of the first
five anniversaries of the date of grant. The exercise price shall be
the fair market value of the Common Stock of the Company as of the date
of grant, as determined by averaging the closing price of the stock on
the five (5) trading days preceding the date of grant. Excluding for
purposes of this paragraph any transactions between the Company and any
affiliate of the Company, if there is (i) a sale of substantially all
of the Common Stock of the Company, (ii) a sale of substantially all of
the assets of the Company, or (iii) a merger in which the Company is
not to be the surviving corporation ("Change in Control"), this Option
shall automatically fully vest immediately prior to the occurrence of
the transaction giving rise to the vesting and, to the extent such
transaction does not occur, the vesting shall be deemed rescinded and
Employee shall again only be entitled to exercise the Option as set
forth above.
Section 2 of Exhibit A is hereby amended and restated in its entirety
as follows:
"2. Car Allowance. Employee shall be provided a $600 per month car
allowance. At year end, the value of this benefit will be reported as
required by the IRS regulations on Employee's Form W-2."
Except as specifically amended herein, the Agreement shall remain in full
force and effect.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and delivered by their proper and duly authorized officers as of the
date first above written. By executing this Amendment, the undersigned
individuals hereby warrant and represent that they have read this Amendment in
its entirety and agree to all of its terms.
ADVANCE PARADIGM, INC.
By:
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Name: David D. Halbert
Title: Chief Executive Officer
EMPLOYEE
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John H. Sattler
