Exhibit 10.2
AMENDMENT NO. 1 TO EMPLOYMENT
AGREEMENT
This Amendment to Employment Agreement
between Magellan Health Services, Inc.
(“Employer”) and Karen S. Rohan entered into on this
28 th day of July, 2009 effective as of the 1st
day of August, 2009 (“Employee”).
WHEREAS , Employer and Employee desire to amend the
terms of the Employment Agreement currently in effect between
Employer and Employee (the “Employment
Agreement”).
NOW THEREFORE , Employer or Employee agree that the Employment
Agreement is hereby amended as follows:
I. New Change in Control
Provisions — Add the following new
paragraphs:
1.
Termination Without Cause by the
Employer or With Good Reason By Executive In connection With, Or
Within Two Years After, A Change In Control:
If Employer terminates this
Agreement and Employee’s employment without cause, or if
Employee terminates this Agreement and Employee’s employment
with Good Reason, in connection with a Change in Control (as
defined below) (whether before or at the time of such Change in
control) or within two years after a change in Control, Employee
shall receive the following, in lieu of the amounts and benefits
described in Section 6:
(i)
Base Salary through the date of
termination, payable at the next payroll date at or after
termination (subject to Section 10);
(ii)
pro-rata target bonus for the year
in which termination occurs, payable in a single installment
immediately after termination (subject to Section 10);
provided, however, that, for any termination in 2010 or later, if
(i) Employee was, for the Company’s fiscal year before
the year of termination, an executive officer (other than the chief
financial officer) for whom disclosure of compensation information
was required in the Company’s proxy statement or
Form 10-K under Item 402 of Regulation S-K (i.e., whose
compensation for the previous fiscal year was potentially subject
to the limitation on deductibility under Code Section 162(m)),
and (ii) the payment required hereunder would otherwise be
payable before the occurrence of a “change of ownership or
control” within the meaning of Treasury Regulation §
1.162-27(e)(2)(v) (a “162(m) Control
Change”), then the amount payable hereunder shall equal the
pro rata bonus Employee would have become entitled to receive for
the year of termination assuming his employment had not terminated
(with no exercise of downward discretion permitted), payable at the
time annual bonuses for such year otherwise are payable, provided
that if a 162(m) Control Change occurs within one year after
such termination, payment shall then be made based on
Employee’s pro-rata target bonus amount as provided in the
first clause of this Section 1(ii) (subject to
Section 10
and net of any amount previously
paid under this proviso, but without any forfeiture by Employee if
such amount previously paid under this proviso exceeds the pro-rata
target bonus), with such further payment payable on the date of
such 162(m) Control Change;
(iii)
2 times the sum of (a) Base
Salary plus (b) Target bonus, payable in a single cash
installment immediately after termination (subject to
Section 10);
(iv)
if employee elects COBRA coverage
for health, dental and vision benefits, Employer shall pay
Employer’s contributions for health insurance and Employee
shall pay Employee’s contributions rate for health, dental
and vision insurance for up to eighteen (18) months after
termination;.
(v)
any other amounts earned, accrued or
owing to Executive but not yet paid (subject to
Section 10); and
(vi)
other payments, entitlements or
benefits, if any, that are payable in accordance with applicable
plans, programs, arrangements or other agreements of the Employer
or any affiliate (subject to Section 10);
2.
Definitions:
A. Change in
Control:
A “Change in Control” of
the Employer shall mean the first to occur after the date hereof of
any of the following events:
(i)
any “person,” as such
term is used in Sections 3(a)(9) and 13(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”), becomes a “beneficial owner,” as such term
is used in Rule 13d-3 promulgated under the Exchange Act, of
51% or more of the Voting Stock (as defined below) of the
Employer;
(ii)
the majority of the Board of
Directors of the Employer consists of individuals other than
“Continuing Directors,” which shall mean the members of
the Board on the date hereof, provided that any person becoming a
director subsequent to the date hereof whose election or nomination
for election was supported by a vote of the directors who then
comprised the Continuing Directors, shall be considered to be a
Continuing Director;
(iii)
the Board of Directors of the
Employer adopts and, if required by law or the
certificate of incorporation of the
Corporation, the shareholders approve the dissolution of the
Employer or a plan of liquidation or comparable plan providing for
the disposition of all or substantially all of the Employer’s
assets;
(iv)
all or substantially all of the
assets of the Employer are disposed of pursuant to a merger,
consolidation, share exchange, reorganization or other transaction
unless the shareholders of the Employer immediately prior to such
merger, consolidation, share exchange, reorganization or other
transaction beneficially own, directly or indirectly, in
substantially the same proportion as they previously owned the
Voting Stock or other ownership interests of the Employer,
51% of the Voting Stock or other ownership interests of the entity
or entities, if any, that succeed to the business of the Employer;
or
(v)
the Employer merges or combines with
another company and, immediately after the merger or combination,
the shareholders of the Employer immediately prior to the merger or
combination own, directly or indirectly, 50% or less of the Voting
Stock of the successor company, provided that in making such
determination there shall be excluded from the number of shares of
Voting Stock held by such shareholders, but not from the Voting
Stock of the successor company, any shares owned by Affiliates of
such other company who were not also Affiliates of the Employer
prior to such merger or combination.
B. “Cause&rdquo
