Exhibit 10.60
AMENDMENT TO EMPLOYMENT
AGREEMENT
(For Compliance with Requirements
of Code Section 409A)
This Amendment to Employment Agreement
between Magellan Health Services, Inc.
(“Employer”) and Raju Mantena (“Employee”)
entered into as of this 1st day of December, 2008.
WHEREAS , Employer and Employee desire to amend the
terms of the Employment Agreement, as amended, 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:
1.
Reorganization of Sections of
Employment Agreement . Section 10 of the Employment
Agreement (“Governing Law”) is moved to become the
fifth to last Section of the Employment Agreement, and
renumbered accordingly, with the four final Sections renumbered
appropriately.
2.
New Section of Employment
Agreement . The
following new text is inserted as Section 10 of the Employment
Agreement:
10
Special Rules for
Compliance with Code Section 409A
. This Section 10 serves to ensure
compliance with applicable requirements of Section 409A of the
Internal Revenue Code (the “Code”). Certain
provisions of this Section 10 modify other provisions of this
Employment Agreement. If the terms of this Section 10
conflict with other terms of the Employment Agreement, the terms of
this Section 10 control.
(a)
Timing of Certain
Payments .
Payments and benefits
specified under this Employment Agreement shall be paid at the
times specified as follows:
(i)
Accrued Payments at
Termination .
Sections 6(a) — (d) of this Employment Agreement
require payment of amounts earned but unpaid, or accrued, at the
date of Employee’s termination. Unless the amount is
payable under an applicable plan, program or arrangement on
explicit terms providing for a delay in payment compliant with Code
Section 409A, these amounts shall be payable at the date the
amounts otherwise would have been payable under the applicable
plans, programs and arrangements in the absence of termination but
in no event more than thirty (30) days after Employee’s
termination of employment, subject to 10(d).
(ii)
Expense Reimbursements
. Any payment under
Section 5 or otherwise as an expense reimbursement hereunder
must be paid no later than the end of Employee’s taxable year
next following the taxable year in which Employee incurred the
reimbursable expense.
(iii)
Other Payments
. Any other payment or benefit
required under this Employment Agreement to be paid in a lump sum
or otherwise to be paid promptly at or following a date or event
shall be paid within five (5) days after the due date, subject
to Section 10(b), (c) and (d) below.
(v)
No Influence on Year of
Payment . In the
case of any payment under the Employment Agreement payable during a
specified period of time following a termination or other event
(including any payment for which the permitted payment period
begins in one calendar year and ends in a subsequent calendar
year), Employee shall have no right to elect in which year the
payment will be made, and the Company’s determination of when
to make the payment shall not be influenced in any way by
Employee.
(b)
Special Rules for Severance
Payments . In the
case of payments in the nature of continuation of payments under
Section 4(a) required under
Section 6(c) (“Severance Payments”), the
following rules will apply:
(i)
Separate Payments.
Each monthly installment of
the Severance Payments shall be deemed to be a separate payment for
all purposes, including for purposes of
Section 409A.
(ii)
Severance Payment Timing
Rules . Each
installment of Severance Payments shall be treated as follows for
purposes of Section 409A:
(A) Installments payable during
the year of termination and by March 15 of the year following
termination shall, to the maximum extent possible, be deemed to
constitute a short-term deferral under Treasury Regulation §
1.409A-1(b)(4);
(B) Installments payable during
the period within six (6) months after termination, to the
extent not covered by Section 10(b)(ii)(A), shall, to the
maximum extent possible, be deemed to constitute amounts payable
under the “two-year/two-times” exclusion from being a
deferral of compensation under Treasury Regulation §
1.409A-1(b)(9)(iii);
(C) To the extent that the
“two-year/two-times” exclusion from being a deferral of
compensation under Treasury Regulation §
1.409A-1(b)(9)(iii) has not been fully applied by virtue of
Section 10(b)(ii)(B), installments payable as Severance
Payments shall be excluded, to the maximum extent possible, by such
“two-years/two-times” exclusion (applied in the reverse
order of payment of the installments — that is, to the latest
installments first); and
(D) All installments of the
Severance Payment not covered by Section 10(b)(ii)(A),
(B) and (C) shall be paid at the applicable installment
payment date in compliance with Section 409A, except that any
such payment shall be subject to the six-month delay rule of
Section 10(d).
2
(c)
Special Rules for Other
Payments . With
respect to any bonus amount that might be payable following
termination of employment under any plan or arrangement covering
Employee as may then be in effect, the following rules will
apply:
(i)
Separate Payments
. The amounts payable
thereunder shall each be deemed to be a separate payment for all
purposes, including for purposes of Section 409A (subject to
any further designation of separate payments explicitly made in any
separately identifiable plan or arrangement for purposes of
Section 409A).
(ii)
Payment Timing Rules
. A payment referenced in
Section 10(c)(i) shall be payable as a lump-sum payment
within thirty (30) days after termination of employment if and to
the extent that (A) the separate payment constitutes
short-term deferral under Treasury Regulation §
1.409A-1(b)(4), (B) the amount of the separate payment not
covered by Section 10(c)(ii)(A) can be paid under the
“two-year/two-times” exclusion from being a deferral of
compensation under Treasury Regulation § 1.409A-1(b)(9)(iii),
after first applying such exclusion under Section 10(b)(ii),
(C) the separate payment is covered by any other applicable
exclusion or exemption under Treasury Regulation §
1.409A-1(b)(9) (provided that the exclusion under subsection
(b)(9)(v)(D) shall be used only to the extent not relied upon
for other payments or benefits) and (D), the six-month delay
rule in Section 10(d) does not apply to the separate
payment (except as otherwise provided in
Section 10(c)(iii)). Any other such separate payment
(i.e., amounts subject to the six-month delay rule) shall be
subject to the six-month delay rule of Section 10(d),
subject to Section 10(c)(iii). Any delay in payment
under the six-month delay rule shall not limit
Employee’s rights under this Employment Agreement to not
forfeit a specified item of compensation as a result of
Employee’s termination.
(iii)
Payments of 409A Deferrals For a
Termination Not Within Two Years After a 409A Change in
Control .&nbs
