Item 1.01. Entry into a Material Definitive Agreement.
Effective as of September 8, 2021, Molina Healthcare, Inc. (the “Company”) has entered into an amended and restated employment agreement with Joseph M. Zubretsky, 64, our current President and Chief Executive Officer (the “amended agreement”). The amended agreement amends and restates the employment agreement originally entered into by the Company and Mr. Zubretsky on October 9, 2017 (the “original agreement”), as
reported and described in the Company’s Form 8-K current report filed on October 10, 2017.
The amended agreement continues Mr.
Zubretsky’s employment as President and Chief Executive Officer of the Company under the same general terms and conditions as was the case under the original agreement,
but updates the original agreement with regard to unvested equity-based awards that are subject to performance-based vesting conditions (the “Performance-Based Awards”) to better align the treatment of those Performance-Based Awards with
the Company’s subsequently adopted long-term equity-based incentive programs and
practices.
If Mr. Zubretsky’s
employment with the Company terminates due to a termination without “Cause” or resignation for “Good Reason” (as such terms are defined in the amended agreement),
in addition to his previously provided severance benefits, any Performance-Based Awards will now vest on a prorated basis, subject to the achievement then-to-date
of the identified performance metrics at or above the specified threshold level for vesting. Such proration shall be based on the number of fiscal quarters that have elapsed over the relevant performance measurement period (typically 12 fiscal
quarters) through the fiscal quarter in which termination occurs, multiplied by the projected final achievement level of the relevant metric based on straight-line
extrapolation to the end of the full measurement period.
Also, if Mr. Zubretsky’s
services are terminated without Cause or by Mr. Zubretsky for Good Reason within 24 months following a Change in Control, in addition to his existing severance benefits, rather than vesting at target, any then unvested Performance-Based Awards will vest on his last day of employment based on the greater of: (i) target performance, and (ii) the projected final achievement of the performance metric
through the measurement period based on the straight-line extrapolation of actual achievement through the end of the relevant performance measurement period.
If Mr. Zubretsky elects to
voluntarily retire after reaching age 65, and provided that he gives the Company at least one-year’s advance notice of his intended retirement, upon his retirement,
rather than vesting at target, any then unvested Performance-Based Awards shall likewise vest at the greater of target and projected final achievement. In the event the Company were to give Mr. Zubretsky 90 days advance written notice of his termination by the Company without “Cause,” Mr. Zubretsky may elect to exercise his retirement rights within such 90-day period.
The foregoing description of the amended agreement does not purport to be complete and is subject to, and
qualified in its entirety by, the full text of the amended agreement. A copy of the amended agreement is being filed as Exhibit
10.1 hereto and is incorporated herein by reference.