September 19, 1994
Xxxxx X. Xxxxxx, M.D.
Chief Executive Officer
President
Green Spring Health Services
0000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Dear Xxxxx:
In a letter, dated November 9, 1993, the Board of Directors agreed to provide
you with certain guaranteed termination and retirement benefits (hereinafter
referred to as the "Original Agreement"). The Original Agreement was entered
into in consideration of (i) your past contribution to the Company and the value
created by your efforts, (ii) the desire of the Board of Directors to encourage
continued employment with the Company until your retirement, and (iii) the
expected contribution that you will make to the profitability of the Company. At
the time of the Original Agreement you were employed by the Company as its Chief
Operating Officer and Executive Vice President. Since the date of the Original
Agreement, you have assumed the responsibilities of the Company's Chief
Executive Officer and President position.
In consideration of the enhanced responsibilities of the new role, the Board of
Directors has directed me to amend paragraph 2 of the Original Agreement to
provide for additional compensation in the event of termination or retirement as
defined by the Original Agreement. Paragraph 2 of the Original Agreement shall
now provide as follows:
2. The amount of the payment shall be:
a. $1,500,000 if the average Earnings Before Interest
and Taxes (EBIT as defined below) over your
employment period exceeds 10 percent of Shareowners'
Investment, as defined below.
b. $1,000,000 if the average EBIT over your employment
period is 10 percent or less of Shareowners'
Investment.
In each of the above cases, the amount of the payment shall be reduced
by any payments to you, as determined from the date of this Agreement
until your employment termination or retirement, from amounts earned
under the grant of PARs, or other long-term incentive payments, for any
plan approved by the Board of Directors.
All other provisions of the Original Agreement shall remain in full force and
effect. I thank you for your continuing efforts in the Company's success.
Sincerely,
/s/ Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxx
Chairman of the Board
