GS HOLDING CORP.
0000 XXXXXX XXXX
XXXXXXXXXX, XXXXXXXX 19805
November 9, 1993
Xxxxx X. Xxxxxx, M.D.
Chief Operating Officer
Executive Vice President
GreenSpring Mental Health Services
0000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Dear Xxxxx:
As we have discussed, XxxxxXxxxxx's Board of Directors places great value on
your leadership and your continuing commitment to the success of our company. We
have taken the action described below to demonstrate our desire for you to have
a long and rewarding career with GreenSpring. This letter constitutes an
agreement (the "Agreement") between you and Green Spring Health Services (the
"Company") to provide a benefit to you at retirement based on your continued
employment with the Company until retirement or employment termination, as
defined herein. This Agreement is 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. This Agreement is made as a separate
Agreement from any employment contract currently in effect between you and the
Company.
The terms and conditions of this Agreement are as follows:
1. It is the intent of the Board that you shall be provided with
a lump-sum dollar amount, or equivalent annual annuity
payment, in an amount as determined by the Board at the time
of payment, at the time of your retirement or termination from
the Company, as defined below. The amount of the payment shall
be specified below.
2. The amount of the payment shall be:
a. $1,250,000 if the average Earnings Before Interest
and Taxes (EBIT) as defined below) over your
employment period exceeds 10 percent of Shareowner's
Investment, as defined below.
b. $850,000 if the average EBIT over your employment
period is 10 percent or less of Shareowner's
Investment.
Xxxxx X. Xxxxxx
Page 2
November 9, 1993
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.
3. Retirement shall be defined as termination of employment from
the Company on or after age 60 years. If termination occurs
prior to age 60 years, then the payment will be based on the
conditions of termination, as defined below.
4. If you voluntarily terminate your employment with the Company,
or the Board terminates your employment For-Cause, as it is
defined in your employment contract (or in the Company's
long-term incentive plan, e.g., the Performance Appreciation
Rights Plan), then there shall be no payment other than any
payments received under the long-term incentive plan of the
Company.
5. If your employment is terminated as a result of death,
disability (as defined in your employment contract or the
company's retirement income plan), or at the request of the
Board of Directors, then the payment shall be as defined in
paragraph 2, above at the time of termination.
6. Earnings Before Interest and Taxes shall be as defined in the
Company's long-term incentive plan, except that it shall
include any accruals, under GAAP accounting, for the Company's
long-term incentive plan.
7. Shareowners' Investment shall be defined as equal to the book
value of the GreenSpring Health Services as determined by
purchase accounting as of April 30, 1993 adjusted for
acquisitions at cost as determined by the Board of Directors
of the Company.
8. If you so elect at the time of retirement or termination, the
benefit payment may be in the form of an annual annuity
payment. Such annuity amount will be determined by the Board
of Directors at the time of request and reflect actuarial
considerations or the cost of providing the annuity if
provided by a third-party. You may select the type of annuity,
e.g., single or joint-and-survivor, to meet your needs at the
time of the payment.
9. This Agreement shall be binding upon the Company, its
successors and assigns, and shall inure to the benefit of you
and your personal representative and/or executor.
Xxxxx X. Xxxxxx
Page 3
November 9, 1993
Each and every payment required hereunder shall be made as
provided herein without regard to your personal state at the
time of required payment, except for annuity payments where
the amount is dependent on your death.
We trust that this Agreement connotes the importance the Board places on your
continued involvement with the success of Green Spring. You have contributed
immensely to its founding and development and we trust that you will see fit to
continue this contribution to corporate performance and success in the future.
Sincerely,
/s/ Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxx
Chairman of the Board
NH/lm
