EXHIBIT 99.9
Employment Contract
Amendment No. 1
The Employment Contract ("Contract") entered into as of June 6, 1996
(the "Effective Date") by and between Community Psychiatric Centers (now known
as Transitional Hospitals Corporation and hereafter referred to as "THC"), and
Xxxxx X. Xxxxxxx, an individual ("Xxxxxxx") is amended as set forth below. The
effective date of this Amendment No. 1 is the date of execution by an authorized
agent of THC.
1. Notwithstanding anything to the contrary contained in the
Employment Contract, in the event of a Change of Control as defined in Article
One, Section 1.4 of the Contract, the Contract Benefits as defined in Section
1.9 and referred to in Article Five, Section 5.6 shall become immediately due
and payable in a lump sum at the time of the Change of Control, except the
Employee Continuation Benefits set forth in subsection (vi) which Continuation
Benefits shall be payable according to the terms set forth in (vi).
2. Article One, Section 1.10("Contract Payout Event").
Add: "(iv) Xxxxxxx'x termination of employment within one (1)
year after a Change in Control."
3. Article Three, Section 3.1.3 ("Non Competition Covenant").
Delete: "or any shire within the United Kingdom..."
4. Article Three, Section 3.2 ("Consulting Contract").
Delete: "two (2) years..."
Add: "five (5) years..."
(c) Office Privileges
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Delete: "appropriate office facilities..."
Add: "Office facilities and parking being used by Xxxxxxx, as
of the date of this Amendment No. 1..."
5. Article Five, Section 5.6 ("Change of Control - Contract
Benefits").
Add: "Xxxxxxx'x Salary for the one-year period shall be
placed in an escrow account earning market rate interest
to be released to
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Xxxxxxx at the earlier of the 6 month period expiring or
at such time when Xxxxxxx is released from employment by
the employer."
6. New - Article Seven.
ARTICLE SEVEN
SPECIAL TAX BENEFIT
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7.1 Tax Payments. Xxxxxxx shall be entitled to receive one or more
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payments from THC which shall compensate her for the following tax liabilities:
(A) any and all exercise taxes (collectively, the "Parachute
Tax") imposed pursuant to Code Section 4999 (or any successor provision) and
comparable provisions of applicable state tax laws upon (I) any payment or other
compensation or benefit which is made or provided to or on behalf of Xxxxxxx in
connection with any Parachute Event under this Contract or her subsequent
termination of employment in connection therewith and which is deemed to be a
parachute payment under Code Section 280G(b)(2) and (ii) all the special tax
payments made to her pursuant to this ARTICLE SEVEN, and
(B) the ordinary federal and state income taxes imposed upon
all the special tax payments made to her pursuant to this ARTICLE SEVEN.
7.1.1 Initial Payment. Within ninety (90) days after determination is
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made by the Internal Revenue Service or Xxxxxxx'x tax advisor that Xxxxxxx has
received a parachute payment for which she is liable for a Parachute Tax,
Xxxxxxx shall identify the nature of such parachute payment to THC and submit to
THC the calculation of the Parachute Tax attributable to that payment and the
tax benefit to which she is entitled under this ARTICLE SEVEN with respect to
such payment. Upon receipt of such calculation, THC shall pay Xxxxxxx an amount
sufficient to satisfy (I) such Parachute Tax and (ii) the ordinary federal and
sate income taxes attributable to clause (I) payment and all additional payments
made pursuant to this clause (ii), with the net effect of providing Xxxxxxx with
the necessary funds to satisfy both her total Parachute Tax liability at that
time and the additional ordinary federal and state income taxes attributable to
the Section 7.1.1 payments made to her. Xxxxxxx'x Parachute Tax calculations
shall be final and binding upon THC for purposes of this Contract, and THC shall
accordingly base any Parachute Tax withholding on such calculations, provided
such calculations are based on reasonable interpretations of the law.
7.1.2 Final Determination. In the event that Xxxxxxx'x actual
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Parachute Tax liability is determined by a Final Determination to be greater
than the Parachute Tax liability taken into account for purposes of the payments
made to her pursuant to Section 7.1.1, then within ninety (90) days following
the Final Determination, Xxxxxxx shall submit to THC a new Parachute Tax
calculation based upon the Final Determination. Upon receipt of such
calculation, THC shall pay
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Xxxxxxx an amount which, when added to any amounts paid under Section 7.1.1,
will be sufficient to satisfy (I) her aggregate Parachute Tax and (II) the
ordinary federal and state income taxes attributable to all payments made
pursuant to any provision of this ARTICLE SEVEN, including all additional
payments made pursuant to this clause (II), with the net effect of providing
Xxxxxxx with sufficient aggregate funds to cover (1) her entire Parachute Tax
liability and (2) the additional federal and state ordinary income taxes
attributable to all the payments made to her pursuant to any provisions of this
ARTICLE SEVEN.
7.1.3 Refund. In the event that Xxxxxxx'x actual Parachute Tax
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liability is determined by a Final Determination to be less than the Parachute
Tax liability taken into account for purposes of the payments made to her
pursuant to Sections 7.1.1 and 7.1.2, then Xxxxxxx shall refund to THC, promptly
upon receipt, any federal or state tax refund attributable to the Parachute Tax
overpayment.
7.1.4 Definition. For purposes of this ARTICLE SEVEN a Final
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Determination means an audit adjustment by the Internal Revenue Service that
is either agreed to by Xxxxxxx or her estate of an adjustment that is sustained
by a court of competent jurisdiction in a decision with which she concurs or
with respect to which the period within which an appeal may be filed has lapsed
without a notice of appeal being filed.
4/4/97 /s/ Xxxxx X. Xxxxxxx
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Date Xxxxx X. Xxxxxxx
Transitional Hospitals Corporation
4/3/97 /s/ Xxxx Xxxxxx, M.D.
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Date Xxxx Xxxxxx, M.D.
Chairman, Compensation Committee
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