EXHIBIT 99.13
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
Xxxxxx X. Xxxxx, an individual ("Xxxxx") 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) Xxxxx'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 Xxxxx, as
of the date of this Amendment No. 1..."
5. Article Five, Section 5.6 ("Change of Control - Contract
Benefits").
Add: "Xxxxx'x Salary for the one-year period shall be placed
in an escrow account earning market rate interest to be
released to Xxxxx at the earlier of the 6 month period
expiring or at such time when Xxxxx is released from
employment by the employer."
7. New - Article Seven.
ARTICLE SEVEN
SPECIAL TAX BENEFIT
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7.1 Tax Payments. Xxxxx shall be entitled to receive one or more
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payments from THC which shall compensate him for the following tax liabilities:
(A) any and all excise 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 Xxxxx in connection with any Parachute Event under this
Contract or his 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 him
pursuant to this ARTICLE SEVEN, and
(B) the ordinary federal and state income taxes imposed upon
all the special tax payments made to him pursuant to this ARTICLE SEVEN.
7.1.1 Initial Payment. Within ninety (90) days after each
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determination is made by the Internal Revenue Service or Xxxxx'x tax advisor
that Xxxxx has received a parachute payment for which she is liable for a
Parachute Tax, Xxxxx 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
Xxxxx an amount sufficient to satisfy (I) such Parachute Tax and (ii) the
ordinary federal and state income taxes attributable to clause (I) payment and
all additional payments made pursuant to this clause (ii), with the net effect
of providing Xxxxx with the necessary funds to satisfy both his 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 him. Xxxxx'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 Xxxxx'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 him pursuant to Section 7.1.1, then within ninety (90) days following
the Final Determination, Xxxxx shall submit to THC a new Parachute Tax
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calculation based upon the Final Determination. Upon receipt of such
calculation, THC shall pay Xxxxx an amount which, when added to any amounts paid
under Section 7.1.1, will be sufficient to satisfy (I) his 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 Xxxxx with sufficient aggregate funds to cover (1) his entire
Parachute Tax liability and (2) the additional federal and state ordinary income
taxes attributable to all the payments made to him pursuant to any provisions
of this ARTICLE SEVEN.
7.1.3 Refund. In the event that Xxxxx'x actual Parachute Tax liability
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is determined by a Final Determination to be less than the Parachute Tax
liability taken into account for purposes of the payments made to him pursuant
to Sections 7.1.1 and 7.1.2, then Xxxxx 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 Xxxxx or his estate or 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.
4-3-97 /s/ Xxxxxx X. Xxxxx
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Date Xxxxxx X. Xxxxx
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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