LETTERHEAD
EXHIBIT 10(BB)
May 2, 1995
Xxxxxxxx Xxxxxxx, Ph.D.
Sr. Vice President,
Chief Clinical Operations
Green Spring Health Services, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Dear Xxxxxxxx:
Green Spring'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 Green Spring. 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, (iii) the expected contribution that you will make to the
profitability of the Company.
The terms and conditions of this Agreement are as follows:
1. It is the intent of the Board and the Company 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 as
specified below.
2. The amount of the payment shall be:
a. $750,000 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. $500,000 if the average EBIT over your employment period is 10
percent or less of Shareowners' Investment.
Xxxxxxxx Xxxxxxx May 2, 1995
Page 2
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, 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 Right's 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 contact 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 Green Spring Health Services as determined by
purchase accounting as of April 30, 1994 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 insure to the benefit of you and your personal
representative and/or executor. 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.
Xxxxxxxx Xxxxxxx May 2, 1995
Page 3
We trust that this Agreement connotes the importance the Board and Company
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/ Xxxxx X. Xxxxxx, M.D.
-------------------------------
Xxxxx X. Xxxxxx, M.D.
President and Chief Executive Officer
DS/mhm
cc: Xxx Xxxxx
