Employment Agreement - HealthSouth Rehabilitation Corp. and Richard M. Scrushy


                              EMPLOYMENT AGREEMENT

         EMPLOYMENT  AGREEMENT,  dated as of July 23, 1986, between  HEALTHSOUTH
Rehabilitation Corporation, a Delaware corporation ('HEALTHSOUTH'),  and RICHARD
M. SCRUSHY, a resident of Birmingham, Alabama ('Scrushy').

                              W I T N E S S E T H:

         WHEREAS,  HEALTHSOUTH  is a  healthcare  concern  engaged in  providing
comprehensive  rehabilitation  care  services  to the public  through a national
organization;

         WHEREAS,  HEALTHSOUTH  desires to avail itself of Scrushy's talents and
expertise in the management of the rehabilitation  business of HEALTHSOUTH,  and
to employ  him as the  Chairman  of the  Board,  President  and Chief  Executive
Officer of HEALTHSOUTH and certain of its subsidiaries and Scrushy is willing to
accept such employment.

         NOW,  THEREFORE,  in  consideration  of the premises,  and other mutual
promises and covenants hereinafter contained,  HEALTHSOUTH and Scrushy do hereby
agree, for their mutual benefit, as follows:

Section 1. Employment.

         Scrushy  shall  be  employed  by  HEALTHSOUTH   under  this  Agreement,
effective August 1, 1986, and Scrushy accepts such employment upon the terms and
conditions hereinafter set forth.

                                      - 1 -




Section 2. Term.

         The term of employment provided for in this Agreement shall commence on
August 1, 1986,  and shall  remain in full force and effect for a period of five
years thereafter.

Section 3. Powers and Duties.

         Scrushy shall be employed by HEALTHSOUTH  during the term of employment
under this Agreement as the Chairman of the Board, President and Chief Executive
Officer of HEALTHSOUTH,  and shall also hold similar offices with  HEALTHSOUTH's
subsidiaries  and/or their  successors.  In addition,  HEALTHSOUTH shall use its
best  efforts to cause  Scrushy to be  nominated  and  elected as a Director  of
HEALTHSOUTH  and its  subsidiaries or their  successors  during the term of this
Agreement. In addition,  Scrushy shall perform such duties as may be assigned to
him from time to time by the Board of Directors of HEALTHSOUTH.  In the event of
a reorganization  of HEALTHSOUTH and its  subsidiaries  which results in Scrushy
not being elected Chairman of the Board,  President and Chief Executive  Officer
of the  successor  company,  such event shall be deemed to be a  termination  of
Scrushy's  employment  pursuant to Section 8(f) of this Agreement.  In the event
that  Scrushy  shall  not be  elected  a  Director  of  HEALTHSOUTH  or any such
successor  company,  Scrushy  may,  at his sole  option,  treat  such event as a
termination of Scrushy's employment pursuant to Section 8(c) of this Agreement.

         In carrying out his duties  under this  Agreement,  Scrushy  shall have
such powers and duties usually  incident to the office of Chairman of the Board,
President and Chief Executive

                                      - 2 -




Officer  and shall have  general  responsibility  for the  overall  development,
expansion and operations of HEALTHSOUTH and its subsidiaries.

         The  performance by Scrushy of any duties assigned to him which are not
of the type  provided  for herein  shall not  constitute  a waiver of his rights
hereunder or an abrogation, abandonment or termination of this Agreement.

         Scrushy  shall  devote all of his working  time and best efforts in the
best interest and behalf of HEALTHSOUTH  throughout the term of this  Agreement,
such working time and best efforts to be of the type and extent usually expended
by executives  of similar  caliber in similar  situations.  Scrushy shall not be
restricted from engaging in a business which is noncompetitive  with HEALTHSOUTH
and its subsidiaries after normal working hours or on weekends or from investing
his assets in such form or manner as will not require  any  services on his part
in the operation of the affairs of the companies in which such  investments  are
made.

Section 4. Place of Performance.

         The  headquarters  for the  performance  of  Scrushy's  duties shall be
located in Birmingham,  Alabama, but from time to time Scrushy shall be required
to travel to  HEALTH-  SOUTH's  other  locations  in the  proper  conduct of his
responsibilities  under this  Agreement.  As it is  HEALTHSOUTH's  intention  to
expand the business of HEALTHSOUTH on a national scale,  HEALTHSOUTH may require
Scrushy to spend a reasonable  amount of time  traveling,  as his duties and the
business of HEALTHSOUTH and its subsidiaries may require.

                                      - 3 -






Section 5. Compensation.

         For all  services  rendered  by  Scrushy  pursuant  to this  Agreement,
HEALTHSOUTH shall pay Scrushy the following compensation:

                  (a) A base  salary  at the  annual  rate of  $160,000  for the
         period  August 1, 1986 through  December  31, 1986,  and an annual base
         salary of $180,000  thereafter,  such  salary to be paid  semi-monthly.
         Such salary shall be reviewed annually by the Board of Directors.

                  (b) Scrushy shall be entitled to participate in any bonus plan
         approved by the Board of Directors for HEALTHSOUTH's management.

Compensation pursuant to this Section 5 or any other provision of this Agreement
shall be subject to reduction by all applicable withholding, social security and
other state, Federal and local taxes and deductions.

Section 6. Employee Benefits.

         (a) Scrushy will be entitled to  participate  in any employee  benefits
provided  by  HEALTHSOUTH  and  its   subsidiaries,   such  as  life  insurance,
hospitalization  and major  medical  insurance  plans which  HEALTHSOUTH  has in
effect or may adopt from time to time.  Without  limiting the  generality of the
foregoing, the benefits provided Scrushy during the term of this Agreement shall
also include the following elements:

                                      - 4 -






                  (i) a four-week vacation during each year of this Agreement;

                  (ii) a car allowance  for an  automobile  owned by Scrushy for
         use by Scrushy in  connection  with the  execution  of his duties under
         this Agreement in the amount of $500 per month; and

                  (iii)  HEALTHSOUTH  shall provide  Scrushy,  either  through a
         corporate group disability insurance plan or otherwise, with disability
         insurance coverage equal to at least 60% of his base salary.

         (b) In addition,  the Board of Directors shall consider Scrushy for the
grant  of  options  to  purchase  Common  Stock  of  HEALTHSOUTH,  as  Scrushy's
performance  shall  dictate,  no less frequent than annually  during the term of
this Agreement.

Section 7. Expenses.

         Scrushy is  authorized  to incur  reasonable  expenses in promoting the
business of HEALTHSOUTH and its subsidiaries,  including expenses, to the extent
used for  business  purposes,  for  entertainment,  travel  and  similar  items.
HEALTHSOUTH will reimburse Scrushy for all such expenses,  upon the presentation
by  him  of  an  itemized  account  of  such  expenditures  in  accordance  with
HEALTHSOUTH procedures.

                                      - 5 -






Section 8.  Termination.

         (a) HEALTHSOUTH may terminate the employment of Scrushy (i) at any time
for just cause by written notice to Scrushy  effective upon receipt,  or (ii) if
Scrushy is unable to perform the services  required of him under this  Agreement
by reason of disability  as defined in the  disability  insurance  plan or plans
referred to in Section  5(a)(iii)  of this  Agreement.  For  purposes of Section
8(a)(i)  above,  the term 'just  cause'  shall have the  meaning  prescribed  in
HEALTHSOUTH's  policy  manual  as  approved  from  time to time by the  Board of
Directors.

         (b) In the event that  Scrushy's  employment by  HEALTHSOUTH  should be
terminated pursuant to Section 8(a)(i) of this Agreement prior to the conclusion
of the term of this  Agreement,  HEALTHSOUTH  shall have no  further  obligation
hereunder,  except for the payment of the  compensation  provided for in Section
5(a) of this  Agreement  for a period of one year  following  such  termination,
which  compensation shall be considered a debt of HEALTH- SOUTH and shall not be
discharged by reason of termination of Scrushy's employment.

         (c) In the event that  Scrushy's  employment  by  HEALTHSOUTH  shall be
terminated for any reason other than as set forth in Section 8(a)(i), 8(d), 8(e)
or  8(f)  of this  Agreement,  HEALTHSOUTH  shall  have  no  further  obligation
hereunder,  except for the payment of compensation  provided for in Section 5(a)
of this Agreement for the remaining term of this Agreement,  but in no event for
a period of less than two years,  which  compensation shall be considered a debt
of HEALTHSOUTH and shall not be discharged by reason of termination of Scrushy's
employment.

                                      - 6 -




         (d) In the  event  of the  death  of  Scrushy  during  the term of this
Agreement,  the Agreement shall terminate  immediately and HEALTHSOUTH shall pay
to the widow or estate of  Scrushy,  or such  other  person or persons as may be
designated  by Scrushy in  writing,  an amount  equal to one year's  annual base
salary payable in one lump sum.

         (e) Scrushy may terminate his employment  under this  Agreement  before
the expiration of its term by giving  HEALTHSOUTH 180 days written notice of his
intention to terminate such employment,  and at the expiration of said 180 days,
Scrushy's  employment  under this Agreement shall terminate and Scrushy shall be
entitled to receive,  as severance  compensation,  an amount equal to one year's
annual  base  salary  at  the  time  of  termination,  payable  at the  time  of
termination.

         (f)  In the  event  that  HEALTHSOUTH  shall  be  acquired,  merged  or
reorganized in such a manner as to result in a change in control of HEALTHSOUTH,
Scrushy may terminate this employment under this Agreement by giving HEALTHSOUTH
30 days written notice of his intention to terminate such employment, and at the
expiration of said 30 days,  Scrushy's  employment  under this  Agreement  shall
terminate and Scrushy shall be entitled to receive,  as severance  compensation,
an amount  equal to two years'  annual base  salary at the time of  termination,
payable at the time of termination.

Section 9. Non-Competition.

         (a) In the event that Scrushy's  employment  under this Agreement shall
terminate  during its term, for the period of time with respect to which Scrushy
is entitled to receive  compensation  hereunder after such termination,  Scrushy
shall not, directly or indirectly, own,

                                      - 7 -






operate,  be  employed  by,  be a  director  of,  act as a  consultant  for,  be
associated  with,  or be a  partner  or  have a  proprietary  interest  in,  any
enterprise,  partnership,  association,  corporation,  joint  venture  or  other
entity, which is competitive with the rehabilitation business of HEALTHSOUTH, or
any subsidiary or affiliate thereof,  in any county in a state where HEALTHSOUTH
or its  subsidiaries  or affiliates are conducting  such business at the time of
such termination;  provided,  however, that if such termination shall occur as a
result of the causes enumerated in Section 8(f) of this Agreement,  this Section
9 shall be void and shall be of no further force and effect.

         (b) The parties have  entered into this Section 9 of this  Agreement in
good faith and for the reasons set forth in the recitals  hereto and assume that
this  Agreement is legally  binding.  If, for any reason,  this Agreement is not
binding  because of its  geographical  scope or  because  of its term,  then the
parties  agree  that this  Agreement  shall be deemed  effective  to the  widest
geographical  area and/or the  longest  period of time (but not in excess of one
year) as may be legally enforceable.

         (c)  Scrushy  acknowledges  that the rights and  privileges  granted to
HEALTH- SOUTH in this Section 9 are of special and unique character, which gives
them a peculiar  value,  the loss of which may not be  reasonably  or adequately
compensated  for by  damages in an action of law,  and that a breach  thereof by
Scrushy of this Agreement will cause HEALTH- SOUTH great and irreparable  injury
and  damage.  Accordingly,  Scrushy  hereby  agrees  that  HEALTHSOUTH  shall be
entitled to remedies of  injunction,  specific  performance  or other  equitable
relief to prevent a breach of this Section 9 of this Agreement by Scrushy.  This
provision  shall not be  construed  as a waiver of any other  rights or remedies
HEALTHSOUTH may have for damages or otherwise.

                                      - 8 -







Section 10. Non-Assignability.

         Scrushy  shall  not  have  the  right  to  assign,  transfer,   pledge,
hypothecate or dispose of any right to receive payments hereunder or any rights,
privileges or interest hereunder,  all of which are hereby expressly declared to
be  non-assignable  and  non-transferable,   except  after  termination  of  his
employment  hereunder.  In the event of a violation  of the  provisions  of this
Section 10, no further sums shall hereafter become due or payable by HEALTHSOUTH
or its  subsidiaries to Scrushy or his assignee,  transferee,  pledgee or to any
other person  whatsoever,  and HEALTHSOUTH shall have no further liability under
this Agreement to Scrushy.

Section 11. Binding Effect.

         The rights and  obligations of HEALTHSOUTH and its  subsidiaries  under
this  Agreement  shall  inure to the  benefit of and shall be  binding  upon the
successors and assigns of HEALTHSOUTH.  Scrushy shall not assign or alienate any
interest of his in this Agreement, except as provided in Section 10 hereof.

Section 12. Waiver of Breach.

         The  waiver  by  either  party to this  Agreement  of a  breach  of any
provision  thereof by the other  party shall not  operate or be  construed  as a
waiver of any subsequent breach of such party.

                                      - 9 -






Section 13. Notices.

         Any notice required or permitted to be given under this Agreement shall
be  sufficient  if in writing and if sent by  certified  or  registered  mail to
Scrushy's  residence  (if  such  notice  is  addressed  to  Scrushy),  or to the
principal  executive  offices of  HEALTHSOUTH  in  Birmingham,  Alabama (if such
notice is addressed to HEALTHSOUTH).

Section 14. Entire Agreement.

         This instrument  shall be governed by the laws of the State of Delaware
and  contains  the entire  agreement  of the parties with respect to the subject
matter hereof and  supersedes  any other  agreements,  whether  written or oral,
between the parties.

         This Agreement may not be changed orally,  but only by an instrument in
writing  signed by the party  against whom  enforcement  of any waiver,  change,
modification, extension or discharge is sought.

Section 15. Counterparts.

         This  Agreement  may be executed in two or more  counterparts,  each of
which  shall for all  purposes be deemed to be an  original,  but each of which,
when so executed, shall constitute but one and the same instrument.

                                     - 10 -






         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
day and year first above written.

                                HEALTHSOUTH Rehabilitation Corporation


                                By /s/ AARON BEAM, JR.
                                   ------------------------------------
                                       Aaron Beam, Jr.
                                    Senior Vice President,
                                    Chief Financial Officer
                                       and Treasurer

                                   /s/ RICHARD M. SCRUSHY
                                   ------------------------------------
                                       Richard M. Scrushy



                                     - 11 -



                     AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

         AMENDMENT NO. 1 TO EMPLOYMENT  AGREEMENT,  dated as of January 5, 1987,
between  HEALTHSOUTH   Rehabilitation   Corporation,   a  Delaware   corporation
('HEALTHSOUTH'),  and  RICHARD M.  SCRUSHY,  a resident of  Birmingham,  Alabama
('Scrushy').

                              W I T N E S S E T H:

         WHEREAS,  the parties to this  Agreement  are  parties to that  certain
Employment  Agreement,  dated as of July 23, 1986 (the 'Employment  Agreement');
and

         WHEREAS,  the  parties  desire to amend  the  Employment  Agreement  as
hereinafter set forth.

         NOW,  THEREFORE,  in  consideration  of the  premises,  and the  mutual
promises and covenants hereinafter contained,  HEALTHSOUTH and Scrushy do hereby
agree, for their mutual benefit, as follows:

         1. Section 5(a) of the Agreement is hereby  amended by  increasing  the
annual base salary effective after December 31, 1986,  previously  $180,000,  to
$200,000.

         2.  HEALTHSOUTH  and Scrushy hereby reaffirm all of the other terms and
provisions of the Employment  Agreement,  which is amended only as  specifically
set forth herein.




         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
day and year first above written.

                                    HEALTHSOUTH Rehabilitation Corporation

                                    By            /s/ AARON BEAM, JR.
                                      -----------------------------------------
                                                 Aaron Beam, Jr., Senior
                                             Vice President and Chief Financial
                                                    Officer and Treasurer

                                                  /s/ RICHARD M. SCRUSHY
                                       ----------------------------------------
                                                   Mr. Richard M. Scrushy



                                      - 3 -





                     AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT

         AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT, dated as of December 16, 1987,
between  HEALTHSOUTH   Rehabilitation   Corporation,   a  Delaware   corporation
('HEALTHSOUTH'),  and  RICHARD M.  SCRUSHY,  a resident of  Birmingham,  Alabama
('Scrushy').

                              W I T N E S S E T H:

         WHEREAS,  the parties to this  Agreement  are  parties to that  certain
Employment  Agreement,  dated as of July 23,  1986,  as amended as of January 5,
1987 (the 'Employment Agreement'); and

         WHEREAS,  the parties desire to further amend the Employment  Agreement
as hereinafter set forth.

         NOW,  THEREFORE,  in  consideration  of the  premises,  and the  mutual
promises and covenants hereinafter contained,  HEALTHSOUTH and Scrushy do hereby
agree, for their mutual benefit, as follows:

         1. Section 5(a) of the Agreement is hereby  amended by  increasing  the
annual base salary  effective  after December 31, 1987,  previously  $200,000 to
$260,000.



         3.  HEALTHSOUTH  and Scrushy hereby reaffirm all of the other terms and
provisions of the Employment  Agreement,  which is amended only as  specifically
set forth herein.

         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
day and year first above written.

                               HEALTHSOUTH Rehabilitation Corporation

                               By /s/ AARON BEAM, JR.
                                  -----------------------------------------
                                      Aaron Beam, Jr., 
                                      Senior Vice President and Chief Financial
                                        Officer and Treasurer

                                  /s/ RICHARD M. SCRUSHY
                                  -----------------------------------------
                                      Mr. Richard M. Scrushy



                                      - 3 -




                     AMENDMENT NO. 3 TO EMPLOYMENT AGREEMENT

         AMENDMENT NO. 3 TO EMPLOYMENT AGREEMENT, dated as of December 20, 1988,
between  HEALTHSOUTH   Rehabilitation   Corporation,   a  Delaware   corporation
('HEALTHSOUTH'),  and  RICHARD M.  SCRUSHY,  a resident of  Birmingham,  Alabama
('Scrushy').

                              W I T N E S S E T H:

         WHEREAS,  the parties to this  Agreement  are  parties to that  certain
Employment  Agreement,  dated as of July 23,  1986,  as amended as of January 5,
1987 and as of December 16, 1987 (the 'Employment Agreement'); and

         WHEREAS,  the parties desire to further amend the Employment  Agreement
as hereinafter set forth.

         NOW,  THEREFORE,  in  consideration  of the  premises,  and the  mutual
promises and covenants hereinafter contained,  HEALTHSOUTH and Scrushy do hereby
agree, for their mutual benefit, as follows:

         1. Section 5(a) of the Agreement is hereby  amended by  increasing  the
annual base salary  effective  after December 31, 1988,  previously  $260,000 to
$325,000.




         3.  HEALTHSOUTH  and Scrushy hereby reaffirm all of the other terms and
provisions of the Employment  Agreement,  which is amended only as  specifically
set forth herein.

         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
day and year first above written.

                                    HEALTHSOUTH Rehabilitation Corporation

                                    By            /s/ AARON BEAM, JR.
                                             ----------------------------------
                                                      Aaron Beam, Jr.,
                                               Senior Vice President and Chief
                                           Chief Financial Officer and Treasurer

                                                 /s/ RICHARD M. SCRUSHY
                                            ----------------------------------
                                                     Richard M. Scrushy


                                      - 3 -




                     AMENDMENT NO. 4 TO EMPLOYMENT AGREEMENT

         AMENDMENT NO. 4 TO EMPLOYMENT AGREEMENT, dated as of December 20, 1989,
between  HEALTHSOUTH   Rehabilitation   Corporation,   a  Delaware   corporation
('HEALTHSOUTH'),  and  RICHARD M.  SCRUSHY,  a resident of  Birmingham,  Alabama
('Scrushy').

                              W I T N E S S E T H:

         WHEREAS,  the parties to this  Agreement  are  parties to that  certain
Employment  Agreement,  dated as of July 23,  1986,  as amended as of January 5,
1987,  as of  December  16, 1987 and as of  December  20, 1988 (the  'Employment
Agreement'); and

         WHEREAS,  the parties desire to further amend the Employment  Agreement
as hereinafter set forth.

         NOW,  THEREFORE,  in  consideration  of the  premises,  and the  mutual
promises and covenants hereinafter contained,  HEALTHSOUTH and Scrushy do hereby
agree, for their mutual benefit, as follows:

         1. Section 2 of the  Agreement is hereby  amended to extend the term of
the Agreement for a period of five years commencing January 1, 1990.

         2. Section 5(a) of the Agreement is hereby amended by the  substitution
in place thereof, the following new Section 5(a):






         '(a) A base salary at the annual rate of $450,000  effective January 1,
1990,  such  salary  to be paid  semi-monthly.  Such  salary  shall be  reviewed
annually by the Board of Directors.

         It is agreed  between the parties that $60,000 of the above base salary
amount shall be considered to be an incentive  portion thereof,  payable only if
HEALTHSOUTH's  operations meet the standards set forth in  HEALTHSOUTH's  annual
business  plan,  as approved for each year during the term of this  Agreement by
the Board of Directors,  it being agreed that the main criteria to be considered
is  whether  HEALTHSOUTH  attains  the  level of net  income  set  forth in such
business plan. The $60,000 incentive portion shall be payable on a monthly basis
(1/12 with respect to each month of the  calendar  year) and shall be payable in
$5,000 increments within five days of the date HEALTHSOUTH's  internal financial
statements  have been  prepared and are  considered by management to be complete
and accurate.  In the event that any monthly  increment shall not be paid during
the course of a calendar  year because the business plan is not met, such amount
shall  be due and  payable  at the  time  HEALTH-  SOUTH's  annual  results  are
announced to the public if  HEALTHSOUTH  attains the net income set forth in the
business plan for the calendar year involved.'

         3. Section 8(f) of the Agreement is hereby amended by  substituting  in
the place of the words 'two years'  annual base salary' the words 'three  years'
annual base salary (including the gross incentive portion)'.

                                      - 2 -






         4.  HEALTHSOUTH  and Scrushy hereby reaffirm all of the other terms and
provisions of the Employment  Agreement,  which is amended only as  specifically
set forth herein.

         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
day and year first above written.

                               HEALTHSOUTH Rehabilitation Corporation

                               By /s/ AARON BEAM, JR.
                                  -----------------------------------------
                                      Aaron Beam, Jr., 
                                  Senior Vice President and 
                                   Chief Financial Officer

                                  /s/ RICHARD M. SCRUSHY
                                  -----------------------------------------
                                      RICHARD M. SCRUSHY




                                      - 3 -




                     AMENDMENT NO. 5 TO EMPLOYMENT AGREEMENT

         AMENDMENT NO. 5 TO EMPLOYMENT  AGREEMENT,  dated as of January 8, 1991,
between HEALTHSOUTH Rehabilitation Corporation, a Delaware corporation ('HEALTH-
SOUTH'), and RICHARD M. SCRUSHY, a resident of Birmingham, Alabama ('Scrushy').

                              W I T N E S S E T H:

         WHEREAS,  the parties to this  Agreement  are  parties to that  certain
Employment  Agreement,  dated as of July 23,  1986,  as amended as of January 5,
1987,  as of December 16,  1987,  as of December 20, 1988 and as of December 20,
1989 (the 'Employment Agreement'); and

         WHEREAS,  the parties desire to further amend the Employment  Agreement
as hereinafter set forth.

         NOW,  THEREFORE,  in  consideration  of the  premises,  and the  mutual
promises and covenants hereinafter contained,  HEALTHSOUTH and Scrushy do hereby
agree, for their mutual benefit, as follows:

         1.  Section 2 of the  Employment  Agreement  is hereby  amended  by the
substitution in place thereof, the following new Section 2:

         'The term of employment  provided for in this Agreement  shall commence
on January 1,  1991,  and shall  remain in full force and effect for a period of
five  years  thereafter.  Such  term  shall  be  automatically  extended  for an
additional  year on each  December 31,  during the term hereof,  unless  written
notice of any  non-extension  is provided Scrushy at least 30 days prior to such
December 31.'







         2.  Section  5(a) of the  Employment  Agreement  is hereby  amended  by
increasing the annual base salary from $450,000 to $600,000,  effective  January
1, 1991.  The incentive  portion of this $600,000 base salary shall be $120,000,
payable in $10,000 increments on a monthly basis.

         3.  HEALTHSOUTH  and Scrushy hereby reaffirm all of the other terms and
provisions of the Employment  Agreement,  which is amended only as  specifically
set forth herein.

         IN WITNESS  WHEREOF,  the parties  have  executed  and  delivered  this
Agreement as of the day and year first above written.

                                   HEALTHSOUTH Rehabilitation Corporation


                                   By     /s/AARON BEAM, JR.
                                      --------------------------------------
                                             Aaron Beam, Jr.
                                         Senior Vice President and
                                           Chief Financial Officer


                                         /s/RICHARD M. SCRUSHY
                                      --------------------------------------
                                            Richard M. Scrushy



         4.  Section  5(a) of the  Employment  Agreement  is hereby  amended  by
increasing the annual base salary from $450,000 to $600,000,  effective  January
1, 1991.  The incentive  portion of this $600,000 base salary shall be $120,000,
payable in $10,000 increments on a monthly basis.

         5.  HEALTHSOUTH  and Scrushy hereby reaffirm all of the other terms and
provisions of the Employment  Agreement,  which is amended only as  specifically
set forth herein.

         IN WITNESS  WHEREOF,  the parties  have  executed  and  delivered  this
Agreement as of the day and year first above written.

                                   HEALTHSOUTH Rehabilitation Corporation

                                   By      /s/ AARON BEAM, JR.
                                     ---------------------------------------   
                                               Aaron Beam, Jr.
                                          Senior Vice President and
                                           Chief Financial Officer


                                          /s/ RICHARD M. SCRUSHY
                                     ---------------------------------------
                                              Richard M. Scrushy







                     AMENDMENT NO. 6 TO EMPLOYMENT AGREEMENT

         AMENDMENT NO. 6 TO EMPLOYMENT  AGREEMENT,  dated as of January 1, 1992,
between  HEALTHSOUTH   Rehabilitation   Corporation,   a  Delaware   corporation
('HEALTHSOUTH'),  and  RICHARD M.  SCRUSHY,  a resident of  Birmingham,  Alabama
('Scrushy').

                              W I T N E S S E T H:

         WHEREAS,  the parties to this  Agreement  are  parties to that  certain
Employment  Agreement,  dated as of July 23,  1986,  as amended as of January 5,
1987, as of December 16, 1987, as of December 20, 1988, as of December 20, 1989,
and as of January 8, 1991 (the 'Employment Agreement'); and

         WHEREAS,  the parties desire to further amend the Employment  Agreement
as hereinafter set forth.

         NOW,  THEREFORE,  in  consideration  of the  premises,  and the  mutual
promises and covenants hereinafter contained,  HEALTHSOUTH and Scrushy do hereby
agree, for their mutual benefit, as follows:

         1.  Section  5(a) of the  Employment  Agreement  is hereby  amended  by
increasing the annual base salary from $600,000 to $730,000,  effective  January
1, 1992.  The incentive  portion of this $600,000 base salary shall be $180,000,
payable in $15,000 increments on a monthly basis.




         3.  HEALTHSOUTH  and Scrushy hereby reaffirm all of the other terms and
provisions of the Employment  Agreement,  which is amended only as  specifically
set forth herein.

         IN WITNESS  WHEREOF,  the parties  have  executed  and  delivered  this
Agreement as of the day and year first above written.

                                  HEALTHSOUTH Rehabilitation Corporation

                                  By    /s/ AARON BEAM, JR.
                                    ---------------------------------------
                                            Aaron Beam, Jr.
                                      Executive Vice President and
                                          Chief Financial Officer

                                        /s/ RICHARD M. SCRUSHY
                                    ----------------------------------------
                                            Richard M. Scrushy


                                      - 3 -




                     AMENDMENT NO. 7 TO EMPLOYMENT AGREEMENT

         AMENDMENT NO. 7 TO EMPLOYMENT  AGREEMENT,  dated as of January 1, 1993,
between  HEALTHSOUTH   Rehabilitation   Corporation,   a  Delaware   corporation
('HEALTHSOUTH'),  and  RICHARD M.  SCRUSHY,  a resident of  Birmingham,  Alabama
('Scrushy').

                              W I T N E S S E T H:

         WHEREAS,  the parties to this  Agreement  are  parties to that  certain
Employment  Agreement,  dated as of July 23,  1986,  as amended as of January 5,
1987, as of December 16, 1987, as of December 20, 1988, as of December 20, 1989,
as of January 8, 1991 and as of  January 1, 1992 (the  'Employment  Agreement');
and

         WHEREAS,  the parties desire to further amend the Employment  Agreement
as hereinafter set forth.

         NOW,  THEREFORE,  in  consideration  of the  premises,  and the  mutual
promises and covenants hereinafter contained,  HEALTHSOUTH and Scrushy do hereby
agree, for their mutual benefit, as follows:

         1.  Section  5(a) of the  Employment  Agreement  is hereby  amended  by
increasing the annual base salary from $730,000 to $766,500,  effective  January
1, 1993.  The incentive  portion of this $730,000 base salary shall be $240,000,
payable in $20,000 increments on a monthly basis.




         3.  HEALTHSOUTH  and Scrushy hereby reaffirm all of the other terms and
provisions of the Employment  Agreement,  which is amended only as  specifically
set forth herein.

         IN WITNESS  WHEREOF,  the parties  have  executed  and  delivered  this
Agreement as of the day and year first above written.

                                   HEALTHSOUTH Rehabilitation Corporation

                                   By        /s/ AARON BEAM, JR.
                                      --------------------------------------
                                                 Aaron Beam, Jr.
                                            Executive Vice President and
                                               Chief Financial Officer

                                            /s/ RICHARD M. SCRUSHY
                                      --------------------------------------
                                                Richard M. Scrushy



                                      - 3 -




                     AMENDMENT NO. 8 TO EMPLOYMENT AGREEMENT


         AMENDMENT NO. 8 TO EMPLOYMENT  AGREEMENT,  dated as of January 1, 1994,
between  HEALTHSOUTH   Rehabilitation   Corporation,   a  Delaware   corporation
('HEALTHSOUTH'),  and  RICHARD M.  SCRUSHY,  a resident of  Birmingham,  Alabama
('Scrushy'). W I T N E S S E T H:

         WHEREAS,  the parties to this  Agreement  are  parties to that  certain
Employment  Agreement,  dated as of July 23,  1986,  as amended as of January 5,
1987, as of December 16, 1987, as of December 20, 1988, as of December 20, 1989,
as of  January  8,  1991,  as of  January 1, 1992 and as of January 1, 1993 (the
'Employment Agreement'); and

         WHEREAS,  the parties desire to further amend the Employment  Agreement
as hereinafter set forth.

         NOW,  THEREFORE,  in  consideration  of the  premises,  and the  mutual
promises and covenants hereinafter contained,  HEALTHSOUTH and Scrushy do hereby
agree, for their mutual benefit, as follows:

         1.  Section  5(a) of the  Employment  Agreement  is hereby  amended  by
increasing the annual base salary to $800,000, effective January 1, 1994.

         In  addition  to the  above  base  salary,  Scrushy  shall  be  paid an
incentive  bonus in the total  amount of  $400,000  per annum,  payable  only if
HEALTHSOUTH's operations meet the




standards set forth in HEALTHSOUTH's  annual business plan, as approved for each
year  during  the term of this  Agreement  by the Board of  Directors,  it being
agreed that the main criteria to be considered  is whether  HEALTHSOUTH  attains
the level of net income set forth in such business plan. The $400,000  incentive
bonus shall be payable on a monthly  basis  (1/12 with  respect to each month of
the calendar  year) and shall be payable in  $33,333.33  increments  within five
days of the date HEALTHSOUTH's  internal financial statements have been prepared
and are considered by management to be complete and accurate.  In the event that
any monthly  increment  shall not be paid  during the course of a calendar  year
because the  business  plan is not met,  such amount shall be due and payable at
the  time  HEALTH-  SOUTH's  annual  results  are  announced  to the  public  if
HEALTHSOUTH  attains  the net  income  set  forth in the  business  plan for the
calendar year involved.

         3.  HEALTHSOUTH  and Scrushy hereby reaffirm all of the other terms and
provisions of the Employment  Agreement,  which is amended only as  specifically
set forth herein.

         IN WITNESS  WHEREOF,  the parties  have  executed  and  delivered  this
Agreement as of the day and year first above written. HEALTHSOUTH Rehabilitation
Corporation


                                             By      /s/AARON BEAM, JR.
                                                 -----------------------------
                                                        Aaron Beam, Jr.
                                                 Executive Vice President and
                                                    Chief Financial Officer



                                                   /s/ RICHARD M. SCRUSHY
                                                  ---------------------------
                                                       Richard M. Scrushy

                                      - 3 -



                     AMENDMENT NO. 9 TO EMPLOYMENT AGREEMENT


         AMENDMENT NO. 9 TO EMPLOYMENT  AGREEMENT,  dated as of January 1, 1995,
between HEALTHSOUTH  Corporation,  a Delaware corporation  ('HEALTHSOUTH'),  and
RICHARD M. SCRUSHY, a resident of Birmingham, Alabama ('Scrushy').

                              W I T N E S S E T H:

         WHEREAS,  the parties to this  Agreement  are  parties to that  certain
Employment  Agreement,  dated as of July 23,  1986,  as amended as of January 5,
1987, as of December 16, 1987, as of December 20, 1988, as of December 20, 1989,
as of January 8, 1991, as of January 1, 1992,  as of January 1, 1993,  and as of
January 1, 1994 (the 'Employment Agreement'); and

         WHEREAS,  the parties desire to further amend the Employment  Agreement
as hereinafter set forth.

         NOW,  THEREFORE,  in  consideration  of the  premises,  and the  mutual
promises and covenants hereinafter contained,  HEALTHSOUTH and Scrushy do hereby
agree, for their mutual benefit, as follows:

         1.  Section  5(a) of the  Employment  Agreement  is hereby  amended  by
increasing the annual  incentive bonus for 1995 to a total of $900,000,  payable
only if  HEALTHSOUTH's  operations meet the standards set forth in HEALTHSOUTH's
annual  business  plan,  as  approved  for  each  year  during  the term of this
Agreement by the Board of Directors, it being


agreed that the main criteria to be considered  is whether  HEALTHSOUTH  attains
the level of net income set forth in such business plan. The $900,000  incentive
bonus shall be payable on a monthly  basis  (1/12 with  respect to each month of
the calendar year) and shall be payable in $75,000  increments  within five days
of the date HEALTHSOUTH's  internal financial  statements have been prepared and
are considered by management to be complete and accurate.  In the event that any
monthly increment shall not be paid during the course of a calendar year because
the business  plan is not met,  such amount shall be due and payable at the time
HEALTHSOUTH's  annual results are announced to the public if HEALTHSOUTH attains
the net income set forth in the business plan for the calendar year involved.

         2.  HEALTHSOUTH  and Scrushy hereby reaffirm all of the other terms and
provisions of the Employment  Agreement,  which is amended only as  specifically
set forth herein.

         IN WITNESS  WHEREOF,  the parties  have  executed  and  delivered  this
Agreement as of the day and year first above written.


                                         HEALTHSOUTH Corporation


                                         By    /s/AARON BEAM, JR.
                                           -----------------------------
                                                  Aaron Beam, Jr.
                                           Executive Vice President and
                                              Chief Financial Officer



                                              /s/RICHARD M. SCRUSHY
                                           ----------------------------
                                                 Richard M. Scrushy   



                                      - 2 -



                    AMENDMENT NO. 10 TO EMPLOYMENT AGREEMENT


         AMENDMENT NO. 10 TO EMPLOYMENT AGREEMENT,  dated as of January 1, 1996,
between HEALTHSOUTH  Corporation,  a Delaware corporation  ('HEALTHSOUTH'),  and
RICHARD M. SCRUSHY, a resident of Birmingham, Alabama ('Scrushy').

                              W I T N E S S E T H:

         WHEREAS,  the parties to this  Agreement  are  parties to that  certain
Employment  Agreement,  dated as of July 23,  1986,  as amended as of January 5,
1987, as of December 16, 1987, as of December 20, 1988, as of December 20, 1989,
as of  January 8, 1991,  as of  January  1, 1992,  as of January 1, 1993,  as of
January 1, 1994, and as of January 1, 1995 (the 'Employment Agreement'); and

         WHEREAS,  the parties desire to further amend the Employment  Agreement
as hereinafter set forth.

         NOW,  THEREFORE,  in  consideration  of the  premises,  and the  mutual
promises and covenants hereinafter contained,  HEALTHSOUTH and Scrushy do hereby
agree, for their mutual benefit, as follows:

         1.  Section  5(a) of the  Employment  Agreement  is hereby  amended  by
increasing the annual incentive bonus for 1996 to a total of $2,400,000, payable
only if HEALTH- SOUTH's operations meet the standards set forth in HEALTHSOUTH's
annual  business  plan,  as  approved  for  each  year  during  the term of this
Agreement by the Board of Directors, it



being  agreed that the main  criteria to be  considered  is whether  HEALTHSOUTH
attains the level of net income set forth in such business  plan. The $2,400,000
incentive  bonus shall be payable on a monthly  basis (1/12 with respect to each
month of the calendar year) and shall be payable in $200,000  increments  within
five days of the date  HEALTHSOUTH's  internal  financial  statements  have been
prepared and are  considered by  management to be complete and accurate.  In the
event  that any  monthly  increment  shall not be paid  during  the  course of a
calendar year because the business plan is not met, such amount shall be due and
payable at the time HEALTHSOUTH's  annual results are announced to the public if
HEALTHSOUTH  attains  the net  income  set  forth in the  business  plan for the
calendar year involved.

         2.  HEALTHSOUTH  and Scrushy hereby reaffirm all of the other terms and
provisions of the Employment  Agreement,  which is amended only as  specifically
set forth herein.

         IN WITNESS  WHEREOF,  the parties  have  executed  and  delivered  this
Agreement as of the day and year first above written. 


                                             HEALTHSOUTH Corporation


                                            By     /s/ AARON BEAM, JR.
                                              -------------------------------
                                                       Aaron Beam, Jr.
                                                Executive Vice President and
                                                   Chief Financial Officer



                                                   /s/ RICHARD M. SCRUSHY
                                             --------------------------------
                                                     Richard M. Scrushy





                                      - 2 -