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.
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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
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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.
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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:
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(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.
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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.
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(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,
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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.
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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.
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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.
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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
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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
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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
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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
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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)'.
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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
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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
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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 -
Employment Agreement - HealthSouth Rehabilitation Corp. and Richard M. Scrushy
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