{"id":39224,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/employment-agreement-healthsouth-corp-and-anthony-j-tanner2.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-healthsouth-corp-and-anthony-j-tanner2","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-healthsouth-corp-and-anthony-j-tanner2.html","title":{"rendered":"Employment Agreement &#8211; HealthSouth Corp. and Anthony J. Tanner"},"content":{"rendered":"<pre>\n                              EMPLOYMENT AGREEMENT\n\n     EMPLOYMENT AGREEMENT, dated as of April 1, 1998 (this 'Agreement'), between\nHEALTHSOUTH Corporation,  a Delaware corporation (the 'Company'), and ANTHONY J.\nTANNER, a resident of Birmingham, Alabama (the 'Executive').\n\n\n                              W I T N E S S E T H:\n                               - - - - - - - - - -\n\n\n     WHEREAS,  the  Company  provides  comprehensive  rehabilitative,  clinical,\ndiagnostic and surgical healthcare services;\n\n     WHEREAS,  the Executive is a founder of the Company and serves as Executive\nVice  President-Administration  and  Secretary of the Company and as a member of\nits Board of Directors; and\n\n     WHEREAS,  the Company wishes to assure itself of the continued  services of\nthe  Executive  so that it will  have  the  continued  benefit  of his  ability,\nexperience and services, and the Executive is willing to enter into an agreement\nto that end, upon the terms and conditions hereinafter set forth.\n\n     NOW,  THEREFORE,  in consideration of good and valuable  consideration  the\nreceipt and  sufficiency  of which are hereby  acknowledged,  the parties hereby\ncovenant and agree as follows:\n\n     1. EMPLOYMENT\n\n     The Company  hereby  agrees to continue  to employ the  Executive,  and the\nExecutive  hereby agrees to remain in the employ of the Company,  on and subject\nto the terms and conditions of this Agreement.\n\n     2. TERM\n\n     (a) The period of this Agreement (the  'Agreement  Term') shall commence as\nof the date  hereof  (the  'Effective  Date')  and  shall  expire  on the  third\nanniversary of the Effective  Date.  The Agreement  Term shall be  automatically\nextended for an  additional  year on each  anniversary  of the  Effective  Date,\nunless written notice of  non-extension is provided by either party to the other\nparty at least 90 days prior to such anniversary.\n\n     (b) The period of the  Executive's  employment  under this  Agreement  (the\n'Employment Period') shall commence as of the Effective Date and shall expire at\nthe end of the Agreement Term,  unless sooner  terminated in accordance with the\nterms and conditions of this Agreement.\n\n     3. POSITION, DUTIES AND RESPONSIBILITIES\n\n     (a) The Executive shall serve as, and with the title,  office and authority\nof, the Executive Vice President-Administration and Secretary of the Company and\nas a member of the Board of  Directors  of the Company  (the  'Board') and shall\nreport  directly to the Chairman of the Company.  The Company shall use its best\nefforts to cause the Executive to be nominated and\n\n\n\nelected (or renominated and reelected, as the case may be) during the Employment\nPeriod as a director of the Company.\n\n     (b) The  Executive  shall  have all of the  powers,  authority,  duties and\nresponsibilities usually incident to the positions and offices of Executive Vice\nPresident-Administration and Secretary of the Company.\n\n     (c) The Executive agrees to devote  substantially all of his business time,\nefforts and skills to the performance of his duties and  responsibilities  under\nthis Agreement; provided, however, that nothing in this Agreement shall preclude\nthe Executive from devoting reasonable periods required for (i) participating in\nprofessional, educational, philanthropic, public interest, charitable, social or\ncommunity  activities,  (ii)  serving  as a  director  or member of an  advisory\ncommittee of any corporation or other entity that the Executive is serving on as\nof the Effective  Date or any other  corporation or entity that is not in direct\ncompetition  with  the  Company  or (iii)  managing  his  personal  investments,\nprovided that such  activities do not materially  interfere with the Executive's\nregular performance of his duties and responsibilities hereunder.\n\n     4. PLACE OF PERFORMANCE\n\n     The  Executive  shall  perform his duties at the  principal  offices of the\nCompany located at One HealthSouth Parkway,  Birmingham,  Alabama, but from time\nto time the Executive may be required to travel to other locations in the proper\nconduct of his responsibilities under this Agreement.\n\n     5. COMPENSATION AND BENEFITS\n\n     In  consideration  of the  services  rendered by the  Executive  during the\nEmployment Period, the Company shall pay or provide to the Executive the amounts\nand benefits set forth below.\n\n     (a) Salary.  The Company shall pay the Executive an annual base salary (the\n'Base Salary') of at least $375,000.  The Executive's  Base Salary shall be paid\nin arrears  in  substantially  equal  installments  at monthly or more  frequent\nintervals,  in accordance with the normal payroll practices of the Company.  The\nExecutive's  Base Salary shall be reviewed at least annually by the Compensation\nCommittee  of the Board (the  'Compensation  Committee')  for  consideration  of\nappropriate merit increases and, once established,  the Base Salary shall not be\ndecreased during the Employment Period.\n\n     (b) Incentive  Plans.  The Executive  shall  participate  in all annual and\nlong-term  bonus or  incentive  plans or  arrangements  in  which  other  senior\nexecutives of the Company of a comparable level are eligible to participate from\ntime  to  time,  including,   without  limitation,  any  management  bonus  pool\narrangement.  The Executive's  incentive  compensation  opportunities under such\nplans and arrangements shall be determined from time to time by the Compensation\nCommittee.\n\n     (c) Equity Incentives. The Executive shall be given consideration, at least\nannually,  by the  Compensation  Committee  for the grant of options to purchase\nshares of the common stock of the Company.  In addition,  the Executive shall be\nentitled  to  receive   awards  under  any  stock  option,   stock  purchase  or\nequity-based  incentive  compensation plan or arrangement adopted by the Company\nfrom time to time for which  senior  executives  of the Company of a  comparable\nlevel are eligible to participate.  The Executive's  awards under such plans and\narrangements  shall  be  determined  from  time  to  time  by  the  Compensation\nCommittee.\n\n\n\n     (d) Employee  Benefits.  The Executive  shall be entitled to participate in\nall employee benefit plans,  programs,  practices or arrangements of the Company\nin which  other  senior  executives  of the  Company of a  comparable  level are\neligible to participate from time to time,  including,  without limitation,  any\nqualified or non-qualified pension,  profit sharing and savings plans, any death\nbenefit and  disability  benefit  plans,  and any  medical,  dental,  health and\nwelfare plans.  Without  limiting the  generality of the foregoing,  the Company\nshall provide the Executive with the following:\n\n          (i) long-term  disability  insurance coverage paying benefits equal to\n     at  least  60% of the  Executive's  Base  Salary  for the  duration  of any\n     permanent and total disability of the Executive;\n\n          (ii) continued provision of split-dollar life insurance coverage; and\n\n          (iii) provision of the pension benefits provided under a non-qualified\n     retirement  plan for the  Executive,  a  summary  of the  terms of which is\n     attached hereto as Exhibit A.\n\n     (e) Fringe  Benefits and  Perquisites.  The Executive  shall be entitled to\ncontinuation of all fringe benefits and perquisites provided to the Executive on\nthe  Effective  Date,  and to all  fringe  benefits  and  perquisites  which are\ngenerally  made  available to senior  executives  of the Company of a comparable\nlevel from time to time.  Without limiting the generality of the foregoing,  the\nCompany shall provide the Executive with the following:\n\n          (i) provision of executive offices and secretarial staff;\n\n          (ii) vacation in accordance with the Company's policy for other senior\n     executives of a comparable level;\n\n          (iii) provision of a non-accountable automobile allowance in an amount\n     to be determined from time to time by the Board of Directors; and\n\n          (iv)  reimbursement  of  all  reasonable  travel  and  other  business\n     expenses and disbursements  incurred by the Executive in the performance of\n     his duties under this Agreement,  upon proper accounting in accordance with\n     the Company's normal practices and procedures for reimbursement of business\n     expenses.\n\n     6. TERMINATION OF EMPLOYMENT\n\n     The Employment  Period will be terminated  upon the happening of any of the\nfollowing events:\n\n     (a)  Resignation.  The Executive may  voluntarily  terminate his employment\nhereunder for any reason at any time.\n\n     (b)  Termination  for Cause.  The Company  may  terminate  the  Executive's\nemployment  hereunder for Cause.  For purposes of this Agreement,  the Executive\nshall be considered  to be  terminated  for 'Cause' only if (i) the Executive is\nfound, by a  non-appealable  order of a court or competent  jurisdiction,  to be\nguilty of a felony under the laws of the United  States or any state  thereof or\n(ii) the Executive is found, by a  non-appealable  order of a court of competent\njurisdiction,  to have committed a fraud, which has a material adverse effect on\nthe Company. However, in no event shall the Executive's employment be considered\nto have been terminated for\n\n\n\n'Cause'  unless and until the  Executive  receives a copy of a  resolution  duly\nadopted by the  affirmative  vote of a majority of the Board at a meeting called\nand held for such purpose  (after  reasonable  written notice is provided to the\nExecutive setting forth in reasonable detail the facts and circumstances claimed\nto  provide  a basis of  termination  for Cause  and the  Executive  is given an\nopportunity,  together with counsel,  to be heard before the Board) finding that\nthe Executive is guilty of acts or omissions constituting Cause.\n\n     (c)  Termination  other than for Cause.  The Board  shall have the right to\nterminate  the  Executive's  employment  hereunder  for any  reason at any time,\nincluding  for any  reason  that  does  not  constitute  Cause,  subject  to the\nconsequences of such termination as set forth in this Agreement.\n\n     (d) Disability.  The Executive's  employment hereunder shall terminate upon\nhis  Disability.  For purposes of this  Agreement,  'Disability'  shall mean the\ninability  of the  Executive  to perform his duties to the Company on account of\nphysical or mental illness for a period of six consecutive full months, or for a\nperiod  of eight  full  months  during  any  12-month  period.  The  Executive's\nemployment  shall  terminate  in such a case on the last  day of the  applicable\nperiod;  provided,  however,  in no event shall the  Executive be  terminated by\nreason of  Disability  unless (i) the  Executive is eligible  for the  long-term\ndisability  benefits set forth in Section  5(d)(i) hereof and (ii) the Executive\nreceives  written  notice from the Company,  at least 30 days in advance of such\ntermination,  stating its  intention to terminate  the  Executive  for reason of\nDisability  and setting forth in reasonable  detail the facts and  circumstances\nclaimed to provide a basis for such termination.\n\n     (f) Death.  The Executive's  employment  hereunder shall terminate upon his\ndeath.\n\n     7. COMPENSATION UPON TERMINATION OF EMPLOYMENT\n\n     In the event the Executive's employment by the Company is terminated during\nthe Agreement  Term, the Executive  shall be entitled to the severance  benefits\nset forth below:\n\n     (a)  Resignation.  In the event the Executive  voluntarily  terminates  his\nemployment  hereunder  for any  reason,  the  Company  shall pay and provide the\nExecutive any Accrued Rights (as defined in paragraph (c) below).\n\n     (b)  Termination  for  Cause.  In  the  event  the  Executive's  employment\nhereunder  is  terminated  by the Company for Cause,  the Company  shall pay and\nprovide to the Executive any Accrued Rights (as defined in paragraph (c) below).\n\n     (c) Termination other than for Cause, Disability or Death. In the event the\nExecutive's  employment  hereunder is  terminated  by the Company for any reason\nother than for Cause,  Disability or death,  the Company shall pay the Executive\nand provide him with the following:\n\n          (i) Accrued  Rights.  The Company  shall pay the  Executive a lump-sum\n     amount  equal to the sum of (A) his earned but unpaid Base  Salary  through\n     the date of termination,  (B) any earned but unpaid bonus for any completed\n     calendar year,  (C) pro-rata  payment of any bonus (based on the bonus paid\n     or payable to Executive for the most recently  completed calendar year) for\n     any partial year or period of service  through the date of termination  and\n     (D)  any  unreimbursed  business  expenses  or  other  amounts  due  to the\n     Executive from the Company as of the date of termination.  In addition, the\n     Company shall  provide to the  Executive all payments,  rights and benefits\n     due as of the date of termination under the terms of the Company's employee\n     and fringe benefit plans, practices,  programs and arrangements referred to\n     in  Sections\n\n\n\n     5(d) and  5(e)  hereof  (including,  but not  limited  to,  the  retirement\n     benefits  set  forth on  Exhibit  A  hereto)  (together  with the  lump-sum\n     payment, the 'Accrued Rights').\n\n          (ii) Severance  Payment.  The Company shall provide the Executive with\n     continued  payment of the Executive's Base Salary, as in effect on the date\n     of  termination,  for a  period  of two  years  following  the  Executive's\n     termination,  payable at the times and in the manner such Base Salary would\n     have been paid if the  Executive  had  continued in the  employment  of the\n     Company.\n\n          (iii) Equity Rights. All stock options and other  equity-based  rights\n     held by the Executive at the date of termination  shall become  immediately\n     and fully vested and exercisable,  and the Executive shall retain the right\n     to  exercise  all  outstanding  stock  options  for the  duration  of their\n     original  full  term  (without  regard to  termination  of  employment)  in\n     accordance with the Founder  Retirement  Benefit Program attached hereto as\n     Exhibit B (the 'Founders'  Program').  The Company shall forthwith take all\n     necessary steps to amend any relevant stock option plans of the Company and\n     stock option  agreements to the extent necessary to allow for the foregoing\n     vesting and term of exercise.\n\n     (d)  Disability.  In the  event the  Executive's  employment  hereunder  is\nterminated by reason of the  Executive's  Disability,  the Company shall pay and\nprovide to the Executive any Accrued Rights,  including all disability insurance\ncoverage.\n\n     (e) Death. In the event the Executive's  employment hereunder is terminated\nby reason of the  Executive's  death,  the Company  shall pay and provide to the\nExecutive's  representatives  or estate any Accrued  Rights,  including all life\ninsurance coverage.\n\n     8. FOUNDERS' BENEFITS\n\n     Upon the  Executive's  termination of employment  hereunder for any reason,\nand in addition to any severance benefits payable to him under Section 7 hereof,\nthe Company shall treat such  termination as a 'retirement'  for purposes of the\nFounder's Program, and shall provide the Executive with the benefits outlined in\nthe Founders' Program in recognition of his status as a founder of the Company.\n\n     9. CHANGE IN CONTROL\n\n     (a) Supplemental  termination Rights. In the event Executive's  termination\nother  than  for  Cause,  Disability  or death  or in the  event of a  voluntary\ntermination of employment by the Executive  pursuant to Section 6(a) hereof,  in\neither case occurring within one year following a Change in Control, the Company\nshall  pay to the  Executive  and  provide  him with  the  benefits  and  rights\ndescribed in Section 7(c) hereof.\n\n     (b) Definition. For purposes of this Agreement, a 'Change in Control' shall\nbe deemed to have occurred by reason of:\n\n          (i) the  acquisition  (other  than from the  Company)  by any  person,\n     entity or 'group'  (within the meaning of Sections  13(d)(3) or 14(d)(2) of\n     the Securities Exchange Act of 1934, but excluding,  for this purpose,  the\n     Company or its subsidiaries, or any employee benefit plan of the Company or\n     its subsidiaries which acquires  beneficial  ownership of voting securities\n     of the Company) of beneficial  ownership  (within the meaning of Rule 13d-3\n     promulgated  under the  Securities\n\n\n\n     Exchange Act of 1934) of 25% or more of either the then-outstanding  shares\n     of the common  stock of the  Company or the  combined  voting  power of the\n     Company's  then-outstanding voting securities entitled to vote generally in\n     the election of directors; or\n\n          (ii) individuals who, as of the date hereof,  constitute the Board (as\n     of such date, the 'Incumbent  Board') cease for any reason to constitute at\n     least a majority of the Board; provided,  however, that any person becoming\n     a  director  subsequent  to such date whose  election,  or  nomination  for\n     election,  was  approved by a vote of at least a majority of the  directors\n     then constituting the Incumbent Board (other than an election or nomination\n     of an individual  whose initial  assumption of office is in connection with\n     an actual or  threatened  election  contest  relating  to the  election  of\n     directors of the Company) shall be, for purposes of this Section  9(b)(ii),\n     considered as though such person were a member of the Incumbent Board; or\n\n          (iii) approval by the stockholders of the Company of a reorganization,\n     merger, consolidation or share exchange, in each case with respect to which\n     persons who were the stockholders of the Company  immediately prior to such\n     reorganization, merger, consolidation or share exchange do not, immediately\n     thereafter, own more than 75% of the combined voting power entitled to vote\n     generally  in  the  election  of  directors  of  the  reorganized,  merged,\n     consolidated   or  other   surviving   entity's   then-outstanding   voting\n     securities,  or a liquidation  or dissolution of the Company or the sale of\n     all or substantially all of the assets of the Company.\n\n     10. NO MITIGATION OR OFFSET\n\n     The Executive  shall not be required to seek other  employment or to reduce\nany severance benefit payable to him under Section 7, 8 or 9 hereof, and no such\nseverance  benefit shall be reduced on account of any  compensation  received by\nthe Executive from other employment.  The Company's  obligation to pay severance\nbenefits  under this  Agreement  shall not be reduced by any amount  owed by the\nExecutive to the Company.\n\n     11. TAX WITHHOLDING; METHOD OF PAYMENT\n\n     All compensation  payable  pursuant to this Agreement,  shall be subject to\nreduction by all  applicable  withholding,  social  security and other  federal,\nstate and local taxes and  deductions.  Any  lump-sum  payments  provided for in\nSections 7 or 9 hereof shall be made in a cash payment,  net of any required tax\nwithholding, no later than the fifth business day following the Executive's date\nof  termination.  Any payment  required to be made to the  Executive  under this\nAgreement  that is not made in a timely  manner  shall bear  interest  at a rate\nequal to 100% of the monthly  compounded  applicable  federal rate, as in effect\nunder Section 1274(d) of the Internal Revenue Code of 1986, as amended,  for the\nmonth in which payment was required to be made.\n\n     12. RESTRICTIVE COVENANTS\n\n     (a) Confidential Information. During the Employment Period and at all times\nthereafter,  the Executive agrees that he will not divulge to anyone (other than\nthe Company or any persons  employed or designated by the Company) any knowledge\nor information of a confidential  nature relating to the business of the Company\nor any of its subsidiaries or affiliates,  including,  without  limitation,  all\ntypes of trade secrets  (unless readily  ascertainable  from public or published\ninformation or trade sources) and confidential commercial  information,  and the\nExecutive further\n\n\n\nagrees not to disclose, publish or make use of any such knowledge or information\nwithout the consent of the Company.\n\n     (b)  Noncompetition.  During the  Employment  Period and for any applicable\nperiod the Executive is entitled to severance benefits under Section 7(c) hereof\nfollowing the  termination of his employment,  the Executive shall not,  without\nthe  prior  written  consent  of  the  Company,   engage  in  the  comprehensive\nrehabilitative and related healthcare services business on behalf of any person,\nfirm or corporation  within any geographical area in which the Company transacts\nsuch  business,  and the  Executive  shall not  acquire any  financial  interest\n(except for an equity interest in publicly-held  companies that do not exceed 5%\nof any  outstanding  class of  equity of that  company),  in any  business  that\nengages in the  comprehensive  rehabilitative  and related  healthcare  services\nbusiness  within  any  geographical  area in which the  Company  transacts  such\nbusiness.  Notwithstanding  the  foregoing,  upon the  occurrence of a Change in\nControl (whether before or after the termination of the Employment Period),  the\nrestrictions of this Section 12(b) shall cease to apply to the Executive for any\nperiod following his termination of employment hereunder.\n\n     (c) Enforcement.  The Company shall be entitled to seek a restraining order\nor injunction in any court of competent jurisdiction to prevent any continuation\nof any violation of the provisions of this Section 12.\n\n     13. SUCCESSORS\n\n     (a) This Agreement  shall be binding upon and shall inure to the benefit of\nthe Company,  its  successors and assigns and any person,  firm,  corporation or\nother entity which succeeds to all or substantially all of the business,  assets\nor property of the  Company.  The Company will  require any  successor  (whether\ndirect or indirect, by purchase, merger, consolidation,  or otherwise) to all or\nsubstantially  all of the  business,  assets  or  property  of the  Company,  to\nexpressly  assume and agree to perform this  Agreement in the same manner and to\nthe same  extent  that the  Company  would be  required to perform it if no such\nsuccession had taken place. As used in this Agreement,  the 'Company' shall mean\nthe Company as hereinbefore defined and any successor to its business, assets or\nproperty as aforesaid  which executes and delivers an agreement  provided for in\nthis Section 13 or which otherwise becomes bound by all the terms and provisions\nof this Agreement by operation of law.\n\n     (b) This Agreement and all rights of the Executive hereunder shall inure to\nthe  benefit  of and  be  enforceable  by  the  Executive's  personal  or  legal\nrepresentatives,  executors,  administrators,  successors,  heirs, distributees,\ndevisees and legatees. If the Executive should die while any amounts are due and\npayable to him hereunder,  all such amounts,  unless otherwise  provided herein,\nshall be paid to the Executive's  designated beneficiary or, if there be no such\ndesignated beneficiary, to the legal representatives of the Executive's estate.\n\n     14. NO ASSIGNMENT\n\n     Except as to  withholding of any tax under the laws of the United States or\nany other  country,  state or locality,  neither this Agreement nor any right or\ninterest hereunder nor any amount payable at any time hereunder shall be subject\nin any manner to alienation, sale, transfer,  assignment, pledge, attachment, or\nother  legal  process,  or  encumbrance  of any  kind  by the  Executive  or the\nbeneficiaries  of the  Executive  or by his legal  representatives  without  the\nCompany's  prior  written  consent,  nor shall  there be any right of set-off or\ncounterclaim  in  respect  of any debts or  liabilities  of the  Executive,  his\nbeneficiaries or legal representatives;  provided, however, that nothing in this\nSection shall preclude the Executive  from  designating a beneficiary to receive\nany benefit payable on his death, or the legal  representatives of the Executive\nfrom assigning any rights hereunder to the\n\n\n\nperson or persons entitled  thereto under his will or, in case of intestacy,  to\nthe person or persons entitled thereto under the laws of intestacy applicable to\nhis estate.\n\n     15. ENTIRE AGREEMENT\n\n     This  Agreement  contains  the entire  understanding  of the  parties  with\nrespect to the  subject  matter  hereof  and,  except as  specifically  provided\nherein,  cancels and supersedes any and all other agreements between the parties\nwith respect to the subject matter hereof. Any amendment or modification of this\nAgreement  shall not be binding  unless in writing and signed by the Company and\nthe Executive.\n\n     16. SEVERABILITY\n\n     In the event that any  provision  of this  Agreement  is  determined  to be\ninvalid or  unenforceable,  the remaining terms and conditions of this Agreement\nshall be  unaffected  and shall  remain in full force and  effect,  and any such\ndetermination of invalidity or unenforceability shall not affect the validity or\nenforceability of any other provision of this Agreement.\n\n     17. NOTICES\n\n     All notices  which may be necessary or proper for either the Company or the\nExecutive  to give to the other  shall be in writing and shall be  delivered  by\nhand or sent by registered or certified mail,  return receipt  requested,  or by\nair courier, to the Executive at:\n              Mr. Anthony J. Tanner\n              2112 Swan Lake Cove\n              Birmingham, Alabama  35243\n\nand shall be sent in the manner  described above to the Chief Executive  Officer\nof the Company at the Company's principal  executives offices at One HealthSouth\nParkway, Birmingham, Alabama 35243, with a copy to the Legal Services Department\nat the same address or delivered by hand to the Secretary and the Legal Services\nDepartment  of the Company,  and shall be deemed given when sent,  provided that\nany notice required under Section 6 hereof or notice given pursuant to Section 2\nhereof shall be deemed given only when received. Any party may by like notice to\nthe other party  change the  address at which he or they are to receive  notices\nhereunder.\n\n     18. GOVERNING LAW\n\n     This Agreement  shall be governed by and enforceable in accordance with the\nlaws of the  State of  Alabama,  without  giving  effect  to the  principles  of\nconflict of laws thereof.\n\n     19. LEGAL FEES AND EXPENSES\n\n     To induce  the  Executive  to execute  this  Agreement  and to provide  the\nExecutive with reasonable assurance that the purposes of this Agreement will not\nbe frustrated by the cost of its enforcement  should the Company fail to perform\nits  obligations  under this Agreement or should the Company or any  subsidiary,\naffiliate or stockholder of the Company  contest the validity or  enforceability\nof this  Agreement,  the  Company  shall pay and be solely  responsible  for any\nattorneys'  fees and expenses and courts  costs  incurred by the  Executive as a\nresult of a claim that the Company has breached or  otherwise  failed to perform\nthis  Agreement or any  provision  hereof to be performed by the Company or as a\nresult of the Company or any subsidiary, affiliate or stockholder of the Company\ncontesting  the validity or  enforceability  of this  Agreement or any provision\nhereof to be performed by the Company,  in each case  regardless of which party,\nif any, prevails in the contest.\n\n\n\n     IN WITNESS  WHEREOF,  the  Company and the  Executive  have  executed  this\nAgreement as of the date first above written.\n\n                                       EXECUTIVE\n\n\n                                       \/s\/ ANTHONY J. TANNER\n                                       ------------------------------\n                                       Anthony J. Tanner\n\n\n                                       HEALTHSOUTH Corporation\n\n                                       By   \/s\/ RICHARD M. SCRUSHY\n                                          ---------------------------\n                                            Richard M. Scrushy\n                                            Chairman of the Board and\n                                            Chief Executive Officer\n\n\n\n                                                                       EXHIBIT A\n\n                             HEALTHSOUTH CORPORATION\n\n                            EXECUTIVE RETIREMENT PLAN\n                              FOR ANTHONY J. TANNER\n\n\n                                          Summary of Terms(2)\n                                          -------------------\n\nRetirement Benefits:          In consideration of Executive's role as a founder,\n                              his service to HEALTHSOUTH since its formation and\n                              in lieu of the benefits and  compensation  offered\n                              through  full-time  employment  as Executive  Vice\n                              President, Administration and Secretary, Executive\n                              shall be entitled to the benefits  described below\n                              upon his retirement  from active  employment  with\n                              HEALTHSOUTH  and  continuing  until he reaches the\n                              age of 72 (as more  specifically set forth below).\n                              In addition,  in  recognition  of the  Executive's\n                              founder  status,  HEALTHSOUTH  shall  provide  the\n                              Executive  with  suitable  office and  secretarial\n                              support  within the corporate  headquarters  for a\n                              period of up to 10 years following his retirement.\n\nBenefit Formula:              Annual  retirement  benefit  equal  to 60% of Base\n                              Compensation  (defined below) at Normal Retirement\n                              Age\n\nBase Compensation:            Average Base Salary and bonus of Executive for the\n                              highest four of the five most  recently  completed\n                              calendar years of service with HEALTHSOUTH\n\nVesting:                      Fully vested at all times,  such that all benefits\n                              payable  as set  forth in this  Exhibit  A will be\n                              payable  upon  Executive's   termination  for  any\n                              reason  from and after  January 23, 1999 (the date\n                              on which  Executive  will have  completed  fifteen\n                              consecutive  years of service  with  HEALTHSOUTH).\n                              There can be no breach of this  retirement plan by\n                              the  Executive  except  for  violation  of Section\n                              12(b)   of   the   Employment   Agreement.    This\n                              consideration is fully earned by the Executive and\n                              HEALTHSOUTH  has no right under any  circumstances\n                              to  discontinue  any  payments  or other  benefits\n                              under this plan.\n\nPayment of Benefits:          The annual  retirement  benefits payable hereunder\n                              will be adjusted  annually for inflation (based on\n                              the  Consumer  Price Index) and will be paid until\n                              Executive  reaches  the age of 65.  From and after\n                              the date on which Executive  reaches the age of 65\n                              and  continuing  until he  reaches  the age of 72,\n                              Executive   will  be   entitled  to  40%  of  Base\n                              Compensation  (as  adjusted  for  inflation).   If\n                              HEALTHSOUTH fails to provide payment in accordance\n                              with the selected schedule and remains  delinquent\n                              for a period of 10 business days following receipt\n                              of  written  notice  from the  Executive  (made in\n                              accordance  with  Section  17  of  the  Employment\n                              Agreement),  HEALTHSOUTH shall pay a penalty equal\n                              to three times the amount owed.\n\n--------\n     (2)  All  defined  terms  shall  have  the  meanings  given  to them in the\nEmployment  Agreement to which this Exhibit A is a part, and all  determinations\nshall be made in accordance with the terms and provisions hereof.\n\n\n\nAlternative Forms of Payment: Unless  Executive  chooses one of the  alternative\n                              forms of  payment  listed  below,  payment of this\n                              retirement  benefit will be in accordance with the\n                              normal payroll practices. Executive may choose one\n                              of the following alternative forms of payment:\n\n                                  o Single Life Annuity\n                                  o Single Life  Annuity with10 year  guarantee\n                                  o Joint and  Survivor  Annuity (50% or 100%)\n                                  o Lump Sum\n                                  o Payment  of  present  value   of  retirement\n                                    benefits in 5 equal annual installments\n\nDeath Benefit:                For death  prior to reaching  age 72,  Executive's\n                              estate   will   continue  to  receive  the  annual\n                              retirement benefits payable to Executive hereunder\n                              (as if  Executive  had not died) for a period of 5\n                              years.\n\nUnfunded Status:              Plan  is  an  unfunded,  unsecured  obligation  of\n                              HEALTHSOUTH,  but HEALTHSOUTH may elect to fund on\n                              a tax-neutral basis to Executive\n\n\n\n                                                                       EXHIBIT B\n\n                       FOUNDER RETIREMENT BENEFITS PROGRAM\n\n     In recognition of the significant  contributions of the management founders\nof HEALTHSOUTH  Corporation,  upon their  retirement from the  Corporation,  the\nCorporation  shall  provide  the  following  benefits  to each  of them  for the\nremainder  of  their  natural  life or until  their  written  election  to cease\nreceiving them:\n\no    Health  Benefits.  The Corporation  will extend its regular Employee Health\n     Benefit  Program,  as it may exist from time to time,  to cover the retired\n     founder, and his spouse, for the remainder of their natural lives, with the\n     founder  continuing  to bear  the  cost of  dependent  coverage.  When  the\n     individuals  become  eligible for the Medicare  program,  or any other such\n     government-funded  health  benefit,  the  HEALTHSOUTH  benefit program will\n     become the individual's secondary coverage.\n\no    Insurance.  The  Corporation  will allow the retired founder to continue to\n     participate in any of the Company's voluntary  insurance programs,  as they\n     may exist from time to time, until age 72.\n\no    Split-Dollar  Policy.  The Corporation will continue to pay the premiums on\n     the retired founder's existing split-dollar life insurance policies (or any\n     policies issued in substitution therefor) until such founder reaches age 65\n     or until the policies are fully paid, whichever comes first.\n\no    Stock Options.  The  Corporation  will waive the normal option  termination\n     period for the  retired  founder,  so that all vested  option  grants  will\n     continue for the term of the original grant period.\n\no    Travel.  The  Corporation  will allow the  retired  founder to utilize  the\n     Corporation's  travel department to make personal travel  arrangements.  In\n     addition,  the retired  founder will also be able to use the  Corporation's\n     aircraft, at no cost, if the aircraft is already scheduled for the trip and\n     there are seats available.  Otherwise,  the retired founder will be allowed\n     to use the  Corporation's  aircraft  at the  standard  use rate,  including\n     direct and indirect expenses.\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7751],"corporate_contracts_industries":[9438],"corporate_contracts_types":[9539,9544],"class_list":["post-39224","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-healthsouth-corp","corporate_contracts_industries-health__misc","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/39224","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=39224"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=39224"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=39224"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=39224"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}