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.
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 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 non-competitive 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 HEALTHSOUTH'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.
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:
(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.
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 HEALTHSOUTH 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.
(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, 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
HEALTHSOUTH 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 HEALTHSOUTH 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.
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.
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.
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.
Executive Vice President and
Chief Financial Officer
/s/ Richard M. Scrushy
___________________________________
Richard M. Scrushy
<PAGE>
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
___________________________________
Richard M. Scrushy
<PAGE>
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.
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
___________________________________
Richard M. Scrushy
<PAGE>
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.
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
___________________________________
Richard M. Scrushy
<PAGE>
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 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."
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)".
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 and Treasurer
/s/ Richard M. Scrushy
___________________________________
Richard M. Scrushy
<PAGE>
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
("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 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 and Treasurer
/s/ Richard M. Scrushy
___________________________________
Richard M. Scrushy
<PAGE>
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.
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 Rehabilitation Corporation
By /s/ Aaron Beam, Jr.
___________________________________
Aaron Beam, Jr., Senior
Vice President and Chief Financial
Officer and Treasurer
/s/ Richard M. Scrushy
___________________________________
Richard M. Scrushy
<PAGE>
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.
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 Rehabilitation Corporation
By /s/ Aaron Beam, Jr.
___________________________________
Aaron Beam, Jr., Senior
Vice President and Chief Financial
Officer and Treasurer
/s/ Richard M. Scrushy
___________________________________
Richard M. Scrushy
<PAGE>
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 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 Rehabilitation Corporation
By /s/ Aaron Beam, Jr.
___________________________________
Aaron Beam, Jr., Senior
Vice President and Chief Financial
Officer and Treasurer
/s/ Richard M. Scrushy
___________________________________
Richard M. Scrushy
<PAGE>
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 Rehabilitation Corporation
By /s/ Aaron Beam, Jr.
___________________________________
Aaron Beam, Jr., Senior
Vice President and Chief Financial
Officer and Treasurer
/s/ Richard M. Scrushy
___________________________________
Richard M. Scrushy