Exhibit 10.11
HEALTHSOUTH
CORPORATION
AMENDED AND
RESTATED
CHANGE IN CONTROL
BENEFITS PLAN
HEALTHSOUTH Corporation, a Delaware
corporation (the "Company") has adopted the HealthSouth Corporation
Change in Control Benefits Plan (the "Plan") for the benefit of
certain Participant employees of the Company and its subsidiaries,
on the terms and conditions hereinafter stated. The Plan is
intended to help retain qualified employees, maintain a stable work
environment and provide financial security to certain Participant
employees of the Company in the event of a Change in Control. The
Plan, as a "severance pay arrangement" within the meaning of
Section 3(2)(B)(i) of ERISA, is intended to be excepted from the
definitions of "employee pension benefit plan" and "pension plan"
set forth under Section 3(2) of ERISA, and is intended to meet the
descriptive requirements of a plan constituting a "severance pay
plan" within the meaning of regulations published by the Secretary
of Labor at Title 29, Code of Federal Regulations §
2510.3-2(b).
ARTICLE I
DEFINITIONS AND
INTERPRETATIONS
Section 1.01 Definitions .
Capitalized terms used in this Plan shall have the following
respective meanings, except as otherwise provided or as the context
shall otherwise require:
" Annual Salary " shall mean
the base salary paid to a Participant immediately prior to his or
her Termination Date on an annual basis exclusive of any bonus
payments or additional payments under any Benefit Plan.
" Benefit Plan " shall mean
any "employee benefit plan" (including any employee benefit plan
within the meaning of Section 3(3) of ERISA), program, arrangement
or practice maintained, sponsored or provided by the Company,
including those relating to compensation, bonuses, profit-sharing,
stock option, or other stock related rights or other forms of
incentive or deferred compensation, paid time off benefits,
insurance coverage (including any self-insured arrangements) health
or medical benefits, disability benefits, workers' compensation,
supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits (including compensation,
pension, health, medical or life insurance or other
benefits).
" Board " means the Board of
Directors of the Company.
" Cause " shall have the
meaning set forth in any individual employment, severance or
similar agreement between the Company and a Participant, or in the
event that a Participant is not party to such an agreement, Cause
shall mean:
(i) the
Company's procurement of evidence of the Participant's act of
fraud, misappropriation, or embezzlement with respect to the
Company;
(ii) the
Participant's indictment for, conviction of, or plea of guilty or
no contest to, any felony (other than a minor traffic
violation);
(iii) the
suspension or debarment of the Participant or of the Company or any
of its affiliated companies or entities as a direct result of any
willful or grossly negligent act or omission of the Participant in
connection with his employment with the Company from participation
in any Federal or state health care program. For purposes of this
clause (iii), the Participant shall not have acted in a
“willful” manner if the Participant acted, or failed to
act, in a manner that he believed in good faith to be in, or not
opposed to the best interests of the Company;
(iv) the
Participant's admission of liability of, or finding by a court or
the SEC (or a similar agency of any applicable state) of liability
for, the violation of any "Securities Laws" (as hereinafter
defined) (excluding any technical violations of the Securities Laws
which are not criminal in nature). As used herein, the term
"Securities Laws" means any Federal of state law, rule or
regulation governing the issuance or exchange of securities,
including without limitation the Securities Act of 1933, the
Securities Exchange and the rules and regulations promulgated
thereunder;
(v) a
formal indication from any agency or instrumentality of any state
or the United States of America, including but not limited to the
United States Department of Justice, the SEC or any committee of
the United States Congress that the Participant is a target or the
subject of any investigation or proceeding into the actions or
inactions of the Participant for a violation of any Securities Laws
in connection with his employment by the Company (excluding any
technical violations of the Securities law which are not criminal
in nature);
(vi) the
Participant's failure after reasonable prior written notice from
the Company to comply with any valid and legal directive of the
Chief Executive Officer or the Board that is not remedied within
thirty (30) days of the Participant being provided written notice
thereof from the Company; or
(vii) other than as
provided in clauses (i) through (vi) above, the Participant's
breach of any material provision of any employment agreement, if
applicable, or the Participant’s breach of the material
duties
of the Participant’s job that
is not remedied within thirty (30) days or repeated breaches of a
similar nature, such as the failure to report to work, perform
duties, or follow directions, all as provided herein, which shall
not require additional notices as provided in clauses (i) through
(vi) above.
Cause shall be determined by the
affirmative vote of at least fifty percent (50%) of the members of
the Board (excluding the Participant, if a Board member, and
excluding any member of the Board involved in events leading to the
Board's consideration of terminating the Participant for
Cause).
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" Change in Control " shall
mean
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(i) the
acquisition (other than from the Company) by any person, entity or
"group" (within the meaning of Sections 13(d)(3) or 14(d)(2) of the
Exchange Act, but excluding, for this purpose, the Company or its
subsidiaries, or any employee benefit plan of the Company or its
subsidiaries which acquires beneficial ownership of voting
securities of the Company) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or
more of either the then-outstanding shares of Common Stock or the
combined voting power of the Company's then-outstanding voting
securities entitled to vote generally in the election of directors;
or
(ii) individuals
who, as of the Effective Date, constitute the Board (as of such
date, the " Incumbent Board ") cease for any reason to
constitute at least a majority of the Board; provided, however,
that any person becoming a director subsequent to such date whose
election, or nomination for election, was approved by a vote of at
least a majority of the directors then constituting the Incumbent
Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or
threatened election contest relating to the election of directors
of the Company) shall be, for purposes of this clause (ii),
considered as though such person were a member of the Incumbent
Board; or
(iii) consummation
of a reorganization, merger, consolidation or share exchange, in
each case with respect to which persons who were the stockholders
of the Company immediately prior to such reorganization, merger,
consolidation or share exchange do not, immediately thereafter, own
at least fifty percent (50%) of the combined voting power entitled
to vote generally in the election of directors of the reorganized,
merged, consolidated or other surviving entity's then-outstanding
voting securities, or a liquidation or dissolution of the Company
or the sale of all or substantially all of the assets of the
Company.
" Code " shall mean the
Internal Revenue Code of 1986, as amended. Reference in this Plan
to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any
regulations under such section.
" Common Stock " means $.01
par value common stock of the Company, and such other securities of
the Company as may be substituted for Common Stock.
" Compensation Committee "
shall mean the Compensation Committee of the Board.
" Disability " shall mean a
physical or mental condition which is expected to result in death
or can be expected to last for a continuous period of not less than
twelve (12) months and which renders the Participant incapable of
performing the work for which he is employed or similar work, as
evidenced by eligibility for and actual receipt of benefits payable
under a group disability plan or policy maintained by the Company
or any of its subsidiaries that is by its terms applicable to the
Participant.
" Effective Date " shall mean
November 4, 2005, the original effective date of this Plan. The
amendment and restatement contained herein shall be effective as of
July __, 2008.
" ERISA " shall mean the
Employee Retirement Income Security Act of 1974, as amended and the
rules and regulations promulgated thereunder.
" Exchange Act " means the
Securities Exchange Act of 1934, as amended and the rules and
regulations promulgated thereunder.
" Good Reason " shall mean,
when used with reference to any Participant, any of the following
actions or failures to act, but in each case only if it occurs
while such Participant is employed by the Company and then only if
it is not consented to by such Participant in writing:
(i) assignment
of a position that is of a lesser rank than held by the Participant
prior to the assignment and that results in a material adverse
change in such Participant's reporting position, duties or
responsibilities or title or elected or appointed offices as in
effect immediately prior to the effective date of such change, or
in the case of a Tier 1 or Tier 2 Participant who was immediately
prior to the Change in Control an executive officer of the Company,
such Participant ceasing to be an executive officer of a company
with securities registered under the Exchange Act;
(ii) a
material reduction in such Participant’s total compensation
from that in effect immediately prior to the Change in Control. For
purposes of this clause (ii), “total compensation”
shall mean
the sum of base salary, target bonus
opportunity and the opportunity to receive compensation in the form
of equity in the Company. Notwithstanding the foregoing, a
reduction will not be deemed to have occurred hereunder on account
of (A) any change to a plan term other than ultimate target
bonus opportunity or equity opportunity, (B) the actual payout
of any bonus amount or equity amount, (C) any reduction
resulting from changes in the market value of securities or other
instruments paid or payable to the Participant, or (D) any
reduction in the total compensation of a group of similarly
situated Participants that includes such Participant; or
(iii) any
change in a Participant’s status as a Tier 1 Participant,
Tier 2 Participant or Tier 3 Participant to a status that provides
a lower benefit hereunder in the event of a Change in Control if
such change in status occurs during the period beginning six (6)
months prior to a Change in Control and ending twenty-four (24)
months after a Change in Control; or
(iv) any
change of more than fifty (50) miles in the location of the
principal place of employment of such Participant immediately prior
to the effective date of such change.
For purposes of this definition,
none of the actions described in clauses (i) and (ii) above shall
constitute "Good Reason" with respect to any Participant if it was
an isolated and inadvertent action not taken in bad faith by the
Company and if it is remedied by the Company within thirty (30)
days after receipt of written notice thereof given by such
Participant (or, if the matter is not capable of remedy within
thirty (30) days, then within a reasonable period of time following
such thirty (30) day period, provided that the Company has
commenced such remedy within said thirty (30) day period); provided
that "Good Reason" shall cease to exist for any action described in
clauses (i) through (iii) above on the sixtieth (60 th )
day following the later of the occurrence of such action or the
Participant's knowledge thereof, unless such Participant has given
the Company written notice thereof prior to such date.
" Participant " shall mean an
employee of the Company who is included on Schedule A
hereto, as that schedule may be amended in accordance with Section
2.01.
" Plan " shall mean this
HealthSouth Corporation Change in Control Benefits Plan, as
amended, restated, supplemented or modified from time to time in
accordance with its terms.
" Potential Change in Control
" shall be deemed to have occurred if the event set forth in any
one of the following paragraphs shall have occurred:
(i) the
Company enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control; or
(ii) the
Company or any person, entity or "group" (within the meaning of
Sections 13(d)(3) or 14(d)(2) of the Exchange Act, but excluding,
for this purpose, the Company or its subsidiaries, or any employee
benefit plan of the Company or its subsidiaries which acquires
beneficial ownership of voting securities of the Company) publicly
announces an intention to take or to consider taking actions which,
if consummated, would constitute a Change in Control; or
(iii) the
acquisition (other than from the Company) by any person, entity or
"group" (within the meaning of Sections 13(d)(3) or 14(d)(2) of the
Exchange Act, but excluding, for this purpose, the Company or its
subsidiaries, or any employee benefit plan of the Company or its
subsidiaries which acquires beneficial ownership of voting
securities of the Company) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
fifteen (15%) or more of either the then-outstanding shares of
Common Stock or the combined voting power of the Company's
then-outstanding voting securities entitled to vote generally in
the election of Directors; or
(iv) the
Board adopts a resolution to the effect that a Potential Change in
Control has occurred.
" Successor " shall mean a
successor to all or substantially all of the business, operations
or assets of the Company.
" Termination Date " shall
mean, with respect to any Participant, the termination date
specified in the Termination Notice delivered by such Participant
to the Company in accordance with Section 2.02 or as set forth in
any Termination Notice delivered by the Company, or as applicable,
the Participant's date of death.
" Termination Notice " shall
mean, as appropriate, written notice from (a) a Participant to the
Company purporting to terminate such Participant's employment for
Good Reason in accordance with Section 2.02 or (b) the Company to
any Participant purporting to terminate such Participant's
employment for Cause or Disability in accordance with Section
2.03.
" Tier 1 Participant " shall
mean each Participant designated in Schedule A hereto as a
Tier 1 Participant, as that schedule may be amended in accordance
with Section 2.01.
" Tier 2 Participant " shall
mean each Participant designated in Schedule A hereto as a
Tier 2 Participant, as that schedule may be amended in accordance
with Section 2.01.
" Tier 3 Participant " shall
mean each Participant designated in Schedule A hereto as a
Tier 3 Participant, as that schedule may be amended in accordance
with Section 2.01.
Section
1.02 Interpretation . In
this Plan, unless a clear contrary intention appears, (a) the words
"herein," "hereof" and "hereunder" refer to this Plan as a whole
and not to any particular Article, Section or other subdivision,
(b) reference to any Article or Section, means such Article or
Section hereof and (c) the words "including" (and with correlative
meaning "include") means including, without limiting the generality
of any description preceding such term. The Article and Section
headings herein are for convenience only and shall not affect the
construction hereof.
ARTICLE II
ELIGIBILITY AND
BENEFITS
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Section 2.01
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Eligible Employees .
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(a) An
employee of the Company shall be a "Participant" in the Plan during
each calendar year (or partial calendar year) for which he or she
has been designated as a Participant (and in the Tier so
designated) by the Chief Executive Officer of the Company and for
each succeeding calendar year, unless the Part
