Exhibit 10.15
SECOND AMENDED AND RESTATED
SENIOR MANAGEMENT AGREEMENT
THIS SECOND AMENDED AND RESTATED SENIOR MANAGEMENT AGREEMENT (“Agreement”) made
and entered into as of October 7, 2019, by and among EHHI Holdings, Inc., a
Delaware corporation (the “Company”), April Anthony (“Executive”), and Encompass
Health Corporation, a Delaware corporation (“EHC” and, together with Executive
and the Company, the “Parties”).
RECITALS:
WHEREAS, Executive is presently employed by the Company pursuant to the Amended
and Restated Senior Management Agreement, dated as of November 23, 2014, by and
among the Company, Executive, EHC (formerly known as HealthSouth Corporation),
and, solely for purposes of Sections 6(b) and 6(j) thereof, Thoma Cressey Fund
VIII, L.P. (the “Existing Employment Agreement”);
WHEREAS, upon the closing of the acquisition of the Company by a subsidiary of
EHC, Thoma Cressey Fund VIII, L.P. ceased having any rights or obligations under
the Existing Employment Agreement;
WHEREAS, as of the date hereof, the Parties desire to amend and restate the
Existing Employment Agreement in order to extend Executive’s employment pursuant
to the terms of this Agreement; and
WHEREAS, the Parties intend that this Agreement shall become effective as of
January 1, 2020 (the “Effective Date”) and that Executive’s employment shall
continue on terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows:
PROVISIONS RELATING TO EMPLOYMENT
1.Employment. The Company agrees to employ Executive and she accepts such
employment for the period beginning as of the Effective Date and ending upon her
termination of employment pursuant to Section 1(e) hereof (the “Employment
Period”).
(a)    Duties. During the Employment Period, Executive shall serve as the Chief
Executive Officer (“CEO”) of the Company and shall have such duties and
responsibilities as are typically commensurate with such position. Executive
shall have powers and perform such duties as may from time to time reasonably be
prescribed by the Chief Executive Officer of EHC (the “EHCCEO”) which are
consistent with the position of CEO of the Company, including serving without
additional compensation as an officer or director of the Company’s Subsidiaries.
(b)    Reporting and Devotion to Duties. Executive shall report to the EHCCEO,
and she shall devote substantially all of her working time and efforts to the
business and affairs of the Company and the Subsidiaries; provided, however, (i)
Executive may serve as director or trustee of an unaffiliated entity as may be
approved from time to time by the Board of Directors of EHC or applicable
committee thereof (the “Board”) pursuant the EHC Corporate Governance
Guidelines; and (ii) Executive may continue to provide services to Homecare
Homebase LLC as an officer or chairman in a manner consistent with those
positions, so long as Executive’s time commitment to such services is no greater
than the time commitment in effect immediately prior to the Effective Date;
provided, further, however, that in the case of clauses (i) and (ii) such
activities do not materially interfere with Executive’s duties and
responsibilities to the Company and its Subsidiaries. Notwithstanding the
foregoing, the Company acknowledges that Executive may continue to serve on the
board of directors of First Financial Bankshares, on the board of directors of
the Encompass Cares Foundation, and on the board of trustees, in the role of
Chair or otherwise, of Abilene Christian University (together with any roles
approved pursuant to the foregoing clause (i), the “Board Roles”).
(c)    Compensation.
(i)    Commencing upon the Effective Date and thereafter, during the Employment
Period, Executive’s base salary shall be $550,000 per annum or such higher rate
as the Board may designate from time to time, based upon the Company’s
achievement of budgetary and other objectives set by the Board (as in effect
from time to time, the “Base Salary”). Executive’s Base Salary shall be payable
in regular installments in accordance with the Company’s general payroll
practices (but no less frequently than monthly) and shall be subject to
customary withholding for income tax, social security or other such taxes.
Executive’s Base Salary for any partial year will be prorated based upon the
number of days elapsed in such year.
(ii)    In addition to the Base Salary, Executive shall be eligible for an
annual bonus (an “Annual Bonus”) as a participant in EHC’s senior management
bonus plan at the following percentages of the Base Salary: 37.5% (threshold);
75% (target); and 150% (maximum). The Annual Bonus shall be paid by no later
than March 1 of the year following the year in which it was earned and shall be
subject to customary withholding for income tax, social security or other such
taxes. Except as provided in Section 1(e), Executive shall receive an Annual
Bonus payable for a calendar year only if she is employed by the Company or its
Subsidiaries as of the date of payment of the Annual Bonus.
(iii)    Each year during the Employment Period, Executive shall be entitled to
participate in and receive equity awards with a target value of 150% of her Base
Salary under the EHC 2016 Omnibus Incentive Plan (or any successor thereto (the
“EHC EIP”)) as approved by the Board from time to time (collectively, the
“Equity Grants”).
(d)    Benefits. In addition to the Base Salary, the Annual Bonus and the Equity
Grants payable to Executive pursuant to this Agreement, she shall be entitled to
the following benefits during the Employment Period:
(i)    paid time off per the Company’s policy;
(ii)    reimbursement for reasonable business expenses incurred by Executive on
the Company’s behalf and within EHC’s stated policies and procedures for expense
reimbursement, subject to providing appropriate documentation thereof to the
Company (including reimbursement for the cost of professional representation and
consultation in connection with the negotiation of this Agreement);
(iii)    participation in all health, disability, welfare and benefit plans
available to the Company’s senior executives, all subject to plan terms and
generally applicable policies;
(iv)    participation in all retirement plans available to the Company’s senior
executives; and
(v)    any other benefits and perquisites approved by the Board.
(e)    Termination.
(i)    The Employment Period shall continue for three years commencing on the
Effective Date (the “Initial Term”) and shall be automatically renewed for
successive one year terms unless the Company or Executive receives written
notice from the other at least ninety (90) days prior to the termination of
either the Initial Term or a successive term then in effect, unless earlier
terminated as provided herein. Executive or the Company may terminate
Executive’s employment prior to the end of the term set forth in the preceding
sentence, as set forth in this Section 1(e); provided, that written notice to
Executive shall be required ninety (90) days prior to termination by the Company
without Cause and written notice to the Board shall be required ninety (90) days
prior to termination by Executive without Good Reason. The Parties’ rights and
duties in the event of a termination of employment during Employment Period will
be as set forth below.
(ii)    If the Company terminates Executive’s employment without Cause or
Executive terminates her employment for Good Reason, the Company will:
(A)    continue to pay Executive’s Base Salary at the rate in effect on the Date
of Termination until the date that is twelve months after the Date of
Termination in accordance with the Company’s payroll practices (but not less
frequently than monthly);
(B)    pay to Executive any Annual Bonus for any fiscal year that has ended
prior to the Date of Termination, if such Annual Bonus has not yet been paid as
of the Date of Termination (payable on the later of the date that annual bonuses
are paid generally, in accordance with Section 1(c)(ii) hereof, and the next
regular payday following the effective date of the release of claims referenced
below in this Section 1(e));
(C)    pay to Executive an amount equal to the amount of the COBRA premium
required to continue health coverage for Executive and her dependents under the
Company’s group health plan to the extent permitted by the plan (provided that
such amount shall not exceed the Company’s cost of coverage prior to
termination) until the earliest of (i) the date that is twelve months after the
Date of Termination, (ii) the date of commencement of health coverage for the
benefit of Executive and her dependents under any other plan, and (iii) the date
of Executive’s eligibility for health coverage as a result of her employment
with another entity; and
(D)    pay to Executive a ratable amount (based on Executive’s Base Salary) with
respect to accrued and unused paid time off as of the Date of Termination.
The right to receive the benefits set forth above is expressly conditioned on
Executive’s execution and delivery to the Company of a release of claims arising
out of Executive’s employment with the Company or termination thereof, in a form
reasonably acceptable to the Company, as of the Date of Termination.
Additionally, if Executive materially breaches her obligations under Sections 2
or 3 of this Agreement during the period in which Executive is entitled to such
benefits, Executive no longer shall be entitled to receive such benefits and the
Company will have no further obligation to provide such benefits to Executive.
In any event, the Company will reimburse Executive for any unreimbursed business
expenses pursuant to Section 1(d)(ii) of this Agreement.
(iii)    If (A) the Company terminates Executive’s employment for Cause or (B)
Executive terminates her employment without Good Reason, the Company will pay
Executive’s Base Salary through the Date of Termination, at the rate then in
effect, plus reimbursement of business expenses pursuant to Section 1(d)(ii) of
this Agreement, without any obligation to pay any other amounts hereunder.
(iv)    If Executive terminates or the Company terminates Executive’s employment
because of Executive’s death or Disability for a period of ninety (90)
consecutive days or one hundred eighty (180) total days during any period of
three hundred sixty five (365) consecutive days, the Company will continue to
pay Executive’s Base Salary through the Date of Termination at the rate then in
effect, without any obligation to pay any other amounts hereunder in cash or
otherwise.
(v)    Payments under Section 1(e)(ii) shall be made without regard to Sections
280G or 4999 of the Internal Revenue Code of 1986, as amended (the “Code”),
except that if Executive’s total after-tax payments would be increased by a
reduction of payments or benefits under Section 1(e)(ii), or by the adjustment
to the vesting of any equity-based or other awards that would otherwise be an
"excess parachute payment" within the meaning of Section 280G of the Code, such
reduction and/or adjustment shall be made to the extent necessary to maximize
Executive’s total after-tax payments. After-tax payments shall be determined
after reduction for federal taxes, including the excise tax under Section 4999
of the Code. The calculations described in this Section 1(e)(v) shall be made by
such certified public accounting firm as the Company may designate prior to the
applicable change in ownership or effective control, or in the ownership of a
substantial portion of the assets, of the applicable corporation under Section
280G of the Code.
2.    Confidential Information and Inventions and Patents.
(a)    Confidential Information. Executive acknowledges that the information,
observations and data prepared by or for her or obtained by her concerning the
business and affairs of the Company and its Affiliates and its and their
predecessors during the course of her performance of services for, or employment
with, any of the foregoing Persons (whether or not compensated for such
services) are the property of the Company and its Affiliates, including
information concerning acquisition opportunities in or reasonably related to the
Company’s business or industry of which Executive becomes aware during such
period. Therefore, Executive agrees that she will not (and shall cause each of
her Affiliates not to) at any time (whether during or after employment) disclose
to any unauthorized Person or, directly or indirectly, use for her own account,
any of such information, observations or data without the Board’s consent,
unless and to the extent that the aforementioned matters become generally known
to and available for use by the public other than as a direct or indirect result
of Executive’s acts or omissions to act. Executive agrees to deliver to the
Company at the termination of her employment with the Company, or at any other
time the Company may request in writing (whether during or after the
employment), all memoranda, notes, plans, records, reports and other documents
and copies thereof, regardless of the format or media, of the Company and its
Affiliates (including, without limitation, all acquisition prospects, lists and
contact information) which she may then possess or have under her control,
except any information relating to her employment terms and benefits, her
performance, or the circumstances of her departure from the Company.
(b)    Inventions and Patents. Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
trade secrets, copyrightable subject matter, reports, and all similar or related
information (whether or not patentable) that relate to the Company’s or any of
its Affiliates’ actual or anticipated business, research and development or
existing or future products or services and that are conceived, developed, made
or reduced to practice by Executive while employed by the Company and its
Affiliates or any of its and their predecessors (“Work Product”) belong to the
Company or such Affiliate and Executive hereby assigns, and agrees to assign
(and to the extent to which she already has assigned pursuant to the Existing
Employment Agreement, hereby confirms such assignment of), all right, title, and
interest in and to the Work Product to the Company or such Affiliate; provided
that the foregoing shall not apply to any inventions, innovations, improvements,
developments, methods, designs, analyses, drawings, reports and all similar or
related information (whether or not patentable) of the information technology
systems and software licenses from Homecare Homebase, LLC, and provided further,
that as between Homecare Homebase, LLC and Advanced Homecare Management, Inc.
d/b/a Encompass Health Home Health & Hospice (an Affiliate of the Company and
EHC), the Innovation Project Development Agreement entered into on February 8,
2019, and the Client Service and License Agreement dated December 1, 2004,
establish the rights and obligations of Homecare Homebase, LLC and that certain
Affiliate of the Company and EHC with respect to the intellectual property that
is the subject of those agreements. Any Work Product comprising copyrightable
subject matter prepared in whole or in part by Executive in the course of her
work for any of the foregoing entities shall be deemed a “work made for hire”
under the copyright laws, and the Company or such Affiliate shall own all rights
therein. To the extent that any such copyrightable subject matter is not a “work
made for hire,” Executive hereby assigns and agrees to assign to Company or such
Affiliate all right, title, and interest, including without limitation,
copyright in and to such copyrightable subject matter. Executive shall promptly
disclose all such Work Product to the Board and perform all actions reasonably
requested by the Board (whether during or after the Employment Period) to
establish and confirm the Company’s or its Affiliate’s ownership (including,
without limitation, assignments, consents, powers of attorney and other
instruments).
3.    Noncompetition and Nonsolicitation.
(a)    Noncompetition. In further consideration of the compensation to be paid
to Executive hereunder, she acknowledges that during the course of her
employment with the Company and its Affiliates (including, without limitation,
any predecessors thereof) she has become familiar with, and during the course of
her employment with the Company and its Affiliates she will become familiar
with, EHC’s and its Subsidiaries’ trade secrets and with other Confidential
Information. Executive acknowledges that her services shall be of special,
unique and extraordinary value to EHC and its Subsidiaries and that EHC’s and
its Subsidiaries’ ability to accomplish their purposes and to successfully
pursue their business plan and compete in the marketplace depends substantially
on the skills and expertise of Executive. Therefore, and in further
consideration of the compensation being paid to Executive hereunder, she agrees
that, during the Noncompete Period (as defined below), she shall not directly or
indirectly engage, whether as an owner, general partner, member, officer,
employee, consultant, director, stockholder or otherwise (other than passive
ownership of less than ten percent (10%) of any class of securities of an
entity, without otherwise participating in or advising on the activities of such
entity), any business of which the primary activity is the provision of products
or services within the Restricted Territory (as defined below) that, as of the
Date of Termination, are competitive with (i) the business of operating or
managing inpatient rehabilitation, home health or hospice services within the
Restricted Territory, or (ii) any business line of EHC or its Subsidiaries that
has generated revenue in excess of $500,000 (the “Revenue Threshold”) during the
twelve months prior to the Date of Termination (each, an “EHC Competitive
Business”); provided that (y) revenues generated by business lines that are not
substantially related shall not be aggregated for purposes of determining
whether any EHC Competitive Business has met the Revenue Threshold; and (z) EHC
shall, within 30 days of the Date of Termination, provide Executive with, and
certify the accuracy of, a schedule identifying each EHC Competitive Business.
The “Noncompete Period” shall mean the period during which she is employed by
EHC or any of its Subsidiaries and the period beginning on the Date of
Termination and ending on the later of 12 months from the Date of Termination
and April 1, 2022. “Restricted Territory” shall mean any state or territory of
the United States in which EHC or any of its Subsidiaries is located or
operates, or is in the process of actively planning to conduct or conducting
operations, as of the Date of Termination. Notwithstanding the foregoing
provisions of this Section 3(a), this Agreement shall not preclude or limit
Executive’s activities relating to (i) Executive’s provision of services to
Homecare Homebase, LLC as an officer or chairman in a manner consistent with
those positions, so long as Executive’s time commitment to such services is no
greater than the time commitment in effect immediately prior to the Effective
Date, (ii) any activities approved by the written consent of the Board after the
Effective Date or (iii) any other Board Roles; provided, that in the case of
clauses (i) and (ii) such activities do not materially interfere with
Executive’s duties and responsibilities to the Company and its Subsidiaries.
Executive acknowledges that the geographic boundaries, scope of prohibited
activities and the time duration are reasonable and are no broader than are
necessary to protect legitimate business interests.
(b)    Nonsolicitation. In addition, Executive agrees that, during the period
during which she is employed by the Company or any of its Affiliates and for two
years thereafter (the “Nonsolicitation Period”), she shall not (and shall cause
all of her Affiliates not to), directly or indirectly through another Person (i)
induce or attempt to induce any employee of the Company or any of its
Subsidiaries to leave the employ of the Company or any of its Subsidiaries, or
in any way interfere with the relationship between the Company or any of its
Subsidiaries and any employee thereof, (ii) hire (in any capacity) any Person
who was an employee of the Company or any of its Subsidiaries at any time during
the six month period immediately prior to the date on which such hiring would
take place (it being conclusively presumed by the Parties so as to avoid any
disputes under this Section 3(b) that any such hiring within such six month
period is in violation of clause (a) above), (iii) for so long as Executive has
any obligations under Section 3(a) above, call on, solicit or service any
customer, supplier, licensee, licensor or other business relation of the Company
or any of its Subsidiaries in order to induce or attempt to induce such Person
to cease doing business with the Company or any of its Subsidiaries, (including
making any negative statements or communications about the Company or any of its
Subsidiaries) or (iv) initiate or engage in any discussions regarding an
acquisition of, or Executive’s employment (whether as an employee, an
independent contractor or otherwise) by, any businesses in which the Company or
any of its Subsidiaries within the two (2) year period prior to the Date of
Termination has had or is engaged in discussions, or has requested or received
information, relating to the acquisition of such business by the Company or any
of its Subsidiaries. This paragraph shall not preclude or limit (X) Executive’s
provision of services to Homecare Homebase as an officer or executive chairman
in a manner consistent with those positions, so long as Executive’s time
commitment to such services is no greater than the time commitment in effect
immediately prior to the Effective Date, (Y) any activities approved by written
consent of the Board or any other Board Roles, or (Z) any solicitation, hiring
or engagement of Misty Nelson.
(c)    Enforcement. If, at the time of enforcement of Sections 2 or 3 of this
Agreement, a court holds that the restrictions stated herein are unreasonable
under circumstances then existing, the Parties agree that the maximum duration,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum
duration, scope and area permitted by law. Because Executive’s services are
unique and because Executive has access to Confidential Information, the Parties
agree that money damages would not be an adequate remedy for any breach of this
Agreement. Therefore, in the event a breach or threatened breach of this
Agreement, EHC, the Company or their successors or assigns may, in addition to
other rights and remedies existing in their favor, apply to any court of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce, or prevent any violations of, the provisions hereof
(without posting a bond or other security and without proving damages).
GENERAL PROVISIONS
4.    Definitions. For purposes of this Agreement:
“Affiliate” means, as to any Person, any other Person, which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition, “control” (including, with its correlative
meanings, “controlled by” and “under common control with”) shall mean
possession, directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or partnership
or other ownership interests, by contract or otherwise).
“Cause” shall mean (i) dishonesty, fraud, or any act involving moral turpitude
on Executive’s part in connection with the performance of her duties which is
materially detrimental to the Company or any of its Affiliates, (ii) being
charged (by indictment, information or otherwise) with any criminal violation of
any law or regulation pertaining to health care and/or pharmaceutical services
and products (including, without limitation, laws and regulations pertaining to
reimbursement or coverage by the Medicare program, any state Medicaid program or
any other governmental health care program or by third-party payors, laws
prohibiting kickbacks or false claims, and laws prohibiting fraud or abuse or
fraudulent or abusive activities), (iii) Executive’s refusal to follow lawful
directives of the Board in a manner that is materially detrimental to EHC, (iv)
Executive’s intentional or gross neglect of the performance of her duties as
Chief Executive Officer of the Company, (v) Executive’s misappropriation of any
corporate opportunity, provided Executive’s pursuit or referral of an
opportunity shall not be improper or misappropriation if (A) Executive first
presents an opportunity to the EHCCEO in writing and the EHCCEO does not express
an interest in pursuing it within thirty (30) days or (B) the Board authorizes
Executive to pursue or refer an opportunity to another Person or entity, (vi)
Executive’s conviction of, or plea of guilty or no contest to, any felony, (vii)
a material breach by Executive of this Agreement, including but not limited to
Sections 2 and 3; provided, Cause shall not exist unless and until (1) Executive
receives written notice from the Board stating the Board’s intent to terminate
Executive’s employment and such written notice includes a reasonably detailed
explanation of the reasons for such intent and states the subsection of the
Cause definition that the Board believes to be present, (2) in the circumstances
described in clauses (iii), (iv), (v) and (vii), Executive shall have fifteen
(15) days to cure the alleged default after written notice by the Board, (3)
Executive may address the Board at a duly-scheduled meeting of the Board, and
shall be able to bring counsel if the Board chooses to have counsel present at
such meeting, at which Company counsel shall be present at such meeting and (4)
the Board votes to authorize a termination for Cause.
“Confidential Information” means all information of a confidential or
proprietary nature (whether or not specifically labeled or identified as
“confidential”), in any form or medium that relates to EHC, the Company or any
of their Affiliates or their business relations and their respective business
activities. Confidential Information includes, but is not limited to, the
following: (i) internal business information (including information relating to
strategic and staffing plans and practices, business, training, marketing,
promotional and sales plans and practices, cost, rate and pricing structures and
accounting and business methods); (ii) identities and individual requirements
of, and specific contractual arrangements with, EHC’s, the Company’s or any of
their Affiliates’ joint venture partners, vendors or customers and other
business relations and their confidential information; (iii) trade secrets,
know-how, compilations of data and analyses, techniques, systems, formulae,
research, records, reports, manuals, documentation, models, data and data bases
relating thereto; (iv) inventions, innovations, improvements, developments,
methods, designs, analyses, drawings, reports and all similar or related
information (whether or not patentable), (v) intellectual property rights, and
(vi) financial information.
“Date of Termination” shall mean the date Executive’s employment with the
Company terminates regardless of the reason.
“Disability” shall have the meaning defined in the long-term disability
insurance plan of the Company or its Affiliates in which Executive participates.
“Good Reason” shall mean (i) any material reduction in Executive’s pay or
benefits or failure to provide any compensation or benefit to which Executive is
entitled other than in connection with a Company-wide reduction in pay or
benefits, or any reduction in Base Salary below $550,000, regardless of the
circumstances, (ii) any relocation of Executive’s primary work site by more than
twenty (20) miles from both Executive’s prior primary work site and Executive’s
primary residence, (iii) a material diminution of Executive’s duties,
responsibilities or title, or (iv) a material breach by the Company of this
Agreement; provided, that in the circumstances described in (i), (ii), (iii) and
(iv) the Company shall have fifteen (15) days to cure the default after delivery
written notice by Executive, such written notice to state the nature of the
issue and subsection of the Good Reason definition that Executive believes to be
present.
“Person” means an individual, a partnership, a limited liability company, a
corporation, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.
“Subsidiary” means any corporation or other entity of which the Company owns
securities having a majority of the ordinary voting power in electing the board
of directors or other body having direction over the affairs of such entity
either directly or through one or more subsidiaries.
5.    Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, one day after being sent to the recipient by reputable overnight
courier service (charges prepaid), upon machine-generated acknowledgement of
receipt after transmittal by facsimile or five days after being mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid. Such notices, demands and other communications shall be sent to the
Company and Executive at the address set forth below, or at such address or to
the attention of such other Person as the recipient Party has specified by prior
written notice to the sending Party.
Notices to Executive:
At the most recent contact information on file in the Company’s payroll records.
Notices to the Company and EHC:
Encompass Health Corporation

9001 Liberty Parkway

Birmingham, Alabama 35242

Facsimile number: (205) 262-3948

Attention: General Counsel
6.    General Provisions.
(a)    Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(b)    Complete Agreement. This Agreement and those other documents expressly
referred to herein and therein embody the complete agreement and understanding
among the Parties and supersede and preempt any prior understandings, agreements
or representations by or among the Parties, written or oral, which may have
related to the subject matter hereof in any way (including, without limitation,
the Existing Employment Agreement).
(c)    Counterparts. This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement. In the event that any signature of this
Agreement is delivered by facsimile or by email delivery of a “PDF” or other
electronic format, such signature shall create a valid and binding obligation of
the executing Party and shall be considered as if it were the original thereof.
(d)    Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company and EHC and their respective successors and assigns;
provided that the rights and obligations of Executive under this Agreement shall
not be assignable. There are no third-party beneficiaries of or to this
Agreement.
(e)    Choice of Law. The corporate law of the State of Delaware will govern all
issues and questions concerning the relative rights of the Company and its
stockholders. All other issues and questions concerning the construction,
validity and interpretation of this Agreement will be governed by, and construed
in accordance with, the internal laws of the State of Delaware, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware. All actions or
proceedings arising out of or from or related to this Agreement shall be
litigated in courts having situs in Dallas, Texas. Executive and the Company
hereby consent and submit to the jurisdiction of any local, state or federal
courts located within such county. Executive and the Company hereby waive any
right either may have to transfer or change the venue of any litigation brought
by the other in accordance with the terms of this Section.
(f)    Remedies. Each of Executive, EHC and the Company will be entitled to
enforce its rights under this Agreement specifically, to recover damages and
costs (including attorney’s fees) caused by any breach of any provision of this
Agreement and to exercise all other rights existing in its favor. Executive, EHC
and the Company agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that any Party may
in its sole discretion apply to any court of law or equity of competent
jurisdiction (without posting any bond or deposit) for specific performance
and/or other injunctive relief in order to enforce or prevent any violations of
the provisions of this Agreement.
(g)    Recoupment. Nothing in the this Agreement should be interpreted to alter
or supersede the terms or requirements of EHC’s Compensation Recoupment Policy,
as it may be amended from time to time, which policy is hereby incorporated in
this Agreement by reference.
(h)    Amendment and Waiver. The provisions of this Agreement may be amended
only with the prior written consent of the Company, EHC and Executive, and any
provision of this Agreement may be waived only by the Party waiving compliance.
(i)    Business Days. If any time period for giving notice or taking action
hereunder expires on a day which is a Saturday, Sunday or holiday in the state
in which the Company’s chief executive office is located, the time period shall
be automatically extended to the business day immediately following such
Saturday, Sunday or holiday.
(j)    Indemnification and Reimbursement of Payments on Behalf of Executive.
Executive shall be solely responsible for all taxes, if any, associated with the
amounts payable or value delivered to Executive under this Agreement. The
Company and its Affiliates shall be entitled to deduct or withhold from any
amounts owing from the Company or any of its Affiliates to Executive any
federal, state, local or foreign withholding taxes, excise taxes, or employment
taxes (“Taxes”) imposed on Executive with respect to Executive’s compensation or
other payments from the Company or any of its Affiliates or Executive’s
ownership interest in Encompass Health Home Health Holdings, Inc. or EHC,
including, but not limited to, wages, bonuses, dividends, the receipt or
exercise of stock appreciation rights and/or the receipt or vesting of
restricted stock.
(k)    Effectiveness of Agreement and Replacement of Prior Agreements. At 12:01
a.m. central time on the Effective Date, (i) this Agreement shall supersede and
replace the Existing Employment Agreement and (ii) the Existing Employment
Agreement shall thereupon be terminated and without any further force or effect,
with no penalty or severance payable to any Person as a result of such
termination. For the avoidance of doubt, from the date that this Agreement is
executed until the Effective Date, the Existing Employment Agreement shall
continue in full force and effect in accordance with its terms.
(l)    Termination. Except as otherwise provided herein, this Agreement shall
survive the termination of Executive’s employment with the Company and shall
remain in full force and effect after such termination.
(m)    Generally Accepted Accounting Principles; Adjustments of Numbers. Where
any accounting determination or calculation is required to be made under this
Agreement, such determination or calculation (unless otherwise provided) shall
be made in accordance with generally accepted accounting principles,
consistently applied, except that if because of a change in generally accepted
accounting principles the Company would have to alter a previously utilized
accounting method or policy in order to remain in compliance with generally
accepted accounting principles, such determination or calculation shall continue
to be made in accordance with the Company’s previous accounting methods and
policies. All numbers set forth herein which refer to share prices or amounts
will be appropriately adjusted to reflect stock splits, stock dividends,
combinations of shares and other recapitalizations affecting the subject class
of stock.
(n)    Reformation; Specified Employee. Executive, EHC and the Company agree
that if any provision of this Agreement is deemed unenforceable or invalid, it
may be reformed to permit enforcement of the objectionable provision to the
fullest permissible extent. Any provision of this Agreement deemed unenforceable
after modification shall be deemed stricken from this Agreement, with the
remainder of the Agreement being given its full force and effect.
Notwithstanding any other provision with respect to the timing of payments under
this Agreement, if, at the time of Executive’s termination of employment,
Executive is deemed to be a “specified employee” (within the meaning of Section
409A(a)(2)(B) of the Code), and any successor statute, regulation and guidance
thereto) of the Company, then only to the extent necessary to comply with the
requirements of Section 409A of the Code, any payments to which Executive may
become entitled under this Agreement as a result of Executive’s termination of
employment which are subject to Section 409A of the Code (and not otherwise
exempt from its application) will be withheld until the first business day of
the seventh month following the Date of Termination, at which time Executive
shall be paid an aggregate amount equal to six months of payments otherwise due
to Executive under the terms of or a full lump sum if otherwise due. For
purposes of Section 409A of the Code, each payment made under this Agreement
shall be treated as a separate payment. Further, notwithstanding anything
herein, to the extent that Executive or the Company reasonably believes that
Section 409A of the Code will result in adverse tax consequences to Executive as
a result of this Agreement, then Executive and the Company shall renegotiate
this Agreement in good faith in order to minimize or eliminate such tax
consequences and retain the basic after-tax economics of this Agreement for
Executive to the extent reasonably possible.
(o)    No Strict Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties, and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of any
of the provisions of this Agreement.
(p)    Descriptive Headings; Interpretation. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement. The use of the word “including” in this Agreement shall be by way of
example rather than by limitation. Definitions are equally applicable to both
the singular and plural forms of the terms defined, and references to the
masculine, feminine or neuter gender include each other gender.
(q)    Resolution of Disputes.
(i)    Mediation. No Party shall initiate arbitration or other legal proceedings
against any other Party arising out of or relating in any way to this Agreement,
except that any Party may seek injunctive relief at any time. No such
arbitration or proceeding shall be initiated in respect of Executive’s
employment with the Company or any and all claims that one Party may have
against another Party or its Affiliates until thirty (30) days after written
notice has been given of the specific nature of any purported claim and the
amount of any purported damages. The Parties further agree that if any Party
submits the claim to the American Arbitration Association for nonbinding
mediation prior to the expiration of such thirty (30) day period, no other Party
may institute arbitration or other legal proceedings against the claimant Party
until the earlier of: (i) completion of nonbinding mediation efforts, or (ii)
forty-five (45) days after the date on which the non-claimant Party receives
notice of the claimant Party’s claim. The mediation shall be conducted in
Dallas, Texas or such other location to which the applicable Parties may agree.
(ii)    Arbitration. Except as provided in Section 6(f) or Section 6(p)(iii),
any dispute or controversy between or among the Parties, whether arising out of
or relating to this Agreement, the breach of this Agreement, or otherwise, shall
be settled by arbitration in Dallas, Texas or such other location to which the
applicable Parties may agree administered by the American Arbitration
Association, with any such dispute or controversy arising under this Agreement
being so administered in accordance with its Employment Rules then in effect,
and judgment on the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The arbitrator shall have the authority to award
any remedy or relief that a court of competent jurisdiction could order or
grant, including, without limitation, the issuance of an injunction. Except as
necessary in court proceedings to enforce this arbitration provision or an award
rendered hereunder, or to obtain interim relief, neither a Party nor an
arbitrator may disclose the existence, content or results of any arbitration
hereunder without the prior written consent of EHC, the Company and Executive.
The Parties acknowledge that this Agreement evidences a transaction involving
interstate commerce. Notwithstanding any choice of law provision included in
this Agreement, the United States Federal Arbitration Act shall govern the
interpretation and enforcement of this arbitration provision.
(iii)    Enforcement. The Parties agree that EHC, the Company and their
Affiliates would be damaged irreparably in the event that any provision of
Section 2 or 3 of this Agreement were not performed in accordance with its terms
or were otherwise breached, and that Executive would be damaged irreparably in
the event of certain conduct by EHC, the Company and their Affiliates, and that
money damages would be an inadequate remedy for any such nonperformance or
breach. Accordingly, Executive, EHC, and the Company and its successors and
permitted assigns shall be entitled, in addition to other rights and remedies
existing in its favor, to seek an injunction or injunctions to prevent any
breach or threatened breach of any of such provisions and to enforce such
provisions specifically (without posting a bond or other security). Executive,
EHC, and the Company agree to submit to the personal jurisdiction of the courts
of the State of Texas in any action by EHC or the Company to enforce an
arbitration award against Executive or to obtain interim injunctive or other
relief pending an arbitration decision.

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective duly authorized officers (as applicable) as of the day and year
first written above.

EHHI HOLDINGS, INC.

By: /s/ Patrick Darby                
Name: Partick Darby
Title: Vice President and Secretary

ENCOMPASS HEALTH CORPORATION

By: /s/ Mark J. Tarr                
Name: Mark J. Tarr
Title: President and Chief Executive Officer

/s/ April Anthony
April Anthony

[2019 Amended and Restated Senior Management Agreement]