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Exhibit 10.1

 
RESTRICTIVE COVENANT AGREEMENT
 

This Restrictive Covenant Agreement (“Agreement”) is entered into between John
L. Workman (“Workman”) and HealthSouth Corporation (the “Company”).

WITNESSETH
 
WHEREAS, Workman has been employed by the Company as its Executive Vice
President and Chief Financial Officer;
 
WHEREAS, on October 21, 2009, Workman tendered notice to the Company of the
voluntary resignation of his offices and employment with the Company effective
November 17, 2009 to accept the position of Chief Financial Officer with
Omnicare, Inc. (“Omnicare”);
 
WHEREAS, Workman has agreed to comply with, among other things, certain
confidentiality, noncompetition and nonsolicitation provisions, which are
provided below, and such provisions shall be fully enforceable by the Company;
and
 
NOW, THEREFORE, in consideration of the promises and mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is mutually acknowledged, the Company and Workman agree as
follows:
 
1. Resignation and Last Date of Employment. Workman acknowledges that on October
21, 2009, he tendered notice to the Company of the voluntary resignation of his
offices and employment with the Company effective November 17, 2009. November
17, 2009 shall be the “Last Date of Employment” for purposes of this Agreement
and the Company will pay Workman his base salary through the Last Date of
Employment. However, Workman and the Company agree that he is only expected and
authorized to actively work through November 9, 2009. Therefore, Workman
acknowledges and agrees that he will not have the authority to act on behalf of
the Company after November 9, 2009 and he shall not hold himself out as having
authority to act on behalf of the Company after November 9, 2009.
 
2. Consideration. In consideration for the promises and covenants contained
herein and provided that this Agreement is executed and not materially breached
by Workman:
 
(a) Workman will receive from the Company a lump sum payment of Two Hundred
Fifty Thousand and 00/100 Dollars ($250,000.00) within 10 business days after
the Company’s filing of its 2009 Form 10-K with the United States Securities and
Exchange Commission.  The Company will issue to Workman a Form 1099-MISC at the
appropriate time reflecting this payment.
 
(b) Workman acknowledges and agrees that, in the absence of this Agreement, the
Company has no obligation to provide any of the consideration set forth in
Section 1 (a) of this Agreement. Workman further acknowledges and agrees that
the payment provided in Section 1 (a) is subject to forfeiture and repayment in
the event of a material violation by Workman of any of the commitments set forth
in this Agreement.
 
3. Acknowledgements.
 
(a) Workman acknowledges and agrees that, other than the Consideration provided
in Section 1(a) above, he is not entitled to any additional compensation,
bonuses, or unvested benefits from the Company after the Last Date of Employment
(other than any payment of accrued base salary through the Last Date of
Employment and payment of Workman’s accrued but unused Paid Time Off (PTO)
through the Last Date of Employment to the extent that such payments have not
yet been made to Workman as of the date of execution of this
Agreement).  Workman explicitly waives any rights to any and all bonus payments
under the 2009 Senior Management Bonus Plan, and any and all rights to
compensation, severance or other post-termination benefits under any oral or
written plan, policy, employment agreement, contract or arrangement with the
Company, including but not limited to HealthSouth Corporation’s Second Amended
and Restated Executive Severance Plan. Workman further acknowledges and agrees
that Workman has no rights to any unvested benefits or options under any
incentive, bonus or other benefit plan, and that all such vesting shall cease as
of the Last Date of Employment. Options which are vested and outstanding as of
the Last Date of Employment shall be exercisable as specified and provided for
in the applicable stock option plan and grant agreements. Workman further
acknowledges and agrees that any right to continue to contribute to the
Company’s 401(k) plan for employees shall end on the Last Date of Employment.
 
(b) Workman acknowledges and agrees that: (i) the “Company Business” (as defined
in Section 7(a) below) is intensely competitive and that Workman’s employment by
the Company required Workman to have access to, and knowledge of, “Confidential
Information” (as defined in Section 7(b) below); (ii) the use or disclosure of
any Confidential Information could place the Company at a serious competitive
disadvantage and could do serious damage, financial and otherwise, to the
Company; (iii) Workman was given access to, and developed relationships with,
employees, physicians and partners of the Company at the time and expense of the
Company; and (iv) by Workman’s training, experience and expertise, Workman’s
services to the Company were extraordinary, special and unique.
 
(c) Workman further acknowledges and agrees that (i) Workman’s experience and
capabilities are such that the provisions contained in Paragraphs 4, 5, and 6
will not prevent Workman from earning a livelihood; (ii) the Company would be
seriously and irreparably injured if Workman were to engage in “Competitive
Activities” (as defined below), or to otherwise breach the obligations contained
in Paragraphs 4, 5 and 6, no adequate remedy at-law would exist and damages
would be difficult to determine; (iii) the provisions contained in Paragraphs 4,
5 and 6 are justified by and reasonably necessary to protect the legitimate
business interests of the Company, including the Confidential Information and
good will of the Company; and (iv) the provisions in Paragraphs 4, 5 and 6 are
fair and reasonable in scope, duration and geographical limitations.
Accordingly, Workman agrees to be bound fully by the restrictive covenants in
this Agreement to the maximum extent permitted by law, it being the intent and
spirit of the parties that the restrictive covenants and the other agreements
contained herein shall be valid and enforceable in all respects.
 
4. Confidentiality.
 
(a) Workman acknowledges and agrees that, up to and including the Last Date of
Employment, and at all times thereafter, Workman will not communicate, divulge
or disclose to any “Person” (as defined in Section 7(c) below) or use for
Workman’s own benefit or purpose any Confidential Information of the Company or
its subsidiaries, except as required by law or court order or expressly
authorized in writing by the Company; provided, however, that Workman shall
promptly notify the Company prior to making any disclosure required by law or
court order so that the Company may seek a protective order or other appropriate
remedy.
 
5. Covenant Not to Compete.
 
From the Last Date of Employment through November 17, 2010 (the “Noncompetition
Period”), Workman shall not, directly or indirectly, participate in the
management, operation or control of, or have any financial or ownership interest
in, or aid or knowingly assist anyone else in the conduct of, any business or
entity that engages in the Company Business (as defined in Section 7(a) below)
in any Restricted Territory (as defined in Section 7(d) below); provided,
however, that (x) the “beneficial ownership” by Workman, either individually or
as a member of a “group” (as such terms are used in Rule 13d of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended), of
not more than one percent (1%) of the voting stock of any publicly held
corporation shall not alone constitute a breach of this Section 5 and (y)
Workman may enter into, at arm’s length, any bona fide joint venture (or
partnership or other business arrangement) with any Person who is not directly
engaged in the Company Business but which is an affiliate of another Person
engaged in Company Business.  The Company acknowledges that Omnicare is not
currently engaged in the Company Business and that by entering into employment
with, and performing services for, Omnicare, Workman does not and will not
violate this Section 5 as long as Omnicare does not during the Noncompetition
Period take any action that causes it to be engaged in the Company Business.
 
6. Employee Nonsolicitation; Nondisparagement.
 
(a) Workman shall not, directly or indirectly, within the Noncompetition Period,
without the prior written consent of the Company, solicit or direct any other
Person to solicit any officer to: (i) terminate such officer’s or employee’s
employment with the Company; or (ii) seek or accept employment or other
affiliation with Workman or any Person engaged in the Company Business in which
Workman is directly or indirectly involved (other than, in each case, any
solicitation directed at the public in general or contact which was initiated by
such officer, director or employee or any contact after such officer’s or
employee’s employment with the Company is terminated).  Workman’s obligations
under this Section 6(a) with respect to new Company employees hired after the
Last Date of Employment shall be subject to the condition that Workman shall
have been notified of such new employees.
 
(b) Workman shall not within the Noncompetition Period, without the prior
written consent of the Company, solicit or direct any other Person to solicit
any Person or entity in a business relationship with the Company (whether an
independent contractor, joint venture partner or otherwise) to terminate such
Person or entity’s business relationship with the Company.
 
(c) Workman shall not, directly or indirectly, within the Noncompetition Period,
make any statements or comments of a defamatory or disparaging nature to third
parties regarding the Company or any of its subsidiaries, members, principals,
officers, managers, directors, personnel, employees, agents, services or
products; provided, however, that nothing contained in this Section 6(b) shall
preclude Workman from providing truthful testimony in response to a valid
subpoena, court order, regulatory request or as may be required by law. In the
event that Workman receives a subpoena, court order, or other process or inquiry
from any third party requiring or requesting him to disclose any information as
to any matter involving or affecting the Company, Workman agrees to promptly
notify the Company’s General Counsel so that the Company has an opportunity to
protect its interest in the disclosure of privileged information, its
confidential information and/or trade secrets.
 
7. Definitions.
 
(a) For the purposes of this Agreement, the “Company Business” shall mean the
business of owning, operating or managing inpatient rehabilitation hospitals
offering a range of rehabilitative health care services, for which the Company
receives compensation. Notwithstanding the foregoing, “Company Business” shall
not include (i) the distribution of pharmaceuticals, related pharmacy
consulting, data management services and medical supplies to nursing homes and
long-term care facilities, (ii) provision of comprehensive product development
and research services to companies in the pharmaceutical, biotechnology, medical
device and diagnostics industries or (iii) any other business in which Omnicare
or its subsidiaries are engaged on the date hereof.
 
(b) For purposes of this Agreement, “Confidential Information” includes, but is
not limited to, certain or all of the Company’s and its subsidiaries’,
physicians’ and third-party managed care providers’ supply agreement
arrangements, compensation arrangements, plans for acquisition or disposition,
expansion and development plans, non-public financial information, consulting
reports, Personal Health Information (PHI), strategic plans, proprietary
information and trade secrets; provided, however, that “Confidential
Information” does not include information that is or becomes available to the
public other than as a result of a breach by Workman of Section 4.
 
(c) For the purposes of this Agreement, “Person” shall mean an individual,
corporation, joint venture, partnership, limited liability company, association,
joint stock or other company, business trust, trust or other entity or
organization, including any national, federal, state, territorial agency, local
or foreign judicial, legislative, executive, regulatory or administrative
authority, commission, court, tribunal, any political or other subdivision,
department or branch of any of the foregoing, and any self regulatory
organization or arbitrator.
 
(d) For the purposes of this Agreement, the “Restricted Territory” means the
area within seventy-five (75) miles of any location where an inpatient
rehabilitation facility, which is owned or operated by the Company, is located
as of the Last Date of Employment.
 
8. Company Property.  Workman represents that Workman has returned to the
Company (or will return on or before the Last Date of Employment) all property
of the Company. Such property includes, but is not limited to, laptop computers,
BlackBerry, printers, other computer equipment (including computers, printers
and equipment paid-for by the Company for use at Workman’s residence), cellular
phones and pagers, keys, security passes, passwords, work files, records, credit
cards, building ID’s and all other Company property in Workman’s possession on
the last day of Workman’s employment with the Company.
 
9. Assignment. This Agreement is binding on, and will inure to the benefit of,
the Company, its subsidiaries, and successors. All rights of Workman under this
Agreement shall inure to the benefit of, and be enforceable by, Workman’s
personal or legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees.
 
10. Injunctive Relief.  Workman agrees that the Company would suffer irreparable
harm if Workman were to breach, or threaten to breach, any provision of this
Agreement and that the Company would by reason of such breach, or threatened
breach, be entitled to injunctive relief in a court of appropriate jurisdiction,
without the need to post any bond, and Workman further consents and stipulates
to the entry of such injunctive relief in such a court prohibiting Workman from
breaching this Agreement. This Section shall not, however, diminish the right of
the Company to claim and recover damages and other appropriate relief, including
but not limited to repayment of the payment provided to Workman pursuant to
Section 2(a) of this Agreement, in addition to injunctive relief.
 
11. Severability.  In the event that any one or more, of the provisions of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. Moreover, if any one or more of the provisions
contained in this Agreement shall be held to be excessively broad as to
duration, activity or subject, such provisions shall be construed by limiting
and reducing them so as to be enforceable to the maximum extent allowed by
applicable law. Furthermore, a determination in any jurisdiction that this
Agreement, in whole or in part, is invalid, illegal or unenforceable shall not
in any way affect or impair the validity, legality or enforceability of this
Agreement in any other jurisdiction.
 
12. Waiver.   The failure of either party to this Agreement to enforce any of
its terms, provisions or covenants shall not be construed as a waiver of the
same or of the right of such party to enforce the same. Waiver by either party
hereto of any breach or default by the other party of any term or provision of
this Agreement shall not operate as a waiver of any other breach or default.
 
13. Cooperation and Reasonable Availability. Workman agrees to cooperate with
the Company, its officers, and attorneys and to make himself reasonably
available to them for purposes of any threatened, pending, or future
administrative charges, litigation and/or questions or investigations, relating
to events during Workman’s employment with the Company and about which Workman
may have relevant information. Such cooperation and reasonable availability may
include, but is not limited to participating in interviews with the Company’s
attorneys, and/or providing truthful testimony in affidavits, hearings, trials
and/or depositions. The Company agrees to reimburse Workman for any reasonable
expenses (such as travel and legal expenses) incurred by Workman as a result of
compliance with this Section, provided that Workman submits proper documentation
of such expenses.  Notwithstanding the foregoing, Workman will not be required
to cooperate or make himself reasonably available to the extent it would
unreasonably interfere with the performance of his duties for Omnicare.
 
14. No Oral Modifications. This Agreement may not be changed orally, but may be
changed only in a writing signed by Workman and a duly authorized representative
of the Company.
 
15. Governing Law; Venue. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to the
application of any choice-of-law rules that would result in the application of
another state’s laws. With respect to any action, suit or proceeding, each party
irrevocably (i) submits to the jurisdiction of the courts of the State of
Delaware and the United States District Court of the District of Delaware, and
(ii) waives any objection which it may have at any time to the laying of venue
of any proceeding brought in any such court, waives any claim that such
proceedings have been brought in an inconvenient forum and further waives the
right to object, with respect to such proceedings, that such court does not have
jurisdiction over such party.
 
16. Entire Agreement. This Agreement sets forth the entire understanding between
Workman and the Company, and supersedes all prior agreements, representations,
discussions, and understandings concerning their subject matter. Workman
represents that, in executing this Agreement, Workman has not relied upon any
representation or statement made by the Company or any other Company Releases,
other than those set forth herein, with regard to the subject matter, basis or
effect of this Agreement or otherwise.
 
17. Voluntary Agreement. Workman acknowledges that Workman has been given a
reasonable time following receipt of this Agreement to consider its terms, that
he has carefully read and fully understands all of the provisions of this
Agreement, and that Workman is entering into this Agreement knowingly, freely
and voluntarily in exchange for good and valuable consideration.
 
18. Descriptive Headings. The section headings contained herein are for
reference purposes only and will not in any way affect the meaning or
interpretation of this Agreement.
 
19. Counterparts. This Agreement may be executed simultaneously in counterparts,
each of which shall be an original, but all of which shall constitute but one
and the same agreement.
 

 

 
[Signatures on the following page.]

 
 

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Workman and the Company have executed this Agreement on the date indicated
below.
 
                                               HEALTHSOUTH CORPORATION

             
By:
/s/ John P. Whittington
       
Title:
Corporate Secretary
     
 
Date:
11/23/2009
                     
/s/ John L. Workman
   
John L. Workman
         
Nov. 21, 2009
   
Date

 

 
 
 

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