Exhibit 10.2
AMENDMENT NO. 7 TO
EMPLOYMENT AGREEMENT
This is an amendment, dated as of November 10, 2010 (the “Amendment”) to the
Employment Agreement made as of the 1st day of March, 2000 (the “Employment
Agreement”), by and between SELECT MEDICAL CORPORATION, a Delaware corporation
(the “Employer”), and ROBERT A. ORTENZIO, an individual (the “Employee”).
Background
Employer and Employee executed and delivered the Employment Agreement, that
certain Amendment No. 1 to the Employment Agreement, dated as of August 8, 2000,
that certain Amendment No. 2 to the Employment Agreement, dated as of
February 23, 2001, that certain Amendment No. 3 to the Employment Agreement,
dated as of September 17, 2001, that certain Amendment No. 4 to the Employment
Agreement, dated as of December 10, 2004, that certain Amendment No. 5 to the
Employment Agreement, dated as of February 24, 2005 and that certain Amendment
No. 6 to the Employment Agreement, dated as of December 18, 2008. Employer and
Employee now desire to amend the Employment Agreement as provided herein.
Agreement
1. The last sentence of Section 3.01 of the Employment Agreement is hereby
amended and restated in its entirety to read as follows:
“The Employee will also be eligible to receive bonus compensation, annual or
otherwise, in an amount to be determined by the Employer’s Board of Directors in
its sole discretion, with any such bonus compensation to be paid to the Employee
by no later than March 15th of the year following the year to which such bonus
relates.”
2. Section 5.01 of the Employment Agreement is hereby amended and restated in
its entirety to read as follows:
“5.01. Change of Control Termination. If, during the Term, (1) there should be a
Change of Control (as defined in Section 5.02), and within the one-year period
immediately following the Change of Control the Employee’s employment with the
Employer (i) is terminated by the Employer without cause as defined in
Section 2.02(b), or (ii) is terminated by the Employee for any reason or (2)
(i) the Employee’s employment is terminated by the Employer other than for
cause, (ii) within the six-month period following such termination, a Change of
Control occurs and (iii) the Employee reasonably demonstrates that such
termination of employment was at the request of a third party who has taken
steps reasonably calculated to effect the Change of Control, then in lieu of the
payments described in Section 2.02(e)(iv) hereof, the Employer shall pay to the
Employee an amount equal to the Employee’s total cash compensation for base
salary and bonus for the immediately preceding three completed calendar years
(or equal to three times his average total annual cash compensation for base
salary and bonus for his years of service to the Employer, if less than three
years), with such amount to be paid in equal installments on each of the
Employer’s regular payroll dates over the remainder of the Term; provided,
however, that the commencement of

 

 

--------------------------------------------------------------------------------

 

such payments shall be delayed until the first payroll date of the seventh month
following such termination; provided further, that, the first payment made
hereunder shall include the payments that otherwise would be made had the delay
described in the preceding clause not been imposed. For the avoidance of doubt,
a termination pursuant to Section 5.01(1)(ii) shall be treated as a termination
for good reason (as defined in Section 2.02(c)) and shall entitle the Employee
to the payments and benefits set forth in Section 2.02(e), as modified by this
Section 5.01.”
3. Section 7.02 of the Employment Agreement is hereby amended and restated in
its entirety to read as follows:
“7.02. Release. As a condition to payment of any amount required under
Section 2.02(e) or Section 5.01 hereof, the Employee shall deliver to the
Employer a general release of liability of the Employer and its officers and
directors in a form reasonably satisfactory to the Employer, such that such
release is effective, with all revocation periods having expired unexercised, by
no later than the 60th day after such termination.”
4. The last sentence of Section 7.10 of the Employment Agreement is hereby
deleted and replaced with the following:
“In addition, no reimbursement or in-kind benefit shall be subject to
liquidation or exchange for another benefit and the amount available for
reimbursement, or in-kind benefits provided, during any calendar year shall not
affect the amount available for reimbursement, or in-kind benefits to be
provided, in a subsequent calendar year. Any reimbursement to which Employee is
entitled hereunder shall be made no later than the last day of the calendar year
following the calendar year in which such expenses were incurred. This Agreement
is intended to comply with Code Section 409A (to the extent applicable) and the
parties hereto agree to interpret, apply and administer this Agreement in the
least restrictive manner necessary to comply therewith and without resulting in
any increase in the amounts owed hereunder by the Employer.”
5. Except as amended hereby, the Employment Agreement shall continue in effect
in accordance with its terms.
Please indicate your acceptance of the above Amendment by signing below in the
space indicated.
Very truly yours,
SELECT MEDICAL CORPORATION, a
Delaware Corporation

             
By:
  /s/ Michael E. Tarvin       /s/ Robert A. Ortenzio
 
           
 
  Michael E. Tarvin,       Robert A. Ortenzio
 
  Executive Vice President