Document:

ex10-53

 

Exhibit 10.53

AMENDMENT NO. 3 TO

EMPLOYMENT AGREEMENT

This is an Amendment dated September 17, 2001 (the Amendment) to the Employment
Agreement (as hereinafter defined) by and between SELECT MEDICAL CORPORATION, a
Delaware corporation (the Employer), and ROBERT A. ORTENZIO, an individual (the
Employee).

Background

A.     The Employer and the Employee executed and delivered that certain Employment
Agreement dated as of March 1, 2000, that certain Amendment No. 1 to Employment
Agreement dated as of August 8, 2000, and that certain Amendment No. 2 to
Employment Agreement dated as of February 23, 2001 (as amended, the Employment
Agreement). The Employer and the Employee now desire to further amend the
Employment Agreement as hereinafter provided.

B.     Accordingly, and intended to be legally bound hereby, the Employer and the
Employee agree as follows:

Agreement

1.     Section 1.02 of the Employment Agreement is hereby amended and restated as
follows:

1.02 Capacity. The Employee shall serve as President and Chief Operating
Officer of the Employer until September 17, 2001. From and after September 17,
2001, the Employee shall serve as the Chief Executive Officer, President and
Chief Operating Officer of the Employer.

2.     Effective as of the first of the Company’s payroll periods beginning after
September 17, 2001, the Employee’s base salary under Section 3.01 of the
Employment Agreement shall be increased to $800,000.

3.     Except as amended hereby, the Employment Agreement shall continue in effect
in accordance with its terms.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.

	 	 	 	 	 
	 	 	SELECT MEDICAL CORPORATION
	
	
	
	

	 	 	 	 	 
	
	
	
	

	 	 	
By:	 	/s/ Michael E.
Tarvin
	
	
	
	

	 	 	 	 	

	
	
	
	

	 	 	 	 	Michael E. Tarvin,
	
	
	
	

	 	 	 	 	Senior Vice President
	 	 		 	 
	
	
	
	

	 	 		 	/s/ Robert A.
Ortenzio
	
	
	
	

	 	 	 	 	

	
	
	
	

	 	 		 	Robert A.
Ortenzioex10-54

 

Exhibit 10.54

Old Gettysburg Associates

4718 Old Gettysburg Road

Mechanicsburg, PA 17055

Fourth Addendum to Lease Agreement

THIS FOURTH AMENDMENT (this Fourth Amendment) is made as of the 1st day of
September, 2001, by and between OLD GETTYSBURG ASSOCIATES, a Pennsylvania
general partnership (Landlord), and SELECT MEDICAL CORPORATION, a Delaware
corporation (Tenant).

BACKGROUND:

A.     Landlord and Tenant are parties to that certain Office Lease Agreement dated
June 15, 1999 (as amended by the First, Second and Third Addenda thereto, the
Lease), pursuant to which Landlord leased to Tenant, and Tenant hired from
Landlord, approximately 12,400 rentable square feet of space in the building
located at 4718 Old Gettysburg Road, Mechanicsburg, Pennsylvania. All
capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Lease.

B.     On August 31, 2001, Tenant desires to surrender possession of 175 square
feet of space which is located on the 4th floor of the Premises, and Landlord
desires to accept possession of such space. Therefore, Tenant and Landlord now
desire to amend the Lease to reflect a reduction in the size of the Premises by
175 square feet.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein, and intending to be legally bound hereby, Landlord and Tenant agree as
follows:

1.     From and after September 1, 2001, the Premises will consist of 12,225 square
feet of space rather than 12,400 square feet of space. Monthly rent will be
$19,184.62 payable on September 1, 2001 and October 1, 2001. Monthly rent will
be $18,372.37 (i.e., to provide a credit of $541.50 for over-payments during
September and October 2001) payable on November 1, 2001. Monthly rent will be
$18,913.87 payable on December 1, 2001 and thereafter until it is increased as
provided in the Lease.

2.     All other terms and conditions contained in the Lease not amended hereby
remain in full force and effect.

IN WITNESS WHEREOF, Landlord and Tenant have caused this Fourth Amendment to be
duly executed as of the day and year first above written.

Landlord:

OLD GETTYSBURG ASSOCIATES

a Pennsylvania general partnership

	 	 	 
	 	 	
By: /s/ Michael E. Salerno
	
	
	
	

	 	 	

	
	
	
	

	 	 	
        Michael E. Salerno
	
	
	
	

	 	 	
        Agent for Owner

 

Tenant:

SELECT MEDICAL CORPORATION,

a Delaware corporation

	 	 	 
	 	 	
By: /s/ Michael E. Tarvin
	
	
	
	

	 	 	

	
	
	
	

	 	 	
        Michael E. Tarvin,
	
	
	
	

	 	 	
        Senior Vice Presidentex10-56

 

Exhibit 10.56

SELECT MEDICAL CORPORATION

4716 Old Gettysburg Road P.O. Box 2034

Mechanicsburg, Pennsylvania 17055

March 1, 2000

Mr. Scott A. Romberger

Select Medical Corporation

4716 Old Gettysburg Road

P.O. Box 2034

Mechanicsburg, PA 17055

         Re: Agreement in the Event of a Change of Control of SMC

Dear Mr. Romberger:

         The following will confirm the agreement of Select Medical Corporation, a Delaware corporation (the Company), with you concerning
the consequences upon certain terminations of your employment in connection with a change in control of the Company.

         In consideration of your past and continued service to the Company and in consideration of the mutual covenants and agreements
contained in this letter (this Letter Agreement), the Company and you hereby agree, intending to be legally bound hereby, as follows:

         1.     Covered Termination. A Covered Termination shall be deemed to occur if your employment with the Company terminates under any one
of the following circumstances: (i) within the two-year period immediately following a Change of Control (as defined below), your employment
with the Company (a) is terminated by the Company without Cause (as defined below), (ii) within the six-month period immediately following a
Change of Control, you terminate your employment with the Company for Good Reason (as defined below), or (iii) within the six-month period
preceding a Change of Control, your employment is terminated by the Company other than for Cause, and you reasonably demonstrate 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.

         2.     Payments Upon a Covered Termination. If a Covered Termination occurs, then (i) the Company agrees that such termination is not a
voluntary termination or a termination for cause as contemplated by any of the Company’s stock option or other incentive plans and any stock
option or other award agreements entered into between you and the Company (including agreements that may be entered into in the future in
connection with additional awards granted pursuant to any Company plan, the Award Agreements) and the Company agrees that all unvested,
unexercised stock options held by you which were granted to you by the Company shall become fully vested and exercisable as of the date of the
Covered Termination and you will have the right to exercise, at any time prior to the earlier of three months after the date of termination or
the expiration date of such option, all such options to purchase the Company’s stock notwithstanding any contrary vesting

 

 

schedule that may be contained in the applicable plan or Award Agreement, and

(ii)  the Company will, on or before your last day as an employee of the Company, pay to you, in lieu of any other rights to cash compensation
other than the payment of your salary for services performed before the date of termination and as a severance benefit, a lump sum cash payment
equal to your total base salary plus bonus compensation from the Company for the preceding three years (or, if you shall have been employed for
less than three years, an amount equal to three times your average total annual cash compensation for base salary and bonus for your years of
service to the Company).

		
	 	         3. Definitions.
	 
	 	         (a) Change of Control.

                                 (i) Prior to a Public Offering(as defined below), a Change of Control shall be deemed to have occurred, subject to Section
3(a)(iii) below, upon (i) any sale, lease, exchange or other transfer of all or substantially all of the property and assets of the Company (on
a consolidated basis) to an entity, other than an entity at least 75% of the combined voting power of the voting securities of which are owned
by persons in substantially the same proportion as their ownership of the Company immediately prior to such sale or other transfer, (ii) any
merger or consolidation to which the Company is a party and as a result of which the holders of the voting securities of the Company
immediately prior thereto own less than a majority of the outstanding voting securities of the surviving entity immediately following such
transaction, or
(iii) any person’s (excluding WCAS, GTCR and Thoma Cressey Partners, the financial sponsors of the Company as of the date hereof), including a
group’s, becoming the beneficial owner of securities representing more than 50% of the voting securities of the Company then outstanding.

                                 (ii) Following a Public Offering, a Change of Control shall be deemed to have occurred if, subject to Section 3(a)(iii) below,
(i) any person including a group, but excluding any stockholder of the Company who immediately prior to the Public Offering beneficially owned
12% or more of the Company’s outstanding shares, becomes the beneficial owner of shares of the Company having more than 50% of the total number
of votes that may be cast for the election of directors of the Company, (ii) any person including a group, other than you or any group of which
you are a party, increases its beneficial ownership of shares of the Company beyond such person’s ownership immediately after the Public
Offering by a number of shares equal to or greater than 33% of the total number of votes that may be cast for the election of directors; (iii)
the individuals who serve on the Board of Directors of the Company as of the effective date hereof (the Incumbent Directors) cease for any
reason to constitute at least a majority of the Board of Directors of the Company; provided, however, any person who becomes a director
subsequent to the effective date hereof, whose election or nomination for election was approved by a vote of at least a majority of the
directors then constituting the Incumbent Directors, shall for purposes of this clause (iii) be considered an Incumbent Director; (iv) the
consummation of a merger or consolidation of the Company in which the stockholders of the Company immediately prior to such merger or
consolidation, would not, immediately after the merger or consolidation, beneficially own, directly or indirectly, shares representing in the
aggregate more than 50% of the combined voting power of the

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voting securities of the corporation issuing cash or securities in the merger or consolidation (or of its ultimate parent corporation, if any);
or (v) there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (on a
consolidated basis), other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least
50% of the combined voting power of the voting securities of which are owned by persons in substantially the same proportion as their ownership
of the Company immediately prior to such sale.

                                 (iii) Notwithstanding the foregoing, in no event shall a Change of Control be deemed to occur for purposes of this Letter
Agreement, whether prior to or following a Public Offering, unless the total consideration for the transaction or transactions which would,
absent this clause (iii), constitute a Change of Control, has a value that is equal to or greater than $3.75 per share of common stock of the
Company (the Minimum Value); provided that such Minimum Value shall be adjusted to reflect changes to such common stock in the event of a stock
dividend, stock split, reverse stock split, stock combination, reclassification, recapitalization, or other similar change in the structure or
capitalization of the Company, or any other event which in the discretion of the Board of Directors of the Company necessitates such an
adjustment.

                                 (iv) For purposes of this Section 3(a), (A) the terms person, group, beneficial owner, and beneficially own have the same
meanings as such terms under Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder, (B) the term Public Offering shall mean the consummation of the first public offering of shares of common stock of the Company in a
firm commitment underwritten offering registered under the Securities Act of 1933, as amended, on Form S-1 or its successor forms, and (C) the
term voting securities shall mean securities, the holders of which are ordinarily, in the absence of contingencies, entitled to elect the
corporate directors (or persons performing similar functions).

         (b)  Cause. For purposes of this Letter Agreement, Cause shall mean

(i)  your willful and continued failure to substantially perform your duties hereunder (other than any such failure resulting from incapacity
due to physical or mental illness); (ii) your engaging in willful or reckless misconduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise; or (iii) your conviction of a felony involving moral turpitude; provided that an act, or failure to act, on
your part shall be considered willful or reckless only if done, or omitted to be done, by you not in good faith and without a reasonable belief
that his action or omission was in the best interest of the Company. Your employment shall not be deemed to have been terminated for Cause
unless the Company shall have given or delivered to you (i) reasonable notice setting forth the reasons for the Company’s intention to
terminate your employment for Cause; (ii) an opportunity to cure any such breach during the 30-day period after your receipt of such notice;
(iii) a reasonable opportunity, at any time during the 30-day period after your receipt of such notice, together with your counsel, to be heard
before the Board of Directors; and (iv) a notice of termination stating that, in the good faith opinion of not less than a majority of the
entire membership of the Board of Directors of the Company, you are guilty of the conduct set forth in any of clauses (i), (ii) or
(iii) of the definition of Cause above.

         (c)  Good Reason. For purposes of this Letter Agreement, you shall have Good Reason to terminate your employment after a Change of
Control if you make good faith determination that, as a result of such Change of Control, (x) you are unable to perform your services
effectively or there is any significant adverse change in your authority or responsibilities, as performed immediately prior to such Change of
Control, (y) there is a reduction by the Company in your compensation from that in effect prior to such Change of Control, or (z) you are
required to be based anywhere other than the Company’s principal executive offices in (or within 25 miles of) Mechanicsburg, Pennsylvania
(except for required travel on the Company’s business to an extent substantially consistent with your business travel obligations prior to the
Change of Control).

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         4.     Additional Payments.

         (a)  If all, or any portion, of the payments or other benefits provided under any section of this Agreement, either alone or together
with other payments and benefits that you receive or are entitled to receive from the Company or its affiliates, (whether or not under an
existing plan, arrangement or other agreement) (collectively the Payments) would constitute an excess parachute payment within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the Code) and would result in the imposition on you of an excise tax under
Section 4999 of the Code, (such excise tax, together with any interest and penalties related thereto, are hereinafter collectively referred to
as the Excise Tax) then, in addition to any other benefits to which you are entitled under this Agreement, you will be entitled to receive an
additional payment (a Gross-Up Payment) in cash, in an amount such that after you pay all taxes including, without limitation, (i) any income
taxes (and any interest and penalties imposed with respect thereto) and (ii) any Excise Tax, imposed upon the Gross-Up Payment, you will retain
an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Unless you and the Company otherwise agree in writing, any
determination required under this Section 4, including without limitation, the amount of payments under this Article 6 (the Parachute Gross-up)
shall be computed and made in writing by the Employer’s then independent public accountants (the Accountants), whose determination shall be,
subject to the Employee’s reasonable approval of the calculations required under this Article 6, conclusive and binding upon the Employee and
the Employer for all purposes. For purposes of making the calculations required by this Section 4, the Accountants may rely on reasonable, good
faith interpretations concerning the application of Section 280G and 4999 of the Code. You and the Company shall furnish to the Accountants
such information and documents as the Accountants may reasonably request in order to make a determination under this Section 4. The Company
shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 4.

         (b) As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the
Accountants hereunder, it is possible that (i) Gross-Up Payments which will not have been made by the Company should have been made (an
Underpayment), consistent with the calculations required to be made hereunder or that (ii) Gross-Up Payments that have been made will be
determined to have been in excess of the Gross-Up Payments actually required (an Overpayment). In the event that you are required to make a
payment of any Excise Tax, the Accountants shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for your benefit. In the event that it is finally determined that an Overpayment has occurred, you will
promptly, and in any event within 30 days of such determination, refund the amount of the Overpayment, plus any interest actually paid to you
with respect to the Overpayment, to the Company. The Company shall have the right with respect to the determination of either an Underpayment
or an Overpayment to you to appeal the assertion of any Underpayment or to claim, and sue for, a refund of any Excise Tax paid by you upon any
Payment or Gross-Up Payment, provided that the Company shall promptly reimburse you for all expenses, including counsel and accounting fees,
incurred in connection with any such proceeding. Alternatively, the Company may undertake any such proceeding, and you shall cooperate with the
Company in any such proceeding.

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         5.     Miscellaneous.

         (a)  The Company will require any purchaser of all or substantially all of the assets of the Company, by agreement in form and
substance reasonably satisfactory to you, to expressly assume and agree to perform this Letter Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such purchase had taken place. Failure of the Company to obtain such agreement
prior to the effectiveness of any such succession shall be a breach of this Letter Agreement and shall entitle you to compensation from the
Company in the same amount and on the same terms as you would be entitled hereunder if a Covered Termination had occurred. As used in this
Letter Agreement, Company shall mean the Company as hereinbefore defined and any purchaser of its assets as aforesaid which executed and
delivers the agreement provided for herein.

         (b)  This Letter Agreement shall remain in effect for so long as you are employed by the Company. This Letter Agreement may not be
modified or waived except in writing and agreed to by the Company and you. This Letter Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania and shall inure to the benefit of your heirs.

         (c)  The Company represents that this Letter Agreement has been duly authorized and is binding on and enforceable against the
Company. The invalidity or unenforceability of any provision of this Letter Agreement shall not affect the validity or enforceability of any
other provision, which shall remain in full force and effect.

         (d)  Upon payment of the amount required under paragraph 1 hereof, you shall deliver to the Company a general release of liability of
the Company and its officers and directors in a form reasonably satisfactory to the Company.

         (e)  All payments made pursuant to this Letter Agreement shall be subject to withholding of applicable deductions and income and
employment taxes.

         (f)  Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, sent by
facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally or sent by facsimile transmission or, if mailed, five days after the date of deposit in the United States mails to the
following addresses:

         If to Employee:

         Scott A. Romberger

         440 Boyer Street

         Halifax, PA 17032

         If to the Company:

         Select Medical Corporation

         4716 Old Gettysburg Road

         Mechanicsburg, PA 17055

         Attention: General Counsel

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         6.     Entire Agreement. This writing represents the entire agreement and understanding of the parties with respect to the subject
matter hereof, and supersedes all prior agreements, written or oral, with respect thereto. This Agreement may not be altered or amended except
by an agreement in writing.

         Please indicate your acceptance of the above agreement by signing below in the space indicated.

	 	 	 	 	 
	
	
	
	

	 	 	
Very truly yours, 	 	 
	
	
	
	

	
	
	
	

	 	 	
	 	 	
SELECT MEDICAL CORPORATION, a Delaware

corporation	 	 
	
	
	
	

	 	 	

	
	
	
	

	 	 	
By: /s/ Robert A. Ortenzio,	 	 
	
	
	
	

	 	 	

	 	 
	
	
	
	

	 	 	
     Robert A. Ortenzio,	 	 
	
	
	
	

	 	 	
     President	 	 

	 
	Agreed to and accepted:
	
	
	
	

	/s/ Scott A. Romberger

Scott A. Romberger

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