EXHIBIT 10.39
SELECT MEDICAL CORPORATION
0000 Xxx Xxxxxxxxxx Xxxx, X.X. Xxx 0000
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
February 24, 2005
Xxxxxxx X. Xxxxxx
Select Medical Corporation
0000 Xxx Xxxxxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Re: Second Amendment to Agreement in the Event of a Change of
Control of SMC
Dear Xx. Xxxxxx:
The following will confirm our desire to amend the Letter Agreement,
dated as of March 1, 2000, and as amended on February 23, 2001 (the "Letter
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.
Capitalized terms used herein without definition shall have the meanings
assigned to such terms in the Letter Agreement.
Reference is made to that certain Agreement and Plan of Merger,
dated as of October 17, 2004 (the "Merger Agreement"), by and among Select
Medical Holdings Corporation (f/k/a EGL Holding Company), a Delaware corporation
("Holdings"), EGL Acquisition Corp., a Delaware corporation ("EGL") and the
Company pursuant to which, upon the terms and subject to the conditions set
forth therein, EGL will merge with and into the Company (the "Merger") with the
Company continuing as the surviving corporation.
In consideration of your continued employment with the Company and
other good and valuable consideration, including the mutual covenants and
agreements contained in that certain Agreement, dated as of December 20, 2004
(the "Rollover Agreement"), by and among Holdings, you and the other individuals
party thereto, pursuant to which, among other things, you agreed to contribute
your shares of stock of the Company to Holdings in exchange for shares of stock
of Holdings and to amend the Letter Agreement as set forth herein, the receipt
and sufficiency of which is hereby acknowledged, the Company and you hereby
agree, intending to be legally bound hereby, as follows:
1. That the Merger and other transactions contemplated by the Merger
Agreement will not be treated as a Change of Control under the terms and
provisions of the Letter Agreement and you will forgo any change of
control or similar payments that you would otherwise be entitled to
receive under such provisions if the Merger or other transactions
contemplated by the Merger Agreement or the Rollover Agreement would
have been treated as a Change of Control (including any gross-up or
payments, or to reimburse you, for excise taxes resulting from such
payments or other benefits provided under the Letter Agreement or
otherwise in connection with the Merger and other transactions
contemplated by the Merger Agreement or the Rollover Agreement).
2. For the avoidance of doubt, it is understood that the
aforementioned provisions shall remain in effect with respect to any
future Change of Control and, except as amended hereby, the Letter
Agreement shall continue in effect in accordance with its terms.
Please indicate your acceptance of the above Amendment by signing
below in the space provided.
Very truly yours,
SELECT MEDICAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
____________________________________
Xxxxxx X. Xxxxxxxx
Chief Executive Officer
AGREED TO AND ACCEPTED BY:
/s/ Xxxxxxx X. Xxxxxx
__________________________
Xxxxxxx X. Xxxxxx
-2-
