AGREEMENT dated as of the 2nd day of December, 1994 by and between NOVACARE, INC., a Delaware
corporation (the "Company"), and TIMOTHY E. FOSTER (the "Executive").
W I T N E S E T H:
WHEREAS, the Executive has served as Senior Vice President-Finance and Administration and Chief Financial
Officer of the Company since 1988; and
WHEREAS, the Executive has been appointed President and Chief Operating Officer of the Company effective
October 27, 1994, and the Company and the Executive wish to set forth the terms and conditions on which he
will serve in such position.
NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth, the
parties hereto hereby agree as follows:
1. EMPLOYMENT, TERM, AUTOMATIC EXTENSION.
1.1 Employment. The Company agrees to employ the Executive, and the Executive agrees to serve in the employ
of the Company, for the term set forth in Section 1.2, in the positions and with the responsibilities, duties and
authority set forth in Section 2 and on the other terms and conditions set forth in this Agreement.
1.2 Term. The term of the Executive's employment under this Agreement shall commence on December 2, 1994
and shall terminate on December 31, 1998, unless extended or sooner terminated in accordance with this
1.3 Automatic Extension. As of December 31, 1997, and as of December 31 of each subsequent year (each, an
"Automatic Renewal Date"), unless either party shall have given a notice of non-extension prior to such Automatic
Renewal Date, the term of this Agreement shall be extended automatically for a period of one year to the
anniversary of the expiration date of the then-current term of this Agreement. Once a notice of non-extension
shall have been given by either party, there shall be no further automatic extension of this Agreement.
2. POSITION, DUTIES.
The Executive shall serve in the positions of President and Chief Operating Officer of the Company. The