Exhibit 10.3
SELECT MEDICAL HOLDINGS CORPORATION
RESTRICTED STOCK AWARD AGREEMENT UNDER THE
2005 EQUITY INCENTIVE PLAN FOR NON-EMPLOYEE DIRECTORS
This Restricted Stock Award Agreement (this “Agreement”) is made as of
August 11, 2010 (the “Effective Date”), between SELECT MEDICAL HOLDINGS
CORPORATION, a Delaware corporation (the “Company”), and JAMES E. DALTON, JR.,
an individual (the “Participant”).
WHEREAS, the Company has adopted the 2005 Equity Incentive Plan for Non-Employee
Directors, amended and restated as of August 12, 2009 (the “Plan”), all of the
terms and provisions of which are incorporated herein by reference and made a
part hereof;
WHEREAS, the Participant serves as an independent member of the Board of
Directors of the Company;
WHEREAS, in order to provide an incentive to the Participant to serve as an
independent member of the Board of Directors of the Company, the Company has
approved and authorized the issuance of certain shares of the Common Stock of
the Company, par value $.001 per share (the “Stock”), to the Participant,
subject to the terms of the Plan and this Agreement; and
WHEREAS, all capitalized terms used but not defined herein shall have the
meanings set forth in the Plan.
NOW, THEREFORE, in consideration of the services to be rendered by the
Participant as an independent member of the Board of Directors of the Company,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and the Participant agree to the terms and
conditions set forth herein.
1. Award of Restricted Stock. The Company hereby awards and issues to the
Participant, effective as of the date hereof, 5,000 shares of Stock (the
“Restricted Stock”).
2. Vesting Schedule. Subject to the further provisions of this Agreement, and
the Participant’s continued service as an independent member of the Board of
Directors of the Company, on the applicable vesting date, commencing on
August 11, 2011 and on August 11 of each year thereafter, 20% of the shares of
Restricted Stock shall vest, so that the following number of shares of
Restricted Stock shall have vested:

              Cumulative Shares of   Vesting Dates   Restricted Stock Vested  
 
       
August 11, 2011
    1,000  
 
     
August 11, 2012
    2,000  
 
     
August 11, 2013
    3,000  
 
     
August 11, 2014
    4,000  
 
     
August 11, 2015
    5,000  
 
     

 

 

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Subject to Section 5 hereof, the period beginning on the date hereof through and
including the vesting date for any shares of Restricted Stock shall be referred
to herein as the “Restricted Period” with respect to such shares of Restricted
Stock.
3. Transferability. Shares of Restricted Stock which have not vested may not be
sold, assigned, transferred, pledged, or otherwise disposed of under any
circumstances during the applicable Restricted Period, except that such shares
may be transferred to a Permitted Transferee who agrees in writing (in a form
satisfactory to the Company and its counsel) to be bound by this Agreement to
the same extent as the Participant, and any such transferred shares shall
continue to be subject to forfeiture upon the Participant’s termination of
service as an independent member of the Board of Directors of the Company as
provided herein. The Restricted Stock shall not be subject to execution,
attachment or similar process during the applicable Restricted Period. Upon any
attempt to transfer, assign, pledge, or otherwise dispose of the Restricted
Stock during the applicable Restricted Period contrary to the provisions of the
Plan or this Agreement, or upon the levy of any attachment or similar process
upon the Restricted Stock during the applicable Restricted Period, the
Restricted Stock shall immediately be forfeited to the Company and cease to be
outstanding.
4. Forfeiture of Restricted Stock. All unvested shares of Restricted Stock shall
immediately be forfeited to the Company and cease to be outstanding upon the
termination of the Participant’s service as an independent member of the Board
of Directors of the Company. The Participant acknowledges that neither the
Participant nor the Participant’s estate will have any claim whatsoever against
the Company or any Subsidiary related to any forfeiture of the Restricted Stock.
5. Acceleration of Vesting Upon Change of Control. Upon a Change of Control all
Restricted Periods shall terminate and all outstanding shares of Restricted
Stock shall be vested in full and all limitations on such Restricted Stock set
forth in this Agreement shall automatically lapse.
6. Plan Governing. The Participant hereby acknowledges receipt of a copy of the
Plan and accepts and agrees to be bound by all of the terms and conditions of
the Plan as if set out verbatim in this Agreement. In the event of a conflict
between the terms of the Plan and the terms of this Agreement, the terms of the
Plan shall control.
7. Miscellaneous. This Agreement may be amended only by written agreement of the
Participant and the Company and may be amended without the consent of any other
person. The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, representatives,
heirs, descendants, distributees and permitted assigns. This Agreement may be
executed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
Effective Date.

 

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            SELECT MEDICAL HOLDINGS CORPORATION
      By:   /s/ Robert A. Ortenzio         Name:   Robert A. Ortenzio       
Title:   Chief Executive Officer        PARTICIPANT:
      /s/ James E, Dalton, Jr.       James E. Dalton, Jr.   

 

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