Exhibit 10.6



 Exhibit 10.6 
 TRANSACTION BONUS AGREEMENT 
 TRANSACTION BONUS AGREEMENT (this “Agreement”) made
and entered into in Plano, Texas, by and between LCI Holding Company, Inc. (the “Company”), a Delaware corporation, LifeCare Holdings, Inc., a Delaware corporation (the “Principal Subsidiary”) with its principal
place of business at 5560 Tennyson Parkway, Plano, TX 75024, and [NAME], of [________, Texas] (the “Employee”), effective as of the [__] day of [            ], 2008.

 WHEREAS, the operations of the Company and its subsidiaries are a complex matter requiring direction and leadership in a variety of
arenas, including financial, strategic planning, regulatory, community relations and others; 
 WHEREAS, the Employee is possessed of certain
experience and expertise that qualify him to provide the direction and leadership required by the Company and its subsidiaries; and 
 WHEREAS, in furtherance of Employee’s continued employment by the Company or the Principal Subsidiary, the Company desires to make available to the Employee a one-time transaction bonus opportunity on the terms, and subject to the
conditions, set forth in this Agreement. 
 NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, terms,
provisions and conditions set forth in this Agreement, the parties hereby agree: 
 1. Transaction Bonus Opportunity. For so long as
the Employee remains employed by the Company or the Principal Subsidiary, the Employee shall be eligible to earn a one-time bonus (the “Transaction Bonus”) following a Change of Control based upon the Transaction Proceeds actually
received by Carlyle Partners IV, L.P. and CP IV Coinvestment, L.P. in respect of their total cash investment in the Company. Any Transaction Bonus earned under this Agreement shall be payable not later than two and one half months following the end
of the fiscal year in which such Change of Control occurs. The amount of any Transaction Bonus (and whether it is payable in cash or in securities) shall be determined in accordance with the schedule set forth on Exhibit A and any amount of
such Transaction Bonus earned in respect of Transaction Proceeds that are received after the closing date of a Change of Control shall become payable by the Company to Employee only upon receipt by Carlyle Partners IV, L.P. and CP IV Coinvestment,
L.P. of such Transaction Proceeds. 
 2. Definitions. For purposes of this Agreement, the following definitions apply: 
 (a) “Affiliates” means all persons and entities directly or indirectly controlling, controlled by or under common control
with the Company, where control may be by either management authority, contract or equity interest. 
 (b)
“Board” means the Board of Directors of the Company. 
 (c) “Change of Control” means the
occurrence, after the date hereof, of any of the following: 







 (i) the sale, lease or transfer (other than by way of merger or consolidation), in one or
a series of related transactions, of all or substantially all of the assets of the Company and its direct and indirect subsidiaries, taken as a whole, to any Person other than one or more Permitted Holders; 
 (ii) the Board’s adoption of a plan relating to the liquidation or dissolution of the Company; or 
 (iii) the acquisition by (x) any Person (other than one or more Permitted Holders and other than in connection with the initial
public offering of the Company’s Common Stock) or (y) any Persons (other than one or more Permitted Holders and other than in connection with the initial public offering of the Company’s Common Stock) that together (A) are a
group (within the meaning of Section 13(d)(3), Section 14(d)(2) of the Securities Exchange Act of 1934, as amended, or any successor provision) or (B) are acting, for purposes of acquiring, holding or disposing of securities, as a
group (within the meaning of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, or any successor provision), in a single transaction or in a related series of transactions, by way of merger, consolidation or other business
combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, or any successor provision), of more than 50% or more of the total voting power of the common stock of the
Company (or the surviving company of such merger, consolidation or other business combination transaction, as applicable). 
 (d) “Permitted Holders” means, directly or indirectly, (i) TC Group, L.L.C., Carlyle Partners IV, L.P. and CP IV Coinvestment, L.P. and their affiliates (but excluding any portfolio companies of the foregoing) and
(ii) any members of the management of the Company on the date hereof and their respective affiliates. 
 (e)
“Person” means an individual, a corporation, a limited liability company, an association, a partnership, an estate, a trust and any other entity or organization, other than the Company or any of its Affiliates. 
 (f) “Transaction Proceeds” means the cumulative total of all consideration (whether cash or securities) actually
received by Carlyle Partners IV, L.P. and CP IV Coinvestment, L.P. (whether received before, on or after the closing date of the Change of Control) in respect of their total cash investment in the Company, excluding, for the avoidance of doubt,
management or similar fees paid to affiliates of Carlyle Partners IV, L.P. and CP IV Coinvestment, L.P. Any securities included in Transaction Proceeds shall be deemed to have the value attributed to such securities in the Change of Control (as
determined by the Board in good faith). 
 3. Withholding. All payments made by the Company or the Principal Subsidiary under this
Agreement shall be reduced by any tax or other amounts required to be withheld under applicable law. 
  

 2 








 4. Assignment. Neither the Company nor the Employee may make any assignment of this Agreement or
any interest herein, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and obligations under this Agreement without the consent of the Employee in the event
that the Employee is transferred to a position with any of the Company’s subsidiaries or in the event that the Company shall hereafter affect a reorganization, consolidate with, or merge into, any person or entity or transfer all or
substantially all of its properties or assets to any person or entity. This Agreement shall inure to the benefit of and be binding upon the Company, the Principal Subsidiary and the Employee, their respective successors, executors, administrators,
heirs and permitted assigns. 
 5. Amendment. This Agreement may be amended or modified only by a written instrument signed by the
Employee and by an expressly authorized representative of the Company. 
 6. Headings. The headings and captions in this Agreement are
for convenience only and in no way define or describe the scope or content of any provision of this Agreement. 
 7. Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 
 8. Obligations of the Company and the Principal Subsidiary. Each of the Company and the Principal Subsidiary shall be jointly and severally liable for any payment obligation of the Company or the Principal
Subsidiary pursuant to this Agreement. In connection with a Change of Control, the Company and the Principal Subsidiary shall require any successor entity to the Company or the Principal Subsidiary, as applicable, to expressly assume and agree to
perform this Agreement in accordance with the terms hereof. 
 9. Entire Agreement. This Agreement, including the exhibit attached
hereto which is incorporated herein, constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior communications, agreements and understandings, whether written or oral, with respect to the
subject matter hereof. 
 10. Governing Law. This is a Texas contract and shall be construed and enforced under and be governed in all
respects by the laws of the State of Texas, without regard to the conflict of laws principles thereof. 
 11. Code Section 409A
Compliance. The payments described in this Agreement are intended either to comply with the requirements of Code Section 409A and the treasury regulations and other guidance issued thereunder, as in effect from time to time, to the extent
they are subject to Code Section 409A, or to be exempt from such requirements, regulations and guidance (where an exemption is available), and shall be construed accordingly. To the extent a payment provided for in any provision of this
Agreement does not qualify for an exemption and is contrary to or fails to comply with the requirements of Code Section 409A and related treasury 

  

 3 








 
regulations, this Agreement shall be construed and administered as necessary to comply with such requirements to the extent allowed under applicable treasury
regulations until this Agreement is appropriately amended to comply with such requirements, to the extent allowed under applicable treasury regulations. 
 [Remainder of Page Intentionally Left Blank] 
  

 4 








 IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by the Company and the
Principal Subsidiary, by a duly authorized representative thereof, and by the Employee, as of the date first above written. 
  

									
	THE EMPLOYEE:	 		 	LCI HOLDING COMPANY, INC.
				
	 	 		 	By:	 	 
		 		 		 	 Name:
 Title:
	 	
			
		 		 	LIFECARE HOLDINGS, INC.
				
		 		 	By:	 	 
		 		 		 	 Name:
 Title:
	 	








 Exhibit A 
 Transaction Bonus Opportunity 
  

			
	 Multiple of Money1
	 	 Transaction
 Bonus2

		
	 <[__]
	 	$[_______]
		
	 3[__] but <[__]
	 	$[_______]
		
	 3[__] but <[__]
	 	$[_______]
		
	 3[__] but <[__]
	 	$[_______]
		
	 3[__] but <[__]
	 	$[_______]
		
	 3[__] but <[__]
	 	$[_______]
		
	 3[__]
	 	$[_______]


	 	


 1 Determined as Transaction Proceeds actually received by Carlyle Partners IV, L.P. and CP IV Coinvestment, L.P. as a multiple of their
total cash investment in the Company, excluding, for the avoidance of doubt, management or similar fees paid to affiliates of Carlyle Partners IV, L.P. and CP IV Coinvestment, L.P. 
 2 In the event that the amount of Transaction Proceeds used to satisfy the multiple of money condition set forth in this Exhibit A includes any securities, the Company, in its sole discretion, may elect to pay
the Transaction Bonus in a combination of cash and such securities. In such event and for purposes of determining the amount of securities to be paid out in respect of the Transaction Bonus, such securities will be deemed to have the value given to
them for purposes of the Change of Control that resulted in the Transaction Bonus becoming payable (as determined by the Board in good faith) and the amount of securities to be received in respect of the Transaction Bonus will not exceed the portion
of the Transaction Bonus equal to a fraction, the numerator of which equals the dollar value of all securities included in the Transaction Proceeds, and the denominator of which equals the dollar value of the total Transaction Proceeds upon which
the amount of the Transaction Bonus was determined. 
 In the event of a Change of Control that (i) does not result in a Transaction Bonus becoming
payable under this Agreement above the <[__] level (whether at the closing of such Change of Control or following such closing), and (ii) either (A) any portion of the Transaction Proceeds includes securities of the surviving entity of
the Change of Control, or (B) the Company is the surviving corporation of such Change of Control and either Carlyle Partners IV, L.P. or CP IV Coinvestment, L.P. retains an equity ownership interest in the Company following such Change of
Control, then this Agreement shall remain in effect following that Change of Control such that the Employee will be eligible to earn a Transaction Bonus on the terms set forth in this Agreement (but calculated and paid net of the dollar value of the
Transaction Bonus paid to such Employee in respect of that Change of Control at the <[__] level) based upon the Transaction Proceeds actually received by Carlyle Partners IV, L.P. and CP IV Coinvestment, L.P. in a subsequent Change of Control
involving the surviving entity of such Change of Control (in the case where clause (ii)(A) above is applicable) or in a subsequent Change of Control involving the Company (in the case where clause (ii)(B) above is applicable). In the event of a
Change of Control in which clauses (i) and (ii)(A) above are applicable, the surviving entity of such Change of Control shall expressly assume the obligations in respect of the Transaction Bonus applicable to such surviving entity as described
in this Agreement.