exv10w20






Exhibit 10.20




SELECT MEDICAL HOLDINGS CORPORATION

RESTRICTED STOCK AWARD AGREEMENT

UNDER THE 2005 EQUITY INCENTIVE PLAN




          This Restricted Stock Award Agreement (this “Agreement”) is made as of November 8,
2005 (the “Effective Date”), between Select Medical Holdings Corporation, a Delaware
corporation (the “Company”), and Robert A. Ortenzio (the “Participant”).




          WHEREAS, the Company has adopted the 2005 Equity Incentive Plan (as amended, restated or
otherwise modified from time to time, the “Plan”), all of the terms and provisions of which
are incorporated herein by reference and made a part hereof;




          WHEREAS, the Company or a Subsidiary thereof has retained the Participant to provide valuable
services to the Company and its Subsidiaries;




          WHEREAS, in order to provide an incentive to the Participant in respect of his employment with
or other service to the Company and its Subsidiaries, the Company has approved and authorized the
issuance of certain shares of the Common Stock of the Company, par value $0.001 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 rendered and to be rendered by the
Participant, 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 Effective Date, 5,250,000 shares of Stock (the “Restricted
Stock”). Subject to the terms of this Agreement and the Plan, the Participant as owner of such
shares shall have all the rights of a stockholder, including but not limited to the right to vote
such shares and, except as otherwise provided by the Committee, the right to receive all dividends
paid on such shares.




          2. Vesting Schedule. Subject to the further provisions of this Agreement, commencing
on December 8, 2005 and on the 8th day of each of the 35 months thereafter, 2.778% of the shares
(rounded to the nearest whole share) of Restricted Stock shall vest, or as applicable, shall have
vested, so that at each anniversary of the Effective Date the following number of shares of
Restricted Stock shall have vested:




 









 








	 	 	 	 	 
	 	 	Cumulative Shares of Restricted
	Vesting Date	 	Stock Vested at Each Anniversary
	 
	November 8, 2006

	 	 	1,750,000	 
	November 8, 2007

	 	 	3,500,000	 
	November 8, 2008

	 	 	5,250,000	 





Subject to Section 6 hereof, the period beginning on the Effective Date 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. 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. Investment Representation.





     (a) The Restricted Stock is awarded under this Agreement at a time when there is not in
effect under the Securities Act of 1933, as amended (the “Securities Act”), a
registration statement relating to the shares of Restricted Stock awarded and there is not
available for delivery to the Participant a prospectus meeting the requirements of Section
10(a)(3) of the Securities Act. The Participant represents and agrees that (i) the
Participant is acquiring the shares of Restricted Stock for the purpose of investment and
not with a view to their resale or distribution and (ii) prior to selling or offering for
sale any such shares, the Participant will furnish the Company with an opinion of counsel
satisfactory to the Company to the effect that such sale may lawfully be made and will
furnish it with such certificates as to factual matters as it may reasonably request.




     (b) Certificates representing the shares of Restricted Stock shall be marked with the
following legend or any other legend which counsel for the Company considers necessary or
advisable to comply with the Securities Act and the other provisions of this Agreement
relating to the transfer of Stock:




“THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY



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STATE AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT UPON SUCH REGISTRATION OR
UPON RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH SALE OR TRANSFER.”




     (c) The Company may, but shall in no event be obligated to, register the Restricted
Stock pursuant to the Securities Act, and in the event any shares of Restricted Stock are so
registered the Company may remove any legend on certificates representing such shares of
Restricted Stock. Except as provided in the Registration Rights Agreement, the Company
shall not be obligated to take any affirmative action in order to cause the issuance of
shares of Restricted Stock pursuant hereto to comply with any law or regulation of any
governmental authority.



          5. Forfeiture of Restricted Stock. Any shares of Restricted Stock issued pursuant to
this Agreement which have not vested shall immediately be forfeited to the Company and cease to be
outstanding upon the termination, for any reason, of the Participant’s employment and service with
the Company and all its Subsidiaries.




          6. Acceleration of Vesting Upon Change of Control or IPO.





     (a) Upon a Change of Control all Restricted Periods shall terminate and all Restricted
Stock shall be vested in full and all limitations on the Restricted Stock set forth in this
Agreement shall automatically lapse.




     (b) Upon a Qualified IPO, the Restricted Periods shall terminate to the extent
necessary to cause the accelerated vesting and termination of the Restricted Periods with
respect to 50% of all shares of Restricted Stock remaining unvested immediately prior to the
application of this Section 6(b).



          7. Certain Tax Matters. The undersigned expressly acknowledges the following:





     (a) The undersigned has been advised to confer promptly with a professional tax advisor
to consider whether the undersigned should make a so-called “83(b) election” with respect to
the Restricted Stock. Any such election, to be effective, must be made in accordance with
applicable regulations and within thirty (30) days following the date of this Agreement.
The Company has made no recommendation to the undersigned with respect to the advisability
of making such an election.




     (b) The award or vesting of the Restricted Stock acquired hereunder, and the payment of
dividends with respect to such Restricted Stock, may give rise to “wages” subject to
withholding. The undersigned expressly acknowledges and agrees that his rights hereunder
are subject to his promptly paying to the Company in cash (or by such other means as may be
acceptable to the Company in its discretion, including, if the Administrator so determines,
by the delivery of previously acquired Stock or shares of Stock acquired hereunder or by the
withholding of amounts from any payment hereunder) all taxes required to be withheld in
connection with such award, vesting or payment.



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          8. 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.




          9. Future Awards. The Participant acknowledges that he shall not be eligible to
receive any future grants of Stock Options under the Plan during the period commencing on the
Effective Date and ending on the third anniversary of the completion of a Qualified IPO by the
Company.




          10. 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.




[Signature Page Follows]





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          IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the Effective
Date.




	 	 	 	 	 
	 	SELECT MEDICAL HOLDINGS CORPORATION

 	 
	 	By:  	/s/ Michael E. Tarvin
 	 
	 	 	Name:  	Michael E. Tarvin 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	PARTICIPANT:

 	 
	 	/s/ Robert A. Ortenzio
 	 
	 	Robert A. Ortenzio