Document:

Employment Agreement with Jill L. Force

 Exhibit 10.12 
  
 AGREEMENT 
  
 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 Jill L. Force, of Plano, Texas (the “Executive”), effective as of the
11th day of August, 2005 (the “Effective Date”). 
  
 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 Executive is possessed of certain experience and expertise that qualify her to provide the direction and leadership required by the Company
and its subsidiaries; and 
  
 WHEREAS, subject to the terms and
conditions hereinafter set forth, the Company therefore wishes to employ the Executive as its Executive Vice President and General Counsel and the Executive wishes to accept such employment; 
  
 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. Employment. Subject to the terms and conditions set forth in this Agreement, the Company hereby offers and the Executive hereby accepts
employment. 
  
 2. Term. Subject to earlier termination as
hereafter provided, the Executive’s employment hereunder shall be for a term of eighteen (18) months, commencing on the Effective Date, and shall automatically renew thereafter for successive terms of one year each unless either party
gives notice to the other not less than ninety (90) days prior to the expiration of the initial or any renewal term that this Agreement shall not renew, in which event this Agreement shall expire at the end of the then-current term.
Notwithstanding anything to the contrary contained herein, however, in the event of a Change of Control, as hereafter defined, the then-current term hereof shall be automatically extended as required in order that the remainder of said term shall
not be less than twelve (12) months from the date of the Change of Control. The term of this Agreement, as from time to time extended or renewed, is hereafter referred to as “the term of this Agreement” or “the term hereof.”
Any notice of nonrenewal given pursuant to this Section 2 shall be treated for all purposes hereunder, if given by the Company, as a termination other than for Cause or, if given by the Executive, as a termination for other than Good Reason.

  
 3. Capacity and Performance. 
  
 (a) During the term hereof, the Executive shall serve the
Company as its Executive Vice President and General Counsel, subject to her appointment by the Board of Directors of the Company (the “Board”) as a condition precedent to the effectiveness of this Agreement, or in such other executive
position as the Board may designate from time to time and which is reasonably acceptable to Executive. In addition, and without further compensation, the Executive shall serve as a director and/or officer of one or more of the Company’s
subsidiaries (including the Principal Subsidiary) if so elected or appointed from time to time. 

 (b) During the term hereof, the Executive shall be employed by the Company on a full-time
basis and shall perform such duties and responsibilities on behalf of the Company and its subsidiaries as may be designated from time to time by the Board or by its designees. During the term hereof and thereafter, the Company will indemnify the
Executive to the maximum extent permitted by the Delaware General Corporation Law in respect of any action, suit, proceeding or claim (other than any such action, suit, proceeding, claim or counterclaim initiated by or on behalf of the Executive) to
which the Executive is or is threatened to be made a party by reason of the fact that the Executive is or was a director or officer of the Company or any of its subsidiaries. 
  
 (c) During the term hereof, the Executive shall devote her full business time and her best efforts, business
judgment, skill and knowledge exclusively to the advancement of the business and interests of the Company and its subsidiaries and to the discharge of her duties and responsibilities hereunder. The Executive shall not engage in any other business
activity or serve in any industry, trade, professional, governmental or academic position during the term of this Agreement, except as may be expressly approved in advance by the Board in writing. 
  
 4. Compensation and Benefits. As compensation for all services
performed by the Executive under and during the term hereof and subject to performance of the Executive’s duties and of the obligations of the Executive to the Company and its subsidiaries, pursuant to this Agreement or otherwise: 

 
 (a) Base Salary. During the term hereof, the
Company shall pay the Executive a base salary at the rate of Two Hundred Fifty Thousand Dollars ($250,000) per annum, payable in accordance with the payroll practices of the Company for its executives and subject to adjustment from time to time by
the Board, in its sole discretion. Such base salary, as from time to time adjusted, is hereafter referred to as the “Base Salary”. 
  
 (b) Incentive and Bonus Compensation. During each fiscal year completed during the term hereof, the Executive shall be eligible to
earn an annual bonus (the “Annual Bonus”). The amount of any bonus earned hereunder shall be determined by the Board based on the achievement of performance objectives by the Executive and/or the Company for that year, as established by
the Board after consultation with the Executive. The target amount of the Annual Bonus is 60% of Base Salary. Any compensation paid to the Executive as a bonus shall be in addition to the Base Salary, but shall be in lieu of participation in any
other plan or compensation program, whether cash or equity, that is intended to offer the opportunity for any incentive, bonus or commission compensation, but excluding for the avoidance of doubt the Executive’s equity participation in
accordance with Section 4(c) hereof. 
  
 (c)
Equity Awards. Promptly following the execution and delivery of this Agreement, the Company shall grant to the Executive, pursuant to the Company’s equity incentive plan, as from time to time in effect, an option to purchase a total of
[_64,000_] shares of the Company’s common stock (the “Common Stock”) at an exercise price per share equal to the fair market value of the Common Stock on the date of grant, as determined by the Board and otherwise on the
terms and subject to the conditions set forth in such equity incentive plan and as determined by the Board (such option award together with any subsequently granted option 

  

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awards, the “Option Awards”) and a restricted stock award for a total of 40,000 shares of Common Stock and otherwise on the terms and subject to
the conditions set forth in such equity incentive plan restricted stock award and as determined by the Board (such restricted stock award together with any subsequently granted restricted stock award, the “Restricted Stock Awards”). Prior
to issuing a Restricted Stock Award, an Option Award or any shares thereunder to the Executive, the Company may require that the Executive provide such representations regarding the Executive’s sophistication and investment intent and other
such matters as the Company shall determine to be legally required or otherwise appropriate. None of the Company’s securities will be registered under applicable securities laws for the indefinite future and there will be substantial
restrictions on resale imposed by the Company’s corporate charter, the stockholders agreement and applicable law. Restricted Stock Awards, Option Awards and any shares issued upon exercise of Option Awards shall be subject to the terms of a
stockholders agreement, as from time to time in effect (the “Stockholders Agreement”). 
  
 (d) Vacations. During the term hereof, the Executive shall be entitled to four (4) weeks of vacation per year, to be taken at
such times and intervals as shall be determined by the Executive, subject to the reasonable business needs of the Company and such scheduling procedure as the Company may from time to time require. Vacation shall otherwise be governed by the
policies of the Company, as in effect from time to time. 
  
 (e) Employee Benefit Plans. During the term hereof and subject to any contribution therefor generally required of executives of the Company, the Executive shall be entitled to participate in any and all
Employee Benefit Plans from time to time in effect for executives of the Company generally, except to the extent such plans are duplicative of benefits otherwise provided to the Executive under this Agreement (e.g., severance pay). Such
participation shall be subject to the terms of the applicable plan documents and generally applicable Company policies. The Company may alter, modify, add to or delete its Employee Benefit Plans at any time as it, in its sole judgment, determines to
be appropriate, without recourse by the Executive. For purposes of this Agreement, “Employee Benefit Plan” shall have the meaning ascribed to such term in Section 3(3) of ERISA, as amended from time to time. 
  
 (f) Business Expenses. The Company shall pay or
reimburse the Executive for all reasonable, customary and necessary business expenses incurred or paid by the Executive in the performance of her duties and responsibilities hereunder, subject to any maximum annual limit and other restrictions on
such expenses set by the Board and to such reasonable substantiation and documentation as may be specified by the Company from time to time. 
  
 5. Termination of Employment and Severance Benefits. Notwithstanding the provisions of Section 2 hereof, the Executive’s employment
hereunder shall terminate prior to the expiration of the term hereof under the following circumstances: 
  
 (a) Death. In the event of the Executive’s death during the term hereof, the Executive’s employment hereunder shall
immediately and automatically terminate. In such event, the Company shall pay to the beneficiary designated by the Executive in writing or, if no beneficiary has been so designated by the Executive, to his estate, (i) the Base Salary earned but
not paid through the date of termination, (ii) pay for any vacation time earned but not used 

  

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through the date of termination, (iii) any bonus compensation awarded for the fiscal year preceding that in which termination occurs, but unpaid on the
date of termination and (iv) any business expenses incurred by the Executive but un-reimbursed on the date of termination, provided that such expenses and required substantiation and documentation are submitted within sixty (60) days of
termination and that such expenses are reimbursable under Company policy (all of the foregoing, “Final Compensation”). In addition, the Company shall pay to the beneficiary designated by the Executive in writing or, if none, his estate, an
annual bonus for the fiscal year in which termination occurs, determined by multiplying the target Annual Bonus the Executive would have been eligible to receive had he continued employment through the last day of the fiscal year by a fraction, the
numerator of which is the number of days he was employed during the fiscal year, through the date of termination, and the denominator of which is 365 (a “Pro-Rated Annual Bonus”). Such Pro-Rated Annual Bonus will be payable at the time
annual bonuses are paid to Company executives generally under its executive incentive plan. Further, the Board shall cause any portion of any Option Awards and Restricted Stock Awards granted to Executive by the Company in accordance with this
Agreement or otherwise that remains unvested on the date of termination hereunder to vest on the date the Executive’s employment terminates (together, the “Accelerated Awards”). Such Accelerated Awards shall be granted to the
beneficiary designated by the Executive in writing or, if none, to his estate. In the event of termination hereunder, payment by the Company of any amounts that may be due the Executive under this Section 5(a) shall constitute the entire
obligation of the Company to the Executive. 
  
 (b) Disability. 
  
 (i) The
Company may terminate the Executive’s employment hereunder, upon notice to the Executive, in the event that the Executive becomes disabled through any illness, injury, accident or condition of either a physical or psychological nature and, as a
result, is unable to perform substantially all of her duties and responsibilities hereunder, notwithstanding the provision of any reasonable accommodation, for ninety (90) days during any period of three hundred and sixty-five
(365) consecutive calendar days. In the event of such termination, the Company shall pay the Executive all Final Compensation. In addition, the Company will pay to the Executive a Pro-Rated Annual Bonus for the fiscal year in which termination
occurs, payable at the time annual bonuses are paid to Company executives generally under its executive incentive plan or, if later, on the tenth (10th) business day following the later of the effective date of the release of claims in the form attached hereto as Appendix A (the “Employee Release”) or the date it is received by the
Chair of the Board. Further, the Board shall cause any portion of any Option Award granted to Executive by the Company in accordance with this Agreement or otherwise that remains unvested on the date of termination hereunder (the “Accelerated
Option”) to vest on the date the Executive’s employment terminates, and the Executive may exercise the Accelerated Option as of the date immediately following the later of (i) the effective date of the Employee Release or
(ii) the date that the Chair of the Board receives the Employee Release, signed by the Executive. In addition, on the later of the effective date of the Employee Release or the date the Chair of the Board receives the Employee Release, signed
by the Executive, the Company shall cause any outstanding portion of any Restricted Stock Award that remains unvested to vest (the “Accelerated Stock Award”). 

  

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Except for the payment of Final Compensation, any obligation of the Company to the Executive hereunder, however, is conditioned upon the Executive signing a
timely and effective Employee Release following termination of the Executive’s employment hereunder. In the event of termination hereunder, payment by the Company of any amounts that may be due the Executive under this Section 5(b) shall
constitute the entire obligation of the Company to the Executive. 
  
 (ii) The Board may designate another employee to act in the Executive’s place during any period of the Executive’s disability. Notwithstanding any such designation, the Executive shall continue to receive
the Base Salary in accordance with Section 4(a) and benefits in accordance with Section 4(e), to the extent permitted by the then-current terms of the applicable benefit plans, until the Executive becomes eligible for disability income
benefits under the Company’s disability income plan or until the termination of her employment, whichever shall first occur. 
  
 (iii) While receiving disability income payments under the Company’s disability income plan, the Executive shall not be entitled to
receive any Base Salary under Section 4(a) hereof, but shall continue to participate in Company benefit plans in accordance with Section 4(e) and the terms of such plans, until the termination of her employment. 
  
 (iv) If any question shall arise as to whether during any
period the Executive is disabled through any illness, injury, accident or condition of either a physical or psychological nature so as to be unable to perform substantially all of her duties and responsibilities hereunder, the Executive may, and at
the request of the Company shall, submit to a medical examination by a physician selected by the Company to whom the Executive or her duly appointed guardian, if any, has no reasonable objection to determine whether the Executive is so disabled and
such determination shall for the purposes of this Agreement be conclusive of the issue. If such question shall arise and the Executive shall fail to submit to such medical examination, the Company’s determination of the issue shall be binding
on the Executive. 
  
 (c) By the Company for
Cause. The Company may terminate the Executive’s employment hereunder for Cause at any time upon written notice to the Executive setting forth in reasonable detail the nature of such Cause. The following, as determined by the Board in its
reasonable judgment, shall constitute Cause for termination: 
  
 (i) fraud, embezzlement or other material dishonesty with respect to the Company or any of its Affiliates; 
  
 (ii) the Executive’s breach of Section 3(c), 7, 8, 9, 10 or 12 hereof or of any fiduciary duty of loyalty owed to the Company or
any of its Affiliates; provided, however, that with respect to a breach of Section 3(c) hereof, “Cause” shall not exist until the Company delivers to Executive written notice of such breach, specifying the nature of the breach, and
Executive fails to cure such breach within thirty days of delivery of such written notice; or 
  

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 (iii) commission of a felony or other crime involving moral turpitude. 
  
 Upon the giving of notice of termination of the Executive’s employment hereunder for
Cause, the Company shall have no further obligation to the Executive, other than for Final Compensation. 
  
 (d) By the Company Other than for Cause. The Company may terminate the Executive’s employment hereunder other than for Cause
at any time upon notice to the Executive. In the event of such termination, in addition to Final Compensation, then until the conclusion of the period of eighteen (18) months following the date of termination (the “Severance Pay
Period”), the Company shall pay the Executive the Base Salary at the rate in effect on the date of termination and, subject to any employee contribution applicable to the Executive on the date of termination, shall continue to contribute to the
premium cost of the Executive’s participation in the Company’s group medical and dental plans, provided that the Executive is entitled to continue such participation under applicable law and plan terms. In addition, the Company shall pay
the Executive a bonus (the “Termination Bonus”) equal to one and one-half (1.5) times the lesser of (i) 60% of the Executive’s Base Salary in effect on the date of termination, or (ii) the Annual Bonus paid to the
Executive in the immediately preceding fiscal year (or if no such Annual Bonus was paid to the Executive in the preceding fiscal year, $0). The Termination Bonus shall be payable in up to two equal installments at the time each year during the
Severance Pay Period that annual bonuses are paid to Company executives generally under its executive incentive plan, provided, however, that no Termination Bonus payment shall be made until the later of the effective date of the Employee Release or
the date the Employee Release, signed by the Executive, is received by the Chair of the Board. The Base Salary payment to which the Executive is entitled hereunder shall be payable in accordance with the normal payroll practices of the Company and
will begin at the Company’s next regular payroll period which is at least five business days following the later of the effective date of the Employee Release or the date the Employee Release, signed by the Executive, is received by the Chair
of the Board, but shall be retroactive to next business day following the date of termination. In the event of termination hereunder, payment by the Company of any amounts that may be due the Executive under this Section 5(d) shall constitute
the entire obligation of the Company to the Executive and any obligation of the Company to the Executive hereunder is conditioned upon the Executive signing a timely and effective Employee Release following termination of the Executive’s
employment hereunder. 
  
 (e) By the Executive
for Good Reason. The Executive may terminate her employment hereunder for Good Reason upon notice to the Company setting forth in reasonable detail the nature of such Good Reason. The following shall constitute Good Reason for termination by the
Executive: 
  
 (i) failure of the Company to
continue the Executive in the position of Executive Vice President and General Counsel or such other executive position to which the Executive may be assigned pursuant to Section 3(a) hereof; or 
  
 (ii) diminution, without her consent (not to be unreasonably
withheld), in the nature or scope of the Executive’s responsibilities, duties or authority attendant to the Executive’s position, in each case other than as is materially consistent with the 

  

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Executive’s assignment to another executive position in accordance with Section 3(a) hereof; provided, however, that the Company’s failure to
continue the Executive’s appointment or election as a director or officer of any of its subsidiaries, a change in reporting relationships resulting from a Change of Control (provided that such Executive’s reporting relationship within the
Principal Subsidiary remains substantially the same), any diminution of the business of the Company or any of its subsidiaries or any sale or transfer of equity, property or other assets of the Company or any of its subsidiaries shall not constitute
“Good Reason”; or 
  
 (iii) failure of
the Company to provide the Executive the Base Salary and benefits in accordance with the terms of Section 4 hereof, excluding an inadvertent failure which is cured within ten business days following notice from the Executive specifying in
detail the nature of such failure; or 
  
 (iv)
Executive is required to relocate her business office to a place more than 30 miles from both her existing office in Louisville, Kentucky and the Company’s existing office in Plano, Texas. 
  
 In the event of termination in accordance with this Section 5(e), then the Executive
will be entitled to the same pay and benefits she would have been entitled to receive had the Executive been terminated by the Company other than for Cause in accordance with Section 5(d) above; provided that the Executive satisfies all
conditions to such entitlement, including without limitation signing and return of a timely and effective Employee Release. In the event of termination hereunder, payment by the Company of any amounts that may be due the Executive under this
Section 5(e) shall constitute the entire obligation of the Company to the Executive and any obligation of the Company to the Executive hereunder is conditioned upon the Executive signing a timely and effective Employee Release following
termination of the Executive’s employment hereunder. 
  
 (f) By the Executive Other than for Good Reason. The Executive may terminate her employment hereunder at any time upon thirty (30) days’ notice to the Company. In the event of termination of the
Executive pursuant to this Section 5(f), the Board may elect to waive the period of notice, or any portion thereof, and, if the Board so elects, the Company will pay the Executive her Base Salary for the first thirty (30) days of the
notice period (or for any remaining portion of that period). The Company shall have no further obligation to the Executive, other than for any Final Compensation due to him. 
  
 (g) Upon a Change of Control. 
  
 (i) If a Change of Control occurs hereafter and, within twelve months following such Change of Control, the
Company terminates the Executive’s employment other than for Cause or the Executive terminates her employment for Good Reason, then, in lieu of any payments to or on behalf of the Executive under Section 5(d) or Section 5(e) hereof,
and provided that the Executive signs a timely and effective Employee Release following termination of employment, within ten business days following the later of the effective date of the Employee Release or the date the Employee Release 

  

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signed by the Executive is received by the Chair of the Board, the Company shall pay (A) all Final Compensation; (B) a lump sum payment to the
Executive equal to one and one-half (1.5) times the current annual Base Salary; (C) the full cost of the Executive’s continued participation in the Company’s group health and dental insurance plans for so long as the Executive
remains entitled to continue such participation under applicable law, to a maximum of eighteen (18) months; and (D) a lump sum amount to the Executive equal to the Termination Bonus. In addition, the Board shall cause the Accelerated
Option to vest on the date the Executive’s employment terminates, and the Executive may exercise the Accelerated Option as of the date immediately following the later of (i) the effective date of the Employee Release or (ii) the date
that the Chair of the Board receives the Employee Release, signed by the Executive. Further, on the later of the effective date of the Employee Release or the date the Chair of the Board receives the Employee Release, signed by the Executive, the
Company shall provide for the Accelerated Stock Award. In the event of termination hereunder, payment by the Company of any amounts that may be due the Executive under this Section 5(g) shall constitute the entire obligation of the Company to
the Executive and any obligation of the Company to the Executive hereunder is conditioned upon the Executive signing a timely and effective Employee Release following termination of the Executive’s employment hereunder. 
  
 (ii) The Company and the Executive agree that in the event
any of the payments or benefits received or to be received by the Executive in connection with a Change of Control or Executive’s termination from employment under this Section 5(g) (the “Change of Control Payments”) might be
characterized as parachute payments under Section 280G of the Internal Revenue Code of 1986 (the “Code”), as amended (“Section 280G”), the parties shall timely take reasonable steps to avoid the tax liability under
Section 280G and Section 4999 of the Code to the extent permitted by law. Accordingly, the Executive agrees to cooperate fully in procuring a shareholder vote (including, but not limited to, providing any required consents or waivers) to
approve the Change of Control Payments in satisfaction of the shareholder approval requirements described in Treas. Reg. Section 1.280G-1, Q&A-7, to the extent applicable. If the shareholder approval required by Treas. Reg.
Section 1.280G-1, Q&A-7 cannot be obtained and it is determined that any of the Change of Control Payments received or to be received by the Executive would be subject to the excise tax imposed by Section 4999 of the Code, together
with any interest or penalties imposed with respect to such excise tax (the “Excise Tax”), then the Company will, prior to the date, on which any amount of the Excise Tax must be paid or withheld, make an additional lump sum payment (the
“gross up payment”) to the Executive. The gross up payment will be sufficient, after giving effect to all federal, state, and other taxes and charges (including interest and penalties, if any) with respect to the gross up payment, to make
the Executive whole for all taxes (including withholding taxes) and any associated interest and penalties, imposed under or as a result of Section 4999. Determinations under this Section 5(g)(ii) will be made by the Company’ s
independent auditors unless the Executive has reasonable objections to the use of that firm, in which case the determinations will be made by a comparable firm chosen by the Executive after consultation with the Company (the firm making the
determinations to be referred to as the “Firm”). The determinations of the Firm will be 

  

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binding upon the Company and the Executive except as the determinations are established in resolution (including by settlement) of a controversy with the
Internal Revenue Service to have been incorrect. All fees and expenses of the Firm will be paid by the Company. If the Internal Revenue Service asserts a claim that, if successful, would require the Company to make a gross up payment or an
additional gross up payment, the Company and the Executive will cooperate fully in resolving the controversy with the Internal Revenue Service. The Company will make or advance such gross up payments as are necessary to prevent the Executive from
having to bear the cost of the payments to the Internal Revenue Service in the course of, or as a result of, the controversy. The Firm will determine the amount of such gross up payments or advances and will determine after resolution of the
controversy whether any advances must be returned by the Executive to the Company. The Company will bear all expenses of the controversy and will gross the Executive up for any additional taxes that may be imposed upon the Executive as a result of
its payment of such expenses. 
  
 (iii)
“Change of Control” means the occurrence hereafter of any of the following: 
  

	 	(1)	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; 

  

	 	(2)	the Board’s adoption of a plan relating to the liquidation or dissolution of the Company; 

  

	 	(3)	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 Exchange Act, 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 Exchange Act, 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 Exchange Act, 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); or 

  

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	 	(4)	the first day on which a majority of the members of the Board (or the board of directors of the surviving company in any merger, consolidation or other business combination
transaction) cease to be Continuing Directors. 

  
 (h) Post-Agreement Employment. In the event the Executive remains in the employ of the Company or any of its subsidiaries following termination of this Agreement, by the expiration of the term hereof or
otherwise, then such employment shall be at will. 
  
 6. Effect
of Termination. The provisions of this Section 6 shall apply to any termination, whether pursuant to Section 5 or otherwise. 
  
 (a) Payment by the Company of any amounts that may be due the Executive in each case under the applicable termination provision of
Section 5 shall constitute the entire obligation of the Company to the Executive. The Executive shall promptly give the Company notice of all facts necessary for the Company to determine the amount and duration of its obligations in connection
with any termination pursuant to Section 5(d), 5(e) or 5(g) hereof. 
  
 (b) Except for any right the Executive has to continue participation in the Company’s medical and dental plans pursuant to COBRA or any successor law, benefits shall terminate pursuant to the terms of the
applicable benefit plans based on the date of termination of the Executive’s employment without regard to any continuation of Base Salary or other payment to the Executive following such date of termination. 
  
 (c) Provisions of this Agreement shall survive any
termination if so provided herein or if necessary or desirable to accomplish the purposes of other surviving provisions, including without limitation the obligations of the Executive under Sections 7, 8 and 9 hereof. The obligation of the Company to
make payments to or on behalf of the Executive under Section 5(b), 5(d), 5(e) or 5(g) hereof is expressly conditioned upon the Executive’s continued full performance of obligations under Sections 7, 8 and 9 hereof. The Executive recognizes
that, except as expressly provided in Section 5(b), 5(d), 5(e) or 5(g), no compensation is earned after termination of employment. 
  
 7. Confidential Information. 
  
 (a) The Executive acknowledges that the Company and its subsidiaries continually develop Confidential Information and that the Executive
may develop Confidential Information for the Company or its subsidiaries. The Company and its subsidiaries promise to provide the Executive with Confidential Information to enable the Executive to perform her duties and responsibilities hereunder
during the course of her employment. The Executive acknowledges that the disclosure of such Confidential Information would be harmful to the Company and its subsidiaries, including without limitation if such Confidential Information were made known
to any Person or entity engaged in business activities that are in competition with the Company and/or its subsidiaries. The Executive will comply with the policies and procedures of the Company for protecting Confidential Information and shall not
disclose to any Person or use, other than as required by applicable law or for the proper performance of her 

  

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duties and responsibilities to the Company and its subsidiaries, any Confidential Information obtained by the Executive incident to her employment or other
association with the Company or any of its subsidiaries. The Executive understands that this restriction shall continue to apply after her employment terminates, regardless of the reason for such termination. 
  
 (b) All documents, records, tapes and other media of every
kind and description relating to the business, present or otherwise, of the Company or its subsidiaries and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by the Executive, shall be the sole and
exclusive property of the Company and its subsidiaries. The Executive shall safeguard all Documents and shall surrender to the Company at the time her employment terminates, or at such earlier time or times as the Board or its designee may specify,
all Documents then in the Executive’s possession or control. 
  
 8. Assignment of Rights to Intellectual Property. The Executive shall promptly and fully disclose all Intellectual Property to the Company. The Executive hereby assigns and agrees to assign to the Company (or as otherwise directed by
the Company) the Executive’s full right, title and interest in and to all Intellectual Property. The Executive agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and to do such
other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company to enforce any patents,
copyrights or other proprietary rights to the Intellectual Property. The Executive will not charge the Company for time spent in complying with these obligations. All copyrightable works that the Executive creates shall be considered “work made
for hire”. 
  
 9. Restricted Activities. The Executive
acknowledges the highly competitive nature of the industry in which the Company and its subsidiaries are involved, and agrees that during her employment with the Company, she will have access to the Confidential Information of the Company and its
subsidiaries, will benefit from the Company’s goodwill and will obtain a competitive advantage as to the Company, its subsidiaries, customers and prospective customers and employees. The Executive agrees that some restrictions on her activities
during and after her employment therefore are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its subsidiaries. 
  
 (a) While the Executive is employed by the Company and during the eighteen (18) months immediately
following termination thereof (in the aggregate, the “Non-Competition Period”), the Executive shall not, directly or indirectly, whether as owner, partner, investor, consultant, agent, employee, co-venturer or otherwise, engage in any
business that owns or operates, directly or indirectly, any long-term acute care hospital, including without limitation any facility that meets or intends to meet the requirements in 42 C.F.R. §412.23(e) (or any successor law, rule or
regulation relating to long-term acute care hospitals) to qualify as a long-term care hospital, or undertake any planning for any such business. Specifically, but without limiting the foregoing, the Executive agrees not to engage in any manner in
any activity that is directly or indirectly competitive or potentially competitive with the business of the Company or any of its subsidiaries as conducted at any time during the Executive’s employment. Restricted activity includes without
limitation accepting employment or a consulting position 

  

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with any Person who is, or at any time within twelve (12) months prior to termination of the Executive’s employment has been, an affiliated
hospital, a service provider, or a supplier to the Company or any of its subsidiaries. For the purposes of this Section 9, the business of the Company and its subsidiaries shall include all Services and the Executive’s undertaking shall
encompass all items, products and services that may be used in substitution for Services. 
  
 (b) The Executive agrees that, during her employment with the Company, she will not undertake any outside activity, whether or not
competitive with the business of the Company or its subsidiaries, that could reasonably give rise to a conflict of interest or otherwise interfere with her duties and obligations to the Company or any of its subsidiaries. 
  
 (c) The Executive further agrees that during the
Non-Competition Period, the Executive will not hire or attempt to hire any employee of the Company or any of its subsidiaries, assist in such hiring by any Person, encourage any such employee to terminate his or her relationship with the Company or
any of its subsidiaries, or solicit or encourage any customer or vendor of the Company or any of its subsidiaries to terminate or diminish its relationship with them, or, in the case of a customer, to conduct with any Person any business or activity
which such customer conducts or could conduct with the Company or any of its subsidiaries. 
  
 10. Notification Requirement. Until ninety (90) days after the conclusion of the Non-Competition Period, the Executive shall give notice to the Company of each new business activity she plans to undertake,
at least thirty (30) days prior to beginning any such activity. Such notice shall state the name and address of the Person for whom such activity is undertaken and the nature of the Executive’s business relationship(s) and position(s) with
such Person. The Executive shall provide the Company with such other pertinent information concerning such business activity as the Company may reasonably request in order to determine the Executive’s continued compliance with her obligations
under Sections 7, 8 and 9 hereof. 
  
 11. Enforcement of
Covenants. The Executive acknowledges that she has carefully read and considered all the terms and conditions of this Agreement, including the restraints imposed upon her pursuant to Sections 7, 8 and 9 hereof. The Executive agrees that said
restraints are necessary for the reasonable and proper protection of the Company and its subsidiaries and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area. The Executive further
acknowledges that, were she to breach any of the covenants contained in Section 7, 8 or 9 hereof, the damage to the Company and its subsidiaries would be irreparable. The Executive therefore agrees that the Company, in addition to any other
remedies available to it, shall be entitled to preliminary and permanent injunctive relief against any breach or threatened breach by the Executive of any of said covenants, without having to post bond. The parties further agree that, in the event
that any provision of Section 7, 8 or 9 hereof shall be determined by any court of competent jurisdiction to be unenforceable by reason of its being extended over too great a time, too large a geographic area or too great a range of activities,
such provision shall be deemed to be modified to permit its enforcement to the maximum extent permitted by law. 
  

 -12- 

 12. Conflicting Agreements. The Executive hereby represents and warrants that the execution of
this Agreement and the performance of her obligations hereunder will not breach or be in conflict with any other agreement to which the Executive is a party or is bound and that the Executive is not now subject to any covenants against competition
or similar covenants or any court order or other legal obligation that would affect the performance of her obligations hereunder. The Executive will not disclose to or use on behalf of the Company any proprietary information of a third party without
such party’s consent. 
  
 13. Certain Expenses. In the
event that the Executive brings any Claim against the Company in an action, suit or other proceeding in law or in equity to enforce a right granted to him under this Agreement, and prevails on any such Claim, resulting in the award of judgment in
favor of the Executive on the Claim, the Company, upon demand of the Executive, shall pay all expenses (including reasonable attorneys’ fees) of the Executive in pursuing such Claim. In the event the Executive fails to obtain a judgment in his
favor on any Claim, all expenses (including reasonable attorneys’ fees) of the Executive in pursuing such Claim shall be paid by the Executive. For the purposes of this Section 13, Claim shall refer to any single claim or count in law or
in equity. 
  
 14. Definitions. Words or phrases which are
initially capitalized or are within quotation marks shall have the meanings provided in this Section and as provided elsewhere herein. 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) “Confidential Information” means any and all information of the Company and its subsidiaries
that is not generally known by others with whom they compete or do business or with whom any of them plans to compete or do business and any and all information, publicly known in whole or in part or not, which, if disclosed by the Company or its
subsidiaries would assist in competition against them. Confidential Information includes without limitation such information relating to (i) the development, research, testing, manufacturing, marketing and financial activities of the Company
and its subsidiaries, (ii) the Services, (iii) the costs, sources of supply, financial performance and strategic plans of the Company and its subsidiaries, (iv) the identity and special needs of the customers of the Company and its
subsidiaries and (v) the people and organizations with whom the Company and its subsidiaries have business relationships and the nature and substance of those relationships. Confidential Information also includes any information that the
Company or any of its subsidiaries have received, or may receive hereafter, belonging to customers or others with any understanding, express or implied, that the information would not be disclosed. 
  
 (c) “Continuing Director” means, as of any date of
determination, any member of the Board who (1) was a member of the Board on the Effective Date; (2) was nominated for election or elected to such Board with the approval of a majority of the Continuing Directors who were members of such
Board at the time of such nomination or election; or (3)

  

 -13- 

 
was designated or appointed by TC Group, L.L.C. (which operates under the trade name “The Carlyle Group”) or any of its Affiliates. 
  
 (d) “Intellectual Property” means inventions,
discoveries, developments, methods, processes, compositions, works, concepts and ideas (whether or not patentable or copyrightable or constituting trade secrets) conceived, made, created, developed or reduced to practice by the Executive (whether
alone or with others, whether or not during normal business hours or on or off Company premises) during the Executive’s employment and during the period of six (6) months immediately following termination of her employment that relate to
either the Services or any prospective activity of the Company or any of its subsidiaries or that make use of Confidential Information or any of the equipment or facilities of the Company or any of its subsidiaries. 
  
 (e) “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 Effective
Date and their respective Affiliates. 
  
 (f)
“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. 
  
 (g) “Services” mean all services provided or
planned by the Company or any of its subsidiaries during the Executive’s employment together with any products planned, researched, developed, tested, manufactured, sold, licensed, leased or otherwise distributed or put into use by the Company
or any of its subsidiaries during the term of this Agreement. 
  
 15. Withholding. All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law. 
  
 16. Assignment. Neither the Company nor the Executive 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 Executive in the event that the Executive 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
transfer all or substantially all of its properties or assets to any Person. This Agreement shall inure to the benefit of and be binding upon the Company and the Executive, their respective successors, executors, administrators, heirs and permitted
assigns. 
  
 17. Severability. If any portion or provision
of this Agreement shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it
is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 
  

 -14- 

 18. Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed
by the waiving party. The failure of either party to require the performance of any term or obligation of this Agreement, or the waiver by either party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or
obligation or be deemed a waiver of any subsequent breach. 
  
 19.
Notices. Any and all notices, requests, demands and other communications provided for by this Agreement shall be in writing and shall be effective when delivered in person, consigned to a reputable national courier service or deposited in the
United States mail, postage prepaid, registered or certified, and addressed to the Executive at his last known address on the books of the Company or, in the case of the Company, at its principal place of business, attention of the Chairman of the
Board, or to such other address as either party may specify by notice to the other actually received. 
  
 20. Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by an expressly authorized
representative of the Company. 
  
 21. 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. 
  
 22. 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. 
  
 23. 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. 
  
 24. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior communications, agreements and understandings, written or oral, with respect to the terms and conditions of the Executive’s employment. 
  
 25. 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. 
  
 [Remainder of Page Intentionally Left Blank] 
  

 -15- 

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

									
	 THE EXECUTIVE:
	 	 	 	 LCI HOLDING COMPANY, INC.

				
	 /s/ Jill L. Force
	 	 	 	 By:
	 	 /s/ W. Earl Reed, III

	 Jill L. Force
	 	 	 	 Name:
	 	 W. Earl Reed, III

	 	 	 	 	 	 	 Title:
	 	 President

			
	 	 	 	 	 LIFECARE HOLDINGS, INC.

				
	 	 	 	 	 By:
	 	 /s/ W. Earl Reed, III

	 	 	 	 	 Name:
	 	 W. Earl Reed, III

	 	 	 	 	 	 	 Title:
	 	 President

  

 -16-Employment Agreement with Chris Walker

 Exhibit 10.13 
  
 EXECUTIVE EMPLOYMENT AGREEMENT 
  
 THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”), dated as of June 22, 1998, is between LIFECARE
MANAGEMENT SERVICES, L.L.C., a Louisiana limited liability company that is a health care management company (the “Company”), and CHRIS WALKER (the “Executive”). The Company and the Executive are
collectively referred to in this Agreement as the “Parties.” 
  
 Background 
  
 The Executive has been
employed by the Company as its Chief Financial Officer, and the Parties desire to provide for the continued employment of the Executive in accordance with the terms of this Agreement. 
  
 Terms of Agreement 
  
 The Parties agree as follows: 
  
 1. EMPLOYMENT. The Company hereby employs the Executive to devote his personal services to the business and affairs of the Company, and the Executive hereby accepts such employment, on the terms and conditions
stated in this Agreement. 
  
 1.1. Duties. The
Executive’s title and position shall be Chief Financial Officer. The Executive’s duties will be those that he has performed in that capacity before the date of this Agreement, those customarily performed by persons acting in that capacity,
and those that may be designated by the President or the Board of Managers of the Company (the “Board”) consistent with the title and position of Chief Financial Officer. 
  
 1.2. Full-Time Employee. The Executive shall devote his full time
(except for reasonable vacation time and absence for any disability), attention, and best efforts to the performance of his duties described in Article 1.1. The Executive may, however, engage in civic, charitable, and professional or trade
activities so long as those activities do not interfere with the performance of his duties under this Agreement. 
  
 1.3. Working Facilities. During the Term (as defined below), the Executive shall be furnished with an office and other business facilities and
services which are, in the Company’s judgment, necessary or appropriate to permit the Executive to perform his duties under this Agreement. 
  
 2. TERM. The term of the Executive’s employment under this Agreement (the “Term”) shall be as follows: 
  
 2.1. Initial Term. The initial term shall commence on the date of
this Agreement and end at 11:59:59 p.m., Central Time, on the day preceding the first anniversary of the date 

 
of this Agreement unless (i) terminated earlier pursuant to Article 5.1 or (ii) extended pursuant to Article 2.2. 
  
 2.2. Extended Term. Upon the expiration of the initial term described
in Article 2.1, or of any subsequent extended term described in this Article 2.2, the one-year term shall be extended, without the need for any action by either Party, for an additional consecutive year, unless either Party gives notice to the
other, at least 90 days before the expiration date, that the notifying Party does not wish to extend the Term. If such a notice is timely given, the Term will expire at the end of the initial term or renewal term in effect at the time of that
notice. 
  
 3. COMPENSATION. As compensation for the services rendered by
the Executive under this Agreement, the Company shall, during the Term, pay or provide the Executive during the Term the following: 
  
 3.1. Base Salary. The Company shall pay the Executive during the Term a base salary equal to $85,000.00 per annum, commencing on the date of this
Agreement. Base salary shall be paid in equal installments every two weeks, in arrears, at the Company’s regular and routine payroll dates, or at such intervals as may otherwise be agreed upon by the Parties, and in accordance with any other
payroll procedures of the Company. Base salary shall be prorated (on a daily basis) for any partial payroll period of employment under this Agreement. 
  
 3.2. Bonus Compensation. The Executive shall be eligible to receive additional cash compensation, as of the end of each fiscal year of the Company
during the Term, as a bonus, incentive, or other similar payment in accordance with the Company’s management incentive plan. The additional cash compensation, however, will not be guaranteed and will be dependent upon achieving predefined goals
for the fiscal year. The Executive’s eligibility to participate in the Company’s management incentive plan will begin on January 1, 1998. The amount or amounts of cash compensation which the Executive may earn by that participation
will be determined by the Board (or a committee or other persons appointed by the Board to administer that plan). 
  
 3.3. Stock Incentive Plan. The Executive shall be eligible to participate in any stock option, performance share, phantom stock, or similar
long-term incentive plan adopted by the Company for its executives having positions similar to the Executive’s position and in effect during the Term. The extent to which the Executive will participate in any such plan will be determined by the
Board (or a committee or other persons appointed by the Board to administer that plan). 
  
 3.4. Savings and Retirement Plans. The Executive shall be eligible to participate in any executive savings, deferred compensation, retirement or pension, or death benefit plan adopted by the Company for its
executives having positions similar to the Executive’s position and in effect during the Term. The extent to which the Executive may participate 

  

 2 

 
in any such plan will be determined by the Board (or a committee or other persons appointed by the Board to administer that plan). 
  
 3.5. Welfare Benefit Plans. The Executive shall be eligible to
participate, on a basis consistent with past practices (if any), in any life insurance, medical, dental, and hospitalization insurance, disability insurance benefit, or other similar employee welfare benefit plan or program adopted by the Company
covering its employees generally or its executives having positions similar to the Executive’s position and in effect during the Term. 
  
 3.6. Paid Time Off. The Executive shall be entitled to 28 days of paid vacation or time off (“PTO”) per fiscal year of the
Company, in accordance with the Company’s PTO policies, practices, and procedures. Such PTO shall, however, be prorated in any fiscal year during which the Executive is employed under this Agreement for less than the entire fiscal year, in
accordance with the number of days in that fiscal year during which the Executive is so employed. 
  
 3.7. Tax Withholding. The Company may deduct from any compensation or other amount payable to the Executive under this Agreement (including under
Article 5) social security (FICA) taxes and all federal, state, municipal, and other taxes or governmental charges as may, in the Company’s judgment, be required. 
  
 3.8. Participation in Compensation and Benefit Plans. The Executive’s participation during the Term in any or
all of the plans or programs adopted by the Company described in Articles 3.2 through 3.5 (“Compensation and Benefit Plans”) will be subject to the terms and conditions of those Compensation and Benefit Plans as they now exist or
may hereafter be adopted, amended, restated, or discontinued by the Company, including the satisfaction of all applicable eligibility requirements and vesting provisions of those Compensation and Benefit Plans. The Company shall have no obligation
under this Agreement to continue any or all of the Compensation and Benefit Plans that now exist or are hereafter adopted. To the extent that the Executive is eligible to participate in any Compensation and Benefit Plan existing on the date of this
Agreement for which a plan description or plan materials are available, the Company has provided to the Executive, and the Executive hereby acknowledges receipt of, a copy of the correct and complete written plan description or plan materials
distributed to participants or prospective participants. 
  
 4. EXPENSE
REIMBURSEMENT. During the Term, the Executive may incur, and shall be reimbursed by the Company for, reasonable, ordinary and necessary, and documented business expenses to the extent that the Executive complies with, and reimbursement is
permitted by, the Company’s policies, practices, and procedures. 
  

 3 

 5. EXPIRATION, TERMINATION, OR CHANGE IN CONTROL. The Parties’ respective rights and obligations upon the
expiration of the Term, upon termination of employment, or upon a Change in Control (as defined below) are as follows: 
  
 5.1. Expiration or Termination Generally. Upon the expiration of the Term, or if the Executive’s employment under this Agreement terminates
for any reason, the Company shall pay or provide the Executive the following: 
  
 5.1.a. Any base salary earned by, but not yet paid to, the Executive through the effective date of termination of employment (the “Termination Date”); 
  
 5.1.b. All benefits, or (at the Company’s option) the cash equivalent
of all benefits, that have been earned by or vested in, and are payable to, the Executive under, and subject to the terms (including all eligibility requirements) of, the Compensation and Benefit Plans in which the Executive participated through the
Termination Date; 
  
 5.1.c. All reimbursable expenses due, but
not yet paid, to the Executive as of the Termination Date under Article 4; and 
  
 5.1.d. An amount equal to all accrued and unused PTO, calculated in accordance with the Company’s PTO policies, practices, and procedures (including authorized deductions and the deductions required by law),
through the Termination Date. 
  
 The amount of base salary due
under section 5. 1.a shall be paid no later than the thirty (30) business day after the Termination Date; the amounts or benefits due under section 5.1.b shall be paid or provided in accordance with the terms of the Compensation and Benefit
Plans under which such amounts or benefits are due to the Executive; and the amounts due under sections 5.1.c and 5.1.d shall be paid in accordance with the terms of the Company’s policies, practices, and procedures regarding reimbursable
expenses and PTO, respectively. Except as expressly provided below in this Article 5, upon paying or providing the Executive the preceding amounts or benefits, the Company shall have no further obligation or liability under this Agreement for base
salary or any other cash compensation or for any benefits under any of the Compensation and Benefit Plans. 
  
 In this Agreement, the Termination Date shall be (i) the date of expiration of the Term, (ii) the date of the Executive’s death,
(iii) the third business day after the date on which the Company gives notice of termination because of Disability, or (iv) the date of termination specified in any other notice of termination, whether for Cause (as defined below) or
without Cause, or if not specified in the notice of termination, the date that notice of termination is given. 
  

 4 

 In this Agreement, “Disability” means the Executive’s permanent and total
disability, which shall be deemed to exist if he is unable reasonably to perform his duties under this Agreement because of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can
be expected to last for at least 90 consecutive days. Any Disability shall be determined by the Board or an authorized committee or representative thereof (“Representative”), in its sole and absolute discretion, upon receipt of
competent medical advice from a qualified physician selected by or acceptable to the Board or its Representative. The Executive shall, if there is any question about his Disability, submit to a physical examination by a qualified physician selected
by the Board or its Representative. 
  
 In this Agreement,
“Cause” means any of the following: (i) the Executive’s failure to substantially perform his duties under this Agreement, other than any such failure resulting from his incapacity due to physical or mental illness or
Disability; (ii) the Executive’s engaging in any action which, or omitting to engage in any action the omission of which, has been, is, or is reasonably expected to be substantially injurious (monetarily or otherwise) to the Company or its
business or reputation; (iii) the Executive’s performance of any act or omission constituting dishonesty that results, directly or indirectly, in significant gain or enrichment of the Executive or his family or affiliates at the expense of
the Company; or (iv) any breach by the Executive of any obligation under any of Articles 6, 7, 8, and 9. Whether an event or circumstance constituting Cause exists will be determined in good faith by the Board or its Representative. If the
Company believes that Cause for termination exists under clause (i) above in this paragraph, the Company shall notify the Executive of that belief, and that notice shall describe the event or circumstance believed to constitute Cause for
termination. If that event or circumstance may reasonably be remedied or corrected, the Executive shall have 30 days to effect that correction or remedy. If not corrected or remedied within that 30- day period, Cause for termination shall
immediately be deemed to exist, and the Executive’s employment shall be deemed terminated. If the Company believes that Cause for termination exists under any of clauses (ii), (iii), and (iv) above in this paragraph, the Company shall
notify the Executive of that belief, and that notice shall constitute immediate termination of the Executive’s employment. 
  
 5.2. Termination Without Cause or Upon Death or Disability. If the Executive’s employment is terminated by death or by the Company because of
Disability or without Cause before the expiration of the Term, the Executive (or his legal representative, estate, or heirs) shall be entitled to receive from the Company, as liquidated damages, the continued payment of the Executive’s base
salary, at the annual rate in effect at the Termination Date, for the six consecutive months immediately after the Termination Date (the “Severance Payments”). The Severance Payments shall be (i) paid at the Company’s
regular and routine payroll dates, or at such intervals as may otherwise be agreed upon by the Parties, and in accordance with any other payroll procedures of the Company, and (ii) in addition to the amounts or benefits to which the Executive
is entitled under Article 5.1 

  

 5 

 
and any rights or remedies the Executive may have under the Compensation and Benefit Plans. The Company will commence the Severance Payments on the first
regular and routine payroll date of the Company after the Termination Date. The Severance Payments shall not be deemed the continuation of the Executive’s employment for any purpose. 
  
 5.3. Conditions to Severance Payments. Except as provided below in
this Article 5.3, none of the Severance Payments will be subject to reduction as the result of future compensation earned or received by the Executive (including by self-employment), and the Executive shall have no duty to mitigate his damages. The
Severance Payments shall, however, be conditioned upon: 
  
 5.3.a. The Company’s receipt of a Settlement Agreement, General Release, and Covenant Not to Sue executed and performed by the Executive (or his legal representative, estate, or heirs) in substantially the form of Exhibit A to this
Agreement (the “Release Agreement”); and 
  
 5.3.b. the compliance by the Executive (or his legal representative, estate, or heirs) with Articles 6, 7, 8, and 9 after the Termination Date as specified in those Articles, as well as with the Release Agreement. 
  
 The Company may reduce the amount of Severance Payments to be made to the
Executive (or his legal representative, estate, or heirs) if, and the Company shall be entitled to a return of amounts of the Severance Payments made to the extent that, there is or has been any violation of any of Articles 6, 7, 8, and 9 or of the
Release Agreement. 
  
 5.4. Change in Control. In addition
to, and not in substitution for, any other amounts that may be payable to the Executive under this Agreement (or otherwise), the Company shall make the Retention Payments (as defined below) to the Executive upon a Change in Control if (i) the
Executive remains in the employ of the Company until the Change in Control, (ii) the Executive continues to perform his duties under this Agreement at substantially the same level of competence as he had performed before the possibility of a
Change in Control arose, and (iii) the Executive assists in any preparation for the Change in Control to the extent reasonably requested by the Company. The Retention Payments shall be payable regarding only one Change in Control during the
Term, but the Executive’s right to the Retention Payments shall be deemed earned and vested upon the Change in Control (if all of the conditions stated in the preceding sentence are satisfied) and shall not be subject to, conditioned upon, or
affected by any continued employment of any termination of employment upon or following a Change in Control. 
  
 The “Retention Payments” shall be an aggregate amount equal to one-half of the Executive’s base salary, at the annual rate in effect
immediately preceding the Change in Control, and shall be paid in installments over the six consecutive months immediately after the Change in Control at the Company’s regular and routine payroll dates, or at such 

  

 6 

 
intervals as may otherwise be agreed upon by the Parties, and in accordance with any other payroll procedures of the Company. A “Change in
Control” shall have occurred if: 
  
 5.4.a. the Company
consummates a merger, consolidation, share exchange, or reorganization with another corporation or other legal entity and, as a result of such merger, consolidation, share exchange, or reorganization, less than a majority of the combined voting
power of the outstanding securities of the surviving entity (whether the Company or another entity) immediately after such transaction is held in the aggregate by the holders of securities of the Company that were entitled to vote generally in the
election of directors of the Company (“Voting Stock”) immediately before such transaction; 
  
 5.4.b. the Company consummates a sale or other transfer of all or substantially all of its assets to another corporation or other legal entity, and less
than a majority of the combined voting power of the outstanding securities of such acquiring entity immediately after such sale or transfer is held in the aggregate by the holders of Voting Stock immediately before such sale or transfer; or

  
 5.4.c. during any period of two consecutive years,
individuals who at the beginning of any such period constitute the Board cease for any reason to constitute at least a majority thereof, unless the election, or the nomination for election by the Company shareholders, of each director of the Company
first elected during such period was approved by a vote of at least two-thirds of the directors of the Company then still in office who were directors of the Company at the beginning of any such two-year period. 
  
 Any series of transactions of the kinds described in sections 5.4.a and
5.4.b shall be deemed a single transaction for the purpose of this definition of “Change in Control.” Nevertheless, no “Change in Control” shall be deemed to have occurred under section 5.4.a or section 5.4.b if (i) any
transaction described in those subsections is effected solely to facilitate an initial registered public offering of Voting Stock, or the equivalent of Voting Stock, on behalf of the Company and the less-than-majority-ownership condition set forth
in those subsections is satisfied principally because of the dilutive effect of that initial registered public offering, or (ii) as the result of any transaction described in those subsections Golder, Thoma, Cressey, Rauner Fund V, L.P. holds a
majority of the combined voting power of the outstanding securities of the Company or other surviving entity immediately after such transaction. 
  
 5.5. Effect of Excess Parachute Payment. If the Executive is a disqualified individual (as defined in Section 280G of the Internal Revenue
Code of 1986, as amended (the “Code”), or any successor provision thereto) and if any portion of the Severance Payments or the Retention Payments to be made would be an “Excess Parachute Payment” (as defined in
Section 280G of the Code or any successor provision thereto) but for the 

  

 7 

 
application of this sentence, then the amount of the Retention Payments or (if the Executive’s employment is terminated upon or after a Change in
Control without Cause) the Severance Payments shall be reduced to the minimum extent necessary (but in no event to less than zero) so that no portion of the Retention Payments or the Severance Payments, as so reduced, constitutes an Excess Parachute
Payment. Whether any reduction in the amount of the Retention Payments or the Severance Payments is required pursuant to this Article 5.5 shall be determined, if requested by a Party, by the Company’s independent accounting firm. Any required
reduction in the Retention Payments or the Severance Payments under this Article 5.5 shall be applied on a pro rata basis to each of the Retention Payments or the Severance Payments. That the Executive may have the Retention Payments or the
Severance Payments reduced as a result of the limitations in this Article 5.5 shall not, of itself, limit or otherwise affect any rights of the Executive arising other than under this Agreement. 
  
 6. CONFIDENTIAL INFORMATION. The Company shall provide to the Executive, during the
Term, access to various trade secrets, confidential information, and proprietary information of the Company (which, in this Article 6 as well as in Articles 7, 8, and 9, shall include the Company’s subsidiaries and affiliates) which are
valuable and unique to the Company (“Confidential Information”). The Executive shall not, either while in the employ of the Company or at any time thereafter, (i) use any of the Confidential Information, or (ii) disclose
any of the Confidential Information to any person not an employee of the Company or not engaged to render services to the Company, except (in either case) to perform his duties under this Agreement or otherwise with the Company’s prior written
consent. Nothing in this Article 6 shall preclude the Executive from the use or disclosure of information generally known to the public or not considered confidential by the Company or from any disclosure to the extent required by law or court order
(though the Executive must give the Company prior notice of any such required disclosure and must cooperate with any reasonable requests of the Company to obtain a protective order regarding, or to narrow the scope of, the Confidential Information
required to be disclosed). All files, records, documents, information, data, and similar items relating to the business or affairs of the Company, whether prepared by the Executive or otherwise coming into his possession, shall remain the exclusive
property of the Company and shall not be removed from the premises from the Company, except in the ordinary course of business as part of the Executive’s performance of his duties under this Agreement, and (in any event) shall be promptly
returned or delivered to the Company (without the Executive’s retaining any copies) upon the expiration of the Term or termination of employment under this Agreement. 
  
 7. NONCOMPETITION. The Executive acknowledges that, in addition to his access to and possession of Confidential Information, during
the Term he will acquire valuable experience and special training regarding the Company’s business and that the knowledge, experience, and training he will acquire would enable him to injure the Company if he were to engage in any business that
is competitive with the business of the Company. Therefore, the Executive shall not, at any time during the Term and for the 12 consecutive months immediately after the Termination Date, directly or indirectly (as an employee, employer, consultant,
agent, principal, 

  

 8 

 
partner, shareholder, officer, director, or manager or in any other individual or representative capacity), engage, invest, or participate in any business
that is in direct competition with the business of the Company within a thirty (30) mile radius of any long-term acute care hospital facility operated by Company or any of its affiliates, subsidiaries or operating entities (The Executive shall
not be prohibited, however, from owning, as a passive investor, less than five percent of the publicly traded stock of any corporation engaged in a business competitive with that of the Company.) The Executive represents that the enforcement of the
restriction in this Article 7 would not be unduly burdensome to the Executive and that, in order to induce the Company to enter into this Agreement (which contains various benefits to the Executive and obligations of the Company with respect to the
Executive’s employment), the Executive is willing and able to compete after the Termination Date in other geographical areas not prohibited by this Article 7. The Parties agree that the restrictions in this Article 7 regarding scope of
activity, duration, and geographic area are reasonable; however, if any court should determine that any of those restrictions is unenforceable, that restriction shall not thereby be terminated, but shall be deemed amended to the extent required to
render it enforceable. 
  
 8. NONSOLICITATION. The Executive shall not, at
any time within the 12 consecutive months immediately after the Termination Date, either directly or indirectly: 
  
 8.1. Disclose Contact Information. Make known to any person the names and addresses, or other contact information, of any of the customers,
suppliers, or other persons having significant business relationships with the Company within the health care industry, so that such person could affect, or attempt to affect, any of those relationships to the detriment of the Company; or

  
 8.2. Solicit Employees. Solicit, recruit, or hire, or
attempt to solicit, recruit, or hire, any employee or consultant of the Company, or in any other manner attempt to induce any employee or consultant of the Company to leave the employ of the Company or cease his or her consulting or similar business
relationship with the Company. 
  
 9. DEVELOPMENTS. The Executive shall
promptly disclose to the Company all inventions, discoveries, improvements, processes, formulas, ideas, know-how, methods, research, compositions, and other developments, whether or not patentable or copyrightable, that the Executive, by himself or
in conjunction with any other person, conceives, makes, develops, or acquires during the Term which (i) are or relate to the properties, assets, or existing or contemplated business or research activities of the Company, (ii) are suggested
by, arise out of, or result from, directly or indirectly, the Executive’s association with the Company, or (iii) arise out of or result from, directly or indirectly, the use of the Company’s time, labor, materials, facilities, or
other resources (“Developments”). 
  
 The Executive hereby
assigns, transfers, and conveys to the Company, and hereby agrees to assign, transfer, and convey to the Company during or after the Term, all of his right and title to and interest in all Developments. The Executive shall, from time to time upon
the request of the 

  

 9 

 
Company during or after the Term, execute and deliver any and all instruments and documents and take any and all other actions which, in the judgment of the
Company or its counsel, are or may be necessary or desirable to document any such assignment, transfer, and conveyance to the Company or to enable the Company to file and process applications for, and to acquire, maintain, and enforce, any and all
patents, trademarks, registrations, or copyrights with respect to any of the Developments, or to obtain any extension, validation, re-issue, continuance, or renewal of any such patent, trademark, registration, or copyright. The Company will be
responsible for the preparation of any such instrument or document and for the implementation of any such proceedings and will reimburse the Executive for all reasonable expenses incurred by him in complying with this Article 9. 
  
 10. CERTAIN REMEDIES. Any breach or violation by the Executive of any of Articles 6,
7, 8, and 9 shall entitle the Company, as a matter of right, to an injunction issued by any court of competent jurisdiction, restraining any further or continued breach or violation, or to specific performance requiring the compliance with the
Executive’s covenants. This right to an injunction or other equitable relief shall be in addition to, and not in lieu of, any other remedies to which the Company may be entitled. The existence of any claim or cause of action of the Executive
against the Company, or any subsidiary or affiliate of the Company, whether based on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the Executive’s covenants in any of Articles 6, 7, 8, and 9.
The covenants in Articles 6, 7, 8, and 9 and in this Article 10 shall survive the expiration or termination of the Executive’s employment under this Agreement. 
  
 11. ARBITRATION. Any controversy or dispute arising under or relating to this Agreement, or any expiration or termination of
employment under this Agreement (a “Dispute”), shall be submitted to and settled by arbitration in accordance with the following: 
  
 11.1. Arbitrators. The arbitration of any Dispute may be initiated by either Party by notice to the other Party, specifying the Dispute and
appointing the notifying Party’s arbitrator, in accordance with Article 14 (the “Arbitration Notice”). The arbitration shall be conducted by a panel of three arbitrators (the “Panel”), one appointed by each of
the Parties and a third appointed by those two arbitrators. The third arbitrator shall act as chairman of the Panel. If (i) the non-initiating Party fails to appoint an arbitrator by written notice to the initiating Party within ten days after
the Arbitration Notice is given, or (ii) the two arbitrators appointed by the Parties fail to appoint a third arbitrator within ten days after the date of the appointment of the second arbitrator, then the American Arbitration Association
(“AAA”) in Dallas, Texas, upon application of a Party, shall appoint an arbitrator to fill the vacancy or vacancies in the Panel. 
  
 11.2. Conduct and Award. The arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the AAA at a location in the
Dallas, Texas metropolitan area agreed upon by the Parties and the Panel or, if the Parties cannot agree, designated by the Panel. The Federal Rules of Procedure shall apply to discovery and evidentiary matters as part of the arbitration. The
determination or award made or approved by 

  

 10 

 
unanimous or majority of the arbitrators shall be the action of the Panel. The determination or award shall be final and binding on the Parties, and judgment
upon such determination or award may be entered and enforced in any court of competent jurisdiction. 
  
 11.3. Equitable Relief. Though any Dispute arising under or relating to any of Articles 6, 7, 8, and 9 shall be subject to arbitration and the
Panel shall have the power to award injunctive or other equitable relief, the Company shall not be precluded from also seeking and obtaining injunctive or other equitable relief from any court of competent jurisdiction to protect or enforce its
rights and remedies under any of Articles 6, 7, 8, and 9. 
  
 11.4. Expenses. Except as otherwise provided in the determination or award of the Panel, (i) each Party shall bear its own expenses of arbitration, including its expenses of obtaining and presenting evidence and attending the
arbitration hearings and the fees and expenses of its legal counsel, and (ii) the Parties shall share equally all other costs of arbitration, including the fees and reimbursable expenses of the Panel. 
  
 12. BINDING AGREEMENT; SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon,
and shall inure to the benefit of, the Company and the Executive and their respective legal representatives, heirs, executors, administrators, and successors and assigns (as permitted by this Article 12), including any successor to the Company by
merger, consolidation, or reorganization and any other person that acquires all or substantially all of the business and assets of the Company. The Company shall have the right, without the need for any consent from the Executive, to assign its
rights, benefits, remedies, and obligations under this Agreement to one or more other persons. The rights, benefits, remedies, and obligations of the Executive under this Agreement are personal to the Executive, however, and may not be assigned or
delegated by him; except that this shall not preclude (i) the Executive from designating one or more beneficiaries to receive any amount or benefit that may be paid or provided after the Executive’s death or (ii) the legal
representative of the Executive’s estate from assigning any right or benefit under this Agreement to the person or persons entitled thereto under the Executive’s will or the laws of intestacy applicable to the Executive’s estate, as
the case may be. 
  
 13. SEVERABILITY. If any provision of this Agreement
is found to be invalid or unenforceable for any reason, then (i) that provision shall be severed from this Agreement, (ii) this Agreement shall be construed and enforced as if that invalid or unenforceable provision never constituted a
part of this Agreement, and (iii) the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by applicable law. Further, in lieu of that invalid or
unenforceable provision, there shall be added to this Agreement a provision as similar in its terms to that invalid or unenforceable provision as may be possible and be valid and enforceable. 
  
 14. NOTICES. Any notice, request, or other communication to be given by either Party
under this Agreement by to the other shall be in writing and either (i) delivered in person, (ii) delivered 

  

 11 

 
by prepaid same-day or overnight courier service, or (iii) sent by certified mail, postage prepaid with return receipt requested, in any case addressed
to the other Party as follows: 
  

			
	To the Company:	  	 LifeCare Management Services, L.L.C.
 6161 Harry Hines
Boulevard, Suite 300
 Dallas, Texas 75235
 Attention: David B.
LeBlanc, President

		
	To the Executive:	  	 134 Charles Ave
 Shreveport, LA 71105
 Attn: Chris Walker

  
 or to such other address as the Party
to be notified may have designated by notice previously given in accordance with this Article 14. Communications delivered in person or by courier service shall be deemed given and received as of actual receipt (or refusal) by the addressee.
Communications mailed as described above in this Article 14 shall be deemed given and received three business days after mailing or upon actual receipt, whichever is earlier. 
  
 15. CERTAIN DEFINED TERMS. In this Agreement, (i) “person” means an individual or any corporation, partnership, trust,
unincorporated association, limited liability company, or other legal entity, whether acting in an individual, fiduciary, or other capacity, and any government, court, or governmental agency, (ii) “include” and “including”
do not signify any limitation, (iii) “Article” means any Article of this Agreement, unless otherwise indicated, (iv) an “affiliate” of a person means any other person controlling, controlled by, or under common control
with that person, and (v) “business day” means any Monday through Friday, other than any such weekday on which the executive offices of the Company are closed. 
  
 16. ENTIRE AGREEMENT. This Agreement, with Exhibit A, constitutes the entire agreement between the Company and the Executive with
respect to the subject matter hereof and supersedes any prior agreement between the Company and the Executive with respect to the same subject matter. 
  
 17. MODIFICATION AND WAIVER. No amendment to or modification of this Agreement, or waiver of any term, provision, or condition of this Agreement, will be binding
upon a Party unless the amendment, modification, or waiver is in writing and signed by the Party to be bound. Any waiver by a Party of a breach or violation of any provision of this Agreement by the other Party shall not be deemed a waiver of any
other provision or of any subsequent breach or violation. 
  
 18. GENDER.
Whenever the context requires in this Agreement, words denoting gender in this Agreement shall include the masculine, feminine, and neuter. 
  

 12 

 19. GOVERNING LAW. This Agreement, and the rights, remedies, obligations, and duties of the Parties under this
Agreement, shall be governed by, construed in accordance with, and enforced under the laws of the State of Texas. 
  
 20. COUNTERPARTS. This Agreement may be executed in counterparts, each of which constitutes an original, but all of which constitute one, and the same document.

  
 The Parties have executed this Agreement to
be effective as of the date stated in the first paragraph. 
  

			
	THE COMPANY:
	
	LIFECARE MANAGEMENT SERVICES, L.L.C.
		
	By:	 	/s/ David B. LeBlanc
	
	THE EXECUTIVE:
	
	/s/ Chris Walker
	Chris Walker

  

 13

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