Document:

EX-10.106

 Exhibit 10.106 
 December 15, 2011 
 PERSONAL AND CONFIDENTIAL 

Mr. James J. Talalai 
 1919 Monterey
Drive 
 Mechanicsburg, PA 17050 
  

	 	Re:	 Restrictive Covenants Letter Agreement 

 Dear Mr. Talalai: 
 Congratulations on your promotion to
Executive Vice President and Chief Operating Officer with Select Medical Corporation, a Delaware corporation (“Select”). Your promotion entitles you to a salary increase and other compensation and benefits, including, but not limited to, a
restricted stock award, all as more specifically set forth in your offer letter. As you know, your promotion, salary increase and other benefits (hereafter referred to as the “Consideration”) were conditioned on your agreement to honor the
covenants and other agreements set forth herein in favor of Select and its affiliates and subsidiaries (collectively, the “Company”). 
 1. Confidentiality Agreement. You covenant and agree that you will not, at any time during or after the date you cease to be employed by the Company regardless of reason therefor (the
“Termination Date”), reveal, divulge or make known to any person (other than the Company or its officers, employees or agents who need to know such information, or as a result of legal process) or use for your own account or the account of
any other person any confidential or proprietary records, data, trade secrets, customer lists or any other confidential or proprietary information whatsoever (the “Confidential Information”) used by the Company and made known (whether or
not with the knowledge and permission of the Company, and whether or not developed, devised or otherwise created in whole or in part by the efforts of you) to you by reason of your association with the Company. You further covenant and agree that
you will retain all such knowledge and information which you will acquire or develop respecting such Confidential Information in trust for the sole benefit of you and its successors and assigns. 

2. Non-Compete Agreement. (a) You acknowledge that the services to be rendered by you to the Company are of a
special and unique character. You agree, in exchange for your promotion and the Consideration, that you will not, during the Restrictive Period (as hereinafter defined), (i) engage, whether as principal, agent, investor, distributor,
representative, stockholder, employee, consultant, volunteer or otherwise, with or without pay, in any activity or business venture that is competitive with any business conducted by the Company on the Termination Date (a “Competitive
Business”), to the extent that such Competitive Business is conducted within 50 miles of the Company’s hospitals, clinics, facilities or other locations at which the Company conducts its business as of the Termination Date;
(ii) solicit or entice, or endeavor to solicit or entice, away any of the clients, referral sources or payors or customers of any member of the Company, either on your own account or for any other person, firm, corporation or organization;
(iii) employ any person who was a director, officer or employee of any member of the Company or any person who is or may be likely to be in 

 Mr. James J. Talalai 
 December 15, 2011 
  Page
 2
 
  

 
possession of any confidential information or trade secrets relating to the business of any member of the Company; or (iv) at any time, take any action or make any statement the effect of
which would be, directly or indirectly, to impair the goodwill of any member of the Company or the business reputation or good name of any member of the Company or the business reputation or good name of any member of the Company, or be otherwise
detrimental to the Company, including any action or statement intended, directly or indirectly, to benefit a competitor of any member of the Company. For purposes hereof, the Restrictive Period will, unless tolled as provided in Section 2(b)
below, be the two-year period following the Termination Date. 
 (b) The Restrictive Period will be deemed
tolled during any period in which you are in violation of your obligations under this Section 2 hereof. You agree that, in any action to enforce your obligations, the Company will be entitled to a full two (2) year period of protection
under Sections 2 and 3 hereof, determined without including any period of your breach. 
 3. Non-Solicitation
Agreement. In exchange for your promotion and the Consideration, you agree that, during the period of your employment with the Company, and during the Restrictive Period, you will not, directly or indirectly, through any entity, family member or
agent, without the express written consent of the Company (which consent may be withheld in Company’s sole discretion), solicit or contact, cause others to solicit or contact, with a view to engaging or employing, nor will you actually engage
or employ, any person who is, or at any time was, an employee or consultant of the Company. 
 4. Restrictive
Covenants. You agree that if, in any proceeding, the court or other authority refuses to enforce the confidentiality and non-compete covenants set forth herein because such covenants cover too extensive a geographic area or too long a period of
time, any such covenant will be deemed appropriately amended and modified in keeping with the intention of the parties, to the maximum extent permitted by law. 
 You acknowledge and agree that the confidentiality and non-compete covenants and agreements set forth herein are reasonable in all respects, and necessary in order to protect, maintain and preserve the
value and goodwill of the business and other legitimate business interests of the Company. You acknowledge and agree that the covenants and agreements set forth herein are a material reason for your promotion and the Consideration. You also hereby
acknowledge and agree that your obligations under this letter agreement, including the restrictive covenants, are assignable by the Company. 
 Your obligations under Sections 1, 2 and 3 hereof will be fully binding and enforceable regardless of the reason for the termination of your employment, and whether such termination was voluntary or
involuntary. Any claim that you may have for breach of this letter agreement will not constitute a defense and will not relieve you from complying with all of your obligations under Sections 1, 2, and 3 hereof. 

In the event of a breach or threatened breach by you of any of the confidentiality, non-compete and non-solicitation
provisions of this letter agreement, you hereby consent and agree that the Company will be entitled to (1) temporary or preliminary injunctive relief or similar equitable relief, designed to maintain the status quo ante, by restraining you from
committing or continuing any such breach or threatened breach in addition to any other relief to which the Company may be entitled, and/or (2) specific performance of any act required to be performed by you under this letter agreement, without
the necessity of showing any actual damage. 
 5. Entire Agreement. This letter agreement contains the
entire agreement between the Company and you with respect to the subject matter hereof and supersedes all prior contracts, letters, side letters and other agreements, whether written or oral, with respect hereto. 

 Mr. James J. Talalai 
 December 15, 2011 
  Page
 3
 
  

 6. Waivers and Amendments. This letter agreement may be amended,
modified, superseded, canceled, renewed or extended, and the terms and conditions hereof may be waived, but only by a written instrument signed by both parties hereto or, in the case of a waiver, by the party waiving compliance. No delay or failure
on the part of any party hereto in exercising any right, remedy, power or privilege hereunder will operate as a waiver thereof, nor will any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof. 
 7. Fees and Expenses. In the event that it is necessary for the Company to retain
the services of an attorney or to initiate legal proceedings to enforce your obligations hereunder, then in the event that it is the prevailing party, the Company will be entitled to recover from you all fees, costs and expenses of enforcing any
right under or with respect to this letter agreement, including, without limitation, reasonable fees and expenses of attorneys and accountants, and court costs. 

8. Assignment. You may not assign this letter agreement or any part hereof, and any attempted or purported
assignment will be null and void. The Company may assign, without your consent, this letter agreement, together with its rights and obligations hereunder, in connection with the sale, transfer or other disposition of all or substantially all of its
assets, businesses, or any business division, whether by stock sale, asset sale, merger, consolidation or otherwise. 
 9. Governing Law; Venue. This letter agreement will be deemed a contract made under, and for all purposes will be construed in accordance with, the laws of the Commonwealth of Pennsylvania without
regard to conflict of laws principles. You also hereby consent to the jurisdiction of any state or federal court located in Harrisburg, Pennsylvania as an appropriate venue for any proceeding under this letter agreement, and you hereby waive all
questions of personal jurisdiction and venue of such courts, including, without limitation, the claim or defense therein that such courts constitute an inconvenient forum. 

10. Severability. If any provision of this letter agreement will be declared invalid or illegal for any reason
whatsoever, then notwithstanding such invalidity or illegality, the remaining terms and provisions of this letter agreement will remain in full force and effect in the same manner as if the invalid or illegal provision had not been contained herein.

 11. Survivorship. The respective rights and obligations of the parties hereunder will survive any
termination of this letter agreement to the extent necessary to the intended preservation of such rights and obligations. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
 [SIGNATURE PAGE IMMEDIATELY FOLLOWING] 

 Mr. James J. Talalai 
 December 15, 2011 
  Page
 4
 
  

 If the foregoing terms are acceptable to you, please execute this letter
in the space provided below and return it to me as soon as possible. 
  

			
	 Sincerely,
  

SELECT MEDICAL CORPORATION,
 a Delaware
corporation

		
	By:	 	 /s/ Patricia A. Rice        

		 	Patricia A. Rice,
		 	President & Chief Operating Officer

 The undersigned, intending to be legally bound hereby, agrees to and accepts the terms hereof: 

 

	
	/s/ James J. Talalai        
	James J. TalalaiEX-10.107

 Exhibit 10.107 
 SELECT MEDICAL HOLDINGS CORPORATION 
 RESTRICTED STOCK AWARD AGREEMENT

 UNDER THE 2011 EQUITY INCENTIVE PLAN 

This Restricted Stock Award Agreement (this “Agreement”) is made as of
                     (the “Grant Date”), between SELECT MEDICAL HOLDINGS CORPORATION, a Delaware corporation (the
“Company”), and                     , an individual (the “Participant”). 

WHEREAS, the Company has adopted the 2011 Equity Incentive Plan (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 or its Subsidiaries; 
 WHEREAS, in order to provide an incentive to the Participant in respect of the Participant’s employment with the Company or its Subsidiaries, the Company has approved and authorized the issuance of
certain shares of the Common Stock of the Company, par value $.001 per share (the “Stock”), to the Participant, subject to the terms of the Plan and this Agreement; and 

WHEREAS, all capitalized terms used but not defined herein shall have the meanings set forth in the Plan. 

NOW, THEREFORE, in consideration of the services to be rendered by the Participant, 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 Grant
Date,                      shares of Stock (the “Restricted Stock”). 

2. Vesting. Subject to Section 4 below and the other provisions of this Agreement, all of the shares of
Restricted Stock shall vest on                     , the third anniversary of the Grant Date (the “Vesting Date”). The period beginning on
the date hereof through and including the Vesting Date shall be referred to herein as the “Restricted Period”. 
 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 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 Restricted Period. Upon any attempt to transfer, assign, pledge, or otherwise dispose of the Restricted Stock during the 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 Restricted Period, the Restricted Stock shall immediately be forfeited to the Company and cease to be outstanding. 

 4. Forfeiture of Restricted Stock. The Restricted Stock shall
immediately be forfeited to the Company and cease to be outstanding upon the termination of the Participant’s full-time employment with the Company or its Subsidiaries prior to the Vesting Date for any reason other than an Exception Event (as
hereinafter defined). For purposes hereof, an “Exception Event” shall arise if the Participant dies, becomes Disabled (as defined in the Plan) or is terminated following the occurrence of a Change of Control (as defined in the Plan). If an
Exception Event occurs prior to the Vesting Date, a pro rata share of the Restricted Stock (based on the date of the Exception Event) will vest. For example, if the Participant dies on the second anniversary of the Grant Date, then two thirds of the
Restricted Stock will vest in favor of the Participant’s estate and the other one third of the Restricted Stock will be forfeited to the Company and cease to be outstanding. The Participant acknowledges that neither the Participant nor the
Participant’s estate will have any claim whatsoever against the Company or any Subsidiary related to any forfeiture of the Restricted Stock. 
 5. Certain Tax Matters. The Participant expressly acknowledges that vesting of the Restricted Stock, and the future payment of dividends with respect to the Restricted Stock, may give rise to
“wages” subject to withholding. The Participant expressly acknowledges and agrees that the Participant’s rights hereunder are subject to the Participant’s promptly paying to the Company in cash, or by the delivery of shares of
the Restricted Stock acquired hereunder, all taxes required to be withheld in connection with such vesting or payment. If vesting occurs as the result of an Exception Event, then the Company may, without the consent of the Participant or the
Participant’s estate, use some of the Participant’s shares acquired hereunder to satisfy the Participant’s tax withholding obligations. 
 6. Plan Governing. The Participant hereby acknowledges receipt of a copy of the Plan and accepts and agrees to be bound by all of the terms and conditions of the Plan as if set out verbatim in this
Agreement. In the event of a conflict between the terms of the Plan and the terms of this Agreement, the terms of the Plan shall control. 
 7. Miscellaneous. This Agreement may be amended only by written agreement of the Participant and the Company and may be amended without the consent of any other person. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, representatives, heirs, descendants, distributees and permitted assigns. This Agreement may be executed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 
 IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the Grant Date. 
  

							
	SELECT MEDICAL HOLDINGS CORPORATION	  		  	The Participant:
				
	 By:
	 	 	  		  	 

  
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