RehabCareGroup, Inc. ExecutiveDeferred Compensation Plan 2009Restatement

1.1

“Account” means amounts credited to a Participant under the Plan or the aggregate of all of a Participant’s accounts.  The Plan includes the following types of Account:

 

(a)

Compensation Reduction Accrual Account;

 

(b)

Matching Contribution Accrual Account; and

 

(c)

NonMatching Contribution Accrual Account

1.2

“Affiliate” means any person, corporation or other entity that from time to time is, along with the Company, considered a single employer under Sections 414(b) or 414(c) of the Code.

1.3

“Allocation Date” means the last day of any Plan Year.

1.4

“Beneficiary” means the person or persons designated by a Participant, or otherwise en­titled, to receive any amount credited to his Account that remains undistributed at his death.

1.5

“Board of Directors” or “Board” means the board of directors of the Company.

1.6

“Bonus Compensation” means an Eligible Employee’s cash incentive compensation under an Employer’s incentive compensation program.

1.7

“Code” means the Internal Revenue Code of 1986, as amended.

1.8

“Committee” means the committee appointed in accordance with Section 8.1 to administer the Plan.

1.9

“Company” means RehabCare Group, Inc., a Delaware corporation.

1.10

“Compensation Reduction Accrual” means an amount credited to the Compensation Reduction Accrual Account pursuant to a Compensation Reduction Agreement, including Qualified Plan Refunds.

1.11

“Compensation Reduction Accrual Account” means the account established to record Compensation Reduction Accruals authorized by Par­ticipants under the terms of this Plan.

1.12

“Compensation Reduction Agreement” means an agreement between a Participant and the Company, under which the Participant agrees to a reduction in his Salary Compensation and/or Bonus Compensation, or to defer any Qualified Plan Refund and the Com­pany agrees to credit him with Compensation Reduction Accruals under this Plan.

1.13

“Disability” means a Participant who:

 

(a)

is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or

 

(b)

is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Company.

1.14

“Distributable Amount” means the portion of a Participant’s Account for a particular Plan Year to be distributed in accordance with an election made pursuant to Section 4.3.4 or 4.3.5.

1.15

“Eligible Employee” means the select group of management or highly compensated employees as determined by the Committee, in its sole discretion, from time to time; provided that the Committee may remove an Eligible Employee from eligibility to participate only as of the end of a Plan Year.

1.16

“Employer” means the Company and any Affiliate who is designated an Employer by the Committee.

1.17

“Matching Contribution Accrual” means an amount credited to a Participant’s Account in accordance with Section 4.1.2.

1.18

“Matching Contribution Accrual Account” means the account established to record Matching Contribution Accruals on a Participant’s behalf.

1.19

“NonMatching Contribution Accrual” means an amount credited to a Participant’s Account in accordance with Section 4.1.3.

1.20

“NonMatching Contribution Accrual Account” means the account established to record NonMatch­ing Contribution Accruals on a Participant’s behalf.

1.21

“Normal Retirement Date” means the later of (a) a Participant’s sixty-fifth (65th) birthday or (b) his completion of ten (10) Years of Service.

1.22

“Participant” means (a) any Eligible Employee who satisfies the conditions for partici­pation in the Plan set forth in Section 2.1 or (b) any Eligible Employee who formerly satisfied the conditions for partici­pation in the Plan set forth in Section 2.1 and who has not received a total distribution of his Account.

1.23

“Plan” means the RehabCare Group, Inc. Executive Deferred Compensation Plan, as set forth herein and as amended from time to time.

1.24

“Plan Year” means the accounting year of the Plan, which ends on December 31st.

1.25

“Qualified Plan” means the RehabCare, Inc. 401(k) Employee Savings Plan (or other applicable RehabCare 401(k) plan), as amended from time to time.

1.26

“Qualified Plan Refund” means elective deferrals made by a Participant into the Qualified Plan that are required to be distributed due to discrimination testing.

1.27

“Salary Compensation” means an Eligible Employee’s base salary.

1.28

“Separation from Service” means separation from service with the Employer and its affiliates (generally, 50% common control with the Employer), as defined in IRS regulations under Section 409A of the Code.

1.29

“Trust” or “Trust Fund” means any rabbi trust established to hold amounts set aside by the Company in accordance with Section 4.4.

1.30

“Trustee” means the trustee of the Trust Fund.

1.31

“Valuation Date” means any Allocation Date and any other date as of which the value of Participants’ Accounts is determined.

1.32

“Years of Service” means years of service for vesting as determined under the RehabCare, Inc. 401(k) Employee Savings Plan.

1.33

Rules of Construction.

1.33.1

Governing law.  The construction and operation of this Plan and Trust are governed by the laws of Delaware.

1.33.2

Undefined terms.  Unless the context clearly requires another meaning, any term not specifically defined in this Plan is used in the sense given to it by the Qualified Plan.

1.33.3

Headings.  The headings of Articles, Sections and Subsections are for reference only and are not to be utilized in construing the Plan.

1.33.4

Gender.  Unless clearly inappropriate, all pronouns of whatever gender refer indifferently to persons or objects of any gender.

1.33.5

Singular and plural.  Unless clearly inappropriate, singular terms refer also to the plural number and vice versa.

1.33.6

Severability.  If any provision of this Plan is held illegal or invalid for any reason, the remaining provisions are to remain in full force and effect and to be construed and enforced in accordance with the purposes of the Plan as if the illegal or invalid provision did not exist.

2.1

Commencement of Participation.  An employee of an Employer becomes a Participant on the date on which he satisfies all of the following conditions:

 

(a)

he is an Eligible Employee; and

 

(b)

he has executed and delivered to the Committee a valid Compensation Reduction Agreement.

2.2

Cessation of Participation.  If a Participant ceases to satisfy either of the conditions set forth in Section 2.1, his participation in this Plan will terminate; provided that the Committee may remove an Eligible Employee from eligibility to participate only as of the last day of a Plan Year.  The Participant’s Account will continue to be held for his benefit and will be distributed to him in accordance with the provisions of Article 6.  He may resume participation as of any date on which he again satisfies the conditions of Section 2.1.

3.1

Establishment of Accounts.  The accounts specified in this Section 3.1 are established under the Plan to record the liability of the Company to Participants.  All Accounts may be main­tained on the books of the Company, and the Company is under no obligation to segregate any assets to provide for these liabilities.  Should the Company elect to segregate assets into a trust fund pursuant to Section 4.4 of the Plan, the accounts specified in this Section 3.1 may be maintained on the books of such fund.

3.1.1

Compensation Reduction Accrual Accounts.  A Compensation Reduction Accrual Account is maintained for each Participant for the purpose of recording the current value of his Compensation Reduction Accruals.

3.1.2

Matching Contribution Accrual Accounts.  A Matching Contribution Accrual Account is maintained for each Participant for the purpose of recording the value of Matching Contribution Accruals credited on his behalf in accordance with Section 4.1.2.

3.1.3

NonMatching Contribution Accrual Accounts.  A NonMatching Contribution Accrual Account is maintained for each Participant for the purpose of recording the value of NonMatching Contribution Accruals credited on his behalf in accordance with Section 4.1.3.

3.2.1

Timing of valuation.  All Accounts are valued as of each Allocation Date and as of any other Valuation Date fixed by the Committee.

3.2. 2

Method of Valuing Accounts.  The value of an Account as of any Valuation Date is equal to the sum of

 

(a)

the fair market value of the Account’s interest in the Trust Fund, plus

 

(b)

any benefits accrued under Article 4 with respect to which the Company has not made contributions to the Trust Fund, with interest, income, expense, gains and losses in accordance with the investment experience that would result if assets were invested given the investment allocation provided by the Committee in accordance with Section 4.6.

4.1

Types of Contribution.  For any Plan Year, Participants may accrue benefits under each of the provisions of this Section 4.1.

4.1.1

Compensation Reduction Accruals.  Compensation Reduction Accruals are credited to each Participant to the extent specified in his Compensation Reduction Agreement in effect for the Plan Year.

4.1.2

Accrual of Matching Contributions.  The amount of Matching Contributions made pursuant to the Compensation Reduction Agreement shall be such amount, if any, equal to the maximum match that the Participant could have received under the Qualified Plan based on the Participant’s compensation (as defined in such plan and increased by the amount of the Eligible Employee’s Compensation Reduction Accruals under this Plan, with such total amount subject to the limit under section 401(a)(17) of the Code), reduced by the maximum match the Participant could have received in the Qualified Plan at a 4% contribution rate, after discrimination testing.

4.1.3

Accrual of NonMatching Contributions.  The amount of such NonMatching Contributions shall be such amount, if any, the Committee, in its sole discretion, determines from year to year.  NonMatching Contributions for a Plan Year shall be allocated as determined by the Committee.

4.2

Timing of Accruals.  Compensation Reduction Accruals are deemed to accrue on the date on which the Participant would otherwise have received the compensation that he elected to defer.  Matching Contribution Accruals are deemed to accrue on the date of the Compensation Reduction Accru­als to which they relate.  NonMatching Contribution Accruals are deemed to accrue on the Allocation Date of the Plan Year to which they relate.

4.3.1

Authorization of Compensation Reduction Accruals.  By executing a Compensation Reduction Agreement with respect to a Plan Year, a Participant may elect to have Compensation Reduction Accruals credited under the Plan on his behalf.  The current Salary Compensation and Bonus Compensation of a Participant who executes a Compensation Reduction Accrual Agreement are reduced by the amount specified in his election, and an equal amount is accrued under the Plan in accordance with Section 4.1.1.  Each Participant’s Compensation Reduction Agreement shall designate separately the amount of reduction of Salary Compensation and Bonus Compensation to be taken from his compensation for the Plan Year.  An agreement may specify whether the reduction is applied as a percentage amount to Salary Compensation, to Bonus Compensation, or to both.  A Compensation Reduction Agreement may also specify whether Qualified Plan Refunds will be deferred into the Plan.  In the discretion of the Committee, separate agreements may be used for Salary Compensation, Bonus Compensation and/or Qualified Plan Refunds.  Compensation Reduction Con­tributions may not be made with respect to Compensation other than Salary Compensation, Bonus Compensation and Qualified Plan Refunds.  Except as provided in Section 4.3.2, a Compensation Reduction Agree­ment becomes irrevocable as of the last day of the Plan Year preceding the Plan Year in which the services for which the compensation is paid are performed; provided that a Participant may cancel a Compensation Reduction Agreement election because of a hardship distribution from the Qualified Plan pursuant to Treas. Reg. §1.401(k)-1(d)(3).  If an agreement is canceled because of a hardship distribution, any later Compensation Reduction Agreement shall be subject to the provisions governing initial Compensation Reduction Agreements.  A Compensation Reduction Agreement made pursuant to this section must be in a form acceptable to the Committee, which may include electronic enrollment procedures.

4.3.2

Timing of Compensation Reduction Agreements.  An employee who becomes an Eligible Employee within a Plan Year and who is deemed “initially eligible” under the Section 409A regulations may execute a Compensation Reduction Agreement to become effective for compensation for services performed after the date of the election, provided that such Compensation Reduction Agreement must in all cases be made within the first 30 days following the date on which such Eligible Employee becomes first eligible.

4.3.3

Limitations on Compensation Reduction Accruals.  The amount deferred by a Participant in accordance with Section 4.3.1 or 4.3.2 for any Plan Year may not exceed 70% of his Salary Compensation for that year and 70% of his Bonus Compensation.  With respect to Qualified Plan Refunds, the Compensation Reduction Agreement will specify whether such Qualified Plan Refunds will be contributed to the Plan.

4.3.4

Election of Distribution Timing and Form.  Each Compensation Reduction Agreement shall indicate the time and form in which amounts deferred under such agreement shall be distributed from the Plan as permitted by, and subject to, Section 6.  The distribution time and distribution form elections made on a Compensation Reduction Agreement pursuant to this 4.3.4 shall also be applicable to the Qualified Plan Refund, Matching Contribution and NonMatching Contribution Accruals made for the Plan Year(s) for which such Compensation Reduction Agreement is effective.

4.3.5

Change in Distribution Timing and Form.  A Participant who elected to receive distribution in a lump sum on a specified date or in installments commencing on a specified date may elect to delay such distribution and to change the form of such distribution. Such an election must be made at least twelve months before the previously scheduled date and the new specified date must be at least five years from the previous specified date.  Such an election to defer commencement shall not become effective until twelve months after the date on which such election is made.

4.4

Contributions to Trust Fund.  The Company may, but is not required to, establish a Trust Fund and make contributions to it corresponding to any or all amounts accrued under Section 4.1.  These contributions are credited with income, expense, gains and losses in accordance with the investment experience of the Trust Fund.  The Committee may direct the Trustee to establish investment funds within the Trust Fund and to permit Participants to direct the allocation of their Account balances among these funds in accordance with rules prescribed by the Committee.  The Committee may alter the available funds or the procedures for allocating Account balances among them at any time.

4.5

Status of the Trust Fund.  Notwithstanding any other provision of this Plan, all assets of the Trust Fund remain the property of the Company and are subject to the claims of its creditors.  No Participant has any priority claim on Trust assets or any security interest or other right in or to them superior to the rights of general creditors of the Company.

4.6

Earnings on Benefit Accruals.  Any benefit accruals under the Plan with respect to which the Company does not make contributions to the Trust Fund in accordance with Section 4.4 are credited with income, expense, gains and losses in accordance with the investment experience that would result if assets were invested given the investment allocation provided by the Committee.  The Committee may permit Participants to direct the investment allocation in accordance with rules provided by the Committee.  The Committee may alter the available investment alternatives or the procedures for allocating Account balances among them at any time.

4.7

Nonalienability.  A Participant’s rights under this Plan may not be voluntarily or involuntarily assigned or alienated.  If a Participant attempts to assign his rights or enters into bankruptcy proceedings, his right to receive payments personally under the Plan will terminate, and the Committee may apply them in such manner as will, in its judgment, serve the best inter­ests of the Participant.

5.1

Definition of “Vesting.”  A Participant’s interest in his Accounts is “vested” when it is not subject to forfeiture for any reason.  The nonvested portion of an Account is forfeited upon Separation from Service for any reason other than death, Disability or Separation from Service on or after Normal Retirement Date.

5.2

Vesting Requirements.

5.2.1

When a Participant’s interest becomes vested.  A Participant’s interest in his Compensation Reduction Accrual Account is fully (100%) vested at all times.  The percentage of his interest in his Matching Contribution Accrual and NonMatching Contribution Accrual Accounts is vested is based upon his number of Years of Service.  The vesting schedule is contained in Section 5.2.2.  If any of the events specified in Section 5.2.3 occurs, the Participant’s interest in his Matching Contribution Accrual and NonMatching Contribution Accrual Accounts is fully (100%) vested irrespective of his number of Years of Service.

5.2.2

Vesting schedule.  Each Participant has, on any date before his Separation from Service, death, or Disability, a vested interest in his Matching Contribution Accrual and NonMatching Contribution Accrual Accounts based on his number of Years of Service, in accordance with the following schedule:

5.2.3

Full vesting upon attainment of Normal Retirement Age, death or Disability.  Regardless of his number of Years of Service, a Participant’s interest in his Matching Contribution Accrual and NonMatching Contribution Accrual Accounts becomes fully (100%) vested upon (a) his Normal Retirement Date or date of death, if his Separation from Service has not previously occurred or (b) the Committee’s determination that he is unable to continue to perform his regular duties on account of Disability.

6.1.1

Manner of distribution.  Distributions to a Participant or Beneficiary will be in one of the following forms or a combination thereof:

 

(a)

lump sum distribution; or

 

(b)

annual installment payments not to exceed ten years;

6.1.2

Computation of distribution amount.  Any distribution to a Participant or Beneficiary under this Article 6 shall be based on the Valuation Date immediately preceding the date of distribution.

6.2.1

Distribution pursuant to Participant’s Compensation Reduction Agreement.  Distribution of the benefits accrued under the Plan shall become payable as designated under properly executed Compensation Reduction Agreements pursuant to Section 4.3.4 upon the earlier of:

 

(a)

a Participant’s Separation from Service;

 

(b)

the specific date designated by the Participant in the Compensation Reduction Agreement provided the date occurs at least two years after any contribution under the Compensation Reduction Agreement or any subsequent date elected in accordance with Section 4.3.5; or

 

(c)

a Participant’s death.

6.2.2

Accounts balances of less than $10,000 at Separation from Service.  Notwithstanding any election made by a Participant pursuant to Section 4.3.4, any Account balance of less than $10,000 shall be payable in a lump sum distribution on a Participant’s Separation from Service.

6.2.3

Other distributions.  Notwithstanding any election made by a Participant pursuant to Section 4.3.4, distributions from a Participant’s Account shall also be made by the Committee:

 

(a)

pursuant to a domestic relations order as defined in Section 414(p)(1)(B) of the Code; or

 

(b)

due to an unforeseeable emergency of the Participant, as defined in the regulations under Section 409A of the Code, provided that the distribution amount shall be limited to the amount necessary to satisfy the Participant’s need.

6.2.4

 

(a)

So long as the Company’s stock is traded on an established exchange, and notwithstanding any other provision in the Plan or any election made by a Participant pursuant to Section 4.3.4, distributions to Specified Employees pursuant to the Specified Employee’s Separation from Service may not be made before the date that is six months after the date of such Specified Employee’s Separation from Service.

 

 (b)

For purposes of this Section 6.2.4, Specified Employee means a Specified Employee as defined in Treas. Reg. §1.409A-1(i) (generally officers earning more than $145,000 per year, as indexed for inflation, who are among the fifty highest paid employees).

6.3

Type of Property to be Distributed.  All distributions from the Plan to Participants and Beneficiaries are made in cash.

6.4

Income and Payroll Tax Withholding.  The Company shall withhold any taxes required to be withheld for federal, state, or local government purposes.

6.5

Manner of Distribution to Minors or Incompetents.  If at any time any distributee is, in the judgment of the Committee, legally, physically or mentally incapable of receiving any distribution due to him, the distribution will be made by the Committee, in its sole and absolute discretion, to a legal or natural guardian or legally appointed representative of the distributee, or, if none exists, to any other person or entity that, in the Committee’s discretionary judgment, will apply the distribution in the best interests of the intended distributee.  The receipt by the guardian, legal representative, or other person or entity pursuant to this section shall be a complete discharge of all obligation and right of such Participant under this Plan.  Neither the Company nor the Committee shall have any responsibility to see to the proper application of payments made under this section.

6.6.1

Designation or change of Beneficiary by Participant.  When an Eligible Employee qualifies for participation in the Plan, the Committee will send him a Beneficiary designation form, on which he may designate one or more Beneficiaries and successor Beneficiaries.  A Participant may change his Beneficiary designation at any time by filing the prescribed form with the Committee.  The consent of the Participant’s current Beneficiary is not required for a change of Beneficiary and no Beneficiary has any rights under this Plan except as are provided by its terms. The rights of a Beneficiary who predeceases the Participant who designated him shall immediately terminate, unless the Participant has specified otherwise.

6.6.2

Beneficiary if no election is made.   Unless a different Beneficiary has been elected in accordance with Section 6.6.1, the Beneficiary of any Participant who is lawfully married on the date of his death is his surviving spouse.  The Beneficiary of any other Participant who dies without having designated a Beneficiary is his estate.

6.7

Actual Date of Payment.  An amount payable on a date specified in this Article 6 shall be paid as soon as administratively feasible after such date; but no later than the later of the end of the calendar year in which the specified date occurs or the 15th day of the third calendar month following such specified date, provided the Participant (or Beneficiary) is not permitted to designate the taxable year of the payment.  The payment date may be postponed further if calculation of the amount of the payment is not administratively practicable due to events beyond the control of the Company.  The amount due the Participant shall be determined based on the vested balance credited to the Account of the Participant on the actual date of payment.

7.1

Amendment of the Plan.  The Company may amend the Plan at any time.  However, no such amendment shall deprive any Participant of any portion of any benefits accrued before the date of the Amendment.

7.2

Termination of the Plan.  The Company may terminate the Plan, and distribute all vested accrued benefits, subject to the restrictions set forth in Treas. Reg. §1.409A-3(j)(4), if applicable.

8.1

The Administrative Committee.  The Plan is administered by a Committee consisting of one or more individuals appointed by the Board of Directors.  The Board may remove any member of the Committee at any time, with or without cause, and may fill any vacancy.  If a vacancy occurs, the remaining member or members of the Committee have full authority to act.  The Board is responsible for transmitting to the Trustee the names and authorized signatures of the members of the Committee and, as changes take place in membership, the names and signatures of new members.  Any member of the Committee may resign by delivering his written resignation to the Board, the Trustee and the Committee.  Any such resignation becomes effective upon its receipt by the Board or on such other date as is agreed to by the Board and the resigning member.  The Committee acts by a majority of its members in office at the time and may take action either by vote at a meeting or by consent in writing without a meeting.  The Committee may adopt such rules and appoint such subcommittees as it deems desirable for the conduct of its affairs and the administration of the Plan.

8.2

Powers of the Committee.  In carrying out its duties with respect to the general administration of the Plan, the Committee has, in addition to any other powers conferred by the Plan or by law, the following powers:

 

(a)

to determine all questions relating to eligibility to participate in the Plan;

 

(b)

to compute and certify to the Trustee the amount and kind of distributions payable to Participants and their Beneficiaries;

 

(c)

to maintain all records necessary for the administration of the Plan that are not maintained by the Company or the Trustee;

 

(d)

to interpret the provisions of the Plan and to make and publish such rules for the administration of the Plan as are not inconsistent with the terms thereof;

 

(e)

to establish and modify the method of accounting for the Plan or the Trust;

 

(f)

to employ counsel, accountants and other consultants to aid in exercising its powers and carrying out its duties hereunder; and

 

(g)

to perform any other acts necessary and proper for the administration of the Plan, except those that are to be performed by the Trustee.

8.3.1

Indemnification of members of the Committee by the Company.  The Company agrees to indemnify and hold harmless each member of the Committee against any and all expenses and liabilities arising out of his action or failure to act in such capacity, excepting only expenses and liabilities arising out of his own willful misconduct.  This right of indemnification is in addition to any other rights to which any member of the Committee may be entitled.

8.3.2

Liabilities for which members of the Committee are indemnified.  Liabilities and expenses against which a member of the Committee is indemnified hereunder include, without limitation, the amount of any settlement or judgment, costs, counsel fees and related charges reasonably incurred in connection with a claim asserted or a proceeding brought against him or the settlement thereof.

8.3.3

Company’s right to settle claims.  The Company may, at its own expense, settle any claim asserted or proceeding brought against any member of the Committee when such settlement appears to be in the best interests of the Company.

8.4

Claims Procedure.  If a dispute arises between the Committee and a Participant or Beneficiary over the amount of benefits payable under the Plan, the Participant or Beneficiary may file a claim for benefits by notifying the Committee in writing of his claim.  The Committee will review and adjudicate the claim pursuant to the rules provided for in the claims and appeals requirements of ERISA.

8.5

Expenses of the Committee.  The members of the Com­mittee shall serve without compensation for services as such.  All expenses of the Committee are paid by the Company.

8.6

Correspondence to the Committee.  Correspondence, including benefit claims, may be sent via first class mail, postage prepaid, to:

8.7

Expenses of the Plan.  The expenses of administering the Plan shall be paid by the Company.

9.1

Plan Not a Contract of Employment.  The adoption and maintenance of the Plan does not constitute a contract between the Employers and any Participant and is not a considera­tion for the employment of any person.  Nothing herein contained gives any Participant the right to be retained in the employ of the Employers or derogates from the right of the Employer to discharge any Participant at any time without regard to the effect of such discharge upon his rights as a Participant in the Plan.

9.2

No Rights Under Plan Except as Set Forth Herein.  Nothing in this Plan, express or implied, is intended, or shall be construed, to confer upon or give to any person, firm, association, or corporation, other than the parties hereto and their successors in interest, any right, remedy, or claim under or by reason of this Plan or any covenant, condition, or stipula­tion hereof, and all covenants, conditions and stipulations in this Plan, by or on behalf of any party, are for the sole and exclusive benefit of the parties hereto.