Exhibit 10.1

December 5, 2006

 

PERSONAL AND CONFIDENTIAL

 

Mr. Michael Garcia

742 Mark Wesley Lane

Ballwin, MO 63021

 

Dear Michael:

 

We are pleased to offer you a full time position to become a member of the
RehabCare Executive team. The following is an overview of our offer of
employment:

 

Position

 

Your position will be Senior Vice President, Chief Human Resources Officer for
RehabCare Group, Inc., reporting directly to me.

 

Start Date

 

Your effective start date with RehabCare is February 28, 2007.

 

Compensation

 

Your base salary for this full-time salaried position will be $260,000 annually.

 

You will be eligible to participate in our Executive Short-Term Incentive Plan
with a 45% of base salary target award opportunity.

 

Upon acceptance and hire, you will be granted 10,000 shares of restricted stock
subject to Board approval. The restrictions lapse and become fully vested 3
years from the date of grant.

 

You will also be eligible to participate in RehabCare Group, Inc.’s 2007-2009
Executive Long-Term Cash Incentive Plan with a 25% target award opportunity.
Your participation will be prorated based on your start date.

 

Furthermore, beginning in 2008 you will be eligible to participate in the equity
component of RehabCare’s Long Term Incentive Plan. Currently the award value for
your position is set at 75% of your base salary, subject to review of the Board
of Directors.

 

 

 

 

 

 

Benefits

 

You will be eligible to participate in RehabCare’s benefits programs (medical,
dental, vision, short-term disability, long-term disability, life insurance,
etc.).

 

Executive Paid Days Off

 

You will be eligible for 30 days per year (this includes vacation, sick time,
personal and holidays).

 

401(k)

 

You will eligible to participate in the RehabCare 401(k) savings plan. The
company match is 50% of the first 4% of base salary that you elect to
contribute.

 

Executive Termination Compensation Agreement – Senior Vice President

 

This position is covered by the RehabCare Group, Inc. Severance Plan for Key
Company Senior Vice Presidents. The agreement provides for Change-In-Control
protection, if executed, of eighteen months base salary, annual target bonus,
and health and welfare coverage. Furthermore, for non-performance based
involuntary termination the agreement provides you with severance pay of twelve
months of base salary, annual target bonus and health and welfare coverage.

 

Other Information

 

RehabCare maintains an employment-at-will relationship with its employees. This
letter constitutes an offer of employment but it is not an employment contract.
You retain the right to terminate this employment relationship at any time and
for any reason. The company retains the same right.

 

On behalf of the new RehabCare family, I look forward to your contribution to
our company. We are very excited about having you join us, and are eager to
begin working together to make RehabCare a leader in the healthcare services
industry.

 

If you have any questions or comments, please contact Deborah Wintner at
314-659-2553. If not, please sign both copies of this offer letter, send one
copy to Deborah Wintner at RehabCare Group, Inc., and keep the other copy for
your records.

 

 

 

 

 

 

Sincerely,

 

 

/s/ John H. Short, Ph.D.                                          

John H. Short, Ph.D.

President and Chief Executive Officer

RehabCare Group, Inc.

 

 

I will respect the confidentiality of my salary information and terms of my
employment. By my signature below, I agree to the terms of employment set forth
in this letter.

 

/s/ Michael R. Garcia                                          
                    December 7, 2006      

Signature

Date