Exhibit
10.6
 
 REHABCARE
GROUP, INC.
 CHANGE
IN CONTROL TERMINATION AGREEMENT
 
 
 This
agreement (“Agreement”) has been entered into as of the 12th day of November
2007, by and between RehabCare Group, Inc., a Delaware corporation (the
“Company”), and Patricia S. Williams, an individual (the
“Executive”).
 
 RECITALS
 
 The Board
of Directors of the Company has determined that it is in the best interests of
the Company and its stockholders to reinforce and encourage the continued
attention and dedication of the Executive to the Company as the Company’s Senior
Vice President, General Counsel and Corporate Secretary and to assure that the
Company will have the continued dedication of the Executive, notwithstanding the
possibility or occurrence of a Change in Control (as defined
below).  The Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties
and risks created by a potential or pending Change in Control and to encourage
the Executive’s full attention and dedication to the Company in the event of any
potential or pending Change in Control.  Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter into this
Agreement.
 
 IT
IS AGREED AS FOLLOWS:
 
 Section
1:                                Definitions
and Construction.
 
 1.1           Definitions. For purposes of this
Agreement, the following words and phrases, whether or not capitalized, shall
have the meanings specified below, unless the context plainly requires a
different meaning.
 
 1.1(a)                      “Board” means the Board of
Directors of the Company.
 
 1.1(b)                      “Cause”means termination
based upon: (i) the Executive's willful and continued failure to
substantially perform his duties with the Company (other than as a result of
incapacity due to physical or mental condition), after a written demand for
substantial performance is delivered to the Executive by the Company, which
specifically identifies the manner in which the Executive has not substantially
performed his duties, (ii) the Executive's commission of an act
constituting a criminal offense that would be classified as a felony under the
applicable criminal code or involving moral turpitude, dishonesty, or breach of
trust, or (iii) the Executive's material breach of any provision of this
Agreement.  For purposes of this Section, no act or failure to act on
the Executive's part shall be considered "willful" unless done, or omitted to be
done, without good faith and without reasonable belief that the act or omission
was in the best interest of the Company.  Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated for Cause
unless and until (i) he receives a Notice of Termination from the Company, (ii)
he is given the opportunity, with counsel, to be heard before
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 the
Board, and (iii) the Board finds, in its good faith opinion, that the Executive
was guilty of the conduct set forth in the Notice of Termination.
 
 1.1(c)                      “Change in Control”
means:
 
 (i)           The
acquisition by any individual, entity or group, or a Person (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of ownership of thirty
percent (30%) or more of either (a) the then outstanding shares of common stock
of the Company (the “Outstanding Company Common Stock”) or (b) the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); or
 
 (ii)           Individuals
who, as the date hereof, constitute the Board (the “Incumbent Board”) cease for
any reason to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election, by the Company’s stockholders was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, as a member of the Incumbent Board, any such
individual whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or
 
 (iii)           Approval
by the stockholders of the Company of a reorganization, merger or consolidation,
in each case, unless, following such reorganization, merger or consolidation,
(a) more than fifty percent (50%) of, respectively, the then outstanding shares
of common stock of the corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be, (b) no Person beneficially owns, directly or indirectly, thirty
percent (30%) or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization, merger or
consolidation or the combined voting power of the then outstanding voting
securities of such corporation, entitled to vote generally in the election of
directors and (c) at least a majority of the members of the board of directors
of the corporation resulting from such reorganization, merger or consolidation
were members of the Incumbent Board at the time of the execution of the initial
agreement providing for such reorganization, merger or
consolidation;
 
 (iv)           Approval
by the stockholders of the Company of (a) a complete liquidation or dissolution
of the Company or (b) the sale or other disposition of all or
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  substantially
all of the assets of the Company, other than to a corporation, with respect to
which following such sale or other disposition, (1) more than forty percent
(40%) of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (2) no Person
beneficially owns, directly or indirectly, thirty percent (30%) or more of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors and (3) at
least a majority of the members of the board of directors of such corporation
were members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such sale or other disposition of
assets of the Company.
 
 1.1(d)                      “Change in Control Date” means
the date that the Change in Control first occurs.
 
 1.1(e)                      “Company”has the meaning set
forth in the first paragraph of this Agreement and, with regard to successors,
in Section 4.2 of this Agreement.
 
 1.1(f)                      “Code” shall mean the Internal
Revenue Code of 1986, as amended.
 
 1.1(g)                      “Date of Termination” means
the date, on or after a Change in Control Date, that Executive’s employment with
the Company terminates due to the termination of Executive’s employment by the
Company without Cause or Executive’s termination of employment with the Company
for Good Reason.  In all cases, a “Date of Termination” shall only
occur upon separation from service from the Company and all of its affiliates,
as defined in Treasury regulations under Section 409A of the Code.
 
 1.1(h)                      “Effective Date” means the
date of this Agreement specified in the first paragraph of this
Agreement.
 
 1.1(i)                      “Exchange Act” means the
Securities Exchange Act of 1934, as amended.
 
 1.1(j)                      “Good Reason”means
termination based upon: (i) the assignment to the Executive of any duties
inconsistent in any respect with the position (including status, offices, titles
and reporting requirements), authority, duties and responsibilities held by the
Executive as of the date of this Agreement or any other action by the Company
which results in a material diminution in such position, authority, duties and
responsibilities; (ii) the Company's requiring the Executive to have any office
arrangements for performing his duties which are different than the arrangements
in effect as of the date of this Agreement; (iii) any reduction in Executive’s
annual base salary; (iv) any reduction in Executive's Target Bonus, as defined
in Section 2.1(b);
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  or (v) a
material breach by the Company of any provision of this Agreement. Any
termination of the Executive’s employment based upon a good faith determination
of "Good Reason" made by the Executive shall be subject to a delivery of a
Notice of Termination by the Executive to the Company in the manner prescribed
in Section 1.1(k) and subject further to the ability of the Company to remedy
promptly any action not taken in bad faith by the Company that may otherwise
constitute Good Reason under this Section 1.1(j).
 
 1.1(k)                      “Notice of Termination” means
a written notice, given in accordance with Section 5.2, which (i) indicates the
specific termination provision in this Agreement relied upon; (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed
to be a basis for termination of the Executive’s employment under the provision
so indicated; and (iii) if the Date of Termination is other than the date of
receipt of such notice, specifies the termination date (which date shall not be
more than fifteen (15) days after the giving of such notice).
 
 1.1(l)                      “Person” means any “person”
within the meaning of Sections 13(d) and 14(d) of the Exchange Act.
 
 1.1(m)                      “Term” means the period that
begins on the Effective Date and ends on the earlier of:
 
 (i)           the
date of Executive’s termination of employment from the Company for any reason
prior to the Change in Control Date;
 
 (ii)           the
date of Executive’s termination of employment after a Change in Control Date for
any reason other than the involuntary termination of Executive’s employment
without Cause or the termination of employment with the Company by the Executive
for Good Reason;
 
 (iii)           the
Date of Termination; or
 
 (iv)           the
close of business on the later of December 31, 2007 or December 31st of any
renewal term.  This Agreement will automatically renew for annual
one-year periods unless the Company gives written notice to Executive, by
September 30, 2007, or September 30th of any
succeeding year, of the Company’s intent not to renew this
Agreement.
 
 1.2           Gender and
Number.  When appropriate, pronouns in this Agreement used in
the masculine gender include the feminine gender, words in the singular include
the plural, and words in the plural include the singular.
 
 1.3           Headings.  All
headings in this Agreement are included solely for ease of reference and do not
bear on the interpretation of the text.
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  1.4           Applicable
Law.  This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Missouri, without reference to
its conflict of law principles.
 
 Section
2:                                Change
in Control Severance Benefits
 
 2.1           Benefits Upon a
Change in Control.Subject to the
provisions of Section 2.5, if a Change in Control occurs during the Term and
within two (2) years after the Change in Control Date (a) the Company terminates
the Executive’s employment without Cause, or (b) the Executive terminates
employment with the Company for Good Reason, then the Executive shall become
entitled to the payment of the benefits as provided below:
 
 2.1(a)                      Accrued
Obligations.  Within thirty (30) days after the Date of
Termination, the Company shall pay to the Executive the sum of the Executive’s
accrued salary through the Date of Termination and any accrued and unused
vacation days, in each case to the extent not previously paid, and the “Prorated
Target Bonus.”  For purposes of this Agreement, the term “Prorated
Target Bonus” means an amount determined by multiplying the actual percentage of
the Executive’s base salary that was to be paid to the Executive as his Target
Bonus in the year in which the Change in Control Date occurs by the Executive’s
then-current Annual Base Salary as of the Date of Termination and prorating this
amount by multiplying it by a fraction, the numerator of which is the number of
days during the then-current calendar year that the Executive was employed by
the Company up to and including the Date of Termination and the denominator of
which is 365.  Payment under any long-term cash incentive plan or
other incentive compensation plan shall be determined and governed solely by the
terms of the applicable plan.
 
 2.1(b)                      Severance
Amount.  Within thirty (30) days after the Date of Termination,
the Company shall pay to the Executive as severance pay in a lump sum, in cash,
an amount equal to one (1) times the sum of the Executive’s then-current annual
base salary plus Target Bonus for the year in which the Change in Control Date
occurs.  Payments under any long term cash incentive plan are not part
of or included in this calculation.  For purposes of this Agreement,
Target Bonus means the designated percentage of Executive’s target annual
incentive award, expressed as a designated percentage of Executive’s annual base
salary, as established by the Board of Directors or the Compensation and
Nomination/Corporate Governance Committee at the beginning of the year in which
the Change of Control Date occurs.
 
 2.1(c)                      Stock-Based
Awards.  All stock-based awards held by the Executive that have
not expired in accordance with their respective terms shall vest and/or become
exercisable, expire or terminate in accordance with the terms of their
respective grant agreements.
 
 2.1(d)                      Health Benefit
Continuation.  For twelve (12) months following the Date of
Termination, the Executive and his spouse and other dependents shall continue to
be covered by the medical, dental, vision, and prescription drug plan(s)
maintained by the Company in which the Executive and his spouse or other
dependents were participating immediately prior to the Date of Termination;
provided that to the extent such continued coverage is not permitted
under
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  the
Company’s plan(s), for each of twelve (12) months beginning in the month the
Date of Termination occurs, the Company will provide substantially similar
benefits or, at the Company’s option, will pay to the Executive an amount,
grossed up for income and employment taxes thereon, equal to the dollar amount
that would have been paid by the Company for medical, dental, vision, and
prescription drug coverage for the Executive and the Executive’s family under
the Company’s plan(s) during such period; provided, however,
that if the Executive becomes reemployed with another employer and is eligible
to receive such benefits under another employer-provided plan, program, practice
or policy the health benefits described herein shall be immediately terminated
upon the commencement of coverage under the new employer’s plan, program,
practice or policy.
 
 2.1(e)                      Outplacement.  During
the one-year period beginning on the Date of Termination, the Company shall
provide to Executive executive-level outplacement services by a vendor selected
by the Company.
 
 2.1(f)                      Gross-up
Payments.
 
 (i)           Anything
in this Agreement to the contrary notwithstanding, in the event that it shall be
determined that any payment by the Company to or for the benefit of the
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise but determined without regard to any
additional payments required under this Section 2.1(f)) (a “Payment”) would be
subject to the excise tax imposed by Code Section 4999 (or any successor
provision) or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the “Excise Tax”), then
the Executive shall be entitled to receive an additional payment (a “Gross-Up
Payment”) in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest or penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment on an after-tax basis
equal to the Excise Tax imposed upon the Payment.  Any Gross-Up
Payment required under this Section 2.1(f) shall be made on the April 1 of each
of the three years immediately following the year in which the Date of
Termination occurred.  The intent of the parties is that the Company
shall be responsible in full for, and shall pay, any and all Excise Tax on any
Payments and Gross-up Payment(s) and any income and all excise and employment
taxes (including, without limitation, penalties and interest) imposed on any
Gross-up Payment(s) as well as any loss of deduction caused by or related to the
Gross-up Payment(s).
 
 (ii)           Subject
to the provisions of Section 2.1(f)(iii), all determinations required to be made
under this Section 2.1(f), including whether and when a Gross-up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determinations, shall be made by the outside
accounting firm that then audits the Company’s financial
statements  (the “Accounting Firm”), which Accounting Firm shall
provide detailed supporting calculations both to the Company and to the
Executive within fifteen (15) business days of receipt of notice from the
Company or the Executive that there has been or will
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  be a
Payment.  In the event that the Accounting Firm is serving as the
accountant or auditor for the Person effecting the Change in Control, the
Executive shall appoint another nationally recognized accounting firm to make
the determinations required hereunder (which accounting firm shall then be
referred to as the “Accounting Firm” hereunder).  All fees and
expenses of the Accounting Firm shall be paid solely by the
Company.  If the Accounting Firm determines that no Excise Tax is
payable by the Executive, it shall furnish the Executive with a written opinion
that failure to report the Excise Tax on the Executive’s applicable federal
income tax return would not result in the imposition of a negligence or similar
penalty.  Any determination by the Accounting Firm shall be binding
upon the Company and the Executive in the absence of a material mathematical or
legal error.  As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that the Gross-Up Payments will not
have been made by the Company that should have been made or that the Gross-Up
Payments will have been made that should not have been made, in each case
consistent with the calculations required to be made hereunder.  In
the event that the Company exhausts its remedies pursuant to Section 2.1(f)(iii)
below and a payment of any Excise Tax or any interest, penalty or addition to
tax related thereto is determined to be due, the Accounting Firm shall determine
the amount of the underpayment of Excise Taxes that has occurred and such
underpayment and interest, penalty or addition to tax shall be promptly paid by
the Company to the Internal Revenue Service in satisfaction of the Company’s
original withholding obligations.  In the event that the Accounting
Firm determines that an overpayment of Gross-Up Payment(s) has occurred, the
Executive shall be responsible for the immediate repayment to the Company of
such overpayment with interest at the applicable federal rate provided for in
Section 7872(f)(2) of the Code; provided, however,
that the Executive shall have no duty or obligation whatsoever to repay such
overpayment if Executive’s receipt of the overpayment, or any portion thereof,
is included in the Executive’s income and the Executive’s repayment of the same
is not deductible by the Executive for federal or state income tax
purposes.
 
 (iii)           The
Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment of the Excise
Tax.  Such notification shall be given as soon as practicable but no
later than ten (10) business days after the Executive is informed in writing of
such claim by the Internal Revenue Service and the notification shall apprise
the Company of the nature of the claim and the date on which such claim is
required to be paid.  The Executive shall not pay such claim prior to
the expiration of a 30-day period following the date on which the Executive has
given such notification to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is
required).  If the Company notifies the Executive in writing prior to
the expiration of such period that it desires to contest such claim, the
Executive shall:
 
 (A)           give
the Company any information reasonably requested by the Company relating to such
claim;
 
 (B)           take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including without
limitation,
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  accepting
legal representation with respect to such claim by an attorney reasonably
selected by the Company;
 
 (C)           
cooperate with the Company in good faith in order to effectively contest such
claim; and
 
 (D)           permit
the Company to participate in any proceedings relating to such
claim;
 
 provided, however,
that the Company shall bear and pay all costs and expenses (including additional
interest and penalties) incurred in connection with such contest, and shall
indemnify and hold the Executive harmless, on an after-tax basis to the
Executive, for any Excise Tax or income tax (including interest and penalties
with respect thereto) imposed as a result of such contest.  Without
limitation on the foregoing provisions of this Section 2.1(f), the Company shall
control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction or in one or more
appellate courts, as the Company shall determine.
 
 2.2           Non-Exclusivity of
Rights.  Except as provided in Sections 2.1(d) or 2.1(e),
nothing in this Agreement shall prevent or limit the Executive’s continuing or
future participation in any plan, program, policy or practice provided by the
Company and for which the Executive may qualify.  Amounts which are
vested benefits of which the Executive is otherwise entitled to receive under
any plan, policy, practice or program of, or any other contract or agreement
with, the Company at or subsequent to the Date of Termination, shall be payable
in accordance with such plan, policy, practice or program or contract or
agreement.
 
 2.3           Full Settlement. The Company’s
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as provided in Section 2.1(d), such
amounts shall not be reduced whether or not the Executive obtains other
employment.  The Company agrees to pay promptly as incurred, to the
full extent permitted by law, all legal fees and expenses which the Executive
may reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by the
Executive regarding the amount of any payment pursuant to this Agreement), plus
in each case interest on any delayed payment at the applicable Federal rate
provided for in Code Section 7872(f)(2)(A).
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  2.4           Conditions To
Payments.To be eligible to receive (and continue to receive)
and retain the payments and benefits described in Section 2, the Executive must
comply with the terms of Section 3, and must execute and deliver to the Company
an agreement, in form and substance satisfactory to the Company, effectively
releasing and giving up all claims the Executive may have against the Company
and its subsidiaries, shareholders, successors and affiliates (and each of their
respective employees, officers, plans and agents) arising out of or based upon
any facts or conduct occurring prior to that date, and reaffirming and agreeing
to comply with the terms of this Agreement and any other agreement signed by the
Executive in favor of the Company or any of its subsidiaries or affiliates. The
agreement will be prepared by the Company and provided to the Executive at the
time the Executive’s employment is terminated or as soon as administratively
practicable thereafter.  The Company will have no obligations to make
the payments and/or provide the benefits specified in Section 2, unless and
until the Executive signs and delivers the agreement described in this Section
2.4 and all conditions to the effectiveness of the release and waiver (including
but not limited to the expiration of any applicable time period to consider
signing the agreement or to revoke acceptance without any action being taken to
revoke acceptance or otherwise invalidate the agreement) have been
satisfied.
 
 2.5           Key Employee Six Month
Deferral.Notwithstanding anything to the contrary in this
Section 2, a “Specified Employee” may not receive a payment of nonqualified
deferred compensation, as defined in Code Section 409A and the regulations
thereunder, until at least six months after a Date of
Termination.  Any payment of nonqualified deferred compensation
otherwise due in such six month period shall be suspended and become payable at
the end of such six month period.
 
 A
“Specified Employee,” for each calendar year, means an employee who is a key
employee, as defined by the Company in accordance with Section 409A and the
regulations thereunder.
 
 Section
3:                                Non-Competition.
 
 The
provisions of this Section 3 and any related provisions shall survive
termination of this Agreement and/or Executive’s employment with the Company and
do not supersede, but are in addition to and not in lieu of, any other
agreements signed by Executive concerning non competition, confidentiality,
solicitation of employees, or trade secrets (whether included in a stock option
agreement or otherwise), and are included in consideration for the Company
entering into this Agreement. Executive’s right to receive and retain the
benefits specified in Section 2 are conditioned upon Executive’s compliance with
the terms of this Section 3:
 
 3.1           Non-Compete
Agreement.
 
 3.1(a)                      During
the Executive’s employment with the Company and during the period beginning on
the date the Executive’s employment with the Company terminates and ending one
(1) year thereafter, the Executive shall not, without prior written approval of
the Company’s Chief Executive Officer, become an officer, employee, agent,
partner, or director of, or provide any services or advice to or for, any
business enterprise in substantial direct competition (as defined
in
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  Section
3.1(b)) with the Company. The above constraint shall not prevent the Executive
from making passive investments, not to exceed five percent (5%), in any
enterprise where Executive’s services or advice is not required or
provided.
 
 3.1(b)                      For
purposes of Section 3.1(a), a business enterprise with which the Executive
becomes associated as an officer, employee, agent, partner, or director shall be
considered in substantial direct competition, if such entity competes with the
Company in any business in which the Company or any of its direct or indirect
subsidiaries is engaged or provides services or products of a type which is
marketed, sold or provided by the Company or any of its subsidiaries or
affiliates (including but not limited to any product or service which the
Company or any such other entity is developing) within any State or country
where the Company or any such affiliate or subsidiary then provides or markets
(or plans to provide or market) any service or product as of the date the
Executive’s Company employment terminates.
 
 3.1(c)                      During
the Executive’s employment with the Company and during the period beginning on
the date the Executive’s employment with the Company terminates and ending one
(1) year thereafter (i.e., on the anniversary of the date the Executive’s
employment terminates), the Executive shall not, without prior written approval
of the Company’s Chief Executive Officer, directly or indirectly, solicit,
provide to, take away, or attempt to take away or provide to any customer or
solicited prospect of the Company or any of its subsidiaries any business of a
type which the Company or such subsidiary provides or markets or which is
competitive with any business then engaged in (or product or services marketed
or planned to be marketed) by the Company or any of its subsidiaries; or induce
or attempt to induce any such customer to reduce such customer’s business with
that business entity, or divert any such customer’s business from the Company
and its subsidiaries; or discuss that subject with any such
customer.
 
 3.1(d)                      During
the Executive’s employment with the Company and during the period beginning on
the date the Executive’s employment with the Company terminates and ending one
(1) year thereafter, the Executive shall not, without prior written approval of
the Company’s Chief Executive Officer, directly or indirectly solicit the
employment of, recruit, employ, hire, cause to be employed or hired, entice
away, or establish a business with, any then current officer, office manager,
staffing coordinator or other employee or agent of the Company or any
of  its  subsidiaries or affiliates (other than
non-supervisory or non-managerial personnel who are employed in a clerical or
maintenance position) or any other such person who was employed by the Company
or any of its subsidiaries or affiliates within the twelve (12) months
immediately prior to the date the Executive’s employment with the Company
terminated; or suggest to or discuss with any such employee the discontinuation
of that person’s status or employment with the Company or any of its
subsidiaries and affiliates, or such person’s employment or participation in any
activity in competition with the Company or any of its subsidiaries or
affiliates.
 
 3.2           Confidential
Information.  The Executive has received (and will receive)
under a relationship of trust and confidence, and shall hold in a fiduciary
capacity for the benefit of the Company, all “Confidential Information” and
secret or confidential information, knowledge or data relating to the Company or
any of its affiliated companies or direct or indirect subsidiaries, and
their
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  respective
businesses, which shall have been obtained by the Executive during the
Executive’s employment by the Company and which shall not be or become public
knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement).  During the Executive’s
employment with the Company and after termination of the Executive’s employment
with the Company, the Executive shall never, without the prior written consent
of the Company, or as may otherwise be required by law or legal process, use
(other than during Executive’s employment with the Company for the benefit of
the Company), or communicate, reveal, or divulge any such information, knowledge
or data, to anyone other than the Company and those designated by
it.  In no event shall an asserted violation of the provisions of this
Section 3.2 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement. “Confidential
Information” means confidential and/or proprietary information and trade secrets
of or relating to the Company or any of its subsidiaries and affiliates (and
includes information the disclosure of which might be injurious to those
companies), including but not limited to information concerning personnel of the
Company or any of its subsidiaries and affiliates, confidential financial
information, customer or customer prospect information, information concerning
temporary staffing candidates, temporary employees, and personnel, temporary
employee and customer lists and data, methods and formulas for estimating costs
and setting prices, research results (such as marketing surveys, or trials),
software, programming, and programming architecture, enhancements and
developments, cost data (such as billing, equipment and programming cost
projection models), compensation information and models, business or marketing
plans or strategies, new products or marketing strategies, deal or business
terms, budgets, vendor names, programming operations, information on proposed
acquisitions or dispositions, actual performance compared to budgeted
performance, long-range plans, results of internal analyses, computer programs
and programming information, techniques and designs, business and marketing
plans, acquisition plans and strategies, divestiture plans and strategies,
internal valuations of Company assets, and trade secrets, but does not include
information generally known in the marketplace.  In addition,
Confidential Information includes information of another company given to the
Company with the understanding that it will be kept information
confidential.  All Confidential Information described herein is and
constitutes trade secret information (regardless of whether the same is legally
determined to be a trade secret) and is not the property of the
Executive.
 
 3.3           Non Disparagement. The
Executive will never criticize, denigrate, disparage, or make any derogatory
statements about the Company or its respective business plans, policies and
practices, or about any of the Company’s officers, employees or former officers
or employees, to customers, competitors, suppliers, employees, former employees,
members of the public, members of the media, or any other person; nor shall the
Executive harm or in any way adversely affect the reputation and goodwill of the
Company.  Nothing in this paragraph shall preclude or prevent the
Executive from giving truthful testimony or information to law enforcement
entities, administrative agencies or courts or in any other legal proceedings as
required by law.
 
 3.4           Provisions Relating To Non
Competition, Non Solicitation And Confidentiality.  The
provisions of this Section 3 survive the termination of Executive’s employment
and this Agreement and shall not be affected by any subsequent changes in
employment terms, positions, duties, responsibilities, authority, or employment
termination,
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  permitted
or contemplated by this Agreement.  To the extent that any covenant
set forth in this Section 3 of this Agreement shall be determined to be invalid
or unenforceable in any respect or to any extent, the covenant shall not be void
or rendered invalid, but instead shall be automatically amended for such lesser
term, to such lesser extent, or in such other lesser degree, as will grant the
Company the maximum protection and restrictions on the Executive’s activities
permitted by applicable law in such circumstances. In cases where there is a
dispute as to the right to terminate the Executive’s employment or the basis for
such termination, the term of any covenant set forth in Section 3 shall commence
as of the date specified in the Notice of Termination and shall not be deemed to
be tolled or delayed by reason of the provisions of this Agreement. The Company
shall have the right to injunctive relief to restrain any breach or threatened
breach of any provisions in this Section 3 in addition to and not in lieu of any
rights to recover damages or cease making payments under this
Agreement.  The Company shall have the right to advise any prospective
or then current employer of Executive of the provisions of this Agreement
without liability. The Company’s right to enforce the provisions of this
Agreement shall not be affected by the existence, or non-existence, of any other
similar agreement for any other executive, or by the Company’s failure to
exercise any of its rights under this Agreement or any other similar agreement
or to have in effect a similar agreement for any other employee.
 
 Section
4:                                Successors.
 
 4.1           Successors of Executive. This Agreement is
personal to the Executive and, without the prior written consent of the Company,
the rights (but not the obligations) shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution.  This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
legal representatives.
 
 4.2           Successors of
Company.  This Agreement is freely assignable by the Company
and its successors/assignees. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company or the division
in which the Executive is employed, as the case may be, to assume expressly and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place.  Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to terminate the Agreement at his option on or after
the Change in Control Date for Good Reason.
 
 Section
5:                                Miscellaneous.
 
 5.1           Other
Agreements.This Agreement supersedes all prior dated
agreements, letters and understandings concerning severance benefits payable to
the Executive after a Change in Control.  The Board may, from time to
time in the future, provide other incentive programs and bonus arrangements to
the Executive with respect to the occurrence of a Change in Control that will be
in addition to the benefits required to be paid in the designated circumstances
in connection with the occurrence of a Change in Control.  Such
additional incentive programs and/or bonus arrangements will affect or abrogate
the benefits to be paid under this Agreement only in the manner and to the
extent explicitly agreed to by the Executive in any such subsequent
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  program
or arrangement. This Agreement does not supersede or affect in any way the
validity of any agreement signed by Executive concerning confidentiality, stock
options, post-employment competition, non solicitation of business, accounts or
employees, or agreements of a similar type or nature; and any provisions of this
Agreement shall be in addition to and not in lieu of (or replace) any such other
agreements.
 
 5.2           Notice.  For
purposes of this Agreement, notices and all other communications provided for in
the Agreement shall be in writing and shall be deemed to have been duly given
when delivered or mailed by certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses as set forth
below; provided that all notices to the Company shall be directed to the
attention of the Board of Directors, or to such other address as one party may
have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
 
 Notice to the
Executive:
 
 1602
Vintage Ridge Court
 Wildwood,
MO 63038
 
 Notice to the
Company:
 
 RehabCare
Group, Inc.
 7733
Forsyth Boulevard, Suite 2300
 St.
Louis, Missouri 63105
 Att:
Board of Directors
 
 5.3           Validity.  The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
 
 5.4           Withholding.  The
Company may withhold from any amounts payable under this Agreement such Federal,
state or local taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
 
 5.5           Waiver.  The
Executive’s or the Company’s failure to insist upon strict compliance with any
provision hereof or any other provision of this Agreement or the failure to
assert any right the Executive or the Company may have hereunder, shall not be
deemed to be a waiver of such provision or right or any other provision or right
of this Agreement.
 
 5.6           Section 409A
Compliance.The parties intend that all provisions of this
Agreement comply with the requirements of Code Section 409A to the extent
applicable.  No provision of this Agreement shall be operative to the
extent that it will result in the imposition of the additional tax described in
Code Section 409A(a)(1)(B)(i)(II) and the parties agree to revise the Agreement
as necessary to comply with Section 409A and fulfill the purpose of the voided
provision.  Nothing in this Agreement shall be interpreted to permit
accelerated payment of
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  nonqualified
deferred compensation, as defined in Section 409A, or any other payment in
violation of the requirements of such Code Section 409A.
 
 IN
WITNESS WHEREOF, the Executive and the Company, pursuant to the authorization
from its Board, have caused this Agreement to be executed in its name on its
behalf, all as of the day and year first above written.
 
 
 
 
 /s/ Patricia S.
Williams
 Patricia S. Williams
 
 
 REHABCARE
GROUP, INC.
 
 
 By:       /s/ John H.
Short
 John H. Short
 President and Chief Executive Officer
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