Document:

EX-10.35

 EXHIBIT 10.35 
 CHANGE-IN-CONTROL SEVERANCE AGREEMENT 
 THIS CHANGE-IN-CONTROL
SEVERANCE AGREEMENT (the “Agreement”) is made as of June 1, 2011 (the “Effective Date”), by and between KINDRED HEALTHCARE OPERATING, INC., a Delaware corporation (or as appropriate, one of its indirect
subsidiaries) (the “Company”) and PATRICIA HENRY (the “Employee”). 
 RECITALS: 

A. The Employee is employed by the Company or a direct or indirect subsidiary of the Company, itself a wholly owned subsidiary of
Kindred Healthcare, Inc. (the “Parent”). 
 B. The Company recognizes that the Employee’s contribution to
the Company’s growth and success will be significant. 
 C. The Company wishes to encourage the Employee to remain
with and devote full time and attention to the business affairs of the Company and wishes to provide income protection to the Employee for a period of time in the event of a Change in Control. 

D. The Employee has voluntarily cancelled and forfeited any change-in-control or similar agreement or plan between the Employee,
the Company and/or any affiliates of the Company, including without limitation RehabCare Group, Inc. (“RehabCare”), in consideration for entering into this Agreement. 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 AGREEMENT: 

1. Definitions. 
 a. “Base Salary” shall mean the Employee’s regular annual rate of base pay in gross as of the date in question as elected under Paragraph 3(a). 

b. “Cause” shall mean the Employee’s (i) conviction of or plea of nolo contendere to a
crime involving moral turpitude; or (ii) willful and material breach by Employee of her duties and responsibilities, which is committed in bad faith or without reasonable belief that such breaching conduct is in the best interests of the
Company, but with respect to (ii) only if the Board of Directors of Parent (the “Board”) adopts a resolution by a vote of at least 75% of its members so finding after giving the Employee and her attorney an opportunity to be heard by
the Board. 
 c. “Change in Control” The term “Change in Control” shall mean any one
of the following events occurring after the date of this Agreement: 

 (i) An acquisition (other than directly from Parent) of any voting securities of Parent
(the “Voting Securities”) by any “Person” (as defined in Paragraph 1(f) hereof) immediately after which such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934)
of 20% or more of the combined voting power of Parent’s then outstanding Voting Securities; provided, however, that in determining whether a Change in Control has occurred, Voting Securities which are acquired in an acquisition by
(i) Parent or any of its subsidiaries, (ii) an employee benefit plan (or a trust forming a part thereof) maintained by Parent or any of its subsidiaries or (iii) any Person in connection with an acquisition referred to in the
immediately preceding clauses (i) and (ii) shall not constitute an acquisition which would cause a Change in Control. 
 (ii) The individuals who, as of the Effective Date, constituted the Board of Directors of Parent (the “Incumbent Board”) cease for any reason to constitute over 50% of the Board; provided,
however, that if the election, or nomination for election by Parent’s stockholders, of any new director was approved by a vote of over 50% of the Incumbent Board, such new director shall, for purposes of this Section 1(c)(ii), be
considered as though such person were a member of the Incumbent Board; provided, further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or
threatened “Election Contest” (as described in Rule 14a-11 promulgated under the 1934 Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors of Parent (a
“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest. 
 (iii) Consummation of a merger, consolidation or reorganization involving Parent, unless each of the following events occurs in connection with such merger, consolidation or reorganization: 

(A) the stockholders of Parent, immediately before such merger, consolidation or reorganization, own, directly or indirectly immediately
following such merger, consolidation or reorganization, over 50% of the combined voting power of all voting securities of the corporation resulting from such merger or consolidation or reorganization (the “Surviving Company”) over which
any Person has Beneficial Ownership in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation or reorganization; 

(B) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such
merger, consolidation or reorganization constitute over 50% of the members of the board of directors of the Surviving Company; and 
 (C) no Person (other than Parent, any of its subsidiaries, any employee benefit plan (or any trust forming a part thereof) maintained by Parent, the Surviving Company or any Person who, immediately prior
to such merger, consolidation or reorganization had Beneficial Ownership of 20% or more of the then outstanding Voting Securities) has Beneficial Ownership of 20% or more of the combined voting power of the Surviving Company’s then outstanding
voting securities. 

 (iv) Approval by Parent’s stockholders of a complete liquidation or dissolution of
Parent. 
 (v) Approval by Parent’s stockholders of an agreement for the sale or other disposition of all or substantially
all of the assets of Parent to any Person (other than a transfer to a subsidiary of Parent). 
 (vi) Any other event that the
Board shall determine constitutes an effective Change in Control of Parent. 
 (vii) Notwithstanding the foregoing, a Change in
Control shall not be deemed to occur solely because any Person (the “Subject Person”) acquired Beneficial Ownership of more than the permitted amount of the outstanding Voting Securities as a result of the acquisition of Voting Securities
by Parent which, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially Owned by the Subject Person; provided that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of Voting Securities by Parent, and after such share acquisition by Parent, the Subject Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the then outstanding
Voting Securities Beneficially Owned by the Subject Person, then a Change in Control shall occur. 
 d.
“Change-in-Control Date” shall mean the date immediately prior to the effectiveness of the Change in Control. 
 e. “Good Reason” The Employee shall have good reason to terminate employment with the Company if (i) the Employee’s title, duties, responsibilities or authority is
reduced or diminished from those in effect on the Change-in-Control Date without the Employee’s written consent; (ii) the Employee’s compensation is reduced; (iii) the Employee’s benefits are reduced, other than pursuant to
a uniform reduction applicable to all managers of the Company; or (iv) the Employee is asked to relocate her office to a place more than 30 miles from her business office on the Change-in-Control Date. 

f. “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Securities
Exchange Act of 1934 and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d). 
 g. “Target Bonus” shall mean the Employee’s target annual short-term incentive bonus for the calendar year in which the date in question occurs. 

h. “Termination of Employment” shall mean (i) the termination of the Employee’s employment by
the Company other than such a termination in connection with an offer of immediate reemployment by a successor or assign of the Company or a purchaser of the Company or its assets under terms and conditions which would not permit the Employee to
terminate her employment for Good Reason; or (ii) the Employee’s termination of employment with the Company for Good Reason. 

 2. Term. The initial term of this Agreement shall be for a three-year period
commencing on the Effective Date. The term shall be automatically extended by one additional day for each day beyond the Effective Date that the Employee remains employed by the Company until such time as the Company or Employee elects to cease such
extension by giving written notice of such election to the other. In such event, this Agreement shall terminate on the third anniversary of the effective date of such election notice (the initial term together with all such extensions, the
“Term”). Notwithstanding the foregoing, this Agreement shall automatically terminate if and when the Employee terminates her employment with the Company other than in connection with a Change-in-Control or two years after the
Change-in-Control Date, whichever first occurs. 
 3. Severance Benefits. If at any time following a Change in
Control and continuing for two years thereafter, the Company terminates the Employee without Cause, or the Employee terminates employment with the Company for Good Reason, then as compensation for services previously rendered the Employee shall be
entitled to the following benefits: 
 a. Cash Payment. The Employee shall be paid a cash severance payment equal
to two times the greater of: 
 (i) the sum of the Employee’s Base Salary and Target Bonus as of the Termination of
Employment, or 
 (ii) the sum of the Employee’s Base Salary and Target Bonus as of the Change-in-Control Date.

 Payment shall be made in a single lump sum upon the effective date of Employee’s Termination of Employment. For purposes
of clarification, the Employee shall not be entitled to payment of an annual bonus (or pro-rated portion thereof) pursuant to the applicable short-term incentive plan of the Company for the year in which the Employee’s Termination of Employment
occurs. Notwithstanding anything herein to the contrary, if at the time of Employee’s separation from service Employee is a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended and the
regulations promulgated thereunder (the “Code”) and the deferral of any payment payable pursuant to Section 3 of this Agreement is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code,
then the amount to which Employee would otherwise be entitled during the first six months following her separation from service in respect of such payment shall be deferred and accumulated (without any reduction in such payment ultimately paid to
Employee) for a period of six months from the date of separation from service and paid in a lump sum on the first day of the seventh month following such separation from service (or, if earlier, the date of Employee’s death), together with
interest during such period at a rate computed by adding 2.00% to the Prime Rate as published in the Money Rates section of the Wall Street Journal, or other equivalent publication if the Wall Street Journal no longer publishes such information, on
the first publication date of 

 
the Wall Street Journal or equivalent publication after the date of Employee’s separation from service (provided that if more than one such Prime Rate is published on any given day, the
highest of such published rates shall be used). 
 b. Continuation of Benefits. 

(i) For a period of two years following the Termination of Employment (the “Benefit Continuation Period”), the Employee shall
be treated as if Employee had continued to be an executive for all purposes under the Company’s health and dental benefits plans with respect to Employee and Employee’s covered dependents; or if the Employee is prohibited from
participating in such plans, the Company shall otherwise provide such benefits; or if such benefits cannot be provided by the plans or the Company with the same overall income tax treatment to the Employee as in effect before the Termination of
Employment, the Company shall permit the Employee to continue coverage under the plans for the Employee and the Employee’s covered dependents on an after-tax basis and the Company shall pay the Employee a monthly amount for the remainder of the
two-year period equal to the total monthly premium cost for such coverage (employer contribution portion only at COBRA rates) that would otherwise apply to the coverage for the Employee and the Employee’s covered dependents. The Employee shall
be responsible for any employee contributions for such insurance. Following the Benefit Continuation Period, Employee shall be entitled to receive continuation coverage under Part 6 of Title I of ERISA (“COBRA Benefits”) by treating the
end of this period as the applicable qualifying event (i.e., as a termination of employment) for purposes of ERISA Section 603(2)) and with the concurrent loss of coverage occurring on the same date, to the extent allowed by applicable law.

 (ii) For the Benefit Continuation Period, the Company shall maintain in force, at its expense, the Employee’s life
insurance in effect under the Company’s voluntary life insurance benefit plan as of the Change-in-Control Date or as of the date of Termination of Employment, whichever coverage limits are greater. For purposes of clarification, the portion of
the premiums in respect of such voluntary life insurance for which Employee and the Company are responsible, respectively, shall be the same as the portion for which the Company and Employee are responsible, respectively, immediately prior to the
date of Termination of Employment or the Change-in-Control Date, as applicable. 
 (iii) For the Benefit Continuation Period,
the Company shall provide short-term and long-term disability insurance benefits to Employee equivalent to the coverage that the Employee would have had had Employee remained employed under the disability insurance plans applicable to Employee on
the Date of Termination of Employment, or, at the Employee’s election, the plans applicable to Employee as of the Change-in-Control Date. Should Employee become disabled during such period, Employee shall be entitled to receive such benefits,
and for such duration, as the applicable plan provides. For purposes of clarification, the portion of the premiums in respect of such short-term and long-term disability benefits for which Employee and the Company are responsible, respectively,
shall be the same as the portion for which Employee and the Company are responsible, respectively, immediately prior to the date of Termination of Employment or the Change-in-Control Date, as applicable. 

 (iv) Notwithstanding anything in this Agreement to the contrary, in no event shall the
provision of in-kind benefits pursuant to this Section 3 during any taxable year of Employee affect the provision of in-kind benefits pursuant to this Section 3 in any other taxable year of Employee. 

c. Retirement Savings Plan. Within fifteen (15) days after the date of Termination of Employment, the Company shall
pay to Employee a cash payment in an amount, if any, necessary to compensate Employee for the Employee’s unvested interests under the Company’s retirement savings plan which are forfeited by Employee in connection with the Termination of
Employment. 
 d. Plan Amendments. The Company shall adopt such amendments to its employee benefit plans, if any,
as are necessary to effectuate the provisions of this Agreement. 
 e. Fringe Benefits. Following the
Employee’s Termination of Employment, the Employee shall receive the computer that Employee is utilizing as of the date of such Termination of Employment. In addition, following Employee’s Termination of Employment, Employee shall be
entitled to be reimbursed for any legal or accounting services utilized by Employee to minimize any personal income tax obligations arising from the Change in Control, in an amount not to exceed $5,000, such reimbursement shall be made in the
calendar year following the calendar year in which the separation from service occurs, subject to the Company’s receipt of appropriate invoices from the Employee evidencing the expenses to be reimbursed. 

f. General Release of Claims. Notwithstanding anything herein to the contrary, the amounts payable pursuant to this
Section 3 are subject to the condition that Employee has delivered to the Company an executed copy of an irrevocable general release of claims in a form satisfactory to the Company within the 60 day period immediately following the
Employee’s separation from service (the “Release Period”). Any payment that otherwise would be made prior to Employee’s delivery of such executed release pursuant to this Section 3 shall be paid on the first business day
following the conclusion of the Release Period; provided that in-kind benefits provided pursuant to subsections (b)(i), (ii) and (iii) of this Section 3 shall continue in effect after separation from service pending the execution and
delivery of such release for a period not to exceed 60 days; provided further that if such release is not executed and delivered within such 60-day period, Employee shall reimburse the Company for the full cost of coverage during such period.

 4. No Mitigation Required or Setoff Permitted. In no event shall Employee be obligated to seek other employment
or take other action by way of mitigation of the amounts payable to Employee under the terms of this Agreement, and all such amounts shall not be reduced whether or not Employee obtains other employment. Further, the Company’s and Parent’s
obligations to make any payments hereunder shall not be subject to or affected by any setoff, counterclaims or defenses which the Company or Parent may have against Employee or others. 

 5. Waiver of Other Severance Benefits. The benefits payable pursuant to this
Agreement are in lieu of any other severance benefits which may otherwise be payable by the Company or its affiliates to the Employee upon termination of employment pursuant to a severance program of the Company or its affiliates (including, without
limitation, any benefits to which Employee might otherwise be entitled under any employment agreement or other severance or change in control or similar agreement between Employee and the Company or any of its affiliates). 

6. Employment at Will. Notwithstanding anything to the contrary contained herein, the Employee’s employment with the
Company is not for any specified term and may be terminated by the Employee or by the Company at any time, for any reason, with or without cause, without any liability, except with respect to the payments provided hereunder or as required by law or
any other contract or employee benefit plan. 
 7. Disputes. Any dispute or controversy arising under, out of, or
in connection with this Agreement shall, at the election and upon written demand of either party, be finally determined and settled by binding arbitration in the City of Louisville, Kentucky, in accordance with the Labor Arbitration rules and
procedures of the American Arbitration Association, and judgment upon the award may be entered in any court having jurisdiction thereof. The Company shall pay all costs of the arbitration and all attorneys’ and accountants’ fees of the
Employee in connection therewith, including any litigation to enforce any arbitration award. 
 8.
Non-Competition. The provisions of this Section 8 and any related provisions shall survive termination of this Agreement and/or Employee’s employment with the Company and do not supersede, but are in addition to and not in lieu
of, any other agreements signed by Employee concerning non-competition, confidentiality, solicitation of employees, or trade secrets, and are included in consideration for the Company entering into this Agreement. Employee’s right to receive
and retain the benefits specified in this Agreement are conditioned upon Employee’s compliance with the terms of this Section 8: 
 a. Non-Compete Agreement. 
 (1) During the period beginning on the
date of Termination of Employment and ending one (1) year thereafter (the “Post-Termination Period”), the Employee 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 Section 8(a)(2)) with the Company. The above constraint shall not prevent the Employee from
making passive investments, not to exceed five percent (5%) of the total equity value, in any enterprise where Employee’s services or advice is not required or provided. 

(2) For purposes of this Section 8(a), a business enterprise with which the Employee becomes associated as an officer, employee,
agent, partner, or director shall be considered in substantial direct competition with the Company if such entity competes with the Company or any of its direct or indirect subsidiaries in the Rehabilitation Business (as defined

 
below) or provides services or products of a type which is marketed, sold or provided by the Company or any of its direct or indirect subsidiaries or affiliates related to the Rehabilitation
Business (including but not limited to any product or service which the Company or any such other entity is developing) within the state or country where the Company or any such direct or indirect subsidiary or affiliate then provides or markets or
plans to provide or market any such service or product as of the Date of Termination. For purposes of this Agreement, “Rehabilitation Business” shall mean the provision of rehabilitation services, including physical and occupational
therapies and speech pathology services, to residents and patients of nursing centers, assisted living facilities and hospice providers. Notwithstanding the above, Employee shall not be restricted from providing direct patient care as a speech
pathologist as long as Employee does not serve in any executive or managerial role. 
 (3) During the Post-Termination Period,
the Employee 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 direct or indirect 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 direct or indirect 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 direct or
indirect subsidiaries; or discuss that subject with any such customer. 
 (4) During the Post-Termination Period, the Employee
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 direct or indirect 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 direct or indirect subsidiaries or affiliates within the twelve (12) months immediately prior to the Date of Termination of Employment; 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 direct or indirect subsidiaries and affiliates, or such person’s employment or participation in any activity in
competition with the Company or any of its direct or indirect subsidiaries or affiliates. 
 b. Confidential
Information. The Employee 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 respective businesses, which shall have been obtained by the Employee during the Employee’s
employment by the Company and which shall not be or become public knowledge (other than by acts by the Employee or representatives of the Employee in violation of this Agreement). During the Employee’s employment with the Company and after
termination of the Employee’s employment with the Company, the Employee 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 Employee’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 8(b) constitute a basis for deferring
or withholding any amounts otherwise payable to the Employee under this Agreement. “Confidential Information” means confidential and/or proprietary information and trade secrets of or relating to the Company or any of its direct or
indirect 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 direct or indirect 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
costs 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 or 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 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 Employee. 
 c. Provisions Relating To Non-Competition, Non-Solicitation and
Confidentiality. The provisions of this Section 8 shall survive the termination of Employee’s employment and this Agreement and shall not be affected by any subsequent changes in employment terms, positions, duties,
responsibilities, authority, or employment termination, permitted or contemplated by this Agreement. To the extent that any covenant set forth in this Section 8 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 Employee’s activities permitted by applicable law in such circumstances. The Company shall have the right to injunctive relief to restrain any breach or threatened breach of any provisions in this Section 8 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 Employee 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 Employee, 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. 

 9. Successors; Binding Agreement. This Agreement shall not be terminated by
the voluntary or involuntary dissolution of the Company or by any merger or consolidation where the Company is not the surviving corporation, or upon any transfer of all or substantially all of the Company’s stock or assets. In the event of
such merger, consolidation or transfer, the provisions of this Agreement shall be binding upon and shall inure to the benefit of the surviving corporation or corporation to which such stock or assets of the Company shall be transferred. 

10. Notices. Any notice or other communication hereunder shall be in writing and shall be effective upon receipt (or
refusal of receipt) if delivered personally, or sent by overnight courier if signature for the receiving party is obtained, or sent by certified or registered mail, postage prepaid, to the other party at the address set forth below: 

 

			
	If to the Company:	  	 Kindred Healthcare Operating, Inc.
 680 South Fourth Street
 Louisville, KY 40202

Attention: General Counsel

		
	If to Employee:	  	 Patricia Henry
 2555 N.
Pearl Street, #502
 Dallas, TX 75201

 Either party may change its specified address by giving notice in writing to the other. 

11. Indemnification. The Company shall indemnify, defend and hold the Employee harmless from and against any liability,
damages, costs and expenses (including attorneys’ fees) in connection with any claim, cause of action, investigation, litigation or proceeding involving her by reason of her having been an officer, director, employee or agent of the Company,
except to the extent it is judicially determined that the Employee was guilty of gross negligence or willful misconduct in connection with the matter giving rise to the claim for indemnification. This indemnification shall be in addition to and
shall not be substituted for any other indemnification or similar agreement or arrangement which may be in effect between the Employee and the Company or may otherwise exist. The Company also agrees to maintain adequate directors and officers
liability insurance, if applicable, for the benefit of Employee for the term of this Agreement and for five years thereafter. 

12. ERISA. Many or all of the employee benefits addressed in Paragraph 3(b) and (c) exist under plans which constitute
employee welfare benefit plans (“Welfare Plans”) within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Any payments pursuant to this Agreement which could cause any
of such Plans not to constitute a Welfare Plan shall be deemed instead to be made pursuant to a separate “employee pension benefit plan” within the meaning of Section 3(2) of ERISA or a “top hat” plan under
Section 201(2) of ERISA as to which the applicable portions of the document constituting the Welfare Plan shall be deemed to be incorporated by reference. None of the benefits hereunder may be assigned in any way. 

 13. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision, which other provision shall remain in full force and effect. 
 14. Interpretation. The headings used herein are for convenience only and do not limit or expand the contents of this Agreement. Use of any male gender pronoun shall be deemed to include the
female gender also. 
 15. No Waiver. No waiver of a breach of any provision of this Agreement shall be construed
to be a waiver of any other breach of this Agreement. No waiver of any provision of this Agreement shall be enforceable unless it is in writing and signed by the party against whom it is sought to be enforced. 

16. Survival. Any provisions of this Agreement creating obligations extending beyond the term of this Agreement shall
survive the expiration or termination of this Agreement, regardless of the reason for such termination. 
 17.
Amendments. Any amendments to this Agreement shall be effective only if in writing and signed by the parties hereto. 

18. Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the subject matter
hereof. 
 19. Governing Law. This Agreement shall be interpreted in accordance with and governed by the law of
the State of Delaware. 
 20. Section 409A. If any provision of this Agreement (or any award of compensation
or benefits provided under this Agreement) would cause Employee to incur any additional tax or interest under Section 409A of the Code, the Company shall reform such provision to comply with 409A and agrees to maintain, to the maximum extent
practicable without violating 409A of the Code, the original intent and economic benefit to Employee of the applicable provision; provided that nothing herein shall require the Company to provide Employee with any gross-up for any tax, interest or
penalty incurred by Employee under Section 409A of the Code. For purposes of Section 409A of the Code, each payment that Employee may be eligible to receive under this Agreement shall be treated as a separate and distinct payment and shall
not collectively be treated as a single payment. 
 21. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same instrument. 

 22. Cancellation of Prior Agreement. The Company and the Employee hereby
acknowledge and agree that this Agreement is intended to and does hereby replace and terminate any change-in-control or similar agreement or plan between the Employee, the Company and/or any affiliates of the Company, including without limitation
RehabCare, and all prior non-competition, non-solicitation or similar covenants or agreements between the Employee and the Company, Parent or any of their respective subsidiaries or affiliates (other than the employment agreement between the Company
and the Employee being executed substantially contemporaneously with the execution of this Agreement), and that all such agreements or plans are cancelled, terminated and of no further force and effect, except that the foregoing shall not apply to
or have any impact on any short-term incentive cash plan cash out payment to which Employee is entitled from RehabCare Group, Inc. or any of its affiliates in connection with the transactions contemplated by the Agreement and Plan of Merger dated as
of February 7, 2011 among Kindred Healthcare, Inc., Kindred Healthcare Development, Inc. and RehabCare Group, Inc. 
 IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. 
  

			
	KINDRED HEALTHCARE OPERATING, INC.
	
	 /s/ Paul J. Diaz

	By: Paul J. Diaz
	President and Chief Executive Officer
	
	 Solely for the purposes of
 Sections 3, 4, 5, 12 and 22:

	
	KINDRED HEALTHCARE, INC.
	
	 /s/ Paul J. Diaz

	By: Paul J. Diaz
	 President and Chief Executive Officer

	
	 /s/ Patricia Henry

	PATRICIA HENRYEX-10.37

 EXHIBIT 10.37 
 [KINDRED LETTERHEAD] 
 Notice of Renewal 

November 29, 2011 
 Ventas Realty, Limited
Partnership 
 c/o Ventas, Inc. 
 10350
Ormsby Park Place, Suite 300 
 Louisville, Kentucky 40223 
 Attention: Lease Administration 
 Ventas Realty, Limited Partnership 

c/o Ventas, Inc. 
 10350 Ormsby Park Place, Suite
300 
 Louisville, Kentucky 40223 

Attention: General Counsel 
  

	 	Re:	Renewal of Certain Renewal Groups to expire on April 30, 2013 between Kindred Healthcare Inc. and Kindred Healthcare Operating, Inc. and Ventas Realty, Limited
Partnership 

 Dear Ladies and Gentlemen: 

KINDRED HEALTHCARE, INC., a Delaware corporation formerly known as Vencor, Inc. (“Kindred”), and
KINDRED HEALTHCARE OPERATING, INC., a Delaware corporation formerly known as Vencor Operating, Inc. (“Operator”; and together with Kindred and permitted successors and assignees of Operator and Kindred, “Tenant”)
hereby give this renewal notice effective as of the date hereof to VENTAS REALTY, LIMITED PARTNERSHIP, a Delaware limited partnership (together with its successors and assigns, “Lessor”) of their exercise of the five-year renewal
option for Renewal Groups 1 and 3, as more particularly set forth on Schedule A attached hereto, pursuant to Section 19.1 of that certain SECOND AMENDED AND RESTATED MASTER LEASE AGREEMENT NO. 1 (the “Master Lease”) by and
between Lessor and Tenant dated as of the 27th day of
April, 2007. Please let us know as soon as possible, and in any event within thirty days following receipt of this notice, whether you intend to exercise your fair market rental determination rights pursuant to Section 19.3 of the Master Lease.
Tenant expressly reserves its right to deliver one or more additional renewal notices in accordance with Section 19.1 of the Master Lease or other master lease agreements currently in effect between Landlord and Tenant. 

 We appreciate your prompt attention to this matter. If you have any questions or concerns,
please feel free to contact the undersigned at 502.596.7485. 
  

	
	Sincerely,
	
	 /s/ Gregory C. Miller

	Name: Gregory C. Miller
	Title: Chief Development Officer

 Enclosure 

  
 2 

 Schedule A 

 

											
	 Facility
ID
	  	 Name
	  	 City
	 	State	  	Current 
Lease
Expiration
Date	  	Renewal
Group
	 132
	  	Madison Healthcare & Rehab Center	  	Madison	 	TN	  	April 30, 2013	  	1
	 280
	  	Winchester Centre for Health/Rehab	  	Winchester	 	KY	  	April 30, 2013	  	1
	 406
	  	Muncie Health Care & Rehab	  	Muncie	 	IN	  	April 30, 2013	  	1
	 577
	  	Minerva Park Nursing & Rehab Center	  	Columbus	 	OH	  	April 30, 2013	  	1
	 635
	  	Coshocton Health & Rehab Center	  	Coshocton	 	OH	  	April 30, 2013	  	1
	 784
	  	Northfield Center for Health & Rehab	  	Louisville	 	KY	  	April 30, 2013	  	1
	 4618
	  	Kindred Hospital Oklahoma City	  	Oklahoma City	 	OK	  	April 30, 2013	  	1
	 4822
	  	Kindred Hospital San Francisco Bay Area	  	San Leandro	 	CA	  	April 30, 2013	  	1
	 114
	  	Arden Rehab & Healthcare Center	  	Seattle	 	WA	  	April 30, 2013	  	3
	 140
	  	Wasatch Care Center	  	Ogden	 	UT	  	April 30, 2013	  	3
	 167
	  	Canyonwood Nursing & Rehab Center	  	Redding	 	CA	  	April 30, 2013	  	3
	 180
	  	Vancouver Healthcare & Rehab Center	  	Vancouver	 	WA	  	April 30, 2013	  	3
	 247
	  	Saint George Care & Rehab Center	  	Saint George	 	UT	  	April 30, 2013	  	3
	 416
	  	Park Place Health Care Center	  	Great Falls	 	MT	  	April 30, 2013	  	3
	 482
	  	Wind River Healthcare & Rehab Center	  	Riverton	 	WY	  	April 30, 2013	  	3
	 4842
	  	Kindred Hospital Westminster	  	Westminster	 	CA	  	April 30, 2013	  	3

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