Document:

Employment Agreement

 Exhibit 10.1 
 EMPLOYMENT AGREEMENT 
 This EMPLOYMENT AGREEMENT is made as of the 22nd day of February, 2006
by and between Kindred Healthcare, Inc., a Delaware corporation (the “Company”) and Edward L. Kuntz (“Kuntz”). 
 W
I T N E S S E T H: 
 WHEREAS, Kuntz is serving as Executive Chairman
of the Board and the Company desires to continue the services of Kuntz in that capacity; and 
 WHEREAS, the Executive Compensation Committee
(the “Executive Compensation Committee”) of the Board of Directors (the “Board”) has determined that it is in the best interests of the Company and its subsidiaries to enter into this Agreement. 
 NOW, THEREFORE, in consideration of the premises and the respective covenants and agreements contained herein, and intending to be legally bound hereby,
the Company and Kuntz agree as follows: 
 1. Employment as Executive Chairman of the Board. 
 A. Term. The Company or one of its subsidiaries hereby agrees to employ Kuntz and Kuntz hereby agrees to be employed as Executive
Chairman of the Board of Directors (“Executive Chairman”) effective on the date hereof on the terms and conditions herein set forth. The term of this Agreement (the “Term”) shall be for a one-year period commencing on the date
hereof (the “Effective Date”). The Term shall be automatically extended by one additional day for each day beyond the Effective Date that Kuntz remains employed by the Company until such time as the Board of Directors elects to cease such
extension by giving written notice of such election to Kuntz. In such an event, the Agreement shall terminate on the first anniversary of the date of such election notice, unless a later date is specified. 
 B. Duties. As Executive Chairman, Kuntz shall perform the following duties: (i) coordinate all Board matters and committee
activities and act as the principal liaison between the Board and senior management; (ii) continue his responsibility for public lobbying and relationships with various healthcare related organizations; (iii) advise the chief executive
officer and senior management on strategic initiatives including financing, acquisition and development activities; (iv) advise the chief executive officer and senior management concerning all compliance and regulatory matters including the
Corporate Integrity Agreement; and (v) such other similar matters as reasonably requested by the Board. 
 C. Extent
of Services. Kuntz, subject to the direction and control of the Board, shall have the power and authority commensurate with his status as Executive Chairman and necessary to perform his duties hereunder. During the Chairman Term, 

 
Kuntz shall devote approximately two days a week or 60 hours a month to the business of the Company. With notice to the Board, Kuntz may engage in any other
business activities, whether or not such business activities are pursued for gain, profit or other pecuniary advantage provided such activities do not conflict with the Company’s objectives and operations. 
 D. Compensation. As compensation for services rendered as Executive Chairman, Kuntz shall receive during the Chairman Term:

 (i) A salary (“Chairman Salary”) of not less than $636,525 per year payable in equal installments in accordance
with the Company’s normal payroll procedures. Kuntz may receive increases in his Chairman Salary from time to time, as approved by the Executive Compensation Committee. 
 (ii) Kuntz may be eligible to receive additional compensation as the Executive Compensation Committee may approve from time to time but is
not intended that Kuntz will continue to participate in the Company’s standard bonus or long-term incentive plans. 
 E.
Benefits. During the Term: 
 (i) Kuntz shall be entitled to participate in any and all welfare benefit (including,
without limitation, medical, dental, disability and group life insurance coverages) and fringe benefit plans from time to time in effect for executives of the Company and its affiliates. 
 (ii) Kuntz may incur reasonable expenses for promoting the Company’s business, including expenses for entertainment, travel and
similar items. The Company shall reimburse Kuntz for all such reasonable expenses in accordance with the Company’s reimbursement policies and procedures. 
 (iii) Kuntz will continue to vest in his existing stock options, restricted stock and accrued long-term incentive benefits. 
 (iv) The Company shall provide Kuntz with an office suite in Houston, Texas and an administrative assistant substantially comparable to
his existing office suite and administrative assistant being furnished as of the date of this Agreement. 
 2. Termination of
Employment. 
 A. Death or Disability. Kuntz’s employment shall terminate automatically upon Kuntz’s
death during the Term. If the Board determines in good faith that the Disability of Kuntz has occurred during the Term (pursuant to the definition of Disability set forth below) it may give to Kuntz written notice of its intention to terminate
Kuntz’s employment. In such event, Kuntz’s employment with the Company shall 

 
terminate effective on the 30th day after receipt of such notice by Kuntz (the “Disability Effective Date”), provided that, within the 30 days
after such receipt, Kuntz shall not have returned to performance of Kuntz’s duties. For purposes of this Agreement, “Disability” shall mean Kuntz’s absence from his duties hereunder for a period of 90 days. 
 B. Cause. The Company may terminate Kuntz’s employment during the Term for Cause. For purposes of this Agreement,
“Cause” shall mean the Kuntz’s (i) conviction of or plea of nolo contendere to a crime involving moral turpitude; or (ii) willful and material breach by Kuntz of his 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 and its affiliates, but with respect to (ii) only if the Board adopts a resolution by a vote of at least 75% of its members
so finding after giving the Kuntz and his attorney an opportunity to be heard by the Board. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon advice of counsel for the Company
shall be conclusively presumed to be done, or omitted to be done, by Kuntz in good faith and in the best interests of the Company. 
 C. Good Reason. Kuntz’s employment may be terminated by Kuntz for Good Reason. “Good Reason” shall exist upon the occurrence, without Kuntz’s express written consent, of any of the following events: 
 (i) The Company shall (A) materially reduce the compensation of Kuntz or (B) materially reduce his benefits and perquisites;

 (ii) The Company shall require Kuntz to relocate Kuntz’s principal business office more than 30 miles from its
location on the date of this Agreement; 
 (iii) If Kuntz ceases to be Chairman of the Board, for any reason, including
failing to be elected at any annual or special meeting of the shareholders of the Company; or 
 (iv) the failure of the
Company to obtain the assumption of this Agreement as contemplated by Section 5(c). 
 For purposes of this Agreement, “Good
Reason” shall not exist until after Kuntz has given the Company notice of the applicable event within 10 days of such event and which is not remedied within 10 days after receipt of written notice from Kuntz specifically delineating such
claimed event and setting forth Kuntz’s intention to terminate employment if not remedied; provided, that if the specified event cannot reasonably be remedied within such 10-day period and the Company commences reasonable steps within
such 10-day period to remedy such event and diligently continues such steps thereafter until a remedy is effected, such event 

 
shall not constitute “Good Reason” provided that such event is remedied within 30 days after receipt of such written notice. 
 D. Notice of Termination. Any termination by the Company for Cause, or by Kuntz for Good Reason, shall be communicated by Notice of
Termination given in accordance with this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets
forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Kuntz’s employment under the provision so indicated and (iii) specifies the intended termination date (which date, in the case of a
termination for Good Reason, shall be not more than 10 days after the giving of such notice). The failure by Kuntz or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or
Cause shall not waive any right of Kuntz or the Company, respectively, hereunder or preclude Kuntz or the Company, respectively, from asserting such fact or circumstance in enforcing Kuntz’s or the Company’s rights hereunder. 

E. Date of Termination. “Date of Termination” means (i) if Kuntz’s employment is terminated by the Company
for Cause, or by Kuntz for Good Reason, the later of the date specified in the Notice of Termination or the date that is one day after the last day of any applicable cure period, (ii) if Kuntz’s employment is terminated by the Company
other than for Cause or Disability, or Kuntz resigns without Good Reason, the Date of Termination shall be the date on which the Company or Kuntz notified Kuntz or the Company, respectively, of such termination and (iii) if Kuntz’s
employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of Kuntz or the Disability Effective Date, as the case may be. 
 3. Obligations of the Company Upon Termination. Following any termination of Kuntz’s employment hereunder, the Company shall pay Kuntz his
accrued wages through the Date of Termination and any amounts owed to Kuntz pursuant to the terms and conditions of the benefit plans and programs of the Company at the time such payments are due. In addition, subject to Kuntz’s execution of a
general release of claims in form satisfactory to the Company, Kuntz shall be entitled to the following additional payments: 
 A. Death or Disability. Kuntz shall not be entitled to any additional benefits by reason of his death or Disability during the Term. 
 B. Good Reason; Other than for Cause. If, during the Term, the Company shall terminate Kuntz’s employment other than for Cause (but not for Disability), or the Kuntz shall terminate his employment for Good
Reason: 
 (i) Within 14 days of Kuntz’s Date of Termination, the Company shall pay to Kuntz an amount equal to three
times the Chairman Salary as the Date of Termination. 

 (ii) For a period of three years following the Date of Termination, the Kuntz shall be
treated as if he had continued to be an executive for all purposes under the Company’s health insurance plan and dental insurance plan; or if Kuntz is prohibited from participating in such plans, the Company shall otherwise provide such
benefits. Following this continuation period, Kuntz shall be entitled to receive continuation coverage under Part 6 of Title I or ERISA (“COBRA Benefits”) treating the end of this period as a termination of Kuntz’s employment if
allowed by law. 
 (iii) For a period of three years following the Date of Termination, the Company shall maintain in force,
at its expense, Kuntz’s life insurance in effect under the Company’s voluntary life insurance benefit plan as of the Date of Termination. 
 (iv) For a period of three years following Kuntz’s Date of Termination, the Company shall provide short-term and long-term disability insurance benefits to Kuntz equivalent to the coverage that Kuntz would have
had had he remained employed under the disability insurance plans applicable to Kuntz on the Date of Termination. Should Kuntz become disabled during such period, Kuntz shall be entitled to receive such benefits, and for such duration, as the
applicable plan provides. 
 (v) To the extent not already vested pursuant to the terms of such plan, Kuntz’s interests
under the Company’s retirement savings plan shall be automatically fully (i.e., 100%) vested, without regard to otherwise applicable percentages for the vesting of employer matching contributions based upon Kuntz’s years of service
with the Company. 
 (vi) The Company shall adopt such amendments to its benefit plans, if any, as are necessary to effectuate
the provisions of this Agreement. 
 (vii) Kuntz shall be credited with an additional three years of vesting for purposes of
all outstanding stock option and restricted stock awards and Kuntz will have an additional three years in which to exercise such stock options. 
 (viii) Following the Date of Termination, Kuntz shall receive the computer which Kuntz is utilizing as of the Date of Termination. In addition, Kuntz shall be entitled to the furniture in Kuntz’s office suite as
of the Date of Termination. In addition, for a period of three years following Kuntz’s Date of Termination, the Company shall provide Kuntz with an office suite and administrative assistant, each substantially 

 
comparable to the office suite and administrative assistant that were furnished to Kuntz as of the date of Kuntz’s Date of Termination. 
 C. Cause; Other than for Good Reason. If Kuntz’s employment shall be terminated for Cause or Kuntz terminates employment
without Good Reason (and other than due to Kuntz’s death) during the Term, this Agreement shall terminate without further additional obligations to Kuntz under this Agreement. 
 D. Death after Termination. In the event of the death of Kuntz during the period Kuntz is receiving payments pursuant to this
Agreement, Kuntz’s designated beneficiary shall be entitled to receive the balance of the payments; or in the event of no designated beneficiary, the remaining payments shall be made to Kuntz’s estate. 
 4. 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 reasonable attorneys’ and accountants’ fees of Kuntz in connection therewith, including any litigation to enforce any arbitration
award. 
 5. Successors. 
 A. This Agreement is personal to Kuntz and without the prior written consent of the Company shall not be assignable by Kuntz otherwise than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by Kuntz’s legal representatives. 
 B. This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns. 
 C. The Company shall 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 any business of the Company for which Kuntz’s services are principally performed, 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. As used this Agreement, “Company” shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. 
 6. Other Severance Benefits. Kuntz hereby agrees that in consideration for the payments to be received under this Agreement, Kuntz waives any and all rights to any payments or benefits under any plans,
programs, contracts or arrangements of the Company or their respective affiliates that provide for severance 

 
payments or benefits upon a termination of employment, other than the Change in Control Severance Agreement between the Company and Kuntz dated as of
February 22, 2006 (the “Severance Agreement”); provided that any payments payable to Kuntz hereunder shall be offset by any payments payable under the Severance Agreement. 
 7. Withholding. All payments to be made to Kuntz hereunder will be subject to all applicable required withholding of taxes. 
 8. Non-solicitation. During the Term and for a period of one year thereafter (collectively, the “Non-solicitation Period”), Kuntz shall
not directly or indirectly, individually or on behalf of any person other than the Company, aid or endeavor to solicit or induce any of the Company’s or its affiliates’ employees to leave their employment with the Company or such
affiliates in order to accept employment with Kuntz or any other person, corporation, limited liability company, partnership, sole proprietorship or other entity. If the restrictions set forth in this section would otherwise be determined to be
invalid or unenforceable by a court of competent jurisdiction, the parties intend and agree that such court shall exercise its discretion in reforming the provisions of this Agreement to the end that Kuntz will be subject to a non-solicitation
covenant which is reasonable under the circumstances and enforceable by the Company. It is agreed that no adequate remedy at law exists for the parties for violation of this section and that this section may be enforced by any equitable remedy,
including specific performance and injunction, without limiting the right of the Company to proceed at law to obtain such relief as may be available to it. The running of the Non-solicitation Period shall be tolled for any period of time during
which Kuntz is in violation of any covenant contained herein, for any reason whatsoever. 
 9. No Mitigation. Kuntz shall have no duty
to mitigate his damages by seeking other employment and, should Kuntz actually receive compensation from any such other employment, the payments required hereunder shall not be reduced or offset by any such compensation. Further, the Company’s
obligations to make any payments hereunder shall not be subject to or affected by any setoff, counterclaims or defenses which the Company may have against Kuntz or others. 
 10. Notices. Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given
when delivered or sent by telephone facsimile transmission, personal or overnight couriers, or registered mail with confirmation or receipt, addressed as follows: 
 If to Kuntz: 
 Edward L. Kuntz 
 8807 Stable Crest Blvd. 
 Houston, Texas 77024

 Facsimile: 713-840-6383 
 If
to Company: 
 Kindred Healthcare, Inc. 
 680 South Fourth Street 
 Louisville, KY 40202 
 Attn: General Counsel 
 Facsimile:
502-596-4075 

 11. Assignment to Subsidiary. The Company may assign its obligations under this Agreement to one
or more of its subsidiaries but such assignment will not relieve the Company of its obligations and liabilities hereunder. 
 12. Waiver
of Breach and Severability. The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by either party. In the event any provision of this
Agreement is found to be invalid or unenforceable, it may be severed from the Agreement and the remaining provisions of the Agreement shall continue to be binding and effective. 
 13. Entire Agreement; Amendment. This instrument contains the entire agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements (including the Employment Agreement dated March 24, 2003 between the Company and Kuntz), promises, covenants, arrangements, communications, representations and warranties between them, whether written or oral
with respect to the subject matter hereof. No provisions of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in writing signed by Kuntz and such officer of the Company specifically
designated by the Board. 
 14. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the
State of Delaware. 
 15. Headings. The headings in this Agreement are for convenience only and shall not be used to interpret or
construe its provisions. 
 16. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same instrument. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

  

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

		 	 Paul J. Diaz,
 President and Chief Executive Officer

		
		 	 /s/ Edward L. Kuntz

		 	 EDWARD L. KUNTZChange-in-Control Severance Agreement

 Exhibit 10.2 
 CHANGE-IN-CONTROL SEVERANCE AGREEMENT 
 THIS CHANGE-IN-CONTROL SEVERANCE AGREEMENT (the
“Agreement”) is made as of February 22, 2006 by and between KINDRED HEALTHCARE OPERATING, INC., a Delaware corporation, (the “Company”) and Edward L. Kuntz (the “Employee”). 
 RECITALS: 
 A. The
Employee is employed by a subsidiary of the Company, 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 his 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. 
 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. “Chairman 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 his 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 his 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 1934 Act) of 20% or more of the combined voting power of Kindred Healthcare, Inc.’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 February 22, 2006, 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 Kindred Healthcare, Inc.’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 

  

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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 his office to a place more than 30 miles from his 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. “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 his employment for Good Reason or otherwise during any Window Period; or (ii) the 

  

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Employee’s termination of employment with the Company for Good Reason or during any Window Period. 
 h. “Window Period” shall mean either of two 30-day periods of time commencing 30 days after (i) a
Change in Control and (ii) one year after a Change in Control. 
 2. Term. The initial term of this Agreement shall be for
a three-year period commencing on February 22, 2006 (the “Effective Date”) (the “Term”). 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 elects to cease such extension by giving written notice of such election to the Employee. In such event, the Agreement shall terminate on the third anniversary of the effective date of such election notice.
Notwithstanding the foregoing, this Agreement shall automatically terminate if and when the Employee terminates his employment with the Company 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 either for Good Reason or during any Window Period, then as compensation for services previously rendered the Employee shall be entitled to the following benefits:

 a. Cash Payment. The Employee shall be paid cash equal to three times the greater of: 
 (i) the Chairman Salary as of the Termination of Employment, or 
 (ii) the Chairman Salary as of the Change-in-Control Date. 
 Payment shall be made in a single lump sum upon the Employee’s effective date of termination. 
 b. Continuation of Benefits. 
 (i) For a period of three years following the Termination of
Employment, the Employee shall be treated as if he had continued to be an employee for all purposes under Parent’s health insurance plan and dental insurance plan; or if the Employee is prohibited from participating in such plan, the Company or
Parent shall otherwise provide such benefits. Following this continuation period, the Employee shall be entitled to receive continuation coverage under Part 6 of Title I or ERISA (“COBRA Benefits”) treating the end of this period as a
termination of the Employee’s employment if allowed by law. 
 (ii) For a period of three years following the Termination
of Employment, Parent shall maintain in force, at its expense, the Employee’s life insurance in effect under Parent’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. 
  

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 (iii) For a period of three years following the Employee’s Termination of
Employment, the Company or Parent shall provide short-term and long-term disability insurance benefits to Employee equivalent to the coverage that the Employee would have had had he 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. 
 c. Retirement Savings Plan. To the
extent not already vested pursuant to the terms of such plan, the Employee’s interests under the Parent’s retirement savings plan shall be automatically fully (i.e., 100%) vested, without regard to otherwise applicable percentages
for the vesting of employer-matching contributions based upon the Employee’s years of service with the Company. 
 d.
Plan Amendments. Parent 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, for a period of one year 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. 
 4. Golden Parachute Tax Reimbursement. Whether or not any payments are made pursuant to Section 3 above, if a Change in Control occurs at any time and the Employee reasonably determines that any payment or distribution by
the Company or any of its affiliates to or for the benefit of the Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan,
program or arrangement, including without limitation any restricted stock, stock option, stock appreciation right or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing
(individually and collectively, the “Payment”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (or any successor provision thereto) by reason of being
considered “contingent on a change in ownership or control,” within the meaning of Section 280G of the Code (or any successor provision thereto), or any interest or penalties with respect to such excise tax (such excise tax, together
with any such interest and penalties, being hereinafter collectively referred to as the “Excise Tax”), then the Company or Parent shall pay to the Employee an additional payment or payments (individually and collectively, the
“Gross-Up Payment”). The Gross-Up Payment shall be in an amount such that, after payment by the Employee of all taxes required to be paid by the Employee with respect to the receipt thereof under the terms of any federal, state or local
government or taxing authority (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed with 

  

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respect to the Gross-Up Payment, the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment. The Gross-Up
Payment shall be paid to the Employee within 30 days of the Company’s receipt of written notice from the Employee that such Excise Tax has been paid or will be payable at any time in the future. 
 5. 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. 
 6. 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 other severance or change in control or
similar agreement previously entered into between Employee and the Company or any of its affiliates or the Employment Agreement dated February 22, 2006 with the Employee). 
 7. 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. 
 8. 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. 
 9. Non-solicitation. During the Term and for a period
of one year thereafter (collectively, the “Non-solicitation Period”), Employee shall not directly or indirectly, individually or on behalf of any person other than the Company, aid or endeavor to solicit or induce any of the Company’s
or its affiliates’ employees to leave their employment with the Company or such affiliates in order to accept employment with Employee or any other person, corporation, limited liability company, partnership, sole proprietorship or other
entity. If the restrictions set forth in this section would otherwise be determined to be invalid or unenforceable by a court of competent jurisdiction, the parties intend and agree that such court shall exercise its discretion in reforming the
provisions of this Agreement to the end that the Employee will be subject to a non-solicitation covenant which is reasonable under the circumstances and enforceable by the Company. It is 

  

 -6- 

 
agreed that no adequate remedy at law exists for the parties for violation of this section and that this section may be enforced by any equitable remedy,
including specific performance and injunction, without limiting the right of the Company to proceed at law to obtain such relief as may be available to it. The running of the Non-solicitation Period shall be tolled for any period of time during
which Employee is in violation of any covenant contained herein, for any reason whatsoever. 
 10. 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. 
 11. 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:
	 	 Edward L. Kuntz
 8807 Stable Crest
Blvd.
 Houston, TX 77024

 Either party may change its specified address by giving notice in writing to the
other. 
 12. 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 him by reason of his 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. 
  

 -7- 

 13. 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.

 14. 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. 
 15. 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. 
 16. 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. 
 17. 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. 
 18. Amendments. Any amendments to this Agreement shall be effective only if in writing and signed by the
parties hereto. 
 19. Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the
subject matter hereof. 
 20. Governing Law. This Agreement shall be interpreted in accordance with and governed by the law of
the State of Delaware. 
 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. 
  

 -8- 

 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 and 12:

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

	 By:
	 	 Paul J. Diaz

		 	 President and Chief Executive Officer

	
	 /s/ Edward L. Kuntz

	 Edward L. Kuntz

  

 -9-

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