Dear Colleague,

I am pleased that so many of you were able to participate in the Town Hall conference call yesterday with RehabCare’s CEO John Short and Kindred’s president and CEO Paul Diaz. There were some great questions, and as we have continued to report, while the closing is still contingent on regulatory approval, things are advancing toward a successful planned integration in June.

Now I’d like to take a moment to answer the questions that were submitted by email over the course of the last week:

Questions Regarding Kindred’s 401(k):

We received many questions regarding Kindred’s 401(k), and so we have combined the questions in order to most efficiently respond. Questions included whether RehabCare’s current 401(k) would remain in effect through the end of 2011, whether the current RehabCare 401(k) match would continue after the close date, what it means that Kindred provides a company match “if the Company meets certain financial targets,” and which company Kindred uses for its 401(k).

Let us do our best to answer these questions as directly as we can. The RehabCare 401(k) policy will remain in place – as will the current match rate – after the companies are combined through the end of 2011.

As we expect to merge the RehabCare and Kindred plans in 2012, individuals will not need to roll over their current 401(k). Determining the level of Kindred match for its current 401(k) policy is based solely on the company’s operating performance. As an example, in 2010 Kindred contributed $2 million to participating employees’ accounts. The Kindred 401(k) is administered by T. Rowe Price.

I have a 401(k) with Triumph. I recently went PRN and I know that RehabCare will match my contributions until January 2012. When Kindred takes over will they still match my PRN status? I have a settlement coming in and was going to roll this money into my 401(k). If Kindred will no longer match my contributions – understanding that you match my settlement money – will I have a problem rolling my 401(k) funds over to another retirement account that I have with Vanguard? I am going through a divorce and need to know what financial decisions to make.

PRN employees are currently not eligible to participate in Kindred’s 401(k), but we are presently reviewing this policy. The employer match applies to all employees who participate in the 401(k) and have met any service requirements of the plan, so if it is determined that PRN employees are eligible to participate in the plan, they too would receive the match. In order to roll your RehabCare 401(k) into another retirement account, the law requires that you terminate employment in order to receive a distribution of the account, so you would be unable to do so in this circumstance. Your accountant or financial advisor should best be able to help you with your questions on your settlement from your divorce.

What happens to one’s flex spending accounts if there are balances in the dependent care or medical FSAs at the time of one’s termination date?

The answer to this question is specific to each employee as the administration of flex spending accounts is governed by the IRS tax code and by the specific design of your plan. It is recommended that you call ACE at 866.314.3944 for specific information. In general, if you have a balance in your medical FSA account when you terminate, you may submit receipts for expenses incurred before your termination. If your medical FSA has funds for services you have not received prior to termination, you may elect COBRA. If you have a balance in your dependent care FSA account when you terminate, you

may submit receipts for expenses incurred before your termination. However, if you have not incurred expenses for the dependent care FSA by the time you terminate, the law requires that the balances be forfeited.

What is Kindred’s maternity leave policy? How long is leave permitted? Is maternity leave covered under Short Term Disability like it is for RehabCare?

Kindred complies with federal, state and local leave programs. While we do not have a specific maternity leave program, Kindred’s disability plan covers maternity leave for the period that you are considered disabled after childbirth – and before in certain circumstances. Maternity leave is granted under the Family Medical Leave Act (FMLA) for those meeting eligibility requirements, and there may be other options available to employees who don’t qualify for FMLA.

In the last edition of Combining Our Strengths there was a question about merit increases. Does this mean that an individual may earn an increase based on their individual performance?

Yes, similar to current practice with Triumph and RehabCare, Kindred’s merit increases are based upon individual performance.

How will the pay dates of the new company differ from the current ones of RehabCare?

At this time, we intend to maintain existing pay cycles for RehabCare and Triumph employees, though some check dates may change to conform with certain state regulations once we close.

I am a Program Director and the current bonus plan is quarterly and a true up at the end of the year, I understand the bonus plan will remain in effect till the end of year. I am questioning if we will still be eligible for the true up bonus?

There will be no change to your current bonus plan – or other benefits – after the companies are combined through the end of 2011, therefore, the true up bonus will occur as scheduled.

I have heard from colleagues who are now employed by Kindred that their productivity expectations have increased to 90%. Are you aware of this and will our expectation be raised after the transition?

Both companies have been focused on improving productivity and operating efficiencies particularly

in light of the most recent MDS 3.0 and RUGs IV regulatory and reimbursement changes. RehabCare is considered to have the best productivity practice model in the industry and we will be reviewing and potentially adopting that model for the combined rehab division post close.

From what I’ve been reading in the Kindred updates, it does not look like Kindred offers a professional choice account (PCA) for us to use toward outside continuing education. Is this correct?

At Kindred we value continuing education and professional development of all employees. Presently we do not have a specific PCA account for each employee, however Kindred follows a similar practice of investing and reimbursing employees for continuing education and professional development. This is an important part of our employee development and retention commitment.

I was wondering with the transition to the new company will the dress code be changing?

At this time, we expect that the dress code for the combined company will be business casual.

As a dietitian at Triumph Healthcare I work closely with the food service team. Our facility does not outsource with a food service company at this time. Does Kindred outsource for their foodservice needs, and if so will all Triumph Hospitals transition to this after the purchase? Will it affect the jobs of our current food service employees? Will our patient menus change to what the Kindred Hospitals are currently using? If the menus will change, when do you anticipate this change to occur?

Kindred does outsource some of its dietary and food service teams in certain locations. This is regarded as a local decision based upon the needs of individual hospitals, and there are no plans for Kindred to make any changes in this area for Triumph hospitals after the close. Additionally, Kindred menus are also established at the local level, with oversight from our clinical dietary departments.

Does Kindred have a stock option program that will allow employees to purchase stock, if so, is the cost the current stock price or is it at a discounted rate?

At this time, Kindred does not offer an employee stock purchase plan.

I just want to take a moment to remind everyone that until the deal is closed, Kindred and RehabCare continue to be competitors and the two companies maintain our businesses as completely independent. As I have stated in previous editions, I encourage everyone to submit any and all questions you may have regarding the planned transition to asktheceo@rehabcare.com or share it with

Patti Williams (corporate)

at pswilliams@rehabcare.com,

Brock Hardaway (Triumph)

at bhardaway@triumph-healthcare.com,

Mary Pat Welc (HRS)

at mpwelc@rehabcare.com,

or Pat Henry (SRS)

at pmhenry@rehabcare.com.

Thank you for your support and continued patience as we move through this process.

Benjamin A. Breier Chief Operating Officer Kindred Healthcare