2003 Committee Charter : RHB

REHABCARE GROUP, INC.
CHARTER OF THE COMPENSATION AND NOMINATING/CORPORATE
GOVERNANCE COMMITTEE OF THE BOARD OF DIRECTORS
Purpose
The purpose of the Compensation and Nominating/Corporate Governance Committee
(the "Committee") of RehabCare Group, Inc. (the "Company") is to:
  • discharge the responsibilities of the Board of Directors of the Company relating to
    compensation of the Company's executives;
  • identify individuals qualified to become members of the Board of Directors and to select,
    or to recommend that the Board of Directors select, the director nominees for the next
    annual meeting of stockholders; and
  • develop, recommend and oversee a set of corporate governance guidelines for the
    Company.
    In addition, the Committee will prepare a report of the compensation policies of the
    Committee that is required by the rules and regulations of the Securities and Exchange
    Commission to be included in the Company's proxy statement for the annual meeting of
    stockholders.
    Composition, Qualifications and Meetings
    Committee members shall meet the requirements of the New York Stock Exchange. The
    Committee shall be comprised of at least two (2) members, each of whom shall be an
    "independent" nonexecutive director. An independent director is a member of the Board of
    Directors who:
  • does not, and has not for the five years prior to the date of determination, received more
    than $100,000 per year in direct compensation from the Company, other than director and
    committee fees and pension or other forms of deferred compensation for prior service
    (provided such compensation is not contingent in any way on continued service);
  • is not, and has not been for the five years prior to the date of determination, an employee
    of the Company;
  • is not, and has not been, affiliated with or employed by the present or former independent
    auditor of the Company, or one of the independent auditor's affiliates, unless it has been
    more than five years since the affiliation, employment or the auditing relationship ended;- 2 -
  • is not, and has not been for the five years prior to the date of determination, part of an
    interlocking directorship in which an executive officer of the Company serves on the
    compensation committee of a company that concurrently employs the director;
  • is not, and has not been for the five years prior to the date of determination, an executive
    officer or an employee of another company (1) that accounts for at least 2% or $1
    million, whichever is greater, of the Company's consolidated gross revenues or (2) for
    which the Company accounts for at least 2% or $1 million, whichever is greater, of such
    other company's consolidated gross revenues;
  • the Board of Directors has affirmatively determined has no other material commercial,
    industrial, banking, consulting, legal, accounting, charitable or familial relationship with
    the Company, either individually or as a partner, stockholder or officer of an organization
    or entity having such a relationship with the Company, which relationship would
    adversely impact the director's independence in connection with the Company; and
  • has, and for the five years prior to the date of determination had, no immediate family
    members (i.e., spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and
    daughters-in-law, brothers- and sisters-in-law and anyone who shares the director's
    home) in any of the above categories; provided, however, that in the case of employment
    of one of the above-described immediate family members, the family member must have
    served as an officer or partner of the subject entity to impact the director's independence.
    Committee members shall be appointed by the Board of Directors and shall serve until
    such member's successor is appointed and qualified or until such member's earlier resignation or
    removal. The members of the Committee may be removed, with or without cause, by a majority
    vote of the Board of Directors. The Committee shall have the authority to delegate, in its sole
    discretion, any of its responsibilities to subcommittees, as it deems appropriate.
    The Committee shall meet at least two (2) times annually, or more frequently as
    circumstances dictate. The Committee Chair shall approve an agenda in advance of each
    meeting. If a Committee Chair is not designated or present at a Committee meeting, the
    members of the Committee may designate a Chair by a majority vote of the Committee
    membership.
    The Committee shall maintain minutes of meetings and report its actions and any
    recommendations to the Board of Directors after each Committee meeting. The report may take
    the form of an oral report by the Committee Chair or by any other member of the Committee
    designated by the Committee to make such report.
    - 3 -
    Responsibilities and Duties
    Executive Compensation
    In carrying out its responsibilities with respect to executive compensation, the Committee
    shall:
  • Review and approve on an annual basis the Company's goals and objectives relevant to
    the compensation of the Chief Executive Officer (the "CEO") of the Company;
  • Evaluate the CEO's performance in light of the Company's goals and objectives;
  • Determine the CEO's compensation, including salary, bonus, incentive and equity
    compensation, based on its evaluation of the CEO's performance and taking into account
    the Company's performance, relative stockholder return, the value of similar incentive
    awards to CEOs at similarly situated companies and the awards given to the CEO in past
    years;
  • Make recommendations to the Board of Directors with respect to the compensation of the
    Company's other executive officers; and
  • Review the Company's incentive-compensation and equity-based plans and recommend
    changes to such plans as needed.
    The Committee shall have the sole authority to retain and terminate any compensation
    consultant and any legal, accounting or other outside advisors that it deems necessary to assist
    with the evaluation of CEO or senior executive compensation and to approve the consultant's
    fees and retention terms.
    Director Nominations and Corporate Governance
    In carrying out its responsibilities with respect to the nomination of directors and
    corporate governance, the Committee shall:
  • Oversee the search for individuals qualified to become members of the Board of
    Directors and to select director nominees to be presented for approval at the annual
    meeting of stockholders. In identifying candidates for membership on the Board of
    Directors, the Committee shall take into account all factors it considers appropriate,
    which may include strength of character, mature judgment, career specialization, relevant
    technical skills, diversity and the extent to which the candidate would fill a present need
    on the Board of Directors;
  • Consider nominees for directors recommended by the Company's stockholders;- 4 -
  • Review the committee structure of the Board of Directors and recommend for its
    approval directors to serve as members of each committee. The Committee shall review
    and make recommendations with respect to committee membership annually and shall
    recommend additional committee members to fill vacancies as needed; and
  • Develop and recommend to the Board of Directors for its approval a set of corporate
    governance guidelines. The Committee shall review the guidelines annually, or more
    frequently as circumstances dictate, and recommend changes to the Board of Directors as
    necessary.
    The Committee shall have the sole authority to retain and terminate any search firm and
    any legal, accounting or other outside advisors that it deems necessary to assist with the
    identification of director candidates and to approve the firm's fees and retention terms. The
    Committee shall also have the sole authority to retain and terminate any legal, accounting or
    other outside advisors to advise the Committee on any corporate governance matters within the
    scope of the Committee's duties and responsibilities.
    Annual Review
    The Committee shall annually perform a review and evaluation of the performance of the
    Committee and its members and report its conclusions to the Board of Directors. In addition, the
    Committee shall assess the adequacy of the Charter and the Committee's own performance under
    the Charter. The Committee will determine whether any changes to the Charter are advisable or
    any corrective actions should be undertaken to correct any deficiencies or weaknesses noted in
    the review and evaluation. The Committee shall present any amendments to the Charter or
    corrective actions that the Committee deems necessary or appropriate to the Board of Directors
    for its approval.
    Adoption and Publication
    The Board of Directors has adopted this Charter of the Compensation and
    Nominating/Corporate Governance Committee, effective August 27, 2003.
    The Charter shall be published on the Company's Internet website and will otherwise be
    filed or reported as may be required by applicable law.