ESOP PRESENTATION 2011

1. ESOP PRESENTATION 2011

2. ESOP OVERVIEW • ESOP STATISTICS • UNDERSTANDING YOUR ALLOCATION STATEMENT • THERACARE COMPARATIVE RESULTS 2003-2010 • FREQUENTLY ASKED QUESTIONS • QUESTIONS AND ANSWERS

3. ESOP OVERVIEW • ESOP is a vehicle in which employees can own stock of a private company • Independent Trustee represents the employee’s financial interest in the ESOP • Independent plan administrator responsible for employee statements and plan recordkeeping • Qualified Retirement Plan, subject to special rules • Reviewed and approved by IRS • Annual reporting requirements to government • Each participant has a separate account in the ESOP

4. ESOP OVERVIEW (CONT.) • Company shares which have not been distributed to employees are held in a suspense account • Each Calendar year shares are released from the suspense account. • Fixed schedule determines how many shares are released and allocated each year • Shares are allocated to each employee account once census information (employee data such as salary, date of birth, date of hire- etc) is sent to the plan administrator. The administrator performs a calculation to determine how many shares will be distributed to each employee.

5. ESOP OVERVIEW (CONT.) • Need 5 years of service to be fully vested in your ESOP account. ESOP Eligibility requirements • Must be an employee of TheraCare • 1000 hours of service in calendar year must be worked • Future employees eligible for either Jan 1 or July 1 entry depending on “anniversary” date of 1 year • Employees must be 21 years of age or older to participate.

6. ESOP STATISTICS • There are currently 245 employees who are fully vested employee owners. • For the 2010 plan year 49 employees vested. • At the end of 2010 there were 197 active participants in the ESOP plan. (Active participants have received share allocations and have an account balance) • For 2011, there are 73 employees who may vest if they meet the criteria. • 80% of employees who vested in 2007 through 2010 are still employed at TheraCare. • Four fully vested have individuals have retired and are receiving retirement payments during 2011.

7. ALLOCATION STATEMENT • Allocation statements are provided to eligible participants receiving distributions for the year or who have active account balances. • Timely and accurate delivery of participant information is very important to TheraCare • Statements provided annually • If there is a problem with your statement or you think you should have gotten a statement but did not, please contact the HR help desk.

10. Frequently asked questions • I began working in November 2009- will I get a statement for the 2010 plan year? • No- although your 1 year anniversary based on your hire date is November 2010, you will enter the plan on January 1, 2011. Assuming you met eligibility requirements including working 1000 hours during the year, you will receive your first statement for the 2011 plan year. If your hire date was before July 1, 2009, you entered the plan on July 1, 2010 and assuming you met minimum eligibility requirements, you will receive a statement for the 2010 plan year.

11. Frequently asked questions • On the year that I enter the plan and receive my first statement, will I be credited with 1 year of service toward my 5 years needed to vest? • If during the period from your hire date to your entry into the plan you worked 1000 or more hours, you will have 2 years of service when you receive your first statement. • If during the period from your hire date to your entry into the plan you worked less than 1000 hours, you will have 1 year of service when you receive your first statement.

12. Frequently asked questions • When can I take my money from the plan? • Retirement age (65 after completing 5 years of service) • Death or full disability • Termination of employment • Distributions for retirement, death or disability will begin within 1 year after the event. • No distributions for termination of employment can take place until the loan from TheraCare to the ESOP for the purchase of shares is paid in full. The ESOP loan is due to be fully repaid in the year 2023. Once the ESOP has repaid its loan for the employee shares to TheraCare, distributions for termination of employment will start 5 years after termination of employment. • TheraCare can elect to make payments over a 5 year period.

13. Frequently asked questions • If someone leaves TheraCare and is not fully vested- what happens to their shares? • If an employee leaves TheraCare and is not fully vested, they forfeit their shares. The forfeited shares from all employees for a plan year are distributed to active employees during that same plan year. Shares that have been distributed to you through this process are labeled as “Forfeitures” on your participant statement.

14. Frequently asked questions • What happens if someone leaves, forfeits their shares, and then returns? • If the employee returns before 1 year has passed, then their shares are restored to the balance they had when the left.

15. Frequently asked questions • What do I do if there is a problem with my statement, I did not receive a statement and think I should have, I lost my statement and need a copy… etc? • Please call the HR helpdesk at 1-(866) 546-1555. Your call will be directed to someone who can help with your specific question/issue. The helpdesk does have access to participant statements for the current and prior year if you need a copy.

16. Your other retirement plan- the TheraCare 401(k) • Did you know: • in 2010, 1,378 TC employees contributed to their 401k plan. • this equals 74% of the eligible TC population - an increase of 8% over 2009. • the average contribution is approx 6% • TheraCare employees contributed over $1.9m million to the plan during 2010. • If you are not currently contributing and want to start, or if you want to increase or decrease your contribution % you can do so online at www.planservices.com/ml. If you need information regarding this please contact the HR helpdesk.

17. QUESTIONS?