AMENDED AND RESTATED KINDRED HEALTHCARE, INC. LONG-TERM INCENTIVE PLAN

Exhibit 10.2

AMENDED AND RESTATED

KINDRED HEALTHCARE, INC. LONG-TERM INCENTIVE PLAN

The purpose of the Kindred Healthcare, Inc. 2000 Long-Term Incentive Plan, dated effective as of January 1, 2009 (the “ Plan ”), is to promote the success of the Company and the interests of its shareholders by attracting, motivating, retaining and rewarding key employees of the Company for assisting the Company and its Affiliates to emerge from bankruptcy and to provide Participants with incentives to contribute toward the improvement and growth of the Company.

As used in this Plan, the following capitalized terms shall have the following meanings:

(a) “ Affiliate ” shall mean any of Kindred Healthcare, Inc.’s direct or indirect subsidiaries within the meaning of Section 424 of the Code.

(b) “ Award ” shall mean a cash bonus payable pursuant to the terms and conditions of this Plan.

(c) “ Award Percentage ” shall mean, with respect to each Performance Period, a percentage corresponding to the achievement of the Performance Targets for such Performance Period. The Award Percentage shall represent the portion of the Maximum Award that each Participant is entitled to receive with respect to each Performance Period.

(d) “ Base Salary ” shall mean, with respect to each Participant, such Participant’s annual base compensation, exclusive of any bonuses (whether under this Plan or otherwise), stock option benefits, or other compensatory or fringe benefits.

(e) “ Beneficiary ” shall mean the Participant’s estate.

(f) “ Board ” shall mean the Board of Directors of Kindred Healthcare, Inc.

(g) “ Cause ”, when used in connection with the termination of a Participant’s employment with the Company, shall mean (i) dishonesty; (ii) deliberate and continual refusal to perform employment duties on substantially a full-time basis; (iii) failure to act in accordance with any specific lawful instructions given to the Participant in connection with the performance of his duties for the Company or any of its subsidiaries or affiliates, unless the Participant has an existing permanent Disability; (iv) deliberate misconduct that is reasonably likely to be materially damaging to the Company without a reasonable good faith belief by the Participant that such conduct was in the best interests of the Company; or (v) conviction of or plea of nolo contendere to a crime involving moral turpitude.

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(h) “ Change of Control ” shall mean any one of the following events:

(i) any Person (as this term is used in Sections 3(a)(9) and 13(d)(3) of the Exchange Act, but excluding any person described in and satisfying the conditions of Rule 13d-1)b)(i) thereunder) (an “ Acquiring Person ”) becomes the “beneficial owner” (as such term is defined in Rule 13d-3 promulgated under the Exchange Act (a “ Beneficial Owner ”), directly or indirectly, of securities of Kindred Healthcare, Inc. representing 50% or more of the combined voting power of Kindred Healthcare, Inc.’s then outstanding securities, other than beneficial ownership by a Participant, the Company, any employee benefit plan of the Company or any Person organized, appointed or established pursuant to the terms of any such benefit plan;

(ii) Kindred Healthcare, Inc.’s stockholders approve an agreement to merge or consolidate Kindred Healthcare, Inc. with another corporation, or an agreement providing for the sale of substantially all of the assets of Kindred Healthcare, Inc. to one or more Persons, in any case other than with or to an entity 50% or more of which is controlled by, or is under common control with, Kindred Healthcare, Inc.;

(iii) during any two-year period, commencing after the Effective Date, individuals who at the date on which the period commences constitute a majority of the Board of Directors (the “Incumbent Directors”) cease to constitute a majority thereof for any reason; provided , however , that a director who was not an Incumbent Director shall be deemed to be an Incumbent Director if such director was elected by, or on the recommendation of, at least two-thirds of the Incumbent Directors (either actually or by prior operation of this provision), other than any director who is so approved in connection with any actual or threatened contest for election to positions on the Board of Directors; or

(iv) the Company is merged, combined, consolidated, recapitalized or otherwise organized with one or more other entities that are not Affiliates, as a result of which less than 50% of the outstanding voting securities of the surviving or resulting entity immediately after the reorganization are, or will be, owned, directly or indirectly, by shareholders of the Company, determined on the basis of record ownership as of the date of determination of holders entitled to vote on the transaction (or in the absence of a vote, the day immediately prior to the event).

(i) “ Code ” shall mean the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder.

(j) “ Committee ” shall mean the Compensation Committee of the Board or such other committee as the Board may designate from time to time.

(k) “ Common Stock ” shall mean the common stock of Kindred Healthcare, Inc., par value $ 0.25 per share.

(l) “ Company ” shall mean Kindred Healthcare, Inc. and its Affiliates.

(m) “ Disability ” shall mean (i) a Participant’s inability to engage in any substantial gainful activity or (ii) a Participant’s receiving income replacement benefits for a

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period of not less than three months under an accident and health plan of the Company, in each case by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, in each case as evidenced by documentation submitted pursuant to the Company’s long-term disability plan or documentation from the Social Security Administration .

(n) “ Effective Date ” shall mean the date on which the Company’s bankruptcy plan is confirmed by the United States Bankruptcy Court for the District of Columbia.

(o) “ Maximum Award ” shall mean the highest amount that may be awarded to Participants in certain positions or employment levels of the Company, expressed as percentages of such Participants’ Base Salary, as follows:

(p) “ Participant ” shall mean an officer or key employee of the Company who is in a position to contribute materially to the success of the Company, as selected for participation in the Plan by the Committee in its sole discretion.

(q) “ Performance Period ” shall mean any period of one or more years during which the Company’s performance against the Performance Targets is measured for the purpose of determining whether and at what level Awards under this Plan shall be granted.

(r) “ Performance Targets ” shall mean the performance targets for the Company that the Committee shall establish in its discretion for each Performance Period to be used in determining Participants’ Awards.

(s) “ Person ” shall mean an individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof.

(t) “ Plan ” shall mean this Kindred Healthcare, Inc. 2000 Long-Term Cash Incentive Compensation Plan.

(u) “ Qualified Change of Control ” shall mean a Change of Control that qualifies as either a change in the (i) ownership of the Company, (ii) effective control of the Company, or (iii) ownership of a substantial portion of the assets of the Company, under Section 409A of the Code.

(v) “ Retirement ” shall mean the termination of the employment of a Participant on or after the Participant’s attainment of fifty-five (55) years of age.

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This Plan shall be administered by the Committee. The Committee shall have full authority to interpret and construe any provision of the Plan, to adopt such rules and regulations and make any decisions necessary for the administration of the Plan, and to determine the eligibility of Participants un