Exhibit 10.29

 

HMS HOLDINGS CORP.

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (the “Agreement”), effective as of March 1,
2013, is by and between HMS HOLDINGS CORP. a New York corporation (the
“Company”), and WILLIAM C. LUCIA (the “Executive”).

 

WHEREAS the Company, as the successor to Health Management Systems, Inc., and
the Executive have entered into prior employment agreements and have previously
amended those agreements (as so amended, the “Prior Agreements”); and

 

WHEREAS, the Executive’s employment agreement dated effective as of March 1,
2011 expires on February 28, 2013 and the Company and the Executive desire to
replace it and confirm the lack of effect of it and any other Prior Agreements,
effective March 1, 2013 (provided that nothing herein waives any rights to
accrued compensation, reimbursements, or other obligations owed from the Prior
Agreements); and

 

WHEREAS the Company desires to continue the employment of the Executive for the
period provided in this Agreement, and the Executive is willing to continue such
employment with the Company, all in accordance with the terms and conditions set
forth below;

 

NOW, THEREFORE, for and in consideration of the promises, representations, and
mutual covenants contained herein, the Company and the Executive agree as
follows:

 

1.                                      Employment.

 

(a)                                 Agreement to Employ.  The Company hereby
agrees to continue to employ the Executive, and the Executive hereby agrees to
accept such continued employment with the Company, beginning on the date hereof
and continuing for the period set forth in Section 2 hereof, all upon the terms
and conditions hereinafter set forth.

 

(b)                                 No Conflict.  The Executive affirms and
represents that he is under no obligation to any former employer or other party
that is in any way inconsistent with, or that imposes any restriction upon, the
Executive’s continued employment by the Company or the Executive’s undertakings
under this Agreement.

 

2.                                      Term of Agreement.  The Agreement will
govern the Executive’s employment for the period from March 1, 2013 through
February 28, 2015 (“Agreement End Date”), unless his employment terminates
earlier in accordance with Section 6 hereof.  After the Agreement End Date, the
Executive’s employment will be on a fully at-will basis with no obligations on
the part of the Company under Section 6(b) or 6(c) hereof, except as provided
under the last sentence of Section 6(c).  The period from the date hereof to
February 28, 2015 (or, if the Executive’s employment ends earlier in accordance
with the provisions of Section 6 hereof, the date it so ends) is the “Agreement
Term.”

 

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3.                                      Duties.

 

(a)                                 Scope.  The Executive shall be employed as
the President and Chief Executive Officer of the Company, shall perform such
duties as inhere in such positions and as are specified in the By-Laws of the
Company and shall also perform and discharge such other executive employment
duties and responsibilities as the Board of Directors of the Company (the
“Board”) shall from time to time determine.  The Executive agrees that the Board
may appoint another individual as President in place of the Executive’s service
in that position, provided that the President reports to and through the
Executive as Chief Executive Officer and that the Executive remains the single
most senior executive officer of the Company.

 

(b)                                 Location.  The Executive shall perform his
duties primarily at the Irving, Texas offices or the principal headquarters of
the Company, with such travel to other locations from time to time as may be
reasonably necessary to perform such duties.

 

(c)                                  Time.  Except as may otherwise be approved
in advance by the Board, and except during vacation periods and reasonable
periods of absence due to sickness, personal injury, disability, or bereavement,
family, or medical leave, the Executive shall devote his full business time to
the services required of him hereunder while employed.

 

(d)                                 Exclusivity.  The Executive shall render his
business services exclusively to the Company and its subsidiaries to improve and
advance the business and interests of the Company and its subsidiaries in a
manner consistent with the duties of his positions.

 

(e)                                  Charitable Work.  Nothing contained in this
Section 3 shall preclude the Executive from performing services for charitable
or not-for-profit community organizations, provided that such activities do not
interfere with the Executive’s performance of his duties and responsibilities
under this Agreement.

 

4.                                      Salary and Bonus.

 

(a)                                 Salary.  As compensation for the performance
by the Executive of the services to be performed by the Executive hereunder
during the Agreement Term, the Company shall pay the Executive a minimum base
salary at the annual rate of Six Hundred Fifty Thousand Dollars ($650,000) (such
amount, together with any increases thereto as may be determined from time to
time by the Compensation Committee (the “Compensation Committee”) in its sole
discretion, being hereinafter referred to as “Base Salary”). Any Base Salary
payable hereunder shall be paid in regular intervals in accordance with the
Company’s usual and customary payroll practices for its employees.

 

(b)                                 Bonus. The Executive shall be eligible to
receive bonus compensation from the Company in respect of each fiscal year (or
portion thereof) during the Agreement Term, in each case as may be determined by
the Compensation Committee in its sole discretion on the basis of performance or
such other criteria as may be established from time to time by the Compensation
Committee in its sole discretion

 

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(the “Bonus”).  The Executive’s target bonus (the “Target Bonus”) shall be equal
to 100% of his Base Salary.  The Bonus, if any, will be paid when other
executives receive their bonuses under comparable arrangements but, in any
event, between January 1 and March 15 of the year following the year with
respect to which it is earned.

 

5.                                      Other Benefits.  While employed, the
Executive shall:

 

(i)                                     be eligible to participate in Executive
fringe benefits and pension and/or profit sharing plans that may be provided by
the Company for its senior executive officers in accordance with the provisions
of any such plans, as the same may be in effect from time to time;

 

(ii)                                  be eligible to participate in any medical
and health plans or other employee welfare benefit plans that may be provided by
the Company for its senior executive employees in accordance with the provisions
of any such plans, as the same may be in effect from time to time;

 

(iii)                               earn paid time off (PTO) at the rate of 18
hours per month (annualized to 27 days per year), or such greater number as the
Company determines from time to time for its senior executive officers, provided
that any carryover from year to year will be subject to the Company’s generally
applicable policies; the Executive shall also be entitled to all paid holidays
given by the Company to its senior executive officers;

 

(iv)                              be eligible for consideration by the
Compensation Committee for awards of equity compensation under any equity
compensation plan that may be established by the Company for its and its
subsidiaries’ key employees, the amount, if any, of shares for which awards may
be granted to Executive to be in the sole discretion of the Board or
Compensation Committee;

 

(v)                                 be entitled to sick leave, medical leave,
family leave, bereavement leave, sick pay, disability benefits, and other paid
or unpaid leave in accordance with any Company policy that may be applicable to
senior executive officers from time to time; and

 

(vi)                              be entitled to reimbursement for all
reasonable and necessary out-of-pocket business expenses incurred by the
Executive in the performance of his duties hereunder in accordance with the
Company’s normal policies from time to time in effect.

 

6.                                      Termination.

 

(a)                                 Contract Terminable; Accrued Compensation. 
Subject in each case to the provisions of this Section 6 and the other
provisions of this Agreement relating to the Company’s and the Executive’s
respective rights and obligations upon termination of his employment, nothing in
this Agreement interferes with or limits in any way the Company’s or the
Executive’s right to terminate his employment at any time consistent with the
provisions of this Agreement, for any reason or no reason and nothing in this
Agreement confers on the Executive any right or obligation to continue in the

 

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Company’s employ. The Company, in its sole discretion, may elect to terminate
the Executive’s employment immediately at any time subject to compliance with
any obligations it has under this Section 6.  If the Executive’s employment
ceases for any or no reason, the Executive (or his estate, as applicable) will
be entitled to receive (in addition to any compensation and benefits that he is
entitled to receive under Section 6(b) or 6(c) below): (i) any earned but unpaid
Base Salary and, to the extent consistent with general Company policy, accrued
but unused paid time off through and including the date of termination of his
employment to be paid in accordance with the Company’s regular payroll practices
and with applicable law but no later than the next regularly scheduled pay
period, (ii) except as provided in Section 6(d), any earned but unpaid annual
Bonus for the calendar year preceding the calendar year in which his employment
ends, to be paid on the date such annual Bonus otherwise would have been paid if
his employment had continued, (iii) unreimbursed business expenses in accordance
with the Company’s policies for which expenses he has provided appropriate
documentation, to be paid in accordance with Section 24(c), and (iv) any amounts
or benefits to which he is then entitled under the terms of the benefit plans
then sponsored by the Company in accordance with their terms (and not
accelerated to the extent acceleration does not satisfy Section 409A of the
Internal Revenue Code of 1986, as amended (“Section 409A” of the “Code”)).
Notwithstanding any other provision in this Agreement to the contrary, the
Executive will be entitled to severance, if any, solely through the terms of
this Section 6, unless another Board-approved written agreement between the
Executive and the Company expressly provides otherwise.  No interest shall
accrue on or be paid with respect to any portion of any payments under Section 6
hereof.

 

(b)                                 Termination Without Cause or Resignation for
Good Reason.  If, during the Agreement Term, the Company terminates the
Executive’s employment without Cause (defined below) or the Executive resigns
for Good Reason (defined below), in addition to the amounts described in
Section 6(a), the Company will pay to the Executive the following, subject to
compliance with Section 6(b)(iii):

 

(i)                                     Cash Severance.  The Company will pay to
the Executive in cash amounts equal to

 

(I)                                   24 times his monthly Base Salary, paid
ratably in equal installments over a 24 month period beginning in the first
payroll period following the Release Effective Date (as defined below) (or such
later date required by Section 24) in accordance with the Company’s standard
payroll policies and procedures and in a manner consistent with Section 24, and

 

(II)                              a bonus component (the “Bonus Component”)
equal to twice the annual Bonus with respect to the year of termination, where
the annual Bonus will be the Target Bonus, paid ratably on the same schedule as
in Section6(b)(i)(I), unless the annual Bonus for the Executive’s year of
termination is determined under a program intended to qualify as
performance-based for purposes of Section 162(m) of the Code (an “Exempt
Bonus”).  If the annual Bonus is intended to be an Exempt Bonus, the Executive
will instead be paid the Bonus Component under the timing provided in
Section 4(b) of this Agreement as

 

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though he had remained employed through such date (subject to any further delay
if the Release Effective Date has not yet then occurred), with the Bonus
Component determined under the performance-based factors for such annual Bonus. 
The Compensation Committee will only use its discretion under Section 162(m) of
the Code to reduce the Bonus Component in this situation if and to the extent
such discretion is used for continuing members of the senior executive officers.

 

(ii)                                  Benefits.  The Company will continue to
provide the Executive with the health insurance coverage provided to other
employees of the Company (including employer contributions) from the date of his
termination of employment under Section 6(b) or 6(c) until the earlier of
(i) the second anniversary of the date his employment ends or (ii) the date upon
which the Executive becomes eligible health coverage from another employer.  The
Executive acknowledges that this Company-paid coverage or the health benefits
provided thereunder may be taxable to him and that no gross-up for such taxes
will be provided.

 

(iii)                               Release. Any compensation or benefits under
Section 6(b) or 6(c), shall be paid to the Executive after the Separation from
Service, provided the Executive delivers to the Company a separation agreement
and general release of claims in a form substantially similar to that attached
as Exhibit A hereto (subject to such changes as the Company may reasonably make
in light of changes in compensation or applicable laws), which agreement and
release must become irrevocable within 60 days (or such earlier date as the
release provides) following the date of the Executive’s termination of
employment.  Compensation and benefits under Section 6(b)(i), (ii), or 6(c) will
be paid or commence on the 60th day after the Separation from Service, subject
to any delays required by Section 24.  The date on which the Executive’s release
of claims becomes effective is the “Release Effective Date.”  The Executive must
continue to comply with the Restrictive Covenants Agreement to continue to
receive severance benefits.

 

(c)                                  Change in Control.  If, within 24 months
following a Change in Control, the Company terminates the Executive’s employment
without Cause or the Executive resigns for Good Reason, in addition to the
benefits described in Section 6(b)(ii) above and subject to the release required
under Section 6(b)(iii), the Executive will receive the cash severance described
in Section 6(b)(i), paid in a single lump sum payment at the time provided under
Section 6(b)(i) for the first payment (i.e., in the first payroll period
following the Release Effective Date (or such later date as either
Section 6(b)(iii) or 24 provides)).  For the purpose of this Agreement, “Change
in Control” means:

 

(i)                                     the acquisition by an individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the “Exchange Act”) (a “Person”) of beneficial ownership
of any capital stock of the Company if, after such acquisition, such Person
beneficially owns (within

 

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the meaning of Rule 13d-3 under the Exchange Act) 50.01% or more of either
(x) the then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (y) the combined voting power of the then-outstanding
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however, that
for purposes of this subsection (A) any acquisition directly from the Company
will not be a Change in Control, nor will any acquisition by any individual,
entity, or group pursuant to a Business Combination (as defined below) that
complies with subclauses (x) and (y) of clause (ii) of this definition;

 

(ii)                                  the consummation of a merger,
consolidation, reorganization, recapitalization or share exchange involving the
Company or a sale or other disposition of all or substantially all (i.e., in
excess of 85%) of the assets of the Company (a “Business Combination”), unless,
immediately following such Business Combination, each of the following two
conditions is satisfied: (x) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such
Business Combination (which shall include a corporation that as a result of such
transaction owns the Company or substantially all of the Company’s assets either
directly or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the “Acquiring Corporation”) in
substantially the same proportions as their ownership of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively,
immediately prior to such Business Combination and (y) no Person beneficially
owns, directly or indirectly, 50.01% or more of the then-outstanding shares of
common stock of the Acquiring Corporation, or of the combined voting power of
the then-outstanding securities of such corporation entitled to vote generally
in the election of directors (except to the extent that such ownership existed
prior to the Business Combination); or

 

(iii)                               a change in the composition of the Board
that results, during any one year period, in the Continuing Directors (as
defined below) no longer constituting a majority of the Board (or, if
applicable, the Board of Directors of a successor corporation to the Company),
where the term “Continuing Director” means at any date a member of the Board
(x) who was a member of the Board on the Effective Date or (y) who was nominated
or elected subsequent to such date by at least a majority of the directors who
were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from this clause
(y) any individual whose initial assumption of office after the Effective Date
occurred as a result of an actual or threatened election contest with respect to
the election or removal of

 

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directors or other actual or threatened solicitation of proxies or consents, by
or on behalf of a person other than the Board;

 

provided that, where required by Section 409A, the event that occurs is also a
“change in the ownership or effective control of a corporation, or a change in
the ownership of a substantial portion of the assets of a corporation” as
defined in Treasury Reg. § 1.409A-3(i)(5).

 

If a Change in Control occurs while the Executive is employed and before the
Agreement End Date, this Section 6(c) will continue to apply to a termination
without Cause or resignation for Good Reason during the 24 months following such
Change in Control notwithstanding the terms of Section 2 above that would
otherwise terminate the protections of Section 6(b) and 6(c) when the Agreement
End Date is reached.

 

(d)                                 Termination for Cause, Voluntary Resignation
Without Good Reason.

 

(i)                                     General.    If, during the Agreement
Term, the Company terminates the Executive’s employment for Cause, or he resigns
from his employment (other than for Good Reason as permitted in Section 6(b) or
(c) above), the Executive will be entitled only to the payments described in
Section 6(a) (excluding, on a termination for Cause, clause (ii) of
Section 6(a)), unless applicable law otherwise requires payment. The Executive
may resign, other than for Good Reason, at any time and for any reason, by
giving at least 30 days’ prior written notice to the Board.  The Company may
choose to respond to such notice of resignation by ending his employment during
the 30 day notice period, in which event he would continue to receive his Base
Salary, less applicable deductions, that he otherwise would have received
through the remainder of the 30 day notice period.  The Executive will have no
further right to receive any other compensation or benefits after such
termination or resignation of employment, except as determined in accordance
with the terms of the employee benefit plans or programs of the Company or as
required by law.

 

(ii)                                  Definitions.

 

(I)                                   Cause.    For purposes of this Agreement,
“Cause” means any of the following: the Executive’s (I) fraud with respect to
the Company or any of its subsidiaries and affiliates; (II) material
misrepresentation to any regulatory agency, governmental authority, outside or
internal auditors, internal or external Company counsel, or the Board concerning
the operation or financial status of the Company or of any of its subsidiaries
and affiliates; (III) theft or embezzlement of assets of the Company or any of
its subsidiaries or affiliates; (IV) conviction, or plea of guilty or nolo
contendere to any felony (or to a felony charge reduced to a misdemeanor), or,
with respect to the Executive’s employment, to any misdemeanor (other than a
traffic violation); (V) material failure to follow the Company’s conduct and
ethics policies that

 

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have been provided or made available to the Executive; (VI) material breach of
this Agreement or the Restrictive Covenants Agreement; and/or (VII) continued
failure to attempt in good faith to perform the Executive’s duties as reasonably
assigned by the Board.  Before terminating the Executive’s employment for Cause
under clauses (V) — (VII) above, the Company will specify in writing to the
Executive the nature of the act, omission, refusal, or failure that it deems to
constitute Cause and, if the Board reasonably considers the situation to be
correctable, give the Executive 30 days after he receives such notice to correct
the situation (and thus avoid termination for Cause), unless the Board agrees to
further extend the time for correction.  The Executive agrees that the Board
will have discretion exercised in a reasonable manner to determine whether the
Executive’s correction is sufficient.  Nothing in this definition prevents the
Board from removing the Executive from his position as CEO at any time and for
any reason.

 

(II)                              Good Reason.  For purposes of this Agreement,
“Good Reason” means, the occurrence, without the Executive’s prior written
consent, of any of the following events: (i)  any material diminution in the
Executive’s authority, duties or responsibilities with the Company (other than
in connection with a portion of his authority, duties, or responsibilities being
assigned to or carried out by a President in a manner consistent with
Section 3(a) above); (ii) a requirement that the Executive report to an officer
rather than to the Board; (iii) a material reduction in the Executive’s Base
Salary; (iv) the Company’s requiring the Executive to perform his principal
services primarily in a geographic area more than 50 miles from the Company’s
offices in Irving, Texas (or such other place of primary employment for the
Executive at which he has agreed to provide such services); or (v) a material
breach by the Company of any material provision of this Agreement.  No
resignation will be treated as resignation for Good Reason unless (x) the
Executive has given written notice to the Company of his intention to terminate
his employment for Good Reason, describing the grounds for such action, no later
than 90 days after the first occurrence of such circumstances, (y) he has
provided the Company with at least 30 days in which to cure the circumstances,
and (z) if the Company is not successful in curing the circumstance, the
Executive ends his employment within 30 days following the cure period in (y). 
If the Company informs the Executive that it will not treat his resignation as
for Good Reason, he may withdraw the resignation and remain employed (provided
that he does so before the original notice of resignation becomes effective) or
may proceed and dispute the Company’s decision.

 

(e)                                  Death or Disability. The Executive’s
employment hereunder will terminate immediately upon his (i) death or
(ii) Separation from Service due to Disability.  “Disability” means the Company,
based on appropriate medical evidence, determines he has become physically or
mentally incapacitated so as to render him incapable of

 

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performing his usual and customary duties, with or without a reasonable
accommodation, for 180 or more days, whether or not consecutive, during any 12
month period.  The Executive is also disabled if he is found to be disabled
within the meaning of any Company’s long-term disability insurance coverage as
then in effect (or would be so found if he applied for the coverage or
benefits.  Employment termination under this subsection is treated as
termination without Cause under Section 6(b) or 6(c) as applicable.  Nothing in
this Section prevents the Board from removing the Executive from his position as
CEO or, under Section 6(b), (c), or (d), from terminating his employment at any
time, subject to compliance with those subsections when applicable.

 

(f)                                   Further Effect of Termination on Board and
Officer Positions. If the Executive’s employment ends for any reason, the
Executive agrees that he will cease immediately to hold any and all officer or
director positions he then has with the Company or any affiliate, absent a
contrary direction from the Board (which may include either a request to
continue such service or a direction to cease serving upon notice). The
Executive hereby irrevocably appoints the Company to be his attorney-in-fact to
execute any documents and do anything in his name to effect his ceasing to serve
as a director and officer of the Company and any affiliate, should he fail to
resign following a request from the Board to do so. The Executive will not be
required to sign, and the Company will not sign on his behalf without his
consent, documents effecting his ceasing to serve as a director that
characterize his cessation of employment differently than the manner in which it
is effected through Section 6 hereof.  A written notification signed by a
director or duly authorized officer of the Company that any instrument, document
or act falls within the authority conferred by this subsection will be
conclusive evidence that it does so. The Company will prepare any documents, pay
any filing fees, and bear any other expenses related to this Section.

 

7.                                      Non-Assignability.

 

(a)                                 Neither this Agreement nor any right or
interest hereunder shall be assignable by the Executive or his beneficiaries or
legal representatives without the Company’s prior written consent; provided,
however, that nothing in this Section 7(a) shall preclude the Executive from
designating a beneficiary to receive any benefit payable hereunder upon his
death or incapacity.  The Company may assign this Agreement without the
Executive’s consent, and such an assignment will not terminate his employment
for purposes of triggering his entitlement to severance; provided, however, that
if such an assignment provides a basis for him to resign for Good Reason, he may
resign for Good Reason, and he will be entitled to severance, if any, subject to
the terms of Section 6.  As used herein, “successor” will mean any person, firm,
corporation or other business entity that at any time, whether by purchase,
merger or otherwise, directly or indirectly acquires all or substantially all of
the assets or business of the Company and its subsidiaries.

 

(b)                                 Except as required by law, no right to
receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge or
hypothecation or to exclusion, attachment, levy or

 

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similar process or to assignment by operation of law, and any attempt, voluntary
or involuntary, to effect any such action shall be null, void and of no effect.

 

8.                                      Restrictive Covenants. In connection
with signing this Agreement, the Executive is signing a Noncompetition,
Nonsolicitation, Proprietary and Confidential Information and Developments
Agreement (the “Restrictive Covenants Agreement”), which addresses his
responsibilities to the Company in connection with confidentiality, transfer and
protection of intellectual property, noncompetition, nonsolicitation of
employees and customers, and nondisparagement.

 

9.                                      Binding Effect.  Without limiting or
diminishing the effect of the provisions affecting assignment of this Agreement,
this Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective heirs, successors, legal representatives and
assigns.

 

10.                               Notices.  All notices required or permitted
under this Agreement must be in writing and will be deemed effective upon
personal delivery or three business days following deposit in a United States
Post Office, by certified mail, postage prepaid, or one business day after it is
sent for next-business day delivery via a reputable nationwide overnight courier
service in the case of notice to the Company at its then principal headquarters,
and in the case of notice to the Executive to the current address on file with
the Company.  Notice to the Company must include a separate notice to the
General Counsel of the Company.  Either party may change the address to which
notices are to be delivered by giving notice of such change to the other party
in the manner set forth in this Section 10.

 

11.                               Law Governing.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Texas
without reference to laws relating to conflict of law.

 

12.                               Severability.  If any part of this Agreement
is held by an arbitrator or court of competent jurisdiction to be invalid or
incapable of being enforced in whole or in part by reason of any rule of law or
public policy, such part shall be deemed to be severed from the remainder of
this Agreement for the purpose only of the particular legal proceedings in
question and all other covenants and provisions of this Agreement shall in every
other respect continue in full force and effect and no covenant or provision
shall be deemed dependent upon any other covenant or provision.

 

13.                               Waiver.  Failure to insist upon strict
compliance with any of the terms, covenants or conditions hereof shall not be
deemed a waiver of such term, covenant or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any other time or
times.

 

14.                               Arbitration.  Any dispute relating to or
arising out of the provisions of this Agreement shall be decided by arbitration
in Dallas, Texas, in accordance with the Expedited Arbitration Rules of the
American Arbitration Association then obtaining, unless the parties mutually
agree otherwise in a writing signed by both parties. This undertaking to
arbitrate shall be specifically enforceable. The decision rendered by the
arbitrator will be final and judgment

 

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may be entered upon it in accordance with appropriate laws in any court having
jurisdiction thereof. Each of the parties shall pay his or its own legal fees
associated with such arbitration, but the Company will pay for the American
Arbitration Association’s charges for arbitration.

 

15.                               Waiver of Jury Trial.  TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE,
AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER PROCEEDING
ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE
RELEASE IT CONTEMPLATES, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, THE PARTIES AGREE THAT ANY PARTY
MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE
KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO
WAIVE THEIR RIGHTS TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM
RELATING TO THIS AGREEMENT OR TO ANY OF THE MATTERS CONTEMPLATED UNDER THIS
AGREEMENT, RELATING TO THE EXECUTIVE’S EMPLOYMENT, OR COVERED BY THE
CONTEMPLATED RELEASE.

 

16.                               No Mitigation.  The Executive is not required
to seek other employment or otherwise mitigate the value of any severance
benefits contemplated by this Agreement, nor will any such benefits be reduced
by any earnings or benefits that you may receive from any other source. 
Notwithstanding any other provision of this Agreement, any sum or sums paid
under this Agreement will be in lieu of any amounts to which the Executive may
otherwise be entitled under the terms of any severance plan, policy, program,
agreement or other arrangement sponsored by the Company or an affiliate of the
Company.

 

17.                               Entire Agreement; Modifications.  This
Agreement constitutes the entire and final expression of the agreement of the
parties with respect to the subject matter hereof and supersedes all prior
agreements, oral and written, between the parties hereto with respect to the
subject matter hereof. This Agreement may only be amended, canceled or
discharged or any obligations thereunder waived through a writing signed by the
Executive and the Chair of the Compensation Committee or any executive officer
of the Company (other than the Executive) duly authorized either by the Board or
the Compensation Committee.

 

18.                               Survivorship.  The respective rights and
obligations of the Company and the Executive hereunder will survive any
termination of his employment to the extent necessary to preserve the intent of
such rights and obligations.

 

19.                               Beneficiaries.  The Executive will be
entitled, to the extent applicable law permits, to select and change the
beneficiary or beneficiaries to receive any compensation or benefit payable
hereunder upon his death by giving the Company written notice thereof in a
manner consistent with the terms of any applicable plan documents. If he dies,
severance then due (because of a prior employment termination) or other amounts
due hereunder will be paid to his designated beneficiary or beneficiaries or, if
none are designated or none survive him, his estate.

 

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20.                               Company Policies. References in this Agreement
to Company policies and procedures are to those policies and procedures in
effect at the Effective Date, as the Company may amend them from time to time.

 

21.                               Withholding.  The Company will be entitled to
withhold, or cause to be withheld, any amount of federal, state, city or other
withholding taxes or other amounts either required by law or authorized by the
Executive with respect to payments made to the Executive in connection with his
employment.

 

22.                               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.

 

23.                               Interpretation.  The parties agree that this
Agreement will be construed without regard to any presumption or rule requiring
construction or interpretation against the drafting party. References in this
Agreement to “include” or “including” should be read as though they said
“without limitation” or equivalent forms.

 

24.                               Effect of Section 409A of the Code.

 

(a)                                 Six Month Delay.  If and to the extent any
portion of any payment, compensation or other benefit provided to the Executive
in connection with his employment termination is determined to constitute
“nonqualified deferred compensation” within the meaning of Section 409A and he
is a specified employee as defined in Section 409A(a)(2)(B)(i), as determined by
the Company in accordance with its procedures, by which determination he hereby
agrees that he is bound, such portion of the payment, compensation or other
benefit shall not be paid before the earlier of (i) the expiration of the six
month period measured from the date of his “separation from service” (as
determined under Section 409A) or (ii) the tenth day following the date of his
death following such separation from service (the “New Payment Date” ).  The
aggregate of any payments that otherwise would have been paid to him during the
period between the date of separation from service and the New Payment Date
shall be paid to him in a lump sum in the first payroll period beginning after
such New Payment Date, and any remaining payments will be paid on their original
schedule.

 

(b)                                 General 409A Principles.  For purposes of
this Agreement, a termination of employment or Separation from Service will mean
a “separation from service” as defined in Section 409A and the regulations and
other guidance issued thereunder.  For purposes of this Agreement, each amount
to be paid or benefit to be provided will be construed as a separate identified
payment for purposes of Section 409A, and any payments that are due within the
“short term deferral period” as defined in Section 409A will not be treated as
deferred compensation unless applicable law requires otherwise. Neither the
Company nor the Executive will have the right to accelerate or defer the
delivery of any such payments or benefits except to the extent specifically
permitted or required by Section 409A.  This Agreement is intended to comply
with the provisions of Section 409A and this Agreement shall, to the extent
practicable, be construed in accordance therewith.  Terms defined in this
Agreement will have the

 

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meanings given such terms under Section 409A if and to the extent required to
comply with Section 409A.  In any event, the Company makes no representations or
warranty and will have no liability to the Executive or any other person if any
provisions of or payments under this Agreement are determined to constitute
deferred compensation subject to Code Section 409A but not to satisfy the
conditions of that section. The Executive acknowledges that the payments under
Sections 6(b) and (c) will likely be delayed six months.

 

(c)                                  Expense Timing.  Payments with respect to
reimbursements of business expenses will be made in the ordinary course in
accordance with the Company’s procedures (generally within 45 days after the
Executive has submitted appropriate documentation) and, in any case, on or
before the last day of the calendar year following the calendar year in which
the relevant expense is incurred.  The amount of expenses eligible for
reimbursement, or in-kind benefits provided, during a calendar year may not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other calendar year, and the right to reimbursement or in-kind
benefits is not subject to liquidation or exchange for another benefit.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Company and the Executive have duly executed and
delivered this Agreement as of the date or dates indicated below.

 

AGREED AND ACCEPTED TO:

HMS HOLDINGS CORP.

 

 

/s/ William C. Lucia

 

/s/ Robert M. Holster

William C. Lucia

By:

Robert M. Holster

 

Title:

Chairman of the Board of Directors

 

 

February 26, 2013

 

February 27, 2013

Date

Date

 

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Exhibit A

Separation Agreement and General Release of Claims

 

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