Exhibit 10

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of
August 6, 2019, by and between Acadia Management Company, Inc., a Delaware
corporation (the “Company”), and Laurence Harrod (“Executive”). This Agreement
shall become binding upon the execution hereof and shall be effective as of
August 12, 2019 (the “Effective Date”).

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

1. Employment; Employment Period. The Company shall employ Executive, and
Executive hereby accepts employment with the Company, upon the terms and
conditions set forth in this Agreement for the period beginning on the Effective
Date and ending on the date on which Executive’s employment is terminated
pursuant to Section 4 hereof (the “Employment Period”). The place of employment
of Executive shall be the principal executive offices and corporate headquarters
of the Company and Acadia Healthcare Company, Inc., a Delaware corporation
(“Acadia”), which, during the Employment Period, shall be located in Williamson
County, Tennessee. Executive will spend substantially all Executive’s business
time in the Williamson County, Tennessee corporate office (other than while
traveling for business purposes).

2. Position and Duties.

(a) Position; Responsibilities. During the Employment Period, Executive shall
serve as Executive Vice President of Finance of the Company and shall have the
normal duties, responsibilities, functions and authority of an executive vice
president of finance in similarly sized companies that are not inconsistent with
Executive’s position as Executive Vice President of Finance, subject to the
power and authority of the board of directors (the “Board”) of Acadia, to expand
or limit such duties, responsibilities, functions and authority within the scope
of duties, responsibilities, functions and authority associated with the
position of Executive Vice President of Finance and to overrule actions of
officers of the Company.

(b) Reporting; Performance of Duties. Executive shall report to the Chief
Executive Officer of Acadia and devote his full business time and attention
(except for permitted vacation periods and reasonable periods of illness or
other incapacity) to the business and affairs of Acadia and the Subsidiaries. So
long as Executive is employed by the Company, Executive shall not, without the
prior written consent or approval of the Board, perform other services for
compensation. Notwithstanding the foregoing, nothing herein shall preclude
Executive from (i) serving, with the prior written consent of the Board, as a
member of the boards of directors or advisory boards (or their equivalents in
the case of a non-corporate entity) of for-profit companies or businesses which
are not directly competitive with the Company or any Subsidiary (provided that
the prior written consent of the Board shall not be required for Executive to
serve as a member of the boards of directors or advisory boards (or their
equivalents) of the companies listed on Exhibit A), (ii) engaging in charitable
activities and community affairs (including serving as a member of the boards of
directors or advisory boards (or their equivalents in the case of a
non-corporate entity) of not-for-profit, charitable or community organizations
which are not directly competitive with the Company or any Subsidiary); and
(iii) managing Executive’s personal

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and legal affairs and his passive personal investments; provided, however, the
activities set out in clauses (i) and (ii) above shall be limited by Executive
so as not to materially interfere, individually or in the aggregate, with the
performance of his duties and responsibilities hereunder. For the avoidance of
doubt, so long as Executive is employed by the Company, Executive shall not
provide any services to any company or business that is directly competitive
with Acadia or its Subsidiaries (whether for-profit or not-for-profit) without
the prior written consent of the Board.

3. Compensation and Benefits.

(a) Base Salary. During the Employment Period, Executive’s base salary shall be
no less than $555,000 per annum, subject to increase by the Board or Acadia’s
Compensation Committee (the “Compensation Committee”) in its sole discretion on
an annual basis (as increased from time to time, the “Base Salary”), which
salary shall be payable by the Company in regular installments in accordance
with the Company’s general payroll practices (as in effect from time to time).
The Base Salary for any partial year during the Employment Period will be based
upon the actual number of days elapsed in such year.

(b) Business Expenses. During the Employment Period, the Company shall reimburse
Executive in the calendar year in which they are incurred for all reasonable
out-of-pocket business expenses incurred by him in the course of performing his
duties and responsibilities under this Agreement which are consistent with the
Company’s policies in effect from time to time with respect to travel,
entertainment and other business expenses, subject to the Company’s requirements
with respect to reporting and documentation of such expenses.

(c) Bonus. In addition to the Base Salary, during each calendar year of the
Employment Period beginning with the year ending December 31, 2019, Executive
will be eligible to earn a target annual cash bonus of not less than 85% of the
Base Salary (the “Target Bonus”) and up to a maximum cash bonus equal to two
(2) times the Target Bonus for such year, if and only if Executive, Acadia and
the Subsidiaries achieve the performance criteria specified by the Board or the
Compensation Committee for such year, as determined by the Board or the
Compensation Committee in its sole discretion. The performance criteria for any
particular year shall be set by the Board or the Compensation Committee no later
than ninety (90) days after the commencement of the relevant year. Unless
otherwise agreed to by Executive, any such bonus amount for any year shall be
earned (if awarded) on the last day of such year and paid by the Company in the
calendar year following the calendar year to which such bonus has been earned
and no later than the earlier of (x) the date that is ten (10) business days
after the Company’s receipt of its audited financial statements for the calendar
year with respect to which such bonus has been earned and (y) December 31 of the
calendar year following such year with respect to which such bonus has been
earned.

(d) Long-Term Incentive Compensation. Executive will be entitled to a long-term
incentive award in 2019 that will have a target value equal to not less than
220% of the Base Salary (such value to be determined on the same basis as the
Committee values such awards generally) and shall be in a form and on terms
consistent with the long-term incentive awards for other senior executives of
the Company granted in 2019. Thereafter, the Executive shall be eligible for
annual grants of equity awards or other long-term incentive awards in amounts as
determined by the Committee and on terms and conditions comparable to the
Company’s other senior executives.

 

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(e) Benefits. In addition to (but without duplication of) the Base Salary and
any bonuses payable to Executive pursuant to this Section 3, Executive shall be
entitled to participate at his sole discretion in all of the Company’s employee
benefit programs for which senior executive employees of the Company are
generally eligible.

(f) Make Whole Compensation. Promptly after the commencement of Executive’s
employment with the Company, the Company will pay or provide Executive with the
payments and benefits set forth on Schedule 1 hereto. The amounts described in
this Section 3(f) shall be in addition to the payments and benefits specified in
Section 3(a) through 3(e) above.

(g) Counsel Fees. Upon presentation of appropriate documentation, the Company
shall pay Executive’s reasonable counsel fees incurred in connection with the
negotiation and documentation of this Agreement in an amount up to $5,000, and
matters related hereto, payable within thirty (30) days following the execution
of this Agreement.

4. Termination.

(a) Termination. The Employment Period shall terminate automatically and
immediately upon Executive’s resignation for any reason (whether with Good
Reason or without Good Reason), Executive’s death or becoming Disabled, or upon
the termination of Executive’s employment by the Company (through action by the
Board) for any reason (whether for Cause or without Cause). The date on which
Executive ceases to be employed by the Company is referred to herein as the
“Termination Date.”

(b) Termination without Cause or with Good Reason. If the Employment Period is
terminated by the Company without Cause or by Executive with Good Reason, then
Executive shall be entitled to receive:

(i) Executive’s unpaid Base Salary through the Termination Date (payable in
accordance with Section 3(a)) and any accrued but unpaid cash bonus with respect
to a completed performance period;

(ii) payment in respect of any unused paid time off and sick pay of Executive in
such amounts as have accrued as of the Termination Date in accordance with the
Company’s policies with respect thereto as in effect during the Employment
Period, and reimbursement of any business expenses incurred by Executive but not
reimbursed prior to the Termination Date in accordance with and reimbursable
under the terms of the Company’s policies with respect thereto as in effect on
the Termination Date (in each case, payable in a lump sum within ten
(10) business days after the Termination Date) and all other payments, benefits
or fringe benefits to which Executive shall be entitled under the terms of any
applicable compensation arrangement or benefit, equity or fringe benefit plan or
program or grant or this Agreement;

 

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(iii) an amount equal to the sum of Executive’s Base Salary and Target Bonus,
payable in substantially equal installments in accordance with the Company’s
general payroll practices (as in effect from time to time) during the 12-month
period following the Termination Date;

(iv) an amount equal to the actual annual cash bonus amount to which Executive
would be entitled under Section 3(c) with respect to the calendar year in which
the Termination Date occurs, determined based on achievement of the performance
objectives specified in Executive’s bonus plan for such year (with any
subjective performance criteria deemed achieved at target), as determined by the
Board or the Compensation Committee consistent with other senior executives of
the Company, which amount shall be prorated based on the actual number of days
elapsed in such year prior to the Termination Date (payable at the same time it
would have been paid pursuant to Section 3(c)); and

(v) an amount equal to the after-tax cost of the premiums for continued health
and dental insurance for Executive and/or Executive’s dependents in accordance
with the Consolidated Budget Reconciliation Act of 1985 (“COBRA”) for the period
commencing on the Termination Date and ending on the eighteen-month anniversary
of the Termination Date (payable in monthly installments during and concurrently
with Executive’s COBRA period).

Notwithstanding the foregoing, Executive shall be entitled to receive such
payments described in Section 4(b)(iii) through 4(b)(v) only so long as
Executive has not breached any of the provisions of Sections 5, 6,7 and 8
hereof, and all amounts payable and benefits or additional rights provided
pursuant to Section 4(b)(iii) through 4(b)(v) shall only be payable if Executive
delivers to the Company and does not revoke a general release of claims in favor
of the Company in substantially the form attached on Exhibit B hereto; such
release shall be executed and delivered (and no longer subject to revocation, if
applicable) within sixty (60) days following Executive’s termination (the
“Release Requirement”).

(c) Termination by Death or Disability. If the Employment Period is terminated
due to Executive’s death or becoming Disabled, then Executive (or his estate or
beneficiary) shall be entitled to receive:

(i) Executive’s unpaid Base Salary through the Termination Date (payable in
accordance with Section 3(a)) and any accrued but unpaid cash bonus with respect
to a completed performance period;

(ii) payment in respect of any unused paid time off and sick pay of Executive in
such amounts as have accrued as of the Termination Date in accordance with the
Company’s policies with respect thereto as in effect during the Employment
Period, and reimbursement of any business expenses incurred by Executive but not
reimbursed prior to the Termination Date in accordance with and reimbursable
under the terms of the Company’s policies with respect thereto as in effect on
the Termination Date (in each case, payable in a lump sum within ten
(10) business days after the Termination Date) and all other payments, benefits
or fringe benefits to which Executive shall be entitled under the terms of any
applicable compensation arrangement or benefit, equity or fringe benefit plan or
program or grant or this Agreement;

 

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(iii) an amount equal to the actual annual cash bonus amount to which Executive
would be entitled under Section 3(c) with respect to the calendar year in which
the Termination Date occurs, determined based on achievement of the performance
objectives specified in Executive’s bonus plan for such year (with any
subjective performance criteria deemed achieved at target), as determined by the
Board or the Compensation Committee consistent with other senior executives of
the Company, which amount shall be prorated based on the actual number of days
elapsed in such year prior to the Termination Date (payable at the same time it
would have been paid pursuant to Section 3(c)); and

(iv) an amount equal to the after-tax cost of the premiums for continued health
and dental insurance for Executive and/or Executive’s dependents in accordance
with COBRA for the period commencing on the Termination Date and ending on the
earliest of (A) the date on which Executive’s COBRA period terminates or
expires, (B) six (6) months after the Termination Date, and (C) the date on
which Executive becomes eligible for long-term disability benefits under any
long-term disability program sponsored by the Company (payable in monthly
installments during and concurrently with Executive’s COBRA period); provided
that if Executive’s COBRA period is terminated prior to expiration of the period
commencing on the Termination Date and ending on the earlier of (I) the date on
which Executive becomes eligible for long-term disability benefits under any
long-term disability program sponsored by the Company, and (II) six (6) months
after the Termination Date (such period, the “Disability Severance Period”),
then Executive shall be entitled to continue to receive an amount equal to the
cost of the premiums for continued health and dental insurance for Executive
and/or Executive’s dependents in accordance with COBRA (assuming such continued
insurance coverage remained available at the same monthly cost) payable in
monthly installments during the period commencing on the date of such
termination or expiration and ending on the date on which the Disability
Severance Period expires.

In addition, if the Employment Period is terminated due to Executive’s becoming
Disabled (but, for the avoidance of doubt, not due to his death), then Executive
(or his estate or beneficiary) shall be entitled to receive, during the
Disability Severance Period, continued installment payments of Executive’s Base
Salary as in effect on the Termination Date, which shall be payable over the
Disability Severance Period in regular installments in accordance with the
Company’s general payroll practices as in effect on the Termination Date, but in
no event less frequently than monthly.

(d) Other Termination. If the Employment Period is terminated (i) by the Company
for Cause, or (ii) by Executive’s resignation without Good Reason, then the
Company shall pay Executive (A) Executive’s unpaid Base Salary through the
Termination Date (payable in accordance with Section 3(a)) and (B) any bonus
amount under Section 3(c) to which Executive is entitled determined by reference
to the calendar year that ended on or prior to the Termination Date (payable at
the same time it would have been paid pursuant to Section 3(c)) and all other
payments, benefits or fringe benefits to which Executive shall be entitled under
the terms of any applicable compensation arrangement or benefit, equity or
fringe benefit plan or program or grant or this Agreement.

 

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(e) Treatment of Equity Awards. If the Employment Period is terminated by the
Company without Cause, by Executive with Good Reason or as a result of
Executive’s death or Disability (each, a “Qualifying Termination”), annual
equity and equity-based awards granted to Executive during the Effective Time
(the “Equity Awards”) shall be treated as set forth below, subject to
Executive’s satisfaction of the Release Requirement: (i) the time vesting
component(s) of the Equity Awards will be deemed satisfied upon a Qualifying
Termination; and (ii) the Equity Awards subject to performance-based vesting
will remain outstanding and eligible to vest based on actual achievement of the
applicable performance conditions, subject to the terms and conditions set forth
in the applicable award agreement and/or governing documentation.

(f) Continuation of Benefits. Upon any termination of employment, whether
voluntary or otherwise, Executive shall have the option to elect health
insurance coverage for himself, his spouse and his eligible dependents during
the period commencing on the end of the statutory COBRA period, if any (provided
that Executive validly elected COBRA continuation coverage), until the earlier
of the date on which Executive (A) is eligible to participate in another health
benefit plan (including, without limitation, a plan sponsored by a then current
or former employer of Executive’s or Executive’s spouse, other than a plan that
provides for “excepted benefits” as defined under section 733(c) of the Employee
Retirement Income Security Act of 1974) or (B) becomes eligible for Medicare.
Such coverage will be provided for by the Company (or any successor to the
Company, whether by operation of law or otherwise) in accordance with applicable
law, and Executive shall pay premiums consistent with other senior executive
employees of the Company (or any successor to the Company, whether by operation
of law or otherwise). Executive agrees to take all required actions and provide
any requested personal medical history and information, in accordance with the
applicable policy application and medical underwriting process. Nothing in this
Section 4(f) shall decrease or reduce Executive’s rights or entitlements under
Sections 4(b)(v) or 4(c)(iv) hereof.

(g) No Mitigation. Executive is under no obligation to mitigate damages or the
amount of any payment provided for under this Section 4 by seeking other
employment or otherwise.

(h) Right of Offset. The Company may offset any bona fide obligations that
Executive owes Acadia or any of the Subsidiaries (which for the avoidance of
doubt shall not include any unliquidated obligations or obligations to the
extent Executive disputes in good faith the nature or amount thereof) against
any amounts the Company or any of the Subsidiaries owes Executive hereunder;
provided that, notwithstanding the foregoing or any other provision of this
Agreement to the contrary, in no event shall any payment under this Agreement
that constitutes “deferred compensation” for purposes of Code Section 409A be
subject to offset, counterclaim or recoupment by any other amount unless
otherwise permitted by Code Section 409A.

 

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(i) Section 409A Compliance.

(i) The intent of the parties is that payments and benefits under this Agreement
comply with Internal Revenue Code Section 409A and the regulations and guidance
promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to
the maximum extent permitted, this Agreement shall be interpreted to be in
compliance therewith. In no event whatsoever shall Acadia or any of the
Subsidiaries be liable for any additional tax, interest or penalty that may be
imposed on Executive by Code Section 409A or damages for failing to comply with
Code Section 409A.

(ii) A termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment,” “termination of the
Employment Period” or like terms shall mean “separation from service.”

(iii) All expenses or other reimbursements under this Agreement shall be made on
or prior to the last day of the taxable year following the taxable year in which
such expenses were incurred by Executive (provided that if any such
reimbursements constitute taxable income to Executive, such reimbursements shall
be paid no later than March 15th of the calendar year following the calendar
year in which the expenses to be reimbursed were incurred), and no such
reimbursement or expenses eligible for reimbursement in any taxable year shall
in any way affect the expenses eligible for reimbursement in any other taxable
year.

(iv) For purposes of Code Section 409A, Executive’s right to receive any
installment payment pursuant to this Agreement shall be treated as a right to
receive a series of separate and distinct payments.

(v) Whenever a payment under this Agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within fifteen
(15) days following the Termination Date”), the actual date of payment within
the specified period shall be within the sole discretion of the Company.

(vi) Notwithstanding any other payment schedule provided herein to the contrary,
if Executive is deemed on the Termination Date to be a “specified employee”
within the meaning of that term under Code Section 409A(a)(2)(B), then any
payment that is considered deferred compensation under Code Section 409A payable
on account of a “separation from service” shall be made on the date which is the
earlier of (i) the expiration of the six (6)-month period measured from the date
of such “separation from service” of Executive and (ii) the date of Executive’s
death (the “Delay Period”) to the extent required under Code Section 409A. Upon
the expiration of the Delay Period, all payments delayed pursuant to the
immediately preceding sentence (whether they otherwise would have been payable
in a single sum or in installments in the absence of such delay) shall be paid
to Executive in a lump sum, and all remaining payments due under this Agreement
shall be paid or provided

 

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in accordance with the normal payment dates specified for them herein. In
addition, if Executive is a “specified employee,” to the extent that welfare
benefits to be provided to Executive pursuant to this Agreement are not
“disability pay,” “death benefit” plans or non-taxable medical benefits within
the meaning of Treasury Regulation Section 1.409A-1(a)(5) or other benefits not
considered nonqualified deferred compensation within the meaning of that
regulation, such provision of benefits shall be delayed until the end of the
Delay Period. Notwithstanding the foregoing, to the extent that the previous
sentence applies to the provision of any ongoing health or welfare benefits that
would not be required to be delayed if the premiums were paid by Executive,
Executive shall pay the full cost of the premiums for such benefits during the
Delay Period and the Company shall pay Executive an amount equal to the amount
of such premiums paid by Executive during the Delay Period within ten (10) days
after the end of Delay Period.

(j) Upon any termination of Executive’s employment with the Company, Executive
shall promptly resign, and shall be automatically deemed to have resigned
without the requirement of any further action, from any position as an officer,
director or fiduciary of Acadia and the Company and their respective Affiliates
(including, without limitation the Board of Acadia). Executive agrees to execute
any additional documentation reasonably requested by the Company to implement
any such resignation contemplated herein.

5. Confidential Information.

(a) Protection of Confidential Information. Executive acknowledges that the
continued success of Acadia and the Subsidiaries depends upon the use and
protection of a large body of confidential and proprietary information. All of
such confidential and proprietary information now existing or to be developed in
the future will be referred to in this Agreement as “Confidential Information.”
Confidential Information will be interpreted broadly to include, without
limitation, all information that is (i) related to Acadia’s or the Subsidiaries’
(including any of their predecessors’ prior to being acquired by the Company)
current or potential business and (ii) is not generally or publicly known
(including, without specific limitation, the information, observations and data
concerning (A) acquisition opportunities in or reasonably related to Acadia’s or
the Subsidiaries’ business or industry, (B) identities and requirements of,
contractual arrangements with and other information regarding Acadia’s or the
Subsidiaries’ employees (including personnel files and other information),
suppliers, distributors, customers, independent contractors, third-party payors,
providers or other business relations and their confidential information,
including, without limitation, patient records, medical histories and other
information concerning patients (including, without limitation, all “Protected
Health Information” within the meaning of the Health Insurance Portability and
Accountability Act), and (C) internal business information and intellectual
property of every kind and description of Acadia and the Subsidiaries).
Executive agrees that during the Employment Period and for five (5) years
thereafter, he shall not disclose to any unauthorized person or use for his own
account any of such Confidential Information, whether or not developed by
Executive, without the Board’s prior written consent, unless and to the extent
that any Confidential Information (i) was known to Executive prior to the
negotiation of this Agreement or the Employment Period from a source (other than
Acadia, the Subsidiaries or any of their respective agents) that, to the
knowledge of Executive, was not prohibited from disclosing such information by a
legal, contractual or fiduciary obligation to Acadia or any of the Subsidiaries,
(ii) becomes generally known to and available for use by the public other than
as a result of Executive’s acts or omissions to act or (iii) is required to be
disclosed pursuant to any applicable law or court order.

 

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(b) Use of Others’ Confidential Information. During the Employment Period,
Executive shall not use or disclose any confidential information or trade
secrets, if any, of any former employers or any other Person to whom Executive
has an obligation of confidentiality. If at any time during his employment with
the Company, Executive believes he is being asked to engage in work that will,
or will be likely to, jeopardize any confidentiality or other obligations
Executive may have to former employers, then Executive shall immediately advise
the Board so that Executive’s duties can be modified appropriately.

(c) Third-Party Information. Executive understands that Acadia and the
Subsidiaries will receive from third parties confidential or proprietary
information (“Third-Party Information”) subject to a duty on Acadia’s and the
Subsidiaries’ part to maintain the confidentiality of such information and to
use it only for certain limited purposes. During the Employment Period and
thereafter, and without in any way limiting the provisions of Section 5(a)
above, Executive will hold Third-Party Information in the strictest confidence
and will not disclose to anyone (other than personnel of Acadia or the
Subsidiaries who need to know such information in connection with their work for
Acadia or the Subsidiaries) or use, except in connection with his work for
Acadia or the Subsidiaries, Third-Party Information unless expressly authorized
by the Board in writing.

(d) Whistleblower Protection. Notwithstanding anything to the contrary contained
herein, no provision of this Agreement shall be interpreted so as to impede
Executive (or any other individual) from reporting possible violations of
federal law or regulation to any governmental agency or entity, including but
not limited to the Department of Justice, the Securities and Exchange
Commission, the Congress, and any agency Inspector General, or making other
disclosures under the whistleblower provisions of federal law or regulation.
Executive does not need the prior authorization of Acadia or any of the
Subsidiaries to make any such reports or disclosures and Executive shall not be
not required to notify the Acadia or any of the Subsidiaries that such reports
or disclosures have been made.

(e) Trade Secrets. 18 U.S.C. § 1833(b) provides: “An individual shall not be
held criminally or civilly liable under any Federal or State trade secret law
for the disclosure of a trade secret that (A) is made (i) in confidence to a
Federal, State, or local government official, either directly or indirectly, or
to an attorney; and (ii) solely for the purpose of reporting or investigating a
suspected violation of law; or (B) is made in a complaint or other document
filed in a lawsuit or other proceeding, if such filing is made under seal.”
Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or
create liability for disclosures of trade secrets that are expressly allowed by
18 U.S.C. § 1833(b). Accordingly, the parties to this Agreement have the right
to disclose in confidence trade secrets to federal, state, and local government
officials, or to an attorney, for the sole purpose of reporting or investigating
a suspected violation of law. The parties also have the right to disclose trade
secrets in a document filed in a lawsuit or other proceeding, but only if the
filing is made under seal and protected from public disclosure.

 

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6. Ownership of Intellectual Property, Inventions and Patents. Executive
acknowledges that all discoveries, concepts, ideas, inventions, innovations,
improvements, developments, methods, processes, programs, designs, analyses,
drawings, reports, patent applications, copyrightable work and mask work
(whether or not including any confidential information) and all registrations or
applications related thereto, all other proprietary information and all similar
or related information (whether or not patentable) which relate to Acadia’s or
the Subsidiaries’ actual or anticipated business, research and development or
existing or future products or services and which are conceived, developed,
contributed to, made or reduced to practice by Executive (whether alone or
jointly with others) while employed by Acadia or the Subsidiaries after the date
of this Agreement, including any of the foregoing that constitutes any
proprietary information or records (“Work Product”), belong to Acadia or such
Subsidiary. Any copyrightable work prepared in whole or in part by Executive in
the course of his work for any of the foregoing entities shall be deemed a “work
made for hire” to the maximum extent permitted under copyright laws, and Acadia
or such Subsidiary shall own all rights therein. To the extent any such
copyrightable work is not a “work made for hire,” Executive hereby assigns and
agrees to assign to Acadia or such Subsidiary all right, title and interest,
including, without limitation, copyright, in and to such copyrightable work.
Executive shall promptly disclose such Work Product to the Board and, at the
Company’s expense, perform all actions reasonably requested by the Board
(whether during or after the Employment Period) to establish and confirm such
ownership by Acadia or such Subsidiary (including, without limitation, execution
and delivery of assignments, consents, powers of attorney and other
instruments).

7. Non-Compete; Non-Solicit.

(a) Non-Compete. In further consideration of the compensation to be paid to
Executive hereunder, Executive acknowledges that during the course of his
employment with the Company he has and shall become familiar with Acadia’s and
the Subsidiaries’ trade secrets and with other Confidential Information
concerning Acadia and the Subsidiaries and that his services have been and shall
be of special, unique and extraordinary value to Acadia and the Subsidiaries,
and, therefore, Executive agrees that, during the Employment Period and for a
period thereafter of twelve (12) months (the “Noncompete Period”), he shall not
(i) directly or indirectly own any interest in, manage, control, participate in,
consult with, render services for, or in any manner engage in any business that
derives at least 25% of its gross revenue from (A) the business of providing
behavioral healthcare and/or related services or (B) any other material business
in which Acadia or any of its Subsidiaries planned to be engaged in on or after
such date of which the Executive has or should have had actual knowledge; or
(ii) directly or indirectly manage, control, participate in, consult with or
render services specifically with respect to any unit, division, segment or
subsidiary of any other business that engages in or otherwise competes with (or
was organized for the purpose of engaging in or competing with) the business of
providing behavioral healthcare and/or related services (provided that, this
clause (ii) shall not be construed to prohibit Executive from directly or
indirectly owning any interest in, managing, controlling, participating in,
consulting with, rendering services for, or in any manner engaging in any
business activities with or for such business generally and, for the avoidance
of doubt, not specifically with respect to such unit, division, segment or
subsidiary), in each case, within any geographical area in which Acadia and the
Subsidiaries engage in such businesses; provided that Executive shall not be
subject to the restrictions set forth in this Section 7(a) if the Employment
Period is terminated by the Company without Cause or by Executive with Good
Reason and for so long as the Company is in breach of its obligations under
Section 4(b) and such breach is not

 

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the subject of a good faith dispute between the Company and Executive. For
purposes of this Agreement, the term “participate in” shall include, without
limitation, having any direct or indirect interest in any Person, whether as a
sole proprietor, owner, stockholder, partner, joint venturer, creditor or
otherwise, or rendering any direct or indirect service or assistance to any
individual, corporation, partnership, joint venture and other business entity
(whether as a director, officer, manager, supervisor, employee, agent,
consultant or otherwise). Nothing herein shall prohibit Executive from being a
passive owner of not more than 2% of the outstanding stock of any class of a
corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation.

(b) Non-Solicit. During the Employment Period and for a period thereafter of
twelve (12) months (the “Nonsolicit Period”), Executive shall not directly or
indirectly through another Person (other than on behalf of Acadia and the
Subsidiaries) (i) induce or attempt to induce any employee or independent
contractor of Acadia or the Subsidiaries to leave the employ or services of
Acadia or the Subsidiaries, or in any way willfully interfere with the
relationship between Acadia and the Subsidiaries and any employee or independent
contractor thereof, (ii) hire or seek any business affiliation with any person
who was an employee or independent contractor of Acadia or the Subsidiaries at
any time during the twelve (12) months prior to the Termination Date or
(iii) willfully induce or attempt to induce any customer, supplier, licensee,
licensor or other business relation of Acadia or any Subsidiary to cease doing
business with Acadia or such Subsidiary or interfere with the relationship
between any such customer, supplier, licensor or other business relation and
Acadia or any Subsidiary; provided that Executive shall not be subject to the
restrictions set forth in this Section 7(b) if the Employment Period is
terminated by the Company without Cause or by Executive with Good Reason and for
so long as the Company is in breach of its obligations under Section 4(b) and
such breach is not the subject of a good faith dispute between the Company and
Executive.

(c) Non-Disparagement. Without limiting any other obligation of Executive
pursuant to this Agreement, Executive hereby covenants and agrees that, except
as may be required by applicable law, Executive shall not make any statement,
written or verbal, in any forum or media, or take any other action in
disparagement of Acadia or any of the Subsidiaries, during the Employment Period
and for a period of five (5) years thereafter (the “Non-Disparagement Period”).
Without limiting any other obligation of Acadia and the Subsidiaries pursuant to
this Agreement, Acadia hereby covenants and agrees that, except as may be
required by applicable law, Acadia shall direct its executive officers and
members of its board of directors (and use commercially reasonable efforts to
obtain compliance with such direction) not to make any statement, written or
verbal, in any forum or media, or take any other action in disparagement of
Executive, during the Employment Period and the Non-Disparagement Period. This
Section 7(c) will not be violated by (i) truthful statements required to be made
by law or legal process, or (ii) internal statements in connection with
providing services to Acadia and the Subsidiaries.

(d) Blue-Pencil. If, at the time of enforcement of Section 5 or 6 or this
Section 7, a court shall hold that the duration, scope or area restrictions
stated herein are unreasonable under circumstances then existing, the parties
agree that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or area and
that the court shall be allowed to revise the restrictions contained herein to
cover the maximum duration, scope and area permitted by law. Executive hereby
acknowledges and represents that he has either consulted with independent legal
counsel regarding his rights and obligations under this Agreement or knowingly
and voluntarily waived the opportunity to do so and that he fully understands
the terms and conditions contained herein.

 

11

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(e) Additional Acknowledgments. Executive acknowledges that the provisions of
Sections 5 and 6 and this Section 7 are in consideration of Executive’s
employment with the Company and other good and valuable consideration as set
forth in this Agreement. In addition, Executive agrees and acknowledges that the
restrictions contained in Sections 5 and 6 and this Section 7 do not preclude
Executive from earning a livelihood, nor do they unreasonably impose limitations
on Executive’s ability to earn a living. In addition, Executive acknowledges
(x) that the business of Acadia and the Subsidiaries will be conducted
throughout the United States and its territories and beyond, (y) notwithstanding
the state of organization or principal office of Acadia or any of the
Subsidiaries or facilities, or any of their respective executives or employees
(including Executive), it is expected that Acadia and the Subsidiaries will have
business activities and have valuable business relationships within its industry
throughout the United States and its territories and beyond, and (z) as part of
Executive’s responsibilities, Executive will be traveling throughout the United
States and other jurisdictions where Acadia and the Subsidiaries conduct
business during the Employment Period in furtherance of the Company’s business
relationships. Executive agrees and acknowledges that the potential harm to
Acadia and the Subsidiaries of the non-enforcement of any provision of Sections
5 and 6 and this Section 7 outweighs any potential harm to Executive of its
enforcement by injunction or otherwise. Executive acknowledges that he has
carefully read this Agreement and either consulted with legal counsel of
Executive’s choosing regarding its contents or knowingly and voluntarily waived
the opportunity to do so, has given careful consideration to the restraints
imposed upon Executive by this Agreement and is in full accord as to their
necessity for the reasonable and proper protection of confidential and
proprietary information of Acadia and the Subsidiaries now existing or to be
developed in the future. Executive expressly acknowledges and agrees that each
and every restraint imposed by this Agreement is reasonable with respect to
subject matter, duration and geographical area.

(f) Specific Performance. In the event of the breach or a threatened breach by
Executive of any of the provisions of Section 5 or 6 or this Section 7, Acadia
and the Subsidiaries would suffer irreparable harm and that money damages would
not be a sufficient remedy and, in addition and supplementary to other rights
and remedies existing in its favor whether under this Agreement or under any
other agreement, the Company shall be entitled to specific performance and/or
injunctive or other equitable relief from a court of competent jurisdiction in
order to enforce or prevent any violations of the provisions hereof (without
posting a bond or other security). In addition, in the event of an alleged
breach or violation by Executive of this Section 7, the Noncompete Period or the
Nonsolicit Period, as applicable, shall be tolled until such breach or violation
has been duly cured.

8. Executive’s Representations. Executive hereby represents and warrants to the
Company that (a) the execution, delivery and performance of this Agreement by
Executive do not and shall not conflict with, breach, violate or cause a default
under any contract, agreement, instrument, order, judgment or decree to which
Executive is a party or by which he is bound, (b) except as previously disclosed
to the Company in writing (a copy of each such agreement having been provided to
the Company prior to the date hereof or being publicly available on EDGAR as of
the date hereof), Executive is not a party to or bound by any employment
agreement, noncompete

 

12

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agreement or confidentiality agreement with any other person or entity,
(c) except as previously disclosed to the Company in writing, Executive took
nothing with him which belonged to any former employer when Executive left his
prior position and Executive has nothing that contains any information which
belongs to any former employer, in either case which would reasonably be likely
to result in any liability to Acadia or any Subsidiary, and (d) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms. Executive hereby acknowledges and represents that he has either
consulted with independent legal counsel regarding his rights and obligations
under this Agreement or knowingly and voluntarily waived the opportunity to do
so and that he fully understands the terms and conditions contained herein.

9. Definitions. For purposes of this Agreement, the following terms shall have
the meanings set forth below:

“Cause” shall mean with respect to Executive one or more of the following:
(i) the conviction of or plea of nolo contendere to a felony or the conviction
of any crime involving misappropriation, embezzlement or fraud with respect to
Acadia or any of the Subsidiaries or any of their customers, suppliers or other
business relations, (ii) willful conduct outside the scope of Executive’s duties
and responsibilities under this Agreement that causes Acadia or any of the
Subsidiaries substantial public disgrace or disrepute or demonstrable economic
harm, (iii) repeated failure to perform duties consistent with this Agreement as
reasonably directed by the Board, (iv) any willful act or knowing omission of
aiding or abetting a competitor of Acadia or any of the Subsidiaries to the
disadvantage or detriment of Acadia and the Subsidiaries, (v) material breach of
fiduciary duty or willful misconduct with respect to Acadia or any of the
Subsidiaries, (vi) an administrative or other proceeding arising as a result of
Executive’s action that results in the suspension or debarment of Executive from
participation in any contracts with, or programs of, the United States or any of
the fifty states or any agency or department thereof, or any finding of a
governmental agency that Executive personally has engaged in misconduct in
connection with his employment by the Company or any predecessor employer, or
(vii) any other material breach by Executive of this Agreement (including, but
not limited to, breach of the Relocation Requirement) or any other agreement
between Executive and Acadia or any of the Subsidiaries, provided that no
determination of “Cause” may be made until Executive has been given written
notice detailing the specific Cause event and a period of fifteen (15) business
days following receipt of such notice to cure such event.

“Disabled” means any physical or mental disability or infirmity that has
prevented the performance of Executive’s duties for a period of (i) one hundred
twenty (120) consecutive days or (ii) one hundred eighty (180) non-consecutive
days during any twelve (12) month period. Any question as to the existence,
extent or potentiality of Executive’s Disability upon which Executive and the
Company cannot agree shall be determined by a qualified, independent physician
selected by the Company and reasonably approved by Executive (or his
representative).

“Good Reason” shall mean if Executive resigns his employment with the Company as
a result of one or more of the following actions (in each case taken without
Executive’s written consent): (i) a reduction in Executive’s Base Salary, (ii) a
material diminution of Executive’s job duties or responsibilities inconsistent
with Executive’s position, which shall include, without limitation,
(A) Executive’s removal from the position specified in Section 1(a), (B) the
Company’s hiring an individual at an equivalent or senior level to Executive to
perform substantially the same duties and responsibilities set forth in
Section 1(a) or (C) Executive’s reporting directly to any officer of the Company
other than the Company’s chief executive officer; (iii) any other material
breach by

 

13

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the Company or Acadia (or their successors) of this Agreement; or (iv) a
relocation of the Company’s and Acadia’s principal executive offices and
corporate headquarters outside of a thirty (30) mile radius of Nashville,
Tennessee; provided that, none of the events described in clauses (i) through
(iv) above shall constitute Good Reason unless Executive shall have notified the
Company and/or Acadia in writing describing the event which constitutes Good
Reason within ninety (90) days after the occurrence of such event and then only
if the Company and/or Acadia and the Subsidiaries shall have failed to cure such
event within thirty (30) days after the Company’s and/or Acadia’s receipt of
such written notice and Executive elects to terminate his employment as a result
at the end of such thirty (30) day period.

“Person” shall mean an individual, a partnership, a corporation (whether or not
for profit), a limited liability company, an association, a joint stock company,
a trust, a joint venture, or other business entity, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.

“Subsidiary” shall mean any corporation or other entity of which the securities
or other ownership interests having the voting power to elect a majority of the
board of directors or other governing body are, at the time of determination,
owned by Acadia or of which Acadia serves as the managing member or in a similar
capacity or of which Acadia holds a majority of the partnership or limited
liability company or similar interests or is otherwise entitled to receive a
majority of distributions made by it, in each case directly or through one or
more Subsidiaries.

10. Survival. Sections 4 through 28 (other than Section 23) shall survive and
continue in full force in accordance with their terms notwithstanding the
expiration or termination of the Employment Period.

11. Notices. Any notice provided for in this Agreement shall be in writing and
shall be personally delivered, sent by facsimile (with hard copy to follow),
sent by reputable overnight courier service, or mailed by first class mail,
return receipt requested, to the recipient at the address below indicated:

Notices to Executive:

Laurence Harrod

252 Woodland Road

Newtown, PA 18940

with copies (which shall not constitute notice) to:

Patricia C. Collins, Esq.

Antheil Maslow & McMinn LLP

131 W. State Street

Doylestown, PA 18901

 

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and:

Acadia Healthcare Company, Inc.

6100 Tower Circle, Suite 1000

Franklin, TN 37067

Attention:     General Counsel

Facsimile:     (615) 261-9685

Notices to the Company:

Acadia Healthcare Company, Inc.

6100 Tower Circle, Suite 1000

Franklin, TN 37067

Attention:     Board of Directors

Facsimile:     (615) 261-9685

with copies (which shall not constitute notice) to:

Acadia Healthcare Company, Inc.

6100 Tower Circle, Suite 1000

Franklin, TN 37067

Attention:     General Counsel

Facsimile:     (615) 261-9685

or such other address or to the attention of such other Person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or sent by facsimile (subject to automatic proof of transmission), one day after
being sent by overnight courier or three days after being mailed by first class
mail, return receipt requested, as applicable.

12. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or any action in any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.

13. Complete Agreement. This Agreement and those documents expressly referred to
herein embody the complete agreement and understanding among the parties with
respect to, and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to, the subject matter hereof in any way.

14. No Strict Construction. The language used in this Agreement shall be deemed
to be the language chosen by the parties hereto to express their mutual intent,
and no rule of strict construction shall be applied against any party.

15. Counterparts. This Agreement may be executed in separate counterparts
(including by means of facsimile or by electronic transmission in portable
document format (pdf) or comparable electronic transmission), each of which is
deemed to be an original and all of which taken together constitute one and the
same agreement.

 

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16. Successors and Assigns. This Agreement is personal in nature and neither of
the parties hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder; provided that
(i) this Agreement will inure to the benefit of and be enforceable by
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees and legatees (but otherwise will not otherwise
be assignable, transferable or delegable by Executive), and (ii) this Agreement
will be assignable, transferable or delegable by the Company, without the
consent of Executive, to Acadia or any of the Subsidiaries or to any successor
(whether direct or indirect, in whatever form of transaction) to all or
substantially all of the business or assets of the Company or Acadia or the
Subsidiaries (none of which shall constitute a termination of Executive’s
employment hereunder).

17. Choice of Law and Forum. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware. The parties agree that any
dispute arising out of or relating to this Agreement, exclusively shall be
brought in the state courts located in Williamson County, Tennessee or the
United States District Court for the Middle District of Tennessee. Each party
hereby waives any objection to the personal or subject matter jurisdiction and
venue of such courts.

18. Amendment and Waiver. The provisions of this Agreement may be amended or
waived only with the prior written consent of the Company (as approved by the
Board) and Executive, and no course of conduct or course of dealing or failure
or delay by any party hereto in enforcing or exercising any of the provisions of
this Agreement (including, without limitation, the Company’s right to terminate
the Employment Period for Cause) shall affect the validity, binding effect or
enforceability of this Agreement or be deemed to be an implied waiver of any
provision of this Agreement.

19. Insurance. The Company may, at its discretion, apply for and procure in its
own name and for its own benefit life and/or disability insurance on Executive
in any amount or amounts considered advisable. Executive agrees to cooperate in
any medical or other examination, supply any information and execute and deliver
any applications or other instruments in writing as may be reasonably necessary
to obtain and constitute such insurance.

20. Indemnification and Reimbursement of Payments on Behalf of Executive. Acadia
and the Subsidiaries shall be entitled to deduct or withhold from any amounts
owing from Acadia or any of the Subsidiaries to Executive any federal, state,
local or foreign withholding taxes, excise tax, or employment taxes (“Taxes”)
imposed with respect to Executive’s compensation or other payments from Acadia
or any of the Subsidiaries or Executive’s ownership interest in Acadia or any of
the Subsidiaries (including, without limitation, wages, bonuses, dividends, the
receipt or exercise of equity options and/or the receipt or vesting of
restricted equity), as may be required to be deducted or withheld by any
applicable law or regulation.

21. Executive Representation. Executive has provided the Company with copies of
all agreements with Executive’s former employer (the “Former Employer”) that
contains post-termination restrictive covenants (the “Former Employer
Covenants”). Executive agrees to comply with the Former Employer Covenants and
the parties agree to communicate among themselves in order to determine how best
to so comply. To that end, Executive shall not perform any services for,

 

16

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or continue or assume any position with, the Company or its Affiliates to the
extent it is determined by the parties that such services or actions would
violate the Former Employer Covenants, it being understood and agreed that this
shall not constitute Good Reason hereunder. The Company hereby agrees to
indemnify, defend and hold harmless Executive from and against any and all
Covered Costs (defined below) related to or arising out of any Covered Claim
(and/or any claim, action, suit or proceeding brought by or on behalf of
Executive to enforce any of the provisions of this paragraph of this Agreement).
Without limitation of the foregoing, the Company will advance all expenses
incurred by Executive in connection with the investigation, defense, settlement
or appeal of any proceeding to which Executive is a party or is threatened to be
made a party by reason of any action by any Former Employer and/or any Claim by
a Former Employer with respect to Executive’s employment with the Company or
Acadia or their Subsidiaries. Executive hereby agrees to resolve any such
investigation, defense, settlement or appeal, as reasonably directed by the
Company and/or Acadia. In the event Executive does not comply with the
immediately preceding sentence, Executive shall not be entitled to any further
indemnification or reimbursements provided for in this Section 21. “Covered
Costs” means all reasonable fees and expenses of counsel, experts and other
advisors, including, without limitation, reasonable attorneys’ fees, retainers,
court costs, witness fees, travel expenses, and all other reasonable
disbursements or expenses of the types customarily incurred in connection with
prosecuting, defending, preparing to prosecute or defend, investigating, being
or preparing to be a witness in, or otherwise participating in, any threatened,
pending or completed action, suit or proceeding, including, without limitation,
any appeals, whether administrative or arbitrative and whether formal or
informal, together with any and all damages, judgments, settlements, penalties,
fines or other amounts assessed against Executive or for which Executive may be
held liable. “Covered Claim” means any and all claims, actions, suits or
proceedings, whether actual, threatened, pending or completed arising from or
relating to any alleged breach of any agreement between Executive and the Former
Employer and/or any of its parents, subsidiaries, divisions, or affiliates as a
result of Executive’s employment by, and/or contracting with, the Company,
Acadia or their Affiliates, including, but not limited to, the Former Employer
Covenants, provided that a Covered Claim shall not apply to any willful or
grossly negligent breach of the Former Employer Covenants by Executive.

22. Waiver of Jury Trial. AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF
THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO
CONSULT WITH COUNSEL), EACH PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY
JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS
AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

23. Opportunity. During the Employment Period, Executive shall submit to the
Board all material investment or business opportunities of which he becomes
aware that would customarily be brought to the attention of a board of directors
and which are within the scope and investment objectives of Acadia or any of the
Subsidiaries.

24. Executive’s Cooperation. During the Employment Period and for a period of
six (6) months thereafter, Executive shall cooperate with Acadia and the
Subsidiaries in any internal investigation or administrative, regulatory or
judicial investigation or proceeding or any dispute with any third party as
reasonably requested by Acadia or the Subsidiaries (including, without
limitation, Executive being available to Acadia and the Subsidiaries upon
reasonable notice for interviews and factual investigations, appearing at
Acadia’s or any of the Subsidiaries’ request to give testimony without requiring
service of a subpoena or other legal process, volunteering Acadia and the

 

17

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Subsidiaries all pertinent information and turning over to Acadia and the
Subsidiaries all relevant documents which are or may come into Executive’s
possession, all at times and on schedules that are reasonably consistent with
Executive’s other permitted activities and commitments), all at Acadia’s or the
Subsidiaries’ sole cost and expense. After such six (6) month period, if
Executive is requested to engage or participate in any of the foregoing, then
Executive will do so and Acadia or the Subsidiaries shall compensate Executive
for his time at an hourly rate of $250/hour. Any services requested by the
Company under this Section 24 shall be scheduled to not unreasonably interfere
with Executive’s employment or personal obligations at the time. It is expressly
agreed that the Company’s rights to avail itself of the advice and consultation
services of Executive shall at all times be exercised in a reasonable manner,
that adequate notice shall be given to Executive in such events, and that
non-compliance with any such request by Executive for good reason, including,
but not limited to, ill health or prior commitments, shall not constitute a
breach or violation of this Agreement.

25. Delivery by Facsimile or PDF. This Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine or electronic transmission in pdf, shall be treated in all manner and
respects as an original agreement or instrument and shall be considered to have
the same binding legal effect as if it were the original signed version thereof
delivered in person. At the request of any party hereto or to any such agreement
or instrument, each other party hereto or thereto shall re-execute original
forms thereof and deliver them to all other parties. No party hereto or to any
such agreement or instrument shall raise the use of a facsimile machine or
electronic transmission in pdf to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine or electronic transmission in pdf as a defense to the
formation or enforceability of a contract and each such party forever waives any
such defense.

26. Indemnification and Directors and Officers Insurance.

(a) During the Employment Period and for a period of six (6) years thereafter,
the Company shall, to the fullest extent permitted under applicable law,
indemnify and hold harmless Executive on a basis no less favorable than members
of the Board and in accordance with the bylaws of the Company and Acadia.

(b) During the Employment Period and for a period of six (6) years thereafter,
the Company, or any successor to the Company, shall purchase and maintain, at
its own expense, directors and officers liability insurance providing coverage
for Executive in the same or greater amount as for members of the Board.

27. Legal Fees and Expenses. In the event any litigation or other court action,
arbitration or similar adjudicatory proceeding (a “Proceeding”) is commenced or
threatened by any party hereto (the “Claiming Party”) to enforce its rights
under this Agreement against any other party hereto (the “Defending Party”), if
the Defending Party is the prevailing party in such Proceeding, all fees, costs
and expenses, including, without limitation, reasonable attorneys fees and court
costs, incurred by the Defending Party in such Proceeding, will be reimbursed by
the Claiming Party, and, if the Claiming Party is the prevailing party in such
Proceeding, all fees, costs and expenses, including, without limitation,
reasonable attorneys fees and court costs, incurred by the Claiming Party in
such Proceeding, will be reimbursed by the Defending Party; provided that if the
Defending Party prevails in part, and loses in part, in such Proceeding, the
court, arbitrator or other adjudicator presiding over

 

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such Proceeding shall award a reimbursement of the fees, costs and expenses
incurred by the Claiming Party and the Defending Party on an equitable basis.
For purposes of this Section 27, and without limiting the generality of the
foregoing, the Defending Party will be deemed to have prevailed in any
Proceeding if the Claiming Party commences or threatens such Proceeding and (i)
the underlying claim(s) in such Proceeding are subsequently dropped or
dismissed, or (ii) the Defending Party defeats any such claim(s).

28. Acadia Guarantee. Acadia unconditionally guarantees and promises to pay and
perform, upon Executive’s demand following a default by the Company, any and all
obligations of the Company from time to time owed to Executive under this
Agreement, subject to any applicable cure period. Acadia further agrees that if
the Company shall fail to fulfill any of its obligations under this Agreement,
Acadia will perform the same on demand as a principal obligor, and not as a
surety. This is a continuing guarantee of the obligations and may not be revoked
and shall not otherwise terminate unless and until the obligations of the
Company have been paid and performed in full. Acadia represents and warrants
that it will receive a substantial benefit from Company’s employment of
Executive, which employment gives rise to the obligations of the Company under
this Agreement. Acadia acknowledges that Executive would not execute this
Agreement if it did not receive this guarantee.

*         *         *         *         *

 

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IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
as of the date first written above.

 

COMPANY: ACADIA MANAGEMENT COMPANY, INC. By: /s/ Christopher L. Howard Name:
Christopher L. Howard Its: Vice President and Secretary EXECUTIVE: /s/ Laurence
Harrod Name: Laurence Harrod ACKNOWLEDGED AND AGREED:

ACADIA HEALTHCARE COMPANY, INC.,

solely with respect to Sections 7 and 28,

as of this 6th day of August, 2019 By: /s/ Debra K. Osteen Name: Debra K. Osteen
Its: Chief Executive Officer

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Schedule 1

1. The Company will pay Executive a cash lump sum of $200,000 promptly after the
Effective Date.

2. The Company will pay Executive a cash lump sum of $410,000 on the first
anniversary of the Effective Date if the Executive is then employed by the
Company.

3. The Company will pay Executive a cash lump sum of $410,000 on the second
anniversary of the Effective Date if the Executive is then employed by the
Company.

.

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EXHIBIT A

Other Activities

None

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EXHIBIT B

GENERAL RELEASE

I,                                         , in consideration of and subject to
the performance by Acadia Management Company, Inc., a Delaware corporation
(together with its subsidiaries, the “Company”), of its obligations under the
Employment Agreement dated as of December 16, 2018 (the “Agreement”), do hereby
release and forever discharge as of the date hereof the Company and its
respective affiliates and all present, former and future managers, directors,
officers, employees, successors and assigns of the Company and its affiliates
and direct or indirect owners (collectively, the “Released Parties”) to the
extent provided below (this “General Release”). The Released Parties are
intended to be third-party beneficiaries of this General Release, and this
General Release may be enforced by each of them in accordance with the terms
hereof in respect of the rights granted to such Released Parties hereunder.
Terms used herein but not otherwise defined shall have the meanings given to
them in the Agreement.

1. I understand that any payments or benefits paid or granted to me under
Section 4 of the Agreement represent, in part, consideration for signing this
General Release and are not salary, wages or benefits to which I was already
entitled. I understand and agree that I will not receive certain of the payments
and benefits specified in Section 4, unless I execute this General Release and
do not revoke this General Release within the time period permitted hereafter.
Such payments and benefits will not be considered compensation for purposes of
any employee benefit plan, program, policy or arrangement maintained or
hereafter established by the Company or its affiliates.

2. Except as provided in paragraphs 5 and 6 below and except for the provisions
of the Agreement which expressly survive the termination of my employment with
the Company, I knowingly and voluntarily (for myself, my heirs, executors,
administrators and assigns) release and forever discharge the Company and the
other Released Parties from any and all claims, suits, controversies, actions,
causes of action, cross-claims, counter-claims, demands, debts, compensatory
damages, liquidated damages, punitive or exemplary damages, other damages,
claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in
law and in equity, both past and present (through the date that this General
Release becomes effective and enforceable) and whether known or unknown,
suspected, or claimed against the Company or any of the Released Parties which
I, my spouse, or any of my heirs, executors, administrators or assigns, may
have, including those that arise out of or are connected with my employment
with, or my separation or termination from, the Company (including, but not
limited to, any allegation, claim or violation, arising under: Title VII of the
Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age
Discrimination in Employment Act of 1967, as amended (including the Older
Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the
Americans with Disabilities Act of 1990; the Family and Medical Leave Act of
1993; the Worker Adjustment Retraining and Notification Act; the Employee
Retirement Income Security Act of 1974; any applicable Executive Order Programs;
the Fair Labor Standards Act; or their state or local counterparts; or under any
other federal, state or local civil or human rights law, or under any other
local, state, or federal law, regulation or ordinance; or under any public
policy, contract or tort, or under common law; or arising under any policies,
practices or procedures of the Company; or any claim for wrongful discharge,
breach of contract, infliction of emotional distress, defamation; or any claim
for costs, fees, or other expenses, including attorneys’ fees incurred in these
matters) (all of the foregoing collectively referred to herein as the “Claims”).

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3. The released claims described in paragraph 2 hereof include all such claims,
whether known or unknown by me.

4. I represent that I have made no assignment or transfer of any right, claim,
demand, cause of action, or other matter covered by paragraph 2 above.

5. I agree that this General Release does not waive or release any rights or
claims that I may have under the Age Discrimination in Employment Act of 1967
which arise after the date I execute this General Release. I acknowledge and
agree that my separation from employment with the Company in compliance with the
terms of the Agreement shall not serve as the basis for any claim or action
(including, without limitation, any claim under the Age Discrimination in
Employment Act of 1967).

6. I agree that I hereby waive all rights to sue or obtain equitable, remedial
or punitive relief from any or all Released Parties of any kind whatsoever in
respect of any Claim, including, without limitation, reinstatement, back pay,
front pay, and any form of injunctive relief. Notwithstanding the above, I
further acknowledge that I am not waiving and am not being required to waive any
right that cannot be waived under law, including the right to file an
administrative charge or participate in an administrative investigation or
proceeding; provided, however, that I disclaim and waive any right to share or
participate in any monetary award resulting from the prosecution of such charge
or investigation or proceeding. Additionally, I am not waiving (and nothing set
forth herein shall be deemed a release of) (i) any right to any earned and
accrued salary, vacation, benefits, expense reimbursements, or any severance
benefits to which I am entitled under the Agreement, or (ii) any claim relating
to directors’ and officers’ liability insurance coverage or any right of
indemnification under the Company’s organizational documents, applicable law or
otherwise, including, without limitation, Sections 21, 26 and 27 of the
Agreement and/or (iii) my rights as an equity or security holder in the Company,
Acadia or their affiliates.

7. In signing this General Release, I acknowledge and intend that it shall be
effective as a bar to each and every one of the Claims hereinabove mentioned or
implied. I expressly consent that this General Release shall be given full force
and effect according to each and all of its express terms and provisions,
including those relating to unknown and unsuspected Claims (notwithstanding any
state or local statute that expressly limits the effectiveness of a general
release of unknown, unsuspected and unanticipated Claims), if any, as well as
those relating to any other Claims hereinabove mentioned or implied. I
acknowledge and agree that this waiver is an essential and material term of this
General Release and that without such waiver the Company would not have agreed
to the terms of the Agreement. I further agree that in the event I should bring
a Claim seeking damages against the Company, or in the event I should seek to
recover against the Company in any Claim brought by a governmental agency on my
behalf, this General Release shall serve as a complete defense to such Claims to
the maximum extent permitted by law. I further agree that I am not aware of any
pending claim of the type described in paragraph 2 above as of the execution of
this General Release.

8. I agree that neither this General Release, nor the furnishing of the
consideration for this General Release, shall be deemed or construed at any time
to be an admission by the Company, any Released Party or myself of any improper
or unlawful conduct.

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9. I agree that if I violate this General Release by suing the Company or the
other Released Parties, I will pay all costs and expenses of defending against
the suit incurred by the Released Parties, including reasonable attorneys’ fees.

10. Any non-disclosure provision in this General Release does not prohibit or
restrict me (or my attorney) from responding to any inquiry about this General
Release or its underlying facts and circumstances by the Securities and Exchange
Commission (SEC), the Financial Industry Regulatory Authority (FINRA), any other
self-regulatory organization or any governmental entity.

11. I hereby acknowledge that Sections 4 through 28 (other than Section 23) of
the Agreement shall survive my execution of this General Release.

12. I represent that I am not aware of any claim by me other than the claims
that are released by this General Release. I acknowledge that I may hereafter
discover claims or facts in addition to or different than those which I now know
or believe to exist with respect to the subject matter of the release set forth
in paragraph 2 above and which, if known or suspected at the time of entering
into this General Release, may have materially affected this General Release and
my decision to enter into it.

13. Notwithstanding anything in this General Release to the contrary, this
General Release shall not relinquish, diminish, or in any way affect any rights
or claims arising out of any breach by the Company or by any Released Party of
the Agreement after the date hereof.

14. Whenever possible, each provision of this General Release shall be
interpreted in, such manner as to be effective and valid under applicable law,
but if any provision of this General Release is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this General Release shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

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BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

 

  (i)

I HAVE READ IT CAREFULLY;

 

  (ii)

I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS,
INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, AS AMENDED; TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED;
THE EQUAL PAY ACT OF 1963; THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

 

  (iii)

I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

 

  (iv)

I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE
DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN NOT TO DO SO
OF MY OWN VOLITION;

 

  (v)

I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE TO
CONSIDER IT, AND THE CHANGES MADE SINCE MY RECEIPT OF THIS RELEASE ARE NOT
MATERIAL OR WERE MADE AT MY REQUEST AND WILL NOT RESTART THE REQUIRED 21-DAY
PERIOD;

 

  (vi)

I UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE EXECUTION OF THIS RELEASE TO
REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL
THE REVOCATION PERIOD HAS EXPIRED;

 

  (vii)

I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE
OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

 

  (viii)

I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED,
CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED
REPRESENTATIVE OF THE COMPANY AND BY ME.

 

SIGNED:                                                           
              

  DATED: