EXHIBIT 10.20
December 29, 2010
Walter D. Hosp
HMS Holdings Corp.
401 Park Avenue South
New York, NY 10016
Dear Walter:
     You and HMS Holdings Corp. (the “Company”) are parties to an offer letter
dated May 30, 2007 that sets forth certain terms of your employment with the
Company (the “Offer Letter”). We have agreed to certain amendments to the Offer
Letter set forth below to correct document failures in the Offer Letter under
Section 409A of the Internal Revenue Code of 1986, as amended, pursuant to
Internal Revenue Service Notice 2010-6, 2010-3 IRB 275 (“Notice 2010-6”). In
accordance with Notice 2010-6, the amendments will have an effective date of
January 1, 2009.
Except as set forth below, your Offer Letter shall remain in full force and
effect.
1. The pre-amendment Offer Letter provides for severance on an involuntary
termination or a change of control. The parties did not intend to have any
severance paid on a single trigger change of control as stated in the Offer
Letter but rather to have severance paid on an involuntary termination whenever
it occurs. Consequently, the separate reference to a “change of control (as
defined in the Company’s public filings)” in Section 11 of the Offer Letter
shall be deleted and Section 11 of the Offer Letter shall be replaced in its
entirety with the following:
“If you are involuntarily terminated by the Company for any reason other than
cause (as “involuntary termination” is defined under Section 409A), the Company
will provide salary and benefit continuation (to the extent post-employment
participation is permitted by its benefit plans and programs) for twelve months.
To receive any severance benefits provided for under this Offer Letter, you must
deliver to the Company a severance agreement and release on the form the Company
provides to you, which release must become irrevocable within 60 days following
the date of your termination of employment or such earlier date as the release
specifies. Severance pay will be paid or commence in the first regular payroll
beginning after the release becomes effective, subject to any delays required by
Section 13 to this Offer Letter; provided, however, that if the last day of the
60 day period for an effective release falls in the calendar year following the
year of your date of termination, the severance payments will be paid or begin
no earlier than January 1 of such subsequent calendar year.”

 

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2. A new Section 13 shall be added to the Offer Letter to read:
     “Withholding; Section 409A

  a.   Withholding. All payments hereunder shall be subject to any and all
applicable withholdings and taxes.     b.   Six Month Delay. If and to the
extent any portion of any payment, compensation or other benefit provided to you
in connection with your employment termination is determined to constitute
“nonqualified deferred compensation” within the meaning of Section 409A of the
Internal Revenue Code of 1986 (“Section 409A”) and you are 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 you hereby agree that you
are 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 your “separation from service” (as determined under
Section 409A) or (ii) the tenth day following the date of your death following
such separation from service (the “New Payment Date”). The aggregate of any
payments that otherwise would have been paid to you during the period between
the date of separation from service and the New Payment Date shall be paid to
you 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.     c.
  General 409A Principles. For purposes of this Agreement, a termination of
employment will mean a “separation from service” as defined in Section 409A. 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 or are paid in a manner covered by Treas. Reg.
Section 1.409A-1(b)(9)(iii) will not be treated as deferred compensation unless
applicable law requires otherwise. Neither the Company nor you 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 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 you 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.

 

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  d.   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 you have 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.”

Signatures on Page Following

 

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Signature Page
Sincerely,
HMS Holdings Corp.

         
By:
Title:
  /s/ David Schmid
 
VP of Human Resources    

     The foregoing correctly sets forth the terms of my continued employment
with the Company. I am not relying on any representations other than as set out
in the Offer Letter and the amendment thereto set forth above. I have been given
a reasonable amount of time to consider this amendment and to consult an
attorney and/or advisor of my choosing. I have carefully read this amendment,
understand the contents herein, freely and voluntarily assent to all of the
terms and conditions hereof, and sign my name of my own free act.

     
/s/ Walter D. Hosp
 
Walter D. Hosp
  Date: December 30, 2010