Exhibit 10.1

 

CHAIRMAN’S AGREEMENT

 

This Chairman’s Agreement (this “Agreement”) is made and entered into as of the
28th day of November, 2005 (the “Effective Date”), between Concentra Inc., a
Delaware corporation (the “Company”), and Norman C. Payson, M.D. (“Dr. Payson”).

 

WITNESSETH:

 

WHEREAS, it is the desire of the Board of Directors of the Company to assure
itself of the services of Dr. Payson by engaging Dr. Payson to serve as the
non-executive Chairman of the Board of Directors of the Company as set forth
herein; and

 

WHEREAS, Dr. Payson is desirous of committing himself to serve the Company on
the terms set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements set forth below, the parties hereto agree as follows:

 

1. Engagement and Term. The Company hereby engages Dr. Payson to serve as the
non-executive Chairman (“Chairman”) of the Board of Directors of the Company
(the “Board”), and Dr. Payson hereby agrees to accept such engagement, on the
terms and conditions set forth herein, for the period commencing on the
Effective Date and expiring as of 11:59 p.m. on the first anniversary of the
Effective Date (unless sooner terminated as hereinafter set forth) (the “Term”);
provided, however, that commencing on such anniversary date, and each
anniversary of the date hereof thereafter, the Term of this Agreement shall
automatically be renewed for one (1) additional year unless at least sixty
(60) days prior to any such anniversary date, the Company or Dr. Payson shall
have given notice of nonrenewal.

 

2. Duties and Restrictions.

 

(a) Duties. Dr. Payson shall serve on the Board as its Chairman, with all such
powers as may be set forth in the Company’s Bylaws with respect to, and/or are
reasonably incident to, such office. Dr. Payson’s responsibilities as Chairman
will consist of (i) overseeing the Company’s (and its operating divisions’)
strategic direction, (ii) developing the Company’s senior management, including
providing guidance and advice to the President and Chief Executive Officer and
other members of senior management, (iii) assisting with investor relations,
(iv) organizing meetings of the Board of Directors; and (v) such other
responsibilities as are incidental to the foregoing. During the Term, Dr. Payson
shall have direct access to the senior management of the Company, including
senior management of the Company’s operating divisions. It is anticipated that
Dr. Payson’s duties will require his business time and attention for an average
of approximately eight (8) days per month during the entire Term, it being
understood that the number of days will vary from month to month.
Notwithstanding the foregoing, it is anticipated that Dr. Payson’s duties will
require his business time and attention for an average of approximately ten
(10) days per month for the first six (6) months after the Effective Date.
Subject to Section 2(b), Dr. Payson may engage in other business and charitable
activities,

 

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including, without limitation business and charitable activities in the health
care and health care financing industries, to the extent that such activities do
not prevent Dr. Payson from performing his duties pursuant to this Agreement and
do not otherwise cause Dr. Payson to violate his fiduciary duties as an officer
and/or director of the Company.

 

(b) Noncompetition. Dr. Payson agrees that during the Term he will not
(i) solicit the employment or engagement of, employ or engage, or endeavor to
entice away from the Company or its subsidiaries or affiliates, any person who
is an employee of the Company or any of its subsidiaries or affiliates, or
(ii) be employed by, associated with, or have any interest in, directly or
indirectly (whether as principal, director, officer, employee, consultant,
partner, stockholder, member, trustee, manager, or otherwise), any occupational
healthcare company, or healthcare network services company that primarily is in
the business of providing review (including fee negotiation), repricing, and
reduction of medical bills, which has a principal line of business that is
directly competitive with the Company or its subsidiaries or affiliates in any
geographical area in which the Company or its subsidiaries or affiliates engage
in business. This noncompetition provision does not preclude Dr. Payson from
being employed by or associated with or having any interest, directly or
indirectly (whether as a principal, director, officer, employee, consultant,
partner, stockholder, member trustee, manager or otherwise), in the health
insurance or health plan “payor” business regardless of the benefit designs or
cost containment techniques utilized by that payor or payors. Further,
notwithstanding the foregoing, Dr. Payson shall not be prohibited from owning
five percent (5%) or less of the outstanding equity securities of any entity
whose equity securities are listed on a national securities exchange or publicly
traded in any over-the-counter market.

 

(c) Confidentiality. Dr. Payson agrees that he shall not, directly or
indirectly, at any time during the Term or following the termination of this
Agreement with the Company (other than in connection with his performance of
services to the Company), reveal, divulge, or make known to any person or
entity, or use for his personal benefit (including, without limitation, for the
purpose of soliciting business, whether or not competitive with any business of
the Company or any of its subsidiaries or affiliates), any nonpublic,
proprietary, or confidential information (“Confidential Information”) acquired
during the course of his engagement hereunder with regard to the financial,
business, or other affairs of the Company or any of its subsidiaries or
affiliates (including, without limitation, any list or record of persons or
entities with which the Company or any of its subsidiaries or affiliates has any
dealings). Confidential Information shall not include (without limitation)
(i) material then in the public domain, (ii) information of a type not
considered confidential by persons engaged in the same business or a similar
business to that conducted by the Company, and (iii) material that Dr. Payson
discloses under the following circumstances: (A) in the performance of his
duties and responsibilities hereunder, (B) reasonably necessary or appropriate
disclosure to an employee of the Company or to representatives or agents of the
Company (such as independent public accountants and legal counsel); (C) at the
express direction of any authorized governmental entity; (D) pursuant to a
subpoena or other legal process; (E) as otherwise required by law or the rules,
regulations, or orders of any applicable regulatory body; (F) as otherwise
necessary or appropriate to be disclosed in connection with the prosecution or
the defense of any legal action or similar

 

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proceeding; or (G) disclosure to Dr. Payson’s legal counsel or other advisers on
a confidential basis.

 

3. Compensation, Expenses, and Benefits.

 

(a) Compensation. In consideration of Dr. Payson’s performance of services
pursuant to this Agreement, the Company shall compensate Dr. Payson by granting
him (i) non-qualified options to acquire shares of the Company’s common stock,
par value $.01 per share (“Common Stock”), (ii) restricted shares of Common
Stock, and (iii) the right to purchase shares of Common Stock, all as more fully
described on Exhibit A hereto. Any additional compensation by the Company to
Dr. Payson for such services shall be in the sole discretion of the Compensation
Committee of the Company’s Board of Directors. The Company makes no
representation or warranty with respect to the tax consequences of any
compensatory awards granted to Dr. Payson. Dr. Payson is responsible for the
payment, if applicable, of (X) any and all local, state, and federal taxes
(including but not limited to any taxes imposed pursuant to section 409A of the
Internal Revenue Code of 1986, as amended), (Y) estimated payment obligations,
and (Z) any penalties or assessments arising from such compensatory awards. It
is the Company’s good faith belief that, as of the Effective Date, the fair
market value of the Common Stock is not greater than $18 per share.

 

(b) Expenses. Dr. Payson shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by him during the Term (in accordance with the
policies and procedures established by the Board of Directors for its senior
executive officers) in performing services hereunder, provided that Dr. Payson
properly accounts therefor in accordance with Company policy. Without limiting
the generality of the foregoing, the Company shall reimburse Dr. Payson for his
use of private aircraft for Company business during the Term, up to a maximum of
Five Hundred Thousand Dollars ($500,000) during each 12-month period commencing
with the Effective Date.

 

(c) Other Benefits. Dr. Payson shall be entitled to participate in or receive
benefits under any employee benefit plan or other arrangement made available by
the Company now or in the future to non-employee members of the Board, subject
to and on a basis consistent with the eligibility requirements and other terms,
conditions, and overall administration of such plan or arrangement. The Company
shall not make any changes in any such employee benefit plans or other
arrangements in effect on the date hereof or subsequently in effect in which
Dr. Payson currently or in the future participates that would adversely affect
Dr. Payson’s rights or benefits thereunder, unless such change is applicable to
all non-employee members of the Company’s Board of Directors and does not result
in a proportionately greater reduction in the rights of or benefits to
Dr. Payson as compared with any non-employee member of the Company’s Board of
Directors.

 

4. Indemnification. The Company and Dr. Payson shall enter into the Company’s
standard Indemnification Agreement for directors and executive officers of the
Company, substantially in the form of Exhibit B hereto.

 

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5. Office Location. Dr. Payson shall primarily perform his duties and
responsibilities hereunder based out of his personal office and/or Company’s
principal executive office located at 5080 Spectrum Drive, Addison, Texas,
except for reasonable required travel on the Company’s business.

 

6. Termination. This Agreement may be terminated by the Company or Dr. Payson,
as applicable, without any breach of this Agreement, only under the following
circumstances and subject to the provisions of Section 8.

 

(a) Death. This Agreement shall terminate upon Dr. Payson’s death.

 

(b) Disability. If, as a result of Dr. Payson’s incapacity due to physical or
mental illness or injury, Dr. Payson shall have been unable, with reasonable
accommodation, to perform the essential functions of his duties and
responsibilities hereunder or shall otherwise become disabled within the meaning
of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, for one
hundred eighty (180) consecutive calendar days (“Disabled”), and within thirty
(30) days after written notice of termination is given (which may occur before
or after the end of such one hundred eighty (180) day period) Dr. Payson shall
not have returned to the performance of his material duties and responsibilities
hereunder, the Company may terminate this Agreement. Dr. Payson may also
terminate this Agreement in the event that he becomes Disabled.

 

(c) Termination by the Company for Cause. Subject to the provisions of
Section 8(c), the Company may terminate this Agreement upon Dr. Payson’s removal
as a member of the Company’s Board of Directors by the Company’s stockholders in
accordance with the Company’s Bylaws either with or without “Cause.” For
purposes of this Agreement (but subject to Section 8(c)), such removal shall be
deemed to have been for “Cause” only if it occurs upon:

 

(i) Dr. Payson’s willful or intentional failure to perform his material duties
and responsibilities hereunder (other than any such failure resulting from
Dr. Payson’s incapacity due to physical or mental illness or any such failure
after the issuance of a Notice of Termination for Good Reason (as hereinafter
defined) by Dr. Payson);

 

(ii) Dr. Payson’s commission of an act of dishonesty or fraud of a material
nature in connection with the performance of his duties hereunder, or his
willful or intentional misconduct of a material nature in connection with the
performance of his duties hereunder; or

 

(iii) Dr. Payson’s conviction of, or entering of a plea of nolo contendere with
respect to, a felony.

 

(d) Termination by Dr. Payson for Good Reason. Subject to the provisions of
Section 8(d), and at his option, Dr. Payson may terminate his employment
hereunder for Good Reason. For purposes of this Agreement, the termination of
this Agreement by Dr. Payson

 

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because of the occurrence of any one or more of the following events shall be
deemed to have occurred for “Good Reason”:

 

(i) a material adverse change or diminution in the nature or scope of
Dr. Payson’s authorities, status, powers, functions, duties, or responsibilities
from those set forth in Section 2 of this Agreement;

 

(ii) any removal by the Company of Dr. Payson from, or any failure to appoint or
reelect Dr. Payson to, the position indicated in Section 1 of this Agreement
except in connection with the Company’s termination of this Agreement for Cause
or Disability;

 

(iii) a failure by the Company to comply with any other material term or
provision hereof or of any other written agreement between Dr. Payson and the
Company;

 

(iv) delivery by the Company of notice of non-renewal pursuant to Section 1 of
this Agreement; or

 

(v) the occurrence of a Change in Control, as defined in Exhibit C hereto.

 

(e) Termination by Dr. Payson Without Good Reason. Dr. Payson may terminate this
Agreement at any time, without Good Reason, upon thirty (30) days prior written
notice to the Company.

 

7. Effect of Expiration or Termination. Upon the expiration or earlier
termination of this Agreement, Dr. Payson shall be deemed to have resigned as
Chairman and from all other officerships and directorships he then holds with
the Company and/or any of its subsidiaries or affiliates.

 

8. Other Provisions Relating to Termination.

 

(a) Notice of Termination. Any termination of this Agreement by the Company or
by Dr. Payson (other than termination because of the death of Dr. Payson) shall
be communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a “Notice of Termination” shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of this Agreement under the provision so
indicated.

 

(b) Date of Termination. For purposes of this Agreement, “Date of Termination”
shall mean: (1) if this Agreement is terminated by Dr. Payson’s death, the date
of his death; (2) if this Agreement is terminated because of a Disability
pursuant to Section 6(b), then thirty (30) days after Notice of Termination is
given (provided that Dr. Payson shall not have returned to the performance of
his duties during such thirty (30) day period); (3) if this Agreement is
terminated by Dr. Payson for Good Reason, then, subject to Section 8(d), the
date

 

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specified in the Notice of Termination; (4) if either party timely gives notice
of nonrenewal pursuant to Section 1, the date upon which the Term expires; and
(5) if this Agreement is terminated by Dr. Payson pursuant to Section 6(e) or by
the Company without Cause pursuant to Section 6(c), then thirty (30) days after
Notice of Termination is given.

 

(c) Cause. In the case of any potential termination of this Agreement for Cause,
the Company will give Dr. Payson a Notice of Termination describing in
reasonable detail, the facts or circumstances giving rise to such termination
(and, if applicable, the action required to cure same) and will permit
Dr. Payson thirty (30) days to cure such facts or circumstances. Cause for
termination will not be deemed to exist until the expiration of the foregoing
cure period. If after thirty (30) days following Dr. Payson’s receipt of a
Notice of Termination for Cause, Dr. Payson has not cured the facts or
circumstances giving rise to termination for Cause, then a subsequent
termination pursuant to Section 6(c) may be deemed to be a termination for
Cause. Further, no termination shall be treated as a termination for Cause
unless the Board has adopted a resolution by the affirmative vote of not less
than two-thirds (2/3) of the entire membership of the Board at a meeting of the
Board which was called and held for the purpose of considering such termination
(after reasonable notice to the Dr. Payson and an opportunity for Dr. Payson,
together with the Dr. Payson ‘s counsel, to be heard before the Board) finding
that, in the good faith opinion of the Board, the Executive was guilty of
conduct set forth in clause (i), (ii) or (iii) of the definition of
Section 6(c), and specifying the particulars thereof in detail. Any such
determination by the Board shall not be given deference in any subsequent
proceeding challenging the existence of Cause.

 

(d) Good Reason. Upon the occurrence of an event described in the definition of
“Good Reason” in Section 6(d), Dr. Payson may terminate this Agreement for Good
Reason by giving a Notice of Termination to the Company to that effect. If the
effect of the occurrence of the event giving rise to Good Reason under
Section 6(d) may be cured, the Company shall have the opportunity to cure any
such effect for a period of thirty (30) days following receipt of Dr. Payson’s
Notice of Termination. If the Company fails to cure any such effect, the
termination for Good Reason shall become effective on the date specified in
Dr. Payson’s Notice of Termination. If Dr. Payson does not give such Notice of
Termination to the Company, then this Agreement will remain in effect; provided,
however, that the failure of Dr. Payson to terminate this Agreement for Good
Reason shall not be deemed a waiver of Dr. Payson’s right to terminate this
Agreement for Good Reason, with respect to a prior or subsequent event.

 

9. Independent Contractor. In the performance of services hereunder, Dr. Payson
is serving as a director of and not an employee of the Company. This Agreement
in no way creates, nor shall Dr. Payson’s performance of services hereunder be
interpreted as creating, an employment relationship between Dr. Payson and the
Company.

 

10. Successors; Binding Agreement. This Agreement shall be binding upon, and
inure to the benefit of, the Company, Dr. Payson, and their respective
successors, assigns, personal and legal representatives, executors,
administrators, heirs, distributees, devisees, and legatees, as applicable. The
Company hereby represents, as a material inducement for Dr.

 

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Payson to execute this Agreement, that the Board has authorized the execution of
this Agreement in this form.

 

11. Notice. For purposes of this Agreement, all notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when (a) delivered personally, (b) sent by
facsimile or similar electronic device and confirmed, (c) delivered by overnight
express, or (d) if sent by any other means, upon receipt. Notices and all other
communications provided for in this Agreement shall be addressed as follows:

 

If to Dr. Payson:   Norman C. Payson, M.D.     NCP, Inc.     8 Centre Street,
Suite 3     Concord, New Hampshire 03301 If to the Company:   Concentra Inc.    
5080 Spectrum Drive, Suite 1200 – West Tower     Addison, Texas 75001    
Attention: General Counsel

 

or to such other address as either party may have furnished to the other in
writing in accordance herewith.

 

12. Miscellaneous. No provision of this Agreement may be modified, waived, or
discharged unless such waiver, modification, or discharge is agreed to in a
written instrument signed by Dr. Payson and the Company. No waiver by either
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. The validity, interpretation, construction, and performance of
this Agreement shall be governed by the laws of the State of Delaware, excluding
any choice-of-law provisions thereof.

 

13. Dispute Resolution. Any controversy or claim arising out of or related to
this Agreement or Dr. Payson’s service to the Company shall be settled by
binding arbitration in Boston, Massachusetts, before a single arbitrator
administered by the American Arbitration Association, and the arbitrator’s
written decision shall include findings of fact and conclusions of law and may
be entered in any court having jurisdiction thereof. The arbitrator shall be
chosen jointly by Dr. Payson and the Company or, if no arbitrator is acceptable
to both parties, shall be chosen jointly by an arbitrator nominated by each such
party.

 

14. Validity. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

 

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15. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original, but all of which together will
constitute one and the same agreement.

 

16. Entire Agreement. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party that are not set forth expressly in this Agreement, including,
without limitation, the Exhibits hereto). This Agreement, including the Exhibits
hereto, constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes in all respects any and all prior
agreements, understandings, or arrangements, written or oral, between the
parties, which prior agreements, understanding, and arrangements, if any, are
hereby superseded, cancelled, and of no further force or effect.

 

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

 

THE COMPANY: CONCENTRA INC. By:  

/s/    Daniel J. Thomas

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President and Chief Executive Officer

   

Daniel J. Thomas

DR. PAYSON:    

/s/    Norman C. Payson, M.D.

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Norman C. Payson, M.D.

 

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EXHIBIT A

DESCRIPTION OF EQUITY COMPENSATION

 

Subject only to the execution and delivery of a definitive Option Award
Agreement, Restricted Stock Award Agreement, and Stock Purchase Agreement
incorporating the following terms:

 

1. Stock Options and Restricted Stock.

 

  (a) Stock Options. Pursuant to and subject to the terms and conditions of the
Concentra Inc. 2005 Stock Option and Restricted Stock Purchase Plan for
Non-Executive Chairman (the “Incentive Plan”), the Company will award to
Dr. Payson, on the Effective Date, a ten-year non-qualified option to acquire
603,205 shares of Common Stock (the “Option”) at an exercise price of $18.00 per
share. Subject to Dr. Payson’s continued service pursuant to the Chairman’s
Agreement and except as otherwise provided in Section 1(c) or Section 1(d), the
Option will vest and become exercisable as to 1/12th of the total number of
shares subject to the Option on February 28, 2006, and with respect to an
additional 1/12th of such shares on each three month anniversary subsequent to
February 28, 2006 (i.e., May 28, 2006, August 28, 2006, etc.) until the Option
is completely vested and exercisable. To the extent vested, the Option shall
remain exercisable for the remainder of its ten-year term. The Option shall be
further subject to the terms of Section 1(e) hereof, and the terms of the Option
shall permit Dr. Payson to exercise an applicable portion of the Option (to the
extent vested) by delivering to the Company a number of unencumbered shares of
Common Stock then held by Dr. Payson for at least six (6) months, and otherwise
qualifying as mature shares pursuant to then-applicable accounting standards,
having an aggregate fair market value as of the applicable exercise date equal
to the exercise price of such Option. Dr. Payson shall also have the right to
sell to the Company a number of shares of Common Stock then held by Dr. Payson
for at least six (6) months, and otherwise qualifying as mature shares pursuant
to then-applicable accounting standards, having a fair market value equal to the
amount of income and other taxes payable by Dr. Payson in connection with such
exercise.

 

  (b) Initial Stock Award and Restricted Stock Award. Pursuant to and subject to
the terms and conditions of the Incentive Plan:

 

  (i) Initial Stock Award. The Company will award to Dr. Payson on the Effective
Date 138,890 fully-vested shares of Common Stock.

 

  (ii)

Restricted Stock Award. The Company will award to Dr. Payson, on the Effective
Date, 402,137 restricted shares of Common Stock (the “Restricted Stock”) under
the Incentive Plan. Subject to Dr. Payson’s continued service pursuant to the
Chairman’s Agreement and except as otherwise provided in Section 1(c) or
Section 1(d), the Restricted Stock will vest and become free from forfeiture
restrictions as to 1/12th of the total number of shares of Restricted Stock on
February 28, 2006, and with

 

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respect to an additional 1/12th of such shares on each three month anniversary
subsequent to February 28, 2006 (i.e., May 28, 2006, August 28, 2006, etc.)
until the Restricted Stock is completely vested. On each vesting date,
Dr. Payson may sell to the Company a number of unencumbered shares of Common
Stock then held by Dr. Payson for at least six (6) months, and otherwise
qualifying as mature shares pursuant to then-applicable accounting standards,
having a fair market value equal to the amount of income and other taxes payable
by Dr. Payson in connection with such vesting. The Restricted Stock shall be
further subject to the terms of Section 1(e) hereof.

 

  (c) Change in Control, Partial Divestiture, and Purchase Option Exercise
Vesting; Lock-Up.

 

  (i) The Option shall become immediately and fully vested and exercisable for
the remainder of its term, and the Restricted Stock shall become immediately and
fully vested and free from forfeiture restrictions, (A) immediately prior to the
occurrence during the Term of the Chairman’s Agreement of a Change in Control
(as defined on Exhibit C to the Chairman’s Agreement) or an Initial Public
Offering, or (B) upon the Company’s sale during the Term of the Chairman’s
Agreement of all of substantially all of one or more of its operating divisions
representing in the aggregate twenty-five percent (25%) or more or the Company’s
Consolidated EBITDA. “Initial Public Offering” shall mean an underwritten public
offering of the Common Stock pursuant to an effective registration statement
under the Securities Act of 1933, as amended.

 

  (ii) In the event that Dr. Payson exercises the Purchase Option (as defined in
Section 2(b) below) in full, the Option shall vest and be exercisable for the
remainder of its term, and the Restricted Stock shall vest and be free of
forfeiture restrictions, as follows: 1/8th of the total number of shares subject
to the Option and 1/8th of the total number of shares of Restricted Stock on
February 28th, 2006,; an additional 1/8th of such shares on each three month
anniversary subsequent to February 28th, 2006 (i.e., May 28th,
2006; August 28th, 2006; etc.) until the Option is completely vested and
exercisable and the Restricted Stock is completely vested and free from
forfeiture restrictions. If applicable, the vesting schedule described in this
clause (ii) shall be applied retroactively to the Effective Date.

 

  (iii) Dr. Payson agrees to be bound to a customary lock-up provision for up to
180 days if required by the Company’s underwriters in connection with an initial
public offering of the Company’s Common Stock

 

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  (d) Effect of Termination of Chairman’s Agreement.

 

  (i) In the event of the termination of the Chairman’s Agreement pursuant to
Section 6(a), Section 6(b) or Section 6(d) of the Chairman’s Agreement or in the
event of a termination of the Chairman’s Agreement pursuant to Section 6(c)
other than for Cause, the Option and Restricted Stock, to the extent not
previously vested (including, without limitation, by reason of Section 1(c)),
shall become immediately and fully vested, and the Option shall remain
exercisable for the remainder of its term.

 

  (ii) In the event of the termination of the Chairman’s Agreement pursuant to
Section 6(c) of the Chairman’s Agreement for Cause, pursuant to Section 6(e) of
the Chairman’s Agreement by Dr. Payson, or by Dr. Payson electing not to renew
the Term pursuant to Section 1 of the Chairman’s Agreement, the vested portion
of the Option shall remain exercisable for the remainder of its term and
unvested portions of the Option and Restricted Stock shall be forfeited.

 

  (e) Equitable Adjustment. In the event of a merger, consolidation,
reorganization, recapitalization, stock split, stock dividend, extraordinary
dividend, or other similar change in the structure or capitalization of the
Company, appropriate adjustments shall be made to Dr. Payson’s Option,
Restricted Stock, and Purchase Option in order to prevent enlargement or
dilution of his rights thereunder, including, if applicable, adjustments to the
(a) number and kind of shares of Common Stock or other securities, cash, or
property subject to the award or that may be delivered thereunder and/or
(b) exercise price of the award.

 

2. Purchases of Common Stock.

 

  (a) Initial Investment. On the Effective Date, Dr. Payson shall purchase from
the Company for his own account, and the Company shall sell to him, 555,556
shares of Common Stock for an aggregate purchase price of $10,000,008 (i.e., at
a purchase price of $18.00 per share).

 

  (b) Purchase Option. On the Effective Date, the Company will grant to
Dr. Payson a fully-vested option (the “Purchase Option”) to acquire, at any time
during the six month period following the Effective Date, up to a maximum of
1,666,667 additional shares of Common Stock, at an exercise price of $18.00 per
share (i.e., an aggregate purchase price with respect to the entire Purchase
Option of $30,000,006). The Purchase Option shall be subject to the terms of
Section 1(e).

 

  (c) Stockholders Agreement. Dr. Payson will make customary representations to
the Company with respect to his purchase of Common Stock and will become a party
to the Stockholders Agreement, dated as of August 17, 1999, between Concentra
and certain of its stockholders, as amended.

 

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EXHIBIT B

FORM OF INDEMNIFICATION AGREEMENT

 

FORM APPROVED BY

CONCENTRA INC. BOARD OF DIRECTORS – JUNE 26, 2003

 

STANDARD FOR ALL CONCENTRA DIRECTORS

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (the “Agreement”) is made and entered into as of
this          day of                      200  , by and between Concentra Inc.,
a Delaware corporation (the “Corporation”), and                     , a
                     resident (“Indemnitee”).

 

RECITALS:

 

A. Competent and experienced persons are reluctant to serve or to continue to
serve corporations as directors or in other capacities unless they are provided
with adequate protection through insurance or indemnification (or both) against
claims and actions against them arising out of their service to and activities
on behalf of those corporations.

 

B. The current uncertainties relating to the availability of adequate insurance
for directors and officers have increased the difficulty for corporations to
attract and retain competent and experienced persons.

 

C. The Board of Directors of the Corporation has determined that the
continuation of present trends in litigation will make it more difficult to
attract and retain competent and experienced persons, that this situation is
detrimental to the best interests of the Corporation’s stockholders, and that
the Corporation should act to assure its directors and officers that there will
be increased certainty of adequate protection in the future.

 

D. The Certificate of Incorporation of the Corporation requires the Corporation
to indemnify its directors and officers to the fullest extent permitted by law.

 

E. It is reasonable, prudent, and necessary for the Corporation to obligate
itself contractually to indemnify its directors and officers to the fullest
extent permitted by applicable law in order to induce them to serve or continue
to serve the Corporation.

 

F. Indemnitee is willing to serve, continue to serve, and to take on additional
service for or on behalf of the Corporation on the condition that he be
indemnified to the fullest extent permitted by law.

 

G. Concurrently with the execution of this Agreement, Indemnitee is agreeing to
serve or to continue to serve as a director or officer of the Corporation.

 

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AGREEMENTS:

 

NOW, THEREFORE, in consideration of the foregoing premises, Indemnitee’s
agreement to serve or continue to serve as a director or officer of the
Corporation, and the covenants contained in this Agreement, the Corporation and
Indemnitee hereby covenant and agree as follows:

 

1. Certain Definitions:

 

(a) “Acquiring Person” means any Person other than (i) the Corporation, (ii) any
of the Corporation’s Subsidiaries, (iii) any employee benefit plan of the
Corporation or of a Subsidiary of the Corporation or of a corporation owned
directly or indirectly by the stockholders of the Corporation in substantially
the same proportions as their ownership of stock of the Corporation, (iv) any
trustee or other fiduciary holding securities under an employee benefit plan of
the Corporation or of a Subsidiary of the Corporation or of a corporation owned
directly or indirectly by the stockholders of the Corporation in substantially
the same proportions as their ownership of stock of the Corporation, or (v) any
Person who, as of July 1, 2003, was the “beneficial owner” (as hereinafter
defined), directly or indirectly, of securities of the Corporation representing
twenty percent or more of the combined voting power of the Voting Securities of
the Corporation outstanding as of such date.

 

(b) “Change in Control” means the occurrence of any of the following events:

 

(i) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either (x) the then outstanding shares of Common Stock of the
Corporation (the “Outstanding Corporation Common Stock”) or (y) the combined
voting power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the “Outstanding
Corporation Voting Securities”); provided, however, that for purposes of this
Subparagraph (i), the following acquisitions shall not constitute a Change of
Control: (A) any acquisition directly from the Corporation, (B) any acquisition
by the Corporation, (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any corporation controlled
by the Corporation or (D) any acquisition by any corporation pursuant to a
transaction which complies with clauses (A), (B) and (C) of paragraph (iii)
below; or

 

(ii) Individuals who, as of the date of this Agreement, constitute Incumbent
Directors cease for any reason to constitute at least a majority of the
Corporation’s Board of Directors;

 

(iii) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Corporation or an
acquisition of assets of another corporation (a “Business Combination”), in each
case, unless, following such

 

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Business Combination, (A) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Corporation or all or substantially all of the Corporation’s assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination,
of the Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities, as the case may be, (B) no Person (excluding any employee benefit
plan (or related trust) of the Corporation or the corporation resulting from the
Business Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership of the Corporation existed prior to the Business Combination and
(C) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Directors at the time of the execution of the initial agreement, or of
the action of the Board, providing for such Business Combination; or

 

(iv) Approval by the stockholders of the Corporation of a complete liquidation
or dissolution of the Corporation.

 

(c) “Claim” means any threatened, pending, or completed action, suit, or
proceeding (including, without limitation, securities laws actions, suits, and
proceedings), or any inquiry or investigation (including discovery), whether
conducted by the Corporation or any other party, that Indemnitee in good faith
believes might lead to the institution of any action, suit, or proceeding,
whether civil, criminal, administrative, investigative, or other. Without
limiting the foregoing, “Claim” shall also mean the good faith determination by
the Indemnitee that the Indemnitee owes or is otherwise liable or obligated to
pay any Joint/Secondary Liability.

 

(d) “Expenses” means all costs, expenses (including attorneys’ and expert
witnesses’ fees), and obligations paid or incurred in connection with
investigating, defending (including affirmative defenses and counterclaims),
being a witness in, or participating in (including on appeal), or preparing to
defend, be a witness in, or participate in, any Claim relating to any
Indemnifiable Event.

 

(e) “Incumbent Directors” means the individuals who, as of the date of this
Agreement, constitute the Board of Directors and any other individual who
becomes a director of the Corporation after that date and whose election or
appointment by the Board of Directors or nomination for election by the
Corporation’s stockholders was approved by a vote of at least a majority of the
directors who are then the Incumbent Directors, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or

 

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threatened solicitation of proxies or consents by or on behalf of a Person other
than the Incumbent Directors.

 

(f) “Indemnifiable Event” means any event or occurrence (including, without
limitation, the incurrence of any Joint/Secondary Liability by the Indemnitee)
related to the fact that Indemnitee is or was a director, member of a committee
of the board of directors, officer, employee, agent, or fiduciary of the
Corporation, or is or was serving at the request of the Corporation as a
director, member of a committee of the Board of Directors, officer, employee,
trustee, agent, or fiduciary of another corporation, partnership, joint venture,
employee benefit plan, trust, or other enterprise, or by reason of any thing
done or not done by Indemnitee in any such capacity. For purposes of this
Agreement, the Corporation agrees that Indemnitee’s service on behalf of or with
respect to any Subsidiary of the Corporation shall be deemed to be at the
request of the Corporation.

 

(g) “Joint/Secondary Liabilities” means any and all taxes and other liabilities
or obligations for which the Corporation is primarily liable and for which the
Indemnitee is jointly or secondarily liable or which the Indemnitee is obligated
to pay under any statute, regulation, or court or arbitral decision.

 

(h) “Person” means any person or entity of any nature whatsoever, specifically
including (but not limited to) an individual, a firm, a company, a corporation,
a limited liability company, a partnership, a trust or other entity. A Person,
together with that Person’s affiliates and associates (as those terms are
defined in Rule 12b-2 under the Exchange Act for purposes of this definition
only), and any Persons acting as a partnership, limited partnership, joint
venture, association, syndicate or other group (whether or not formally
organized), or otherwise acting jointly or in concert or in a coordinated or
consciously parallel manner (whether or not pursuant to any express agreement),
for the purpose of acquiring, holding, voting or disposing of securities of the
Corporation with that Person, shall be deemed a single “Person.”

 

(i) “Potential Change in Control” shall be deemed to have occurred if (i) the
Corporation enters into an agreement, the consummation of which would result in
the occurrence of a Change in Control; (ii) any Person (including the
Corporation) publicly announces an intention to take or to consider taking
actions that, if consummated, would constitute a Change in Control; (iii) after
the Corporation has become a reporting company under the Exchange Act, any
Acquiring Person who is or becomes the beneficial owner, directly or indirectly,
of securities of the Corporation representing 10% or more of the combined voting
power of the then outstanding Voting Securities of the Corporation increases his
beneficial ownership of such securities by 5% or more over the percentage so
owned by that Person on the date hereof; or (iv) the Board of Directors of the
Corporation adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.

 

(j) “Reviewing Party” means any appropriate person or body consisting of a
member or members of the Corporation’s Board of Directors or any other person or
body appointed by the Board (including Special Counsel referred to in Section 3)
who is not a party to the particular Claim for which Indemnitee is seeking
indemnification.

 

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(k) “Special Counsel” means special, independent counsel selected by Indemnitee
and approved by the Corporation (which approval shall not be unreasonably
withheld), and who has not otherwise performed services for the Corporation or
for Indemnitee within the last three years (other than as Special Counsel under
this Agreement or similar agreements).

 

(l) “Subsidiary” means, with respect to any Person, any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by that Person.

 

(m) “Voting Securities” means any securities that vote generally in the election
of directors or in the selection of any other similar governing body.

 

2. Basic Indemnification and Expense Reimbursement Arrangement.

 

(a) In the event Indemnitee was, is, or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness or other
participant in, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Corporation shall indemnify Indemnitee to the fullest
extent permitted by law as soon as practicable but in any event no later than 30
days after written demand is presented to the Corporation, against any and all
Expenses, Joint/Secondary Liabilities, judgments, fines, penalties, and amounts
paid in settlement (including all interest, assessments, and other charges paid
or payable in connection with or in respect of such Expenses, Joint/Secondary
Liabilities, judgments, fines, penalties, or amounts paid in settlement) of or
with respect to that Claim. Notwithstanding the foregoing, the obligations of
the Corporation under Section 2(a) shall be subject to the condition that the
Reviewing Party shall not have determined in good faith, following its receipt
of a written opinion of Special Counsel (as contemplated by Section 3), that the
Corporation would not be permitted under applicable law to make a requested
indemnification payment to the Indemnitee. Nothing contained in this Agreement
shall require any determination under this Section 2(a) to made by the Reviewing
Party prior to the disposition or conclusion of the Claim against the
Indemnitee; provided, however, that Expense Advances shall continue to be made
by the Corporation pursuant to and to the extent required by the provisions of
Section 2(b).

 

(b) If so requested by Indemnitee, the Corporation shall pay any and all
Expenses incurred by Indemnitee (or, if applicable, reimburse Indemnitee for any
and all Expenses incurred by Indemnitee and previously paid by Indemnitee)
within two business days after such request (an “Expense Advance”). The
Corporation shall be obligated to make or pay an Expense Advance in advance of
the final disposition or conclusion of any Claim. In connection with any request
for an Expense Advance, if requested by the Corporation, Indemnitee or
Indemnitee’s counsel shall submit an affidavit stating that the Expenses
incurred were reasonable. Any dispute as to the reasonableness of any Expense
shall not delay an Expense Advance by the Corporation, and the Corporation
agrees that any such dispute shall be resolved only upon the disposition or
conclusion of the underlying Claim against the Indemnitee. If, when, and to the
extent that the Reviewing Party determines in good faith, following its receipt
of a written opinion of Special Counsel (as contemplated by Section 3), that the

 

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Corporation would not be permitted under applicable law to indemnify Indemnitee
with respect to a Claim, the Corporation shall be entitled to be reimbursed by
Indemnitee and Indemnitee hereby agrees to reimburse the Corporation without
interest (which agreement shall be an unsecured obligation of Indemnitee) for
all related Expense Advances theretofore made or paid by the Corporation;
provided, however, that if Indemnitee has commenced action pursuant to
Section 21 hereof to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Corporation for any Expense Advance, and the Corporation shall be obligated to
continue to make Expense Advances, until a final judicial determination (as to
which all rights of appeal therefrom have been exhausted or lapsed) or an
arbitral determination, as the case may be, is made with respect thereto. As
contemplated by Section 3, the Reviewing Party shall be advised by or shall be
Special Counsel. If there has been no determination by the Reviewing Party or if
the Reviewing Party determines that Indemnitee substantively would not be
permitted to be indemnified in whole or in part under applicable law, Indemnitee
shall have the right to commence an action pursuant to Section 21 hereof. Any
determination by the Reviewing Party otherwise shall be conclusive and binding
on the Corporation and Indemnitee.

 

3. Special Counsel. The Corporation agrees that it shall not deny any
indemnification payments or Expense Advances that Indemnitee requests or demands
under this Agreement unless the Reviewing Party shall have received a written
opinion of Special Counsel, delivered to the Corporation and Indemnitee, that
the Corporation would not be permitted under applicable law to pay Indemnitee
such indemnification payment or Expense Advance. The Corporation agrees to pay
the reasonable fees of Special Counsel referred to in this Section 3 and to
indemnify fully Special Counsel against any and all expenses (including
attorneys’ fees), claims, liabilities, and damages arising out of or relating to
this Agreement or Special Counsel’s engagement pursuant hereto.

 

4. Establishment of Trust. In the event of a Potential Change in Control, the
Corporation shall, upon written request by Indemnitee, create a trust for the
benefit of Indemnitee (the “Trust”) and from time to time upon written request
of Indemnitee shall fund the Trust in an amount sufficient to satisfy any and
all Expenses reasonably anticipated at the time of each such request to be
incurred in connection with investigating, preparing for, and defending any
Claim relating to an Indemnifiable Event, and any and all judgments, fines,
penalties, and settlement amounts (including all interest, assessments, and
other charges paid or payable in connection with or in respect of such expenses,
judgments, fines, penalties, and settlement amounts) of any and all Claims
relating to an Indemnifiable Event from time to time actually paid or claimed,
reasonably anticipated, or proposed to be paid. The amount or amounts to be
deposited in the Trust pursuant to the foregoing funding obligation shall be
determined by the Reviewing Party, in any situation in which Special Counsel
referred to in Section 3 is involved. The terms of the Trust shall provide that,
upon a Change in Control, (i) the Trust shall not be revoked or the principal
thereof invaded, without the written consent of Indemnitee; (ii) the trustee of
the Trust shall advance, within two business days of a request by Indemnitee,
any and all Expenses to Indemnitee (and Indemnitee hereby agrees to reimburse
the Trust under the circumstances in which Indemnitee would be required to
reimburse the Corporation for Expense Advances under Section 2(b) of this
Agreement); (iii) the Trust shall continue to be funded by

 

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the Corporation in accordance with the funding obligation set forth above;
(iv) the trustee of the Trust shall promptly pay to Indemnitee all amounts for
which Indemnitee shall be entitled to indemnification pursuant to this Agreement
or otherwise; and (v) all unexpended funds in that Trust shall revert to the
Corporation upon a final determination by the Reviewing Party or a court of
competent jurisdiction or arbitral tribunal, as the case may be, that Indemnitee
has been fully indemnified under the terms of this Agreement. The trustee of the
Trust shall be chosen by Indemnitee. Nothing in this Section 4 shall relieve the
Corporation of any of its obligations under this Agreement.

 

5. Indemnification for Additional Expenses. The Corporation shall indemnify
Indemnitee against any and all costs and expenses (including attorneys’ and
expert witnesses’ fees) and, if requested by Indemnitee, shall (within two
business days of that request) advance those costs and expenses to Indemnitee,
that are incurred by Indemnitee in connection with any claim asserted against or
action brought by Indemnitee for (i) indemnification or advance payment of
Expenses by the Corporation under this Agreement or any other agreement or
provision of the Corporation’s Certificate of Incorporation or By-laws now or
hereafter in effect relating to Claims for Indemnifiable Events or (ii) recovery
under any directors’ and officers’ liability insurance policies maintained by
the Corporation, regardless of whether Indemnitee ultimately is determined to be
entitled to that indemnification, advance expense payment, or insurance
recovery, as the case may be.

 

6. Partial Indemnity. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Corporation for some or a portion of the
Expenses, judgments, fines, penalties, and amounts paid in settlement of a Claim
but not, however, for all of the total amount thereof, the Corporation shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled. Moreover, notwithstanding any other provision of this Agreement, to
the extent that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection therewith.

 

7. Contribution.

 

(a) Contribution Payment. To the extent the indemnification provided for under
any provision of this Agreement is determined (in the manner hereinabove
provided) not to be permitted under applicable law, then in the event Indemnitee
was, is, or becomes a party to or witness or other participant in, or is
threatened to be made a party to or witness or other participant in, a Claim by
reason of (or arising in part out of) an Indemnifiable Event, the Corporation,
in lieu of indemnifying Indemnitee, shall contribute to the amount of any and
all Expenses, judgments, fines, or penalties assessed against or incurred or
paid by Indemnitee on account of that Claim and any and all amounts paid in
settlement of that Claim (including all interest, assessments, and other charges
paid or payable in connection with or in respect of such Expenses, judgments,
fines, penalties, or amounts paid in settlement) for which such indemnification
is not permitted (“Contribution Amounts”), in such proportion as is appropriate
to reflect the relative fault with respect to the Indemnifiable Event giving
rise to the Contribution Amounts of Indemnitee, on the one hand, and of the
Corporation and any and all other parties

 

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(including officers and directors of the Corporation other than Indemnitee) who
may be at fault with respect to such Indemnifiable Event (collectively,
including the Corporation, the “Third Parties”) on the other hand.

 

(b) Relative Fault. The relative fault of the Third Parties and the Indemnitee
shall be determined (i) by reference to the relative fault of Indemnitee as
determined by the court or other governmental agency assessing the Contribution
Damages or (ii) to the extent such court or other governmental agency does not
apportion relative fault, by the Reviewing Party (which shall include Special
Counsel) after giving effect to, among other things, the relative intent,
knowledge, access to information, and opportunity to prevent or correct the
applicable Indemnifiable Event and other relevant equitable considerations of
each party. The Corporation and Indemnitee agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does take account of the
equitable considerations referred to in this Section 7(b).

 

8. Burden of Proof. In connection with any determination by the Reviewing Party
or otherwise as to whether Indemnitee is entitled to be indemnified under any
provision of this Agreement or to receive contribution pursuant to Section 7 of
this Agreement, the burden of proof shall be on the Corporation to establish
that Indemnitee is not so entitled.

 

9. No Presumption. For purposes of this Agreement, the termination of any claim,
action, suit, or proceeding, by judgment, order, settlement (whether with or
without court approval), or conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law.

 

10. Action of Others. The knowledge and/or actions, or failure to act, of any
director, officer, agent, or employee of the Corporation shall not be imputed to
the Indemnitee for purposes of determining the right to indemnification under
this Agreement.

 

11. Indemnitee’s Individual Capacity. The Corporation acknowledges that the
Indemnitee is undertaking to act as a director, member of a committee of the
Board of Directors, officer, employee, trustee, agent, or fiduciary of the
Corporation at the request of the Corporation and solely in the Indemnitee’s
individual capacity and not in any capacity as a director, officer, member,
partner, employee, trustee, or other representative of any other corporation,
partnership, association, business trust, trust, or similar organization or
entity. The Corporation covenants and agrees to indemnify any such organization
or entity from and against any and all Claims, judgments, fines, or penalties
assessed against or incurred or paid by such organization or entity and any and
all amounts paid in settlement (including all interest, attorneys’ and expert
witnesses’ fees, and other charges paid or payable in connection with such
Claims, judgments, fines, penalties, or amounts paid in settlement) with respect
to any action or inaction taken in the course of the Indemnitee’s duties as a
director, member of a committee of the Board of Directors, officer, employee,
trustee, agent, or fiduciary of the Corporation, or at the request of the
Corporation as a director, member of a committee of the Board of Directors,
officer, employee,

 

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trustee, agent, or fiduciary of another corporation, partnership, joint venture,
employee benefit plan, trust, or other enterprise.

 

12. Non-exclusivity. The rights of Indemnitee hereunder shall be in addition to
any other rights Indemnitee may have under the Corporation’s By-laws or
Certificate of Incorporation or the Delaware General Corporation Law or
otherwise. To the extent that a change in the Delaware General Corporation Law
(whether by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under the Corporation’s By-laws or
Certificate of Incorporation and this Agreement, it is the intent of the parties
hereto that Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by that change.

 

13. Liability Insurance. Except as otherwise agreed to by the Corporation and
Indemnitee in a written agreement, to the extent the Corporation maintains an
insurance policy or policies providing directors’ and officers’ liability
insurance, Indemnitee shall be covered by that policy or those policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any Corporation director or officer.

 

14. Period of Limitations. No legal action shall be brought and no cause of
action shall be asserted by or on behalf of the Corporation or any affiliate of
the Corporation against Indemnitee or Indemnitee’s spouse, heirs, executors, or
personal or legal representatives after the expiration of five years from the
date of accrual of that cause of action, and any claim or cause of action of the
Corporation or its affiliate shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within that five-year period;
provided, however, that, if any shorter period of limitations is otherwise
applicable to any such cause of action, the shorter period shall govern.

 

15. Amendments. No supplement, modification, or amendment of this Agreement
shall be binding unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions hereof (whether or not similar) nor
shall that waiver constitute a continuing waiver.

 

16. Subrogation. In the event of payment under this Agreement, the Corporation
shall, subject to the conflicting rights of an insurer pursuant to any policy
contemplated by Section 13 hereof, be subrogated to the extent of that payment
to all of the rights of recovery of Indemnitee, who shall execute all papers
required and shall do everything that may be necessary to secure those rights,
including the execution of the documents necessary to enable the Corporation
effectively to bring suit to enforce those rights.

 

17. No Duplication of Payments. The Corporation shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy for which the premiums are paid by the Corporation,
provision of the Corporation’s Certificate of Incorporation or By-laws, or
otherwise) of the amounts otherwise indemnifiable hereunder.

 

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18. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors, assigns (including any direct or indirect successor by purchase,
merger, consolidation, or otherwise to all or substantially all of the business
or assets of the Corporation), spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as a as a director, member of a committee of the
Board of Directors, officer, employee, trustee, agent, or fiduciary of the
Corporation, or at the request of the Corporation as a director, member of a
committee of the Board of Directors, officer, employee, trustee, agent, or
fiduciary of another corporation, partnership, joint venture, employee benefit
plan, trust, or other enterprise.

 

19. Severability. If any provision of this Agreement is held to be illegal,
invalid, or unenforceable under present or future laws effective during the term
hereof, that provision shall be fully severable; this Agreement shall be
construed and enforced as if that illegal, invalid, or unenforceable provision
had never comprised a part hereof; and the remaining provisions shall remain in
full force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of that illegal, invalid, or unenforceable provision, there shall be added
automatically as a part of this Agreement a provision as similar in terms to the
illegal, invalid, or unenforceable provision as may be possible and be legal,
valid, and enforceable.

 

20. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in that state without giving effect to the
principles of conflicts of laws.

 

21. Dispute Resolution. Any and all claims, counterclaims, demands, causes of
action, disputes, controversies, and other matters in question arising out of or
relating to this Agreement, or the alleged breach hereof, or in any way relating
to the subject matter of this Agreement or the relationship between the parties
created by this Agreement (hereinafter referred to as a “Dispute”) shall, at the
election of the Indemnitee, be finally resolved by either (A) binding
arbitration administered by the American Arbitration Association (“AAA”) under
the AAA Commercial Arbitration Rules and Expedited Procedures (the “Rules”) then
in force, to the extent the Rules are not inconsistent with the provisions of
this Agreement, or (B) litigation in any U.S. or state court in the States of
Delaware or Texas having subject matter jurisdiction thereof and in which venue
is proper (with such venue being at the election of the Indemnitee). The
Corporation hereby consents to service of process (which shall be deemed given
if in writing upon actual receipt (by any means) by the Corporation) and to
appear in any such proceeding. Once the Indemnitee has made such an election,
the Dispute must be resolved pursuant to the chosen dispute resolution
procedure.

 

(a) Arbitration. In the event of an arbitration, the arbitral tribunal shall be
composed of a single arbitrator (the “Arbitrator”) selected in accordance with
the Rules. The seat of the arbitration shall be Dallas, Texas.

 

(i) Arbitration Awards. The Arbitrator’s award shall be entitled to all of the
protections and benefits of a final judgment as to any Dispute, including
compulsory

 

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counterclaims, that were or could have been presented to the tribunal, and shall
be final and binding on the parties and non-appealable to the maximum extent
permitted by law.

 

(ii) Confidentiality. Except to the extent necessary for proceedings relating to
enforcement of this Agreement, any award made or granted pursuant hereto or
other related rights of the parties hereunder, the fact of any arbitration
hereunder, the arbitration proceeding itself, all evidence, memorials or other
documents exchanged or used in such arbitration and the arbitrators’ award shall
be maintained in confidence by the parties hereto to the fullest extent
permitted by applicable law. However, a violation of this paragraph (ii) shall
not affect the enforceability of this Agreement to arbitrate or any Arbitrator’s
award.

 

(b) Costs of Arbitration or Court Proceedings. Without limiting the Indemnitee’s
other rights under Section 5 or elsewhere herein, the costs of arbitration or
court proceedings pursuant to this Section 21, including the parties’ reasonable
attorneys’ fees, shall be paid by the Corporation.

 

(c) Special, Consequential, Exemplary, and Punitive Damages Authorized. The
arbitrator or court, as applicable, in any proceeding pursuant to this
Section 21 is hereby authorized to award special, consequential, exemplary,
and/or punitive damages in favor of the Indemnitee in such amounts as the
arbitrator or court shall determine to be warranted.

 

22. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

 

23. Notices. Whenever this Agreement requires or permits notice to be given by
one party to the other, such notice must be in writing to be effective and shall
be deemed delivered and received by the party to whom it is sent upon actual
receipt (by any means) of such notice. Receipt of a notice by any officer of the
Corporation (other than Indemnitee) shall be deemed receipt of such notice by
the Corporation.

 

24. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but in making proof hereof it shall
not be necessary to produce or account for more than one such counterpart.

 

[Signature Page Follows]

 

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EXECUTED as of the date first written above.

 

THE CORPORATION:   CONCENTRA INC. By:                       INDEMNITEE:        

 

 

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EXHIBIT C

DEFINITION OF “CHANGE IN CONTROL”

 

As used in this Agreement, “Change in Control” shall mean the occurrence of any
of the following events:

 

(A) The acquisition by any individual, entity, or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended)
of beneficial ownership 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 voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”), such that Welsh, Carson, Anderson & Stowe VIII,
L.P., ceases to own, in the aggregate, more than 50% of the Outstanding Company
Common Stock or of the Outstanding Company Voting Securities; provided, however,
that for purposes of this Subparagraph (A), the following acquisitions shall not
constitute a Change of Control: (1) any acquisition of Company Common Stock or
other Company voting securities directly from the Company as part of or in
connection with a transaction which complies with clauses (1) and (2) of
Subparagraph (C) below; (2) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company; or (3) any acquisition by any corporation pursuant to
a transaction which complies with clauses (1) and (2) of Subparagraph (C) below;
or

 

(B) Individuals who, as of the date of the Plan, constitute the Board of
Directors cease for any reason to constitute at least a majority of the
Incumbent Board (as hereinafter defined); or

 

(C) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or an
acquisition of assets of another corporation (a “Business Combination”), in each
case, unless, following such Business Combination: (1) Welsh, Carson, Anderson &
Stowe VIII, L.P., beneficially owns, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries); and (2) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

 

(D) Approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.

 

As used in this Agreement, “Incumbent Board” means the individuals who
constitute the Board of Directors on the date hereof and any other individual
who becomes a director of the Company after that date and whose election or
appointment by the Board of

 

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Directors or nomination for election by the Company’s stockholders was approved
by a vote of at least a majority of the directors then comprising the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Incumbent Board.

 

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