Exhibit 10.5

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of
April 7, 2014, by and between Acadia Management Company, Inc., a Delaware
corporation (the “Company”), and David M. Duckworth (“Executive”).

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 date
hereof 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.

2. Position and Duties.

(a) Position; Responsibilities. During the Employment Period, Executive shall
serve as the Chief Financial Officer of the Company and shall have the normal
duties, responsibilities, functions and authority of a chief financial officer,
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 Chief Financial Officer 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 Schedule 2(b)), (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);
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 the Subsidiaries (whether for-profit or
not-for-profit) without the prior written consent of the Board.

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3. Compensation and Benefits.

(a) Base Salary. During the Employment Period, Executive’s base salary shall be
$400,000 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 adjusted 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, 2014, Executive
will be eligible to earn a target annual cash bonus of not less than 75% of the
Base Salary and up to a maximum cash bonus equal to two (2) times the target
annual cash 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. 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 2014 that will have a value equal to not less than 125% 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 2014. 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.

(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.

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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));

(ii) 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, as determined by
the Board or the Compensation Committee in its sole discretion (provided such
discretion would not have resulted in the payment failing to be considered
performance-based compensation under Code Section 162(m) if the Executive were a
covered employee), 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));

(iii) an amount equal to the target 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 as if Executive, Acadia and the
Subsidiaries have achieved all of the performance objectives specified in
Executive’s bonus plan for such year at the target level, whether or not such
objectives actually have been achieved as of the Termination Date (payable in a
lump sum within ten (10) business days after the Termination Date);

(iv) an amount equal to twelve (12) months of Executive’s Base Salary as in
effect on the Termination Date (such 12-month period, the “Severance Period”),
(payable in a lump sum within ten (10) business days after the Termination
Date);

(v) 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);

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(vi) 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 the
Consolidated Budget Reconciliation Act of 1985 (“COBRA”) for the period
commencing on the Termination Date and ending on the date on which the Severance
Period expires (payable in monthly installments during and concurrently with
Executive’s COBRA period); provided that if Executive’s COBRA period is
terminated or expires prior to expiration of the 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) for the period
commencing on the date of such termination or expiration and ending on the date
on which the Severance Period expires;

(vii) cause each stock option of Executive, to the extent that it shall not
otherwise have become vested and exercisable, to automatically become fully and
immediately vested and exercisable, without regard to any otherwise applicable
vesting requirement; and

(viii) cause each restricted stock or other equity-based award of Executive, to
the extent that it shall not otherwise have become vested and exercisable, to
automatically become fully and immediately vested and exercisable, without
regard to any otherwise applicable vesting requirement, and all forfeiture and
transfer restrictions thereon shall lapse. Notwithstanding the above, in the
case of an equity-based incentive other than an option or stock appreciation
right (e.g., a grant of performance-based shares) where such incentive was
intended to qualify as performance-based compensation under Code Section 162(m),
the forfeiture restrictions related to pre-established goals shall not lapse
until the results of the related goals have been determined and certified by the
Compensation Committee.

Notwithstanding the foregoing, Executive shall not be entitled to receive such
payments unless and until Executive signs and delivers the General Release
substantially in the form attached hereto as Exhibit A; and provided further
that Executive has not breached any of the provisions of Sections 5, 6 and 7
hereof.

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 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

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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.

(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));

(ii) 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, as determined by
the Board or the Compensation Committee in its sole discretion, 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));

(iii) 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);

(iv) 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
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

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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;

(v) cause each stock option of Executive, to the extent that it shall not
otherwise have become vested and exercisable, to automatically become fully and
immediately vested and exercisable, without regard to any otherwise applicable
vesting requirement; and

(vi) cause each restricted stock or other equity-based award of Executive, to
the extent that it shall not otherwise have become vested and exercisable, to
automatically become fully and immediately vested and exercisable, without
regard to any otherwise applicable vesting requirement, and all forfeiture and
transfer restrictions thereon shall lapse. Notwithstanding the above, in the
case of an equity-based incentive other than an option or stock appreciation
right (e.g., a grant of performance-based shares) where such incentive was
intended to qualify as performance-based compensation under Code Section 162(m),
the forfeiture restrictions related to pre-established goals shall not lapse
until the results of the related goals have been determined and certified by the
Compensation Committee.

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)).

(e) Interest. Without limiting the rights of Executive at law or in equity, if
the Company fails to make any payment required to be made hereunder on a timely
basis, the Company will pay interest on the amount thereof at an annualized rate
of interest equal to the so-called composite “prime rate” as quoted from time to
time during the relevant period in The Wall Street Journal. Such interest will
be payable as it accrues on demand. Any change in such prime rate will be
effective on and as of the date of such change.

(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 earliest
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

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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.

(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.

(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.

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(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.

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.

(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.

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(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.

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 the business of providing
behavioral healthcare and/or related services or (ii) directly or indirectly
manage, control, participate in, consult with or render services

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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 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 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) 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 its 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 its subsidiaries pursuant to
this Agreement, Acadia hereby covenants and agrees that, except as may be
required by applicable law, Acadia shall cause its executive officers and
members of its board of directors 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.

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(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.

(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.

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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 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 other crime
involving moral turpitude 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) 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 economic harm, (iii) repeated failure to perform duties
consistent with this Agreement as reasonably directed by the Board, (iv) any act
or knowing omission aiding or abetting a competitor, supplier or customer of
Acadia or any of the Subsidiaries to the disadvantage or detriment of Acadia and
the Subsidiaries, (v) breach of fiduciary duty, gross negligence or willful
misconduct with respect to Acadia or any of the Subsidiaries, (vi) an
administrative or other proceeding 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
(vii) any other material breach by Executive of this Agreement or any other
agreement between Executive and Acadia or any of the Subsidiaries, which is not
cured to the Board’s reasonable satisfaction within thirty (30) days after
written notice thereof to Executive.

“Change in Control” means the occurrence of one or more of the following events:

(a) the acquisition by any one person, or more than one person acting as a group
(other than any person or more than one person acting as a group who is
considered to own more than fifty percent (50%) of the total fair market value
or total voting power of Acadia prior to such acquisition) of stock of Acadia
that, together with stock held by such person or group, constitutes more than
fifty percent (50%) of the total fair market value or total voting power of the
stock of Acadia or the Company, as applicable;

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(b) during any twelve-month period, the date individuals who at the beginning of
such period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in paragraph (a), (c), or (d) of this “Change in
Control” definition or a director whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such term is used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on behalf of a
person other than the Board) whose election by the Board or nomination for
election by Acadia’s stockholders was approved by a vote of at least two-thirds
of the directors then still in office who either were directors at the beginning
of the twelve-month period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
of the Board;

(c) within any twelve-month period, the acquisition by any one person, or more
than one person acting as a group, of ownership of stock of Acadia possessing
thirty percent (30%) or more of the total voting power of the stock of Acadia;
or

(d) within any twelve-month period, the acquisition by any one person, or more
than one person acting as a group, of the assets of Acadia that have a total
gross fair market value of forty percent (40%) or more of the total gross fair
market value of all of the assets of Acadia immediately before such acquisition
or acquisitions; provided, however, that transfers to the following entities or
person(s) shall not be deemed to result in a Change in Control under this
subsection (d):

(I) an entity that is controlled by the shareholders of Acadia immediately after
the transfer;

(ii) a shareholder (determined immediately before the asset transfer) of Acadia
in exchange for or with respect to its stock;

(iii) an entity, fifty percent (50%) or more of the total value or voting power
of which is owned, directly or indirectly, by Acadia;

(iv) a person, or more than one person acting as a group, that owns, directly or
indirectly, fifty percent (50%) or more of the total value or voting power of
all the outstanding stock of Acadia; or

(v) an entity, at least fifty percent (50%) of the total value or voting power
of which is owned, directly or indirectly, by a person described in the above
subsection (d) (IV).

Notwithstanding the foregoing, a merger or consolidation effected to implement a
recapitalization of Acadia (or similar transaction) in which no person (other
than Acadia, any trustee or other fiduciary holding securities under any
employee benefit plan of Acadia, or any company owned, directly or indirectly,
by the shareholders of Acadia in substantially the same

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proportions as their ownership of shares of Acadia) acquires more than 50% of
the combined voting power of the Company’s then-outstanding securities shall not
constitute a Change in Control of Acadia. For purposes of this Agreement,
“person” shall have the same meaning as in Sections 13(d) and 14(d) of the
Exchange Act; and persons will be considered to be acting as a group if they are
owners of a corporation that enters into a merger, consolidation, purchase or
acquisition of stock, or similar business transaction with Acadia.

“Disabled” shall mean with respect to Executive that, as a result of his
incapacity due to physical or mental illness, Executive is considered disabled
under the Company’s long-term disability insurance plans or, in the absence of
such plans, Executive is unable to perform the essential duties,
responsibilities and functions of his position with the Company as a result of
any mental or physical disability or incapacity even with reasonable
accommodations of such disability or incapacity provided by Acadia and the
Subsidiaries or if providing such accommodations would be unreasonable, all as
determined by the Board in its good faith judgment. Executive shall cooperate in
all respects with the Company if a question arises as to whether he has become
Disabled (including, without limitation, submitting to an examination by a
medical doctor or other health care specialists selected by the Company and
authorizing such medical doctor or such other health care specialist to discuss
Executive’s condition with the Company).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“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 (other
than as part of an across-the-board reduction that (A) results in a 10% or less
reduction of Executive’s Base Salary as in effect on the date of any such
reduction or (B) is approved by the Chief Executive Officer of the Company),
(ii) a material diminution of Executive’s job duties or responsibilities
inconsistent with Executive’s position, which shall include, without limitation,
Executive’s removal from the position specified in Section 2(a) or 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 2(a));
(iii) any other material breach by 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

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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. Except as otherwise provided in Section 4(d), Sections 4 through
27 (other than Section 22) 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: David M. Duckworth

[REDACTED]

with copies (which shall not constitute notice) to:

Acadia Healthcare Company, Inc.

830 Crescent Centre Drive, Suite 610

Franklin, TN 37067

Attention: General Counsel

Facsimile: (615) 261-9685

Notices to the Company:

Acadia Healthcare Company, Inc.

830 Crescent Centre Drive, Suite 610

Franklin, TN 37067

Attention: Board of Directors

Facsimile: (615) 261-9685

with copies (which shall not constitute notice) to:

Acadia Healthcare Company, Inc.

830 Crescent Centre Drive, Suite 610

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.

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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, including, without limitation, the
Original Employment Agreement, and any prior employment agreement, by and
between Executive and Acadia or any of the Subsidiaries.

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.

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

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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. In the event Acadia or any of the Subsidiaries
does not make such deductions or withholdings, Executive shall indemnify Acadia
and the Subsidiaries for any amounts paid with respect to any such Taxes,
together (if such failure to withhold was at the written direction of Executive
or if Executive was informed in writing by Acadia or such Subsidiary that such
deductions or withholdings were not made) with any interest, penalties and
related expenses thereto.

21. 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.

22. Opportunity. During the Employment Period, Executive shall submit to the
Board all investment or business opportunities of which he becomes aware and
which are within the scope and investment objectives of Acadia or any of the
Subsidiaries.

23. 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
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.

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24. 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.

25. 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 against all costs and expenses (including
attorneys’ fees), judgments, fines, losses, claims, damages, liabilities and
settlement amounts paid in connection with any claim, action, suit, proceeding
or investigation (whether arising before or after the date hereof), whether
civil, criminal, administrative or investigative, arising out of or pertaining
to any action or omission in their capacity as an officer, director, employee,
fiduciary or agent of the Company (or Acadia or any Subsidiary). In the event of
any such claim, action, suit, proceeding or investigation, (i) the Company shall
pay the reasonable fees and expenses of counsel selected by Executive promptly
after statements therefor are received, (ii) neither the Company, Acadia nor any
Subsidiary shall settle, compromise or consent to the entry of any judgment in
any pending or threatened action to which Executive is a party (and in respect
of which indemnification could be sought by Executive hereunder), unless such
settlement, compromise or consent includes an unconditional release of Executive
from all liability arising out of such action, or Executive otherwise consents
(which consent shall not be unreasonably withheld, conditioned or delayed), and
(iii) the Company, Acadia and the applicable Subsidiaries shall cooperate in the
defense of any such matter. In the event that any claim for indemnification is
asserted or made within the Employment Period or the six (6) year period
thereafter, all rights of Executive to indemnification in respect of such claim
shall continue until the final disposition of such claim. The rights of
Executive under this Section 25(a) shall be in addition to any rights Executive
may have under the organizational documents of the Company, Acadia or any
Subsidiary, under any law, or under any agreement of Executive with the Company,
Acadia or any Subsidiary.

(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.

26. 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

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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 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 26, 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).

27. 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/ David M. Duckworth

Name: David M. Duckworth ACKNOWLEDGED AND AGREED:

ACADIA HEALTHCARE COMPANY, INC.,

solely with respect to Sections 7 and 27,

as of this 7th day of April, 2014

By:  

/s/ Joey A. Jacobs

  Name:   Joey A. Jacobs   Its:   Chief Executive Officer

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Schedule 2(b)

Other Activities

None

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EXHIBIT A

GENERAL RELEASE

I,                 , in consideration of and subject to the performance by
Acadia Management Company, Inc., a Delaware corporation (together with its
subsidiaries and affiliates, the “Company”), of its obligations under the
Employment Agreement, dated as of April 7, 2014 (the “Agreement”), do hereby
release and forever discharge as of the date hereof the Company and its
affiliates and all present and former directors, officers, agents,
representatives, employees, successors and assigns of the Company and its
affiliates and the Company’s direct and indirect owners (collectively, the
“Released Parties”) to the extent provided below.

I understand that any payments or benefits paid or granted to me under Sections
4(b)(iii) through 4(b)(viii) 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 the
payments and benefits specified in Sections 4(b)(iii) through 4(b)(viii) of the
Agreement unless I execute this General Release and do not revoke this General
Release within the time period permitted hereafter or breach this General
Release.

Except as provided in this paragraph 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 I executed this
General Release) 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, which 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
Orders; 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”);
provided that, this General Release shall not apply to or affect or impair
(i) Claims for vested benefits pursuant to any Company employee benefit plan in
which I was a participant prior to the termination of my employment with the
Company; (ii) any Claims for unemployment insurance benefits or workers’
compensation benefits applicable to the period through the termination of my
employment with the Company; or (iii) any Claims that may arise for my
indemnification under any directors and officers or similar insurance, or under
the certificate of incorporation, bylaws, limited liability company agreement,
certificate of formation and/or other applicable governing documents of the
Company, its subsidiaries and/or affiliates.

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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.

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 is in compliance with the
terms of the Agreement and company policy and shall not serve as the basis for
any Claim (including, without limitation, any claim under the Age Discrimination
in Employment Act of 1967).

I agree that I am waiving all rights to sue or obtain equitable, remedial or
punitive relief from any or all Released Parties of any kind whatsoever,
including, without limitation, reinstatement, back pay, front pay, attorneys’
fees 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 applicable 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.

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. 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 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. 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
applicable law.

I represent that I am not aware of any pending charge or complaint of the type
described in paragraph 2 above as of the execution of this General Release. 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. Nevertheless, I hereby waive any right, claim or
cause of action that might arise as a result of such different or additional
claims or facts.

I agree that I will forfeit all amounts payable by the Company pursuant to
Sections 4(b)(iii) through 4(b)(viii) of the Agreement if I challenge the
validity of this General Release. I also 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, and upon the Company’s request return all
payments theretofore received by me pursuant to Sections 4(b)(iii) through
4(b)(viii) of the Agreement.

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I agree that this General Release and the Agreement are confidential and agree
not to disclose any information regarding the terms of this General Release or
the Agreement, except to my immediate family and any tax, legal or other counsel
I have consulted regarding the meaning or effect hereof or as required by law,
and I will instruct each of the foregoing not to disclose the same to anyone.

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 National Association of Securities Dealers, Inc. (NASD),
any other self-regulatory organization or governmental entity.

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.

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 and unenforceability shall not affect
any other provision or its validity and enforceability in 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.

[Signature Page Follows]

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

I HAVE READ IT CAREFULLY;

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;

I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

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;

I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS GENERAL RELEASE
SUBSTANTIALLY IN ITS FINAL FORM ON                      TO CONSIDER IT AND THE
CHANGES MADE SINCE THE                      VERSION OF THIS GENERAL RELEASE ARE
NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD;

THE CHANGES TO THIS GENERAL RELEASE SINCE                      EITHER ARE NOT
MATERIAL OR WERE MADE AT MY REQUEST;

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

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

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.

 

        EXECUTIVE:

Date: