Exhibit 10.1  EMPLOYMENT AGREEMENT  THIS EMPLOYMENT AGREEMENT(Agreement) is made and entered into
by and between Karen S. Rohan an individual (Employee), and, Magellan Health
Services, Inc. on behalf of itself and its subsidiaries and affiliates
(collectively referred to herein as Employer) on this 28thday of July,
2009 effective as of August 1, 2009.  WHEREAS, Employer desires to obtain the services of Employee
and Employee desires to continue to render services to Employer; and  WHEREAS, Employer and Employee desire to set forth the terms
and conditions of Employees employment with Employer under this Agreement;  NOW, THEREFORE, in consideration of the foregoing recitals and of
the mutual covenants and agreements contained in this Agreement and Amendment No. 1
to this Agreement executed simultaneously herewith (hereinafter Amendment No. 1),
the parties agree as follows:  STATEMENT OF AGREEMENT  1.Employment.Employer
agrees to employ Employee, and Employee accepts such employment in accordance with
the terms of this Agreement, for a term of one year commencing on  August 1, 2009 and, unless terminated
earlier in accordance with the terms of this Agreement, ending on July 31,
2010. Thereafter, this Agreement shall automatically renew for twelve (12)
month periods, unless sooner terminated as provided herein.  If either party desires not to renew the
Agreement, they must provide the other party with written notice of their
intent not to renew the Agreement at least one hundred eighty (180) days prior
to the next renewal date. Non-renewal of the Agreement by either party will in
all cases result in termination of employment at the non-renewal date.  Employers notice of intent not to renew the
Agreement shall be deemed to be a termination without cause and the provisions
of Section 6(c) shall apply.  2.Position and Duties of
Employee.Employee will serve as President of Employer.
Employee agrees to serve in such position, or in such other positions as
Employer determines, and with agreement from Employee, from time to time, and
to perform the duties that Employer may assign from time to time to Employee,
at the same or greater base salary level and a similar location, until the
expiration of the term or such time as Employees employment with Employer is
terminated pursuant to this Agreement.  3.Time Devoted.Employee
will devote his or her full business time and energy to the business affairs
and interests of Employer, and will use his or her best efforts and abilities
to promote Employers interests. 
Employee agrees that he or she will diligently endeavor to perform
services contemplated by this Agreement in a manner consistent with his or her
position and in accordance with the policies established by the Employer.  Excluding charitable and civic organizations,
Employee shall not serve on any outside boards of directors of any
organizations without the prior approval of the board of directors of Employer.


4.Compensation.  (a)Base Salary. 
Employer will pay Employee an annual base salary in the amount of
$530,000 which amount will be paid in semi-monthly intervals less appropriate
withholdings for federal and state taxes and other deductions authorized by
Employee.  Such salary will be subject to
review and adjustment by Employer not less than annually.  (b)Annual Bonus. 
Employees annual target bonus opportunity will be 75% of Base Salary (Target
Bonus) under the Companys Short-Term Incentive Plan (or successor annual
incentive plan applicable to similarly situated executive officers).   The actual payout to Employee will be based
on Company and individual performance during the measurement period.  Any such bonus payable to Employee shall be
paid to Employee during the period January 1 to March 15 of each year
in respect of service in the preceding year provided that Employee is still
employed by Employer at the time the bonus is paid. Subject to the conditions
for payment of bonus stated above in this paragraph, for the year 2009 Employees
Target Bonus shall be 37.5% of Base Salary (2009 Target).  (c)Sign on Equity Grant.Employee will receive a grant of options
with a total value of $1,375,000, to purchase that number of shares equal to
$1,375,000 divided by the Black Sholes value of an option to purchase a share
of stock of Employer as determined by Employer on the first business day of the
month following the month of commencement of her employment under this
Agreement (the Grant Date) at an exercise price equal to the closing price of
a share of the Common Stock of Employer on NASDAQ on the Grant Date.  Such options shall be granted on terms
provided to other employees of Employer under the Employers 2008 Management
Incentive Plan on the Grant Date and shall vest ratably in annual installments
over a period of three years from the Grant Date.  (d)Benefits.  Employee will
be eligible to participate in Employers Benefit Plans commensurate with his or
her position on a basis at least as favorable as other similarly situated
senior level executives of Employer. 
Employee will receive separate information detailing the terms of such
Benefit Plans and the terms of those plans will control.  Employee also will be eligible to participate
in any annual incentive plan and stock option plan applicable to Employee by
their terms respectively on terms at least as favorable as other similarly
situated senior level executives of Employer. 
Annual incentive payments, if any, will be determined and paid (unless
validly deferred if then permitted by the Company) between January 1 and March 15
of the year following the performance year. 
During the term of this Agreement, Employee will be entitled to such
other benefits of employment with Employer as are now or may later be in effect
for salaried employees of Employer, and also will be eligible to participate in
other benefits adopted for employees at his or her level.  2


5.Expenses.During the
term of this Agreement, Employer will reimburse Employee promptly for all
reasonable travel, entertainment, parking, business meetings and similar
expenditures in pursuance and furtherance of Employers business upon receipt
of reasonably supporting documentation as required by Employers policies
applicable to its employees generally, subject to Section 10(a) (iii).  6.Termination.  (a)Termination Due to Resignation.Employee may resign his or her employment at any time by giving 90 days
written notice of resignation to Employer. 
Except as otherwise set forth in this Agreement, Employees employment,
and Employees right to receive compensation and benefits from Employer, will
terminate upon the effective date of Employees termination.  If Employee resigns pursuant to this Section 6(a),
Employers only remaining financial obligation to Employee under this Agreement
will be to pay, subject to Section 10: (i) any earned but unpaid Base
Salary and accrued Paid Time Off through the effective date of Employees
termination; (ii) reimbursement of expenses incurred by Employee through
the effective date of termination which are reimbursable pursuant to this
Agreement; and (iii) the Employees vested portion of any Magellan
deferred compensation or other benefit plan.  (b)Termination
with Cause.  Except as otherwise set forth in this
Agreement, Employees employment, and Employees right to receive compensation
and benefits from Employer, will be terminated for cause at the discretion of
Employer under the following circumstances:  (i)Employees
commission of an act of fraud or dishonesty involving his or her duties on
behalf of Employer;  (ii)Employees
failure or refusal to faithfully and diligently perform duties assigned to
Employee or other breach of any material term under this Agreement;  (iii)Employees
failure or refusal to abide by Employers policies, rules, procedures or
directives; or  (iv)Employees
conviction of a felony or a misdemeanor involving moral turpitude.  If Employee is terminated pursuant to
this Section 6(b), Employers only remaining financial obligation to
Employee under this Agreement will be to pay, subject to Section 10: (i) any
earned but unpaid Base Salary and accrued Paid Time Off through the date of
Employees termination; (ii) reimbursement of expenses incurred by
Employee through the date of termination which are reimbursable pursuant to
this Agreement; and (iii) the Employees vested portion of any Magellan
deferred compensation or other benefit plan.  For the events described in Sections 6(b) (ii) and
(iii), Employer will give Employee written notice of such deficiency and a reasonable
opportunity to cure such situation, but in no event more than thirty days.  3


(c)Termination Without Cause. 
Employer may terminate this Agreement for any reason without cause at
any time.  Without cause termination
shall also include, but not be limited to (i) Employers notice to
Employee of its intent not to renew this Agreement in accordance with the
provisions of Section 1 hereof; (ii) Employers notice to Employee
that his or her position will be relocated to an office which is greater than
50 miles from Employees prior office location; or (iii) Employers
material reduction of Employees base salary to an amount less than the base
salary identified in Section 4(a) of this Agreement (a reduction with
an annualized value of 1.5% of Employees base pay or more, taking into account
any related effect of the reduction on annual incentive, shall be deemed
material); provided, however, that in the case of the reasons stated in (i), (ii) and
(iii) above, Employee must have given notice to Employer that an event
under clause (i), (ii) or (iii) has occurred, that the Employee
objects to such action by the Employer and the circumstance must remain
uncorrected by Employer after the expiration of 30 days after receipt of such
notice.  If Employer terminates this
Agreement without cause, Employer shall continue to pay, subject to Section 10,
Employee the compensation provided for in Section 4(a) of this
Agreement for a period of time equal to one year.  Such pay continuation is contingent upon
Employee executing Employers standard severance agreement, which incorporates
a general release, at the time of termination. 
In addition, Employee will receive (i) any earned but unpaid Base
Salary and accrued Paid Time Off through the date of Employees termination; (ii) reimbursement
of expenses incurred by Employee through the date of termination which are
reimbursable pursuant to this Agreement; and (iii) the Employees vested
portion of any Magellan Health Services, Inc. deferred compensation or
other benefit plan, including but not limited to, any stock option or
restricted stock grant plans, in accordance with the terms of those plans. If
Employee participates in any bonus plan(s), including but not limited to, any
long term bonus plan(s), Employer may in its sole discretion pay Employee, on a
pro-rata basis, the amount of such plan(s) as Employee would have earned
if Employee had been employed for the full calendar year. The pro-ration will
be determined by the fraction of the number of months in the calendar year in
which the Employee worked (rounded to the nearest whole month) divided by 12
months. In determining whether a pro-rata bonus shall be paid to Employee, the
Employer may consider factors that include but are not limited to (i) the
Employees target bonus (percentage of base salary), (ii) the Companys
financial performance and (iii) the Employees achievement of his or her
specific performance objectives. At the time of termination, Employer shall determine
the Employees bonus amount, if any. Notwithstanding the foregoing, any payout
of such bonus amount shall be at the Employers sole discretion and shall be
contingent upon the Company satisfying the financial targets established by the
Companys Board of Directors. Payment of bonus, if any, shall be made at the
time of the annual bonus payout for all employees, subject to Section 4(b).
Also, notwithstanding the foregoing, Employer shall have sole discretion to
make any additional payments to Employee.COBRA coverage may be elected to continue health,
dental, and vision insurance during the Severance Period and beyond. If COBRA
coverage is elected, Employee will pay only the employee contribution rate for
the health insurance portion of the COBRA coverage during the Severance
Period.  Dental and vision coverage under
COBRA will be billed at the full COBRA rate.  (d)Automatic Termination. 
This Agreement will terminate automatically upon the death or permanent
disability of Employee.  Employee will be
deemed to be Disabled or to suffer from a Disability within the meaning of
this Agreement if, because of a physical or mental  4


impairment,
Employee has been unable to perform the essential functions of his or her
position, with or without reasonable accommodation, for a period of 180
consecutive days, or if Employee can reasonably be expected to be unable to
perform the essential functions of his or her position for such period.  If Employee is terminated pursuant to this Section 6(d),
Employee or her estate will receive, subject to Section 10, (i) any
earned but unpaid Base Salary and accrued Paid Time Off through the date of
Employees termination; (ii) reimbursement of expenses incurred by
Employee through the date of termination which are reimbursable pursuant to
this Agreement; and (iii) the Employees vested portion of any Magellan
Health Services retirement, deferred compensation or other benefit plan,
including but not limited to, any stock option or restricted stock grant plans,
in accordance with the terms of those plans. If Employee participates in any
bonus plan(s), including but not limited to, any long term bonus plan(s),
Employer may at its sole discretion pay Employee or her estate, on a pro-rata
basis, the amount of such plan(s) as Employee would have earned if
Employee had been employed for the full calendar year. The pro-ration will be
determined by the fraction of the number of months in the calendar year in
which the Employee worked (rounded to the nearest whole month) divided by 12
months.  In determining whether a
pro-rata bonus shall be paid to Employee or her estate, the Employer may
consider factors that include but are not limited to (i) the Employees
target bonus (percentage of base salary); (ii) the Companys financial
performance; and (iii) the Employees achievement of her specific
performance objectives. At the time of termination, Employer shall determine
the Employees bonus amount, if any. Notwithstanding the foregoing, any payout
of such bonus amount shall be at Employers sole discretion and shall be
contingent upon the Company satisfying the financial targets established by the
Companys Board of Directors. Payment of bonus, if any, shall be made at the
time of the annual bonus payout for all employees, subject to Section 4(b).  (e)Effect of Termination. 
Except as otherwise provided for in this Section 6, upon
termination of this Agreement, all rights and obligations under this Agreement
will cease except for (i) the rights and obligations under Sections 4 and
5 to the extent Employee has not been compensated or reimbursed for services
performed prior to termination (the amount of compensation to be prorated for
the portion of the pay period prior to termination); (ii) the rights and
obligations under Sections 7, 8 and 9; and (iii) all procedural and
remedial provisions of this Agreement.  7.Protection of Confidential
Information/Non-Competition/Non-Solicitation.  Employee covenants and agrees as follows:  (a)(i)Confidential
Information:  During Employers
employment of Employee and for a period of one year following the termination
of Employees employment for any reason, Employee will not use or disclose,
directly or indirectly, for any reason whatsoever or in any way, other than at
the direction of Employer during the course of Employees employment or after
receipt of the prior written consent of Employer, any confidential information
of Employer or its controlled subsidiaries or affiliates, that comes into her
knowledge during her employment by Employer (the Confidential Information as
hereinafter defined).  The obligation not
to use or disclose any Confidential Information will not apply to any
Confidential Information that is or becomes public knowledge through no fault
of Employee, and that may be utilized by the public without any direct or
indirect obligation to Employer, but the termination of the obligation for
non-use or nondisclosure by  5


reason of such information becoming public will extend only from the
date such information becomes public knowledge. 
The above will be without prejudice to any additional rights or remedies
of Employer under any state or federal law protecting trade secrets or other
information.  (a)(ii)Trade Secrets.Employee shall hold in confidence all Trade Secrets of Employer, its
direct and indirect subsidiaries or affiliates, and/or its customers that came
into her knowledge during her employment by Employer and shall not disclose, publish
or make use of at any time after the date hereof such Trade Secrets, other than
at the direction of Employer, for as long as the information remains a Trade
Secret.  (a)(iii)For purposes of this Agreement, the
following definitions apply:  Confidential Information
means any data or information, other than Trade Secrets, that is valuable to
Employer and not generally known to the public or to competitors of
Employer.  It is understood that the term
Confidential Information does not mean and shall not include information
which:  (a)is or subsequently becomes publicly
available without the breach of any obligation owed to the Employer;  (b)is disclosed with the prior written
approval of the Employer; or  (c)is obligated to be produced under order of a court of
competent jurisdiction or a valid administrative, congressional, or other
subpoena, civil investigative demand or similar process; provided,
however, that upon issuance of any such order, subpoena, demand or
other process, the Employee shall promptly notify the Employer and shall
provide the Employer with an opportunity (if then available) to contest, at the
Employers expense, the propriety of such order or subpoena (or to arrange for
appropriate safeguards against any further disclosure by the court or
administrative or congressional body seeking to compel disclosure of such
Confidential Information).  Trade Secret means information including, but not limited to, any
technical or non-technical data, formula, pattern, compilation, program,
device, method, technique, drawing, process, financial data, financial plan,
product plan, list of actual or potential customers or suppliers or other
information similar to any of the foregoing, which (i) derives economic
value, actual or potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who can derive economic
value from its disclosure or use; and (ii) is the subject of efforts that
are reasonable under the circumstances to maintain its secrecy.  (a)(iv)Interpretation.The restrictions stated in paragraphs 7(a)(i) and 7(a)(ii) are
in addition to and not in lieu of protections afforded to trade secrets and
confidential information under applicable state law.  Nothing in this Agreement is intended to or
shall be interpreted as diminishing or otherwise limiting Employers right
under applicable state law to protect its trade secrets and confidential
information.  6


(b)Non-Competition.  (i)Employee
covenants and agrees that during the term of her employment with Employer and
for a period of one year immediately following the termination of said
employment for any reason, she will not, on her own behalf or as a partner,
officer, director, employee, agent, or consultant of any other person or
entity, directly or indirectly, engage or attempt to engage in the business of
providing or selling services in the United States that are services offered by
Employer or any of its subsidiaries and affiliates at the time of the
termination of this Agreement, unless waived in writing by Employer in its sole
discretion. Employee recognizes that the above restriction is reasonable and
necessary to protect the interest of the Employer and its subsidiaries and affiliates.  (ii)During
the one year period immediately following Employees termination from her
employment with Employer, Employee may submit a written request to Employer
outlining a proposed employment or other employment opportunity that Employee
is considering. Employer will review such request, and make a determination
within ten (10) business days following receipt of such request, in its
sole discretion, as to whether the opportunity would constitute a breach of the
non-competition covenant.  (c)Non-Solicitation.To protect the
goodwill of Employer and its controlled subsidiaries and affiliates, or the
customers of Employer and its subsidiaries and affiliates, Employee agrees
that, for a period of one year immediately following the termination of her
employment with Employer, she will not, without the prior written permission of
Employer, directly or indirectly, for herself or on behalf of any other person
or entity, solicit, divert away, take away or attempt to solicit or take away
any Customer of Employer for purposes of providing or selling services that are
offered by Employer, if Employer, or the particular subsidiary or affiliate of
Employer, is then still engaged in the sale or provision of such services at
the time of the solicitation.  For purposes
of this Section 7(c), Customer means any individual or entity to whom
Employer or its controlled subsidiaries or affiliates has provided, or
contracted to provide, services and with whom Employee had, alone or in
conjunction with others, contact with or knowledge of, during the twelve months
prior to the termination of his or her employment.  For purposes of this Section 7(c),
Employee had contact with or knowledge of a customer if (i) Employee had
business dealings with the customer on behalf of Employer or its subsidiaries
or affiliates; (ii) Employee was responsible for supervising or
coordinating the dealings between the customer and Employer or its subsidiaries
or affiliates; or (iii) Employee obtained or had access to trade secrets
or confidential information about the customer as a result of Employees
association with Employer or its subsidiaries or affiliates.  (d)Solicitation or Hiring of Employees.During
Employers employment of Employee and for a period of one year following the
termination of Employees employment with Employer for any reason, Employee
will not, on her own behalf or on behalf of any other person or  7


entity, solicit
for employment or hire, directly or indirectly, any employee of Employer or any
of its subsidiaries or affiliates who was employed with Employer or its
subsidiaries or affiliates within the one year period immediately prior to
Employees termination.  8.Work Made for Hire.Employee agrees that any written program materials,
protocols, research papers, other writings, as well as improvements,
inventions, new techniques, programs or products (the Work) made or developed
by Employee within or after normal working hours relating to the business or
activities of Employer or any of its subsidiaries, shall be deemed to have been
made or developed by Employee solely for the benefit of Employer and will be
considered work made for hire within the meaning of the United States
Copyright Act, Title 17, United States Code, which vests all copyright interest
in and to the Work in the Employer.  In the event, however, that any court
of competent jurisdiction finally declares that the Work is not or was not a
work made for hire as agreed, Employee agrees to assign, convey, and transfer
to the Employer all right, title and interest Employee may presently have or
may have or be deemed to have in and to any such Work and in the copyright of
such work, including but not limited to, all rights of reproduction,
distribution, publication, public performance, public display and preparation
of derivative works, and all rights of ownership and possession of the original
fixation of the Work and any and all copies. Additionally, Employee agrees to
execute any documents necessary for Employer to record and/or perfect its
ownership of the Work and the applicable copyright.  9.Property of Employer.Employee
agrees that, upon the termination of Employees employment with Employer,
Employee will immediately surrender to Employer all property, equipment, funds,
lists, books, records and other materials of Employer or its controlled
subsidiaries or affiliates in the possession of or provided to Employee.  10.Special
Rules for Compliance with Code Section 409A.This Section 10 serves to ensure
compliance with applicable requirements of Section 409A of the Internal
Revenue Code (the Code).  Certain
provisions of this Section 10 modify other provisions of this
Agreement.  If the terms of this Section 10
conflict with other terms of the Agreement, the terms of this Section 10
control.  (a)Timing of Certain Payments.Payments and benefits specified under this
Agreement shall be paid at the times specified as follows:  (i)Accrued
Payments at Termination. 
Sections 6(a)  (d) of this Agreement and Section I.1 (ii) of
the Amendment No. 1 to the Employment Agreement relating to Change in
Control (the CIC Amendment) require payment of amounts earned but unpaid or
accrued at the date of Employees termination. 
Unless the amount is payable under an applicable plan, program or
arrangement on explicit terms providing for a delay in payment compliant with
Code Section 409A, these amounts shall be payable at the date the amounts
otherwise would have been payable under the applicable plans, programs and
arrangements in the absence of termination but in no event more than 30 days
after Employees termination of employment (subject to 10(d)).  8


(ii)Gross-Up.  Gross-up payments payable under the CIC
Amendment will be paid as promptly as practicable after the excise tax is
payable by Employee, and in any event must be paid no later than the end of
Employees taxable year next following the taxable year in which Employee
remits the excise tax or related taxes to the taxing authorities; provided,
however, that any gross-up payment will be subject to Section 10(d) if
applicable under Section 409A.  (iii)Expense
Reimbursements.  Any payment under Section 5
or otherwise as an expense reimbursement hereunder must be paid no later than
the end of Employees taxable year next following the taxable year in which
Employee incurred the reimbursable expense.  (iv)Other Payments.  Any other payment or benefit required under
this Agreement to be paid in a lump sum or otherwise to be paid promptly at or
following a date or event shall be paid within five days after the due date,
subject to Section 10(b), (c) and (d) below.  (v)No Influence on Year of
Payment.  In the case of any payment
under the Agreement payable during a specified period of time following a
termination or other event (including any payment for which the permitted
payment period begins in one calendar year and ends in a subsequent calendar year),
Employee shall have no right to elect in which year the payment will be made,
and the Companys determination of when to make the payment shall not be
influenced in any way by Employee.  (b)           Special Rules for
Severance Payments.  In the case of
payments in the nature of continuation of payments under Section 4(a) required
under Section 6(c) (Pre-CIC Severance Payments) and severance
payable under Section I.1(iii) of the CIC Amendment  (the CIC Severance Payments and, with the Pre-CIC
Severance Payment, the Severance Payments), the following rules will
apply:  (i)Separate
Payments.Each monthly
installment of the Pre-CIC Severance Payments shall be deemed to be a separate
payment for all purposes, including for purposes of Section 409A.  The portion of the CIC Severance Payments
that exceeds the Pre-CIC Severance Payments (or the present value thereof, if
such present valuing is required to comply with Section 409A), and the
portion attributable to inclusion of Target Bonus in the calculation of CIC
Severance Payments (or, if so required, the present value thereof) as compared
to Pre-CIC Severance Payments, shall be deemed to be a separate payment for all
purposes, including for purposes of Section 409A (the Separate Lump Sum).  (ii)Severance Payment
Timing Rules.  Each
installment of Pre-CIC Severance Payments shall be treated as follows for
purposes of Section 409A:  (A)Installments payable during
the year of termination and by March 15 of the year following termination
shall, to the maximum extent possible, be deemed to  9


constitute a short-term deferral under Treasury Regulation § 1.409A-1(b) (4);  (B)  Installments payable during the period within six months
after termination, to the extent not covered by Section 10(b)(ii)(A),
shall, to the maximum extent possible, be deemed to constitute amounts payable
under the two-year/two-times exclusion from being a deferral of compensation
under Treasury Regulation § 1.409A-1(b)(9)(iii);  (C)  To the extent that the two-year/two-times exclusion from
being a deferral of compensation under Treasury Regulation § 1.409A-1(b)(9)(iii) has
not been fully applied by virtue of Section 10(b)(ii)(B), installments
payable as Pre-CIC Severance Payments shall be excluded, to the maximum extent
possible, by such two-years/two-times exclusion (applied in the reverse order
of payment of the installments  that is, to the latest installments first);
and  (D) All installments of the Pre-CIC Severance Payment not covered
by Section 10(b)(ii)(A), (B) and (C) shall be paid at the
applicable installment payment date in compliance with Section 409A,
except that any such payment shall be subject to the six-month delay rule of
Section 10(d).  The portions of the CIC Severance Payments that correspond to the
Pre-CIC Severance Payments (that is, deemed to be the same payment for purposes
of Section 409A) shall be governed by Section 10(b)(ii)(A)  (D) above,
provided that amounts of the CIC Severance Payments corresponding to Pre-CIC
Severance Payments covered by Section 10(b)(ii)(A), (B), and (C) above
shall be payable as a lump sum within five days after termination of
employment.   The Separate Lump Sum shall
be treated as follows for purposes of Section 409A:  (E)The Separate
Lump Sum shall, to the maximum extent possible, be deemed to constitute a
short-term deferral under Treasury Regulation § 1.409A-1(b) (4);  (F)  To the extent that the two-year/two-times exclusion from
being a deferral of compensation under Treasury Regulation § 1.409A-1(b)(9)(iii) has
not been fully applied by virtue of Section 10(b)(ii)(B) and (C), the
Separate Lump Sum, to the extent not covered by Section 10(b)(ii)(E),
shall, to the maximum extent possible, be deemed to constitute amounts payable
under the two-year/two-times exclusion; and  (G)  Any portion of the Separate Lump Sum not covered by Section 10(b)(ii)(E) and  (F) shall be paid within five days after
the qualifying termination of employment in compliance with Section 409A,
except that any such payment shall be subject to the six-month delay rule and
other provisions of Section 10(d) and except to the extent that the
Separate Lump Sum is not deemed to be a valid separate payment from amounts
governed by Section 10(b)(ii)(D).  Any portions of the CIC Severance Payments corresponding to Pre-CIC
Severance Payments governed by Section 10(b)(ii)(D) shall be payable,
subject to Section 10(d), in a lump sum within five days after the
qualifying termination of employment if such termination has occurred within
two years following a change in the ownership of the Company, a change in
effective control of the Company, or a change in the ownership  10


of a substantial portion of the assets of the Company as defined in
Treasury Regulation § 1.409A-3(i)(10) (a 409A Change in Control),
and in any other case shall be payable at the applicable time under Section 10(b)(ii)(D).  (c)           Special Rules for
Other Payments.  With respect to
amounts payable under Section I.1 (ii) of the CIC Amendment (relating
to incentive awards), the following rules will apply:  (i)Separate
Payments.  The amounts
payable thereunder shall each be deemed to be a separate payment for all
purposes, including for purposes of Section 409A (subject to any further
designation of separate payments explicitly made in any separately identifiable
plan or arrangement for purposes of Section 409A).  (ii)Payment Timing
Rules.  A payment referenced in Section 10(c)(i) shall
be payable as a lump-sum payment within five days after termination of
employment if and to the extent that (A) the separate payment constitutes
short-term deferral under Treasury Regulation § 1.409A-1(b)(4), (B) the
amount of the separate payment  not
covered by Section 10(c)(ii)(A) can be paid under the two-year/two-times
exclusion from being a deferral of compensation under Treasury Regulation §
1.409A-1(b)(9)(iii), after first applying such exclusion under Section 10(b)(ii),
(C) the separate payment is covered by any other applicable exclusion or
exemption under Treasury Regulation § 1.409A-1(b)(9) (provided that the
exclusion under subsection (b)(9)(v)(D) shall be used only to the extent
not relied upon for other payments or benefits) and (D), the six-month delay rule in
Section 10(d) does not apply to the separate payment (except as
otherwise provided in Section 10(c)(iii)). 
Any other such separate payment (i.e., amounts subject to the six-month
delay rule) shall be subject to the six-month delay rule of Section 10(d),
subject to Section 10(c) (iii). 
Any delay in payment under the six-month delay rule shall not limit
Employees rights under this Agreement to not forfeit a specified item of
compensation as a result of Employees termination.  (iii)Payments of
409A Deferrals For a Termination Not Within Two Years After a 409A Change in
Control.  If a payment referenced in Section 10(c)(ii) is
a direct payment or a substitute or replacement for a right to payment (the Original
Payment Right) that constitutes a deferral of compensation under Section 409A,
and if either (A) the Change in Control does not involve a 409A Change in
Control, or (B) Employees termination triggering payments hereunder did
not occur within the two-year period following a 409A Change in Control, then
such payments (i.e., payments that constitute deferrals under Section 409A)
must be paid at the times and in the form applicable to a separation from
service under the terms of the Original Payment Right, subject to Section 10(d).   If in no circumstances was such payment
payable upon a separation from service under the Original Payment Right, then
this Section 10(c)(iii) shall not apply.  (d)           Six-Month Delay Rule.  11


(i)General Rule.  The six-month delay rule will apply to
payments and benefits under the Agreement if all of the following conditions
are met:  (A)Employee is a key employee (as defined in Code Section 416(i) without
regard to paragraph (10) thereof) for the year in which the termination
occurs.  The Company will determine
status of key employees annually, under administrative procedures applicable
to all Section 409A plans and arrangements and applied in accordance with
Treasury Regulation § 1.409A-1(i).  (B)The Companys stock is publicly traded on an
established securities market or otherwise.  (C)The payment or benefit in question is a deferral of
compensation and not excepted, exempted or excluded from being such by the
short-term deferral rule, or the two-years/two-times rule in Treasury
Regulation § 1.409A-1(b)(9)(iii), or any other exception, exemption or
exclusion; provided, however, that the exclusion under Treasury Regulation
§ 1.409A-1(b)(9)(v)(D) shall apply only if and to the extent that it
is not necessary to apply to any other payment or benefit payable within six
months after Employees termination.  (ii)Effect of Rule.  If it applies, the six-month delay rule will
delay a payment or benefit which otherwise would be payable under this
Agreement within six months after Employees separation from service.  (A)Any delayed payment or benefit shall be paid on the
date six months after Employees separation from service.  (B)During the six-month delay period, accelerated
payment will occur in the event of the Employees death but not for any other
reason (including no acceleration upon a Change in Control), except for
accelerations expressly permitted under Treasury Regulation § 1.409A-1  A-6.  (C)Any payment that is not triggered by a termination,
or is triggered by a termination but would be made more than six months after
the termination (without applying this six-month delay rule), or would be
payable at a fixed date not tied to termination that is earlier than the
expiration of the six-month delay period, shall be unaffected by the six-month
delay rule.  (iii)Limit to
Application of Six-Month Delay Rule.  If the terms of this Agreement or other plan
or arrangement or document relating to this Agreement or payments hereunder
impose this six-month delay rule in circumstances in which it is not
required for compliance with Section 409A, those terms shall not be given
effect.  (e)           Other Provisions.  12


(i)Good Reason.  Termination for Good Reason as defined
under the CIC Amendment  and termination
without cause under the related rules governing constructive termination
not for cause are intended to qualify as involuntary separations within the
meaning of Treasury Regulation § 1.409A-1(n)(2)(i), and shall be so construed and
interpreted.  (ii)Non-transferability.  No right to any payment or benefit under this
Agreement shall be subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by Employees
creditors or creditors of any of Employees beneficiaries.  (iii)No Acceleration.  The timing of payments and benefits under the
Agreement which constitute a deferral of compensation under Code Section 409A
may not be accelerated to occur before the time specified for payment
hereunder, except to the extent permitted under Treasury Regulation
§ 1.409A-3(j)(4) or as otherwise permitted under Code Section 409A
without Employee incurring a tax penalty.  (iv) Timing Relating to Release.  Other provisions of this Agreement (including
this Section 10) notwithstanding, if Employee is obligated to execute a
release, non-competition, or other agreement as a condition to receipt of a
payment hereunder, the Company will supply to Employee a form of such release
or other document not later than the date of Employees termination, which must
be returned within the time period required by law and must not be revoked by
Employee within the applicable time period in order for Employee to satisfy any
such condition, such that it becomes legally effective.  If any amount payable during a fixed period
following Employees termination is subject to a requirement or condition
requiring Employees execution of a release (including any case in which such
fixed period would begin in one year and end in the next), the Company, in
determining the time of payment of any such amount, will not be influenced by
the timing of any action by Employee including execution of such a release or
other document and expiration of any revocation period.  In particular, the Company will be entitled
in its discretion to deposit any payment hereunder in escrow at any time during
such fixed period, so that such deposited amount is constructively received and
taxable income to Employee upon deposit (it may be constructively received even
in the absence of such deposit) but with distribution from such escrow
remaining subject to Employees execution and non-revocation of such release or
other document.  (v)Definition of
Termination of Employment.  For
purposes of this Agreement, the term termination of employment shall mean a
separation from service as defined in Treasury Regulation § 1.409A-1(h);
provided, however, that if a date for termination of employment is designated
by the Company but Employee has a separation from service prior to such
designated date, the designated termination date shall be deemed the date of
termination for any compensation payable under this Agreement that would fully
qualify for the short-term deferral exception under Treasury Regulation §  13


1.409A-1(b)(4) and/or the two-year/two-times exclusion from
being a deferral of compensation under Treasury Regulation § 1.409A-1(b)(9)(iii) under
both circumstances (i.e., assuming the separation from service date was the
termination date hereunder or that the designated termination of employment
date was the termination date hereunder).  (vi)Continued
Medical Coverage.Any continued medical coverage following
termination of employment, to the extent provided under Section 6 or any
other provision of this Agreement, if and to the extent such medical coverage
(or the Companys contributions or reimbursement of such coverage) represents
taxable income to Employee, is intended to qualify as excluded from being a
deferral of compensation under Treasury Regulation § 1.409A-1(b)(9)(v)(B), and
the rights to such coverage shall be limited to the extent necessary to qualify
thereunder.  (vii)References to
Other Plans.References
in the Agreement to the obligation of the Company to pay amounts under other
plans, including Employees vested portion of any Magellan deferred
compensation or other benefit plan, shall not be construed to modify the timing
of payment, which shall be governed by such other plans..  11.          Remedies.An actual or threatened violation by Employee of the covenants and
obligations set forth in Sections 7, 8 and 9 will cause irreparable harm to
Employer or its controlled subsidiaries or affiliates and that the remedy at
law for any such violation will be inadequate. Employee agrees, therefore, that
Employer or its controlled subsidiaries or affiliates will be entitled to
appropriate equitable relief, including, but not limited to, a temporary
restraining order and a preliminary injunction, without the necessity of
posting a bond.  Employee will also be
entitled to seek equitable relief against Employer in connection with
enforcement of the covenants and obligations set forth in Sections 7, 8 and 9.  The provisions of Sections 4, 5, 6, 7, 8 and
9 will survive the termination of this Agreement in accordance with the terms
set forth in each Section.  12.          Arbitration.Except for an action for injunctive relief as described in Section 11,
any disputes or controversies arising under this Agreement will be settled by
arbitration in Avon, Connecticut in accordance with the rules of the
American Arbitration Association relating to the arbitration of employment
disputes.  The determination and findings
of such arbitrators will be final and binding on all parties and may be
enforced, if necessary, in any court of competent jurisdiction.  The costs and expenses of the arbitration
shall be paid for by Employer, but each party shall pay its own attorneys fees
and other litigation costs.  Employees
Initials  13.          Notices.Any notice or request required or permitted to be given to any party
will be given in writing and, excepting personal delivery, will be given at the
address set forth below or at such other address as such party may designate by
written notice to the other party to this Agreement:  14


To Employee:
  
  Name: Karen S.
  RohanAddress on fileTo Employer:
  
  Magellan Health
  Services, Inc.55 Nod RoadAvon, CT 06001Attention:
  General Counsel  Each notice given
in accordance with this Section will be deemed to have been given, if
personally delivered, on the date personally delivered; if delivered by
facsimile transmission, when sent and confirmation of receipt is received; or,
if mailed, on the third day following the day on which it is deposited in the
United States mail, certified or registered mail, return receipt requested,
with postage prepaid, to the address last given in accordance with this
Section.  14.          Headings.The
headings of the sections of this Agreement have been inserted for convenience
of reference only and should not be construed or interpreted to restrict or
modify any of the terms or provisions of this Agreement.  15.          Severability.If any provision of this Agreement is held to be illegal, invalid, or
unenforceable under present or future laws effective during the term of this
Agreement, such provision will be fully severable and this Agreement and each
separate provision will be construed and enforced as if such illegal, invalid
or unenforceable provision had never comprised a part of this Agreement, and
the remaining provisions of this Agreement will remain in full force and effect
and will not be affected by the illegal, invalid or unenforceable provision or
by its severance from this Agreement.  In
addition, in lieu of such illegal, invalid or unenforceable provision, there
will be added automatically, as a part of this Agreement, a provision as
similar in terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable, to the extent such reformation is
allowable under applicable law.  16.          Governing Law.This Agreement and all issues relating to the validity, interpretation,
and performance will be governed by, interpreted,
and enforced under the laws of the State of Connecticut.  17.          Binding Effect.This Agreement and Amendment No. 1 hereto will be binding upon and
shall inure to the benefit of each party and each partys respective
successors, heirs and legal representatives. 
This Agreement may not be assigned by Employee to any other person or
entity but may be assigned by Employer to any subsidiary or affiliate of
Employer or to any successor to or transferee of all, or any part, of the stock
or assets of Employer.  18.          Employer Policies, Regulations, and
Guidelines for Employees.Employer may
issue policies, rules, regulations, guidelines, procedures or other material,
whether in the form of handbooks, memoranda, or otherwise, relating to its
Employees.  These materials are general  15


guidelines for
Employees information and will not be construed to alter, modify, or amend
this Agreement for any purpose whatsoever.  19.           Background Check, Drug
Screening, Employment Eligibility.This
Agreement  and Employees employment
hereunder are subject to and conditioned upon: (i) satisfactory completion
of a background investigation of Employee by Employer at Employers expense; (ii) Employees
receipt of a drug screening test conducted in accordance with Employers
customary practice for all new employees, with results acceptable to Employer
in accordance with such practice, to be arranged by Employer and Employer at
Employers expense; (iii) Employee shall complete an Officers
Questionnaire containing answers satisfactory to Employer, and (iv) Employee  shall provide Employer documentation
indicating  her eligibility to work
within the United States pursuant to The Immigration Reform and Control Act of
1986.   Notwithstanding anything herein
to the contrary, the effective date of this Agreement shall be the date on
which the conditions contained in this Section 19 are fulfilled.  20.           Indemnification.   Employer shall indemnify Employee  for her services as an officer of Employer to
the fullest extent permitted by Delaware law, subject to all requirements and
conditions of such law.  21.          Entire Agreement.This Agreement and Amendment No. 1 embodies the entire agreement
and understanding between the parties with respect to its subject matter and
supersedes all prior agreements and understandings, whether written or oral,
relating to its subject matter, unless expressly provided otherwise within this
Agreement.  No amendment or modification
of this Agreement will be valid unless made in writing and signed by each of
the parties.  No representations,
inducements, or agreements have been made to induce either Employee or Employer
to enter into this Agreement, which are not expressly set forth within this
Agreement.    Employee and Employer
acknowledge and agree that Employers controlled subsidiaries and affiliates
are express third party beneficiaries of this Agreement.  IN
WITNESS WHEREOF,
the parties hereto have executed this Agreement on the     day of 
August, 2009 but shall not become effective until the conditions
contained in Section 19 have been fulfilled.   MAGELLAN
  HEALTH SERVICES, INC.Employee
  
  Employer/s/ Karen S.
  RohanKaren S. Rohan
  By:
  /s/ René LererName: René
  Lerer, M.D.Title: Chairman
  and Chief Executive  16