prsc_stockoptionagreemen






                     THE PROVIDENCE SERVICE CORPORATION                        NON-QUALIFIED STOCK OPTION   To:  [●]   Date of Grant:  [●]         You are hereby granted an option, effective as of the date hereof, to purchase up to [●]  shares of common stock, $.001 (“Common Stock”), of The Providence Service Corporation, a  Delaware corporation, (the “Company”) at the price of $[●] per share, the closing price of the  Common Stock on the Nasdaq Global Select Market on the Date of Grant, pursuant to the terms  and conditions set forth below, and pursuant to the Company’s 2006 Long-Term Incentive Plan,  as amended in 2016 (the “Plan”) as modified herein.  Capitalized terms used but not defined  herein shall have the meanings ascribed to such terms in the Plan.         This option shall terminate and is not exercisable after 11:59 p.m. eastern time on [●] (the  “Scheduled Expiration Date”), except as hereinafter provided.         The option granted hereunder shall be subject to vesting as follows:             (a) If you remain continuously Employed (as defined in the Plan) with the               Company, its Affiliate or successor through the applicable Vesting Date, your               respective options shall become vested on the Vesting Dates set forth in the               Vesting Schedule below and exercisable on or after such date prior to the               Scheduled Expiration Date.                                         Vesting Schedule                            Vesting Dates      Number of Options Vest                              [●]                     [●]                              [●]                     [●]                              [●]                     [●]             (b) If your option remains outstanding and unvested upon the occurrence of a              Change in Control Termination, such option shall become fully vested upon the              occurrence of such Change in Control Termination.  As used herein, “Change in              Control Termination” means a termination of your Employment by the Company              or its successor without Cause within thirty (30) days prior or one (1) year after              the occurrence of a Change in Control.         Notwithstanding anything to the contrary contained in the Plan, upon any termination of  your Employment with the Company or its Affiliate (whether such termination be voluntary or  involuntary), (i) any portion of your option that has vested as of such termination (including any  portion that becomes vested in connection with a Qualifying Termination or Change in Control  Termination) will be exercisable for ninety (90) days following such termination and (ii) any  portion of your option that has not vested as of such termination shall be immediately forfeited  without consideration therefor and without any further action on the part of any person.   “Qualifying Termination” means a termination of your Employment by the Company or its  Affiliate without Cause.                                             





 






          Notwithstanding anything to the contrary contained in the Plan, if your option remains  outstanding as of immediately prior to a Change in Control, the Company shall take all actions  necessary or appropriate to ensure that your option shall be honored or assumed, or new rights  substituted therefor by the acquiror of the Company or its Affiliate in such Change in Control in  the form of a cash- or equity-based award (such honored, assumed or substituted option, an  “Alternative Award”) of substantially equivalent terms and conditions, as provided below, by  the entity for which you will be employed immediately following the Change in Control (or the  parent or a subsidiary of such entity); provided that any such Alternative Award must provide  that if your employment is terminated upon or following such Change in Control other than for  Cause following the Change in Control, your rights under such Alternative Award shall become  fully vested and payable in accordance with its otherwise applicable terms.  In furtherance of the  foregoing, any such Alternative Award granted to you must:            (a) provide you with rights and entitlements substantially equivalent to or better than              the rights and entitlements applicable under this option, including, but not limited              to, an identical or better vesting schedule and identical or better timing and              methods of exercise and payment (including all provisions applicable in respect              of this option that provide for accelerated vesting);                         (b) provide for settlement in cash or, only if the acquiror then has publicly-traded              securities, in publicly-traded securities issued by the acquiror; and                         (c) have substantially equivalent economic value to this option, as determined by the              Compensation Committee of the Board of Directors of the Company (the              “Committee”) as constituted immediately prior to the Change in Control.         If, as of immediately following the Change in Control, your option has not been  honored, assumed, or substituted by the acquiror of the Company or its Affiliate in such Change  in Control with an award meeting all of the requirements of an Alternative Award as set forth  above, your option shall either (i) if the per-share exercise price of your option exceeds the  value of a share of Common Stock as of the occurrence of such Change in Control, as  determined by the Committee, your option shall be immediately and automatically cancelled  without consideration therefor and without any further action on the part of any person, or (ii) if  the per-share exercise price of your option is less than the value of a share of Common Stock, as  determined by the Committee, as of the occurrence of such Change in Control, your option shall  become fully and immediately vested and the Company shall pay you, within thirty (30) days,  an amount in cash equal to the value of a corresponding number of shares of Common Stock  less the aggregate exercise price of your option, subject to such adjustments as the Committee  may deem necessary to reflect the value of your option.         You may exercise your option granted hereunder by giving written notice to the Secretary  of the Company on forms supplied by the Company at its then principal executive office,  accompanied by payment of the option price for the total number of shares you specify that you  wish to purchase.  The payment may be in any of the following forms: (a) cash, which may be  evidenced by a check and includes cash received from a stock brokerage firm in a so-called  “cashless exercise”; (b) (unless prohibited by the Administrator) certificates representing shares  of Common Stock, which will be valued by the Secretary of the Company at the fair market                                        2       





 






    value per share of the Common Stock (as determined in accordance with the Plan) on the date of  delivery of such certificates to the Company, accompanied by an assignment of the stock to the  Company; or (c) (unless prohibited by the Administrator) any combination of cash and Common  Stock valued as provided in clause (b).  Any transfer of stock in payment of the option price for  the options granted hereunder shall be in a form and substance satisfactory to the Secretary of the  Company, including guarantees of signature(s) and payment of all transfer taxes if the Secretary  deems such guarantees necessary or desirable.         Notwithstanding anything to the contrary contained in the Plan, if you die while  employed by the Company or a Company subsidiary corporation, your executor or  administrator, as the case may be, may, at any time after the date of your death (but in no event  later than the Scheduled Expiration Date), exercise the option as to any shares which you had a  vested right to purchase and did not purchase during your lifetime.  Your executor,  administrator, guardian or custodian must present proof of his or her authority satisfactory to the  Company prior to being allowed to exercise this option.           After the date your Employment is terminated as described in this paragraph, you may  exercise this option only for the number of shares then available for purchase under this option  on the date your Employment terminated.  If you are employed by a Company subsidiary  corporation, your Employment shall be deemed to have terminated on the date your employer  ceases to be a Company subsidiary corporation, unless you are on that date transferred to the  Company or another Company subsidiary corporation.  Your Employment shall not be deemed  to have terminated if you are transferred from the Company to a Company or subsidiary, or  vice versa, or from one Company subsidiary to another Company subsidiary.         In the event of any change in the outstanding shares of the Common Stock of the  Company by reason of a stock dividend, stock split, combination of shares, recapitalization,  merger, consolidation, transfer of assets, reorganization, conversion or what the Administrator  deems in its sole discretion to be similar circumstances, the number and kind of shares subject to  this option and the option price of such shares shall be appropriately adjusted in a manner to be  determined in the sole discretion of the Administrator, whose decision shall be final, binding  and conclusive in the absence of clear and convincing evidence of bad faith.         This option is not transferable otherwise than by will or the laws of descent and  distribution, and is exercisable during your lifetime only by you, including, for this purpose, your  legal guardian or custodian in the event of Disability.  Until the option price has been paid in full  pursuant to due exercise of this option and the purchased shares are delivered to you, you do not  have any rights as a shareholder of the Company.  The Company reserves the right not to deliver  to you the shares purchased by virtue of the exercise of this option during any period of time in  which the Company deems, in its sole discretion, that such delivery would violate a federal, state,  local or securities exchange rule, regulation or law.         Notwithstanding anything to the contrary contained herein, this option is not exercisable  until all the following events occur and during the following periods of time:         (a)   During any period of time in which the Company deems that the exercisability of              this option, the offer to sell the shares optioned hereunder, or the sale thereof, may                                         3       





 






                violate a federal, state, local or foreign law, rule or regulation, or any applicable              securities exchange or listing rule or agreement, or may cause the Company to be              legally obligated to issue or sell more shares than the Company is legally entitled              to issue or sell;         (b)   Until you have paid or made suitable arrangements to pay (which may include              payment through the surrender of Common Stock, unless prohibited by the              Administrator) (i) all federal, state, local and foreign tax withholding required              by the Company in connection with the option exercise and (ii) the employee’s              portion of other federal, state, local and foreign payroll and other taxes due in              connection with the option exercise.         Further, nothing herein guarantees you employment for any specified period of time.   You recognize that, for instance, you may terminate your Employment or the Company or any of  its Affiliates may terminate your Employment prior to the date on which your option becomes  vested or exercisable.         You understand and agree that the existence of this option will not affect in any way the  right or power of the Company or its shareholders to make or authorize any or all adjustments,  recapitalizations, reorganizations, or other changes in the Company’s capital structure or its  business, or any merger or consolidation of the Company, or any issuance of bonds, debentures,  preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the  common shares or the rights thereof, or the dissolution or liquidation of the Company, or any  sale or transfer of all or any part of its assets or business, or any other corporate act or  proceeding, whether of a similar character or otherwise.         Any notice you give to the Company must be in writing and either hand-delivered or  mailed to the office of the General Counsel of the Company.  If mailed, it should be addressed to  the General Counsel of the Company at its then main headquarters.  Any notice given to you will  be addressed to you at your address as reflected on the personnel records of the Company.  You  and the Company may change the address for notice by like notice to the other.  Notice will be  deemed to have been duly delivered when hand-delivered or, if mailed, on the day such notice is  postmarked.         Any dispute or disagreement between you and the Company with respect to any portion  of this option or its validity, construction, meaning, performance or your rights hereunder shall  be settled by arbitration, at a location designated by the Company in accordance with the  Commercial Arbitration Rules of the American Arbitration Association or its successor, as  amended from time to time.  However, prior to submission to arbitration you will attempt to  resolve any disputes or disagreements with the Company over this option amicably and  informally, in good faith, for a period not to exceed two weeks.  Thereafter, the dispute or  disagreement will be submitted to arbitration.  At any time prior to a decision from the  arbitrator(s) being rendered, you and the Company may resolve the dispute by settlement.  You  and the Company shall equally share the costs charged by the American Arbitration Association  or its successor, but you and the Company shall otherwise be solely responsible for your own  respective counsel fees and expenses.  The decision of the arbitrator(s) shall be made in writing,  setting forth the award, the reasons for the decision and award and shall be binding and                                         4       





 






    conclusive on you and the Company.  Further, neither you nor the Company shall appeal any  such award.  Judgment of a court of competent jurisdiction may be entered upon the award and  may be enforced as such in accordance with the provisions of the award.         This option shall be subject to the terms of the Plan as modified herein, which terms are  hereby incorporated herein by reference and made a part hereof.  In the event of any conflict  between the terms of this option and the terms of the Plan in effect on the date of this option, the  terms of this Agreement shall govern.  This Agreement constitutes the entire understanding  between the Company and you with respect to the subject matter hereof and no amendment,  supplement or waiver of this Agreement, in whole or in part, shall be binding upon the Company  unless in writing and signed by an authorized officer of the Company (other than you).  This  option and the performances of the parties hereunder shall be construed in accordance with and  governed by the laws of the State of Delaware.                                          5       





 






          Please sign the copy of this option and return it to the Company’s Secretary, thereby  indicating your understanding of and agreement with its termination and conditions.                                             THE PROVIDENCE SERVICE CORPORATION                                                                                                                                                                                           By:   R. Carter Pate                                   Title:  Interim Chief Executive Officer                     ACKNOWLEDGEMENT         I hereby acknowledge receipt of a copy of the Plan.  I hereby represent that I have read  and understood the terms and conditions of the Plan and of this option.  I hereby signify my  understanding of, and my agreement with, the terms and conditions of the Plan and of this  option.  I agree to accept as binding, conclusive, and final all decisions or interpretations of the  Administrator concerning any questions arising under the Plan with respect to this option.  I  accept this option in full satisfaction of any previous written or verbal promise made to me by  the Company or any of its Affiliates with respect to option or stock grants.      Date                                                                                                                                          Signature of Optionee                                    Name: