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                                                                    Exhibit 10.2

                         PROVIDENCE SERVICE CORPORATION
                         STOCK OPTION AND INCENTIVE PLAN

     1.   PURPOSE

          The purpose of the Providence Service Corporation Stock Option and
Incentive Plan (the "Plan") is to provide a means through which Providence
Service Corporation (the "Company"), and its Subsidiaries may attract able
persons to enter the employ of the Company and its Subsidiaries and to provide a
means whereby those key employees and other individuals upon whom the
responsibilities for the successful administration and management of the Company
and its Subsidiaries rest, and whose present and potential contributions to the
welfare of the Company and its Subsidiaries are of importance, can acquire and
maintain stock ownership, thereby strengthening their commitment to the welfare
of the Company and its Subsidiaries.

          A further purpose of the Plan is to provide such key employees and
other individuals with additional incentive and reward opportunities designed to
enhance the profitable growth of the Company and its Subsidiaries. So that the
appropriate incentive can be provided, the Plan provides for granting Incentive
Stock Options, nonqualified Options, Stock Appreciation Rights, or any
combination of the foregoing.

     2.   DEFINITIONS

          The following definitions shall be applicable throughout the Plan:

          a.   "Award" means, individually or collectively, any Option or Stock
     Appreciation Right.

          b.   "Award Period" means a period of not less than three years.

          c.   "Board" means the Board of Directors of the Company.

          d.   "Code" means the Internal Revenue Code of 1986 and any
     regulations issued thereunder, as the same may be amended from time to
     time.

          e.   "Committee" means the committee of the Board described in Section
     4.

          f.   "Company" means Providence Service Corporation.

          g.   "Date of Grant" means the date on which the granting of an Award
     is authorized by the Committee or such later date as may be specified by
     the Committee in such authorization.

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          h.   "Eligible Individual" means any employee or other individual who
     satisfies all of the requirements of Section 6.

          i.   "Fair Market Value" means as follows:

               (i)   For periods during which the Stock is not regularly traded
          on an established securities market, it shall be the value of a share
          of Stock as determined by the Board in any manner as it may deem
          appropriate, provided that such value shall be determined in good
          faith and without regard to any restriction other than a restriction
          which, by its terms, will never lapse.

               (ii)  For periods during which the Stock is regularly traded on
          an established securities market, it shall be the average of the
          highest price and the lowest price at which the Stock shall have been
          reported as sold on a generally recognized stock exchange (the
          "Exchange") or quoted pursuant to an inter-dealer quotation system of
          a national securities association registered with the United States
          Securities and Exchange Commission (the "Quotation System") on a
          specified date;

          j.   "Holder" or "Grantee" means an Eligible Individual who has been
     granted an Award.

          k.   "Incentive Stock Option" means an Option within the meaning of
     Section 422 of the Code.

          l.   "Normal Termination" means Termination:

               (i)   Of an employment relationship with the Company (or
          Subsidiary) at retirement pursuant to the Company (or Subsidiary)
          retirement plan covering the Holder,

               (ii)  Of an employment relationship with the Company (or
          Subsidiary) for permanent and total disability, or

               (iii) Of an employment or other relationship for any other
          reason, other than a Termination "for cause", as determined in the
          sole discretion of the Committee, provided that the Committee has
          approved, in writing, the continuation of any Option outstanding on
          the date of the Holder's Termination.

          m.   "Option" means an Award granted under Section 7 of the Plan.

          n.   "Plan" means the Providence Service Corporation Stock Option and
     Incentive Plan, as set forth herein and as the same may be amended from
     time to time.

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          o.   "Stock" means the class of common stock of the Company designated
     for participation hereunder.

          p.   "Stock Appreciation Right" or "SAR" means an Award granted
     pursuant to Section 8 of the Plan.

          q.   "Subsidiary" means any corporation of which a majority of the
     outstanding voting stock or voting power is beneficially owned directly or
     indirectly by the Company. A Subsidiary may participate in the Plan,
     provided the Board approves such participation. A Subsidiary participating
     in this Plan shall be deemed to have delegated to the Board all authority
     to amend or terminate this Plan and to appoint the Committee hereunder.

          r.   "Termination" means separation from the employment or other
     relationship with the Company or any of its Subsidiaries for any reason
     other than death.

          s.   "Valuation Date" the last day of the fiscal year of the Company
     and such other dates as the Committee shall determine in its discretion.

     3.   EFFECTIVE, DURATION AND SHAREHOLDER APPROVAL

          The Plan will become effective on the date it is approved by the
shareholders of the Company holding a majority of the Company's voting stock.
Awards may be made as provided herein for a period of 10 years after such date.

          The Plan shall continue in effect until all matters relating to the
payment of Awards and administration of the Plan have been settled.

     4.   ADMINISTRATION

          The Committee shall administer the Plan. The Committee shall consist
of at least one individual who is/are member(s) of the Board provided that, when
and if Awards are to be made to officers or directors of the Company or its
Subsidiaries who are subject to the provisions of Section 16 of the Securities
Exchange Act of 1934 (the "1934 Act"), the Committee shall consist of at least
two individuals who are members of the Board and who are "disinterested
persons", as such term is defined in Rule 16b-3 promulgated under the 1934 Act,
or any successor provision, except as may be otherwise permitted under Section
16 of the 1934 Act and the regulations and rules promulgated thereunder. A
majority of the Committee shall constitute a quorum. The acts of a majority of
the members present at any meeting at which a quorum is present and acts
approved in writing by a majority of the Committee in lieu of a meeting shall be
deemed the acts of the Committee. No member of the Committee, while serving as
such, shall grant Awards or rule on matters pertaining to an Award for himself
or herself, with such determinations to be made by the remaining members of the
Committee, if any, or another individual or individuals as appointed by the
Board for such purpose. Except as otherwise provided in the Plan, the Committee
shall have exclusive power, authority and discretion to:

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          a.   Select Eligible Individuals to participate in the Plan.

          b.   Determine the Awards to be made to each Eligible Individuals so
     selected.

          c.   Determine the time or times when Awards will be made.

          d.   Determine the conditions (including the performance requirements)
     to which the payment of Awards may be subject.

          e.   Prescribe the form or forms evidencing Awards.

          f.   Establish, adopt or revise such rules and regulations as it may
     deem necessary or advisable for the administration of the Plan.

          g.   Make all determinations relating to the Plan.

          The Committee's interpretation of the Plan or any Awards granted
pursuant thereto and all decisions and determinations by the Committee with
respect to the Plan shall be final, binding, and conclusive on all parties.

     5.   SHARES SUBJECT TO THE PLAN

          The Committee may, from time to time, grant Awards to one or more
Eligible Individuals; provided, however, that:

          a.   Subject to Section 10, the aggregate number of shares of Stock
     made subject to Awards under this Plan may not exceed 500,000.

          b.   Shares shall be deemed to have been used in payment of SARs only
     if such shares are actually delivered to the Holder.

          c.   To the extent that an Award lapses or the rights of its Holder
     terminate, any shares of Stock subject to such Award shall again be
     available for the grant of an Award, but only if the Holder has not
     received any benefits of ownership from such shares prior to the time of
     such lapse or termination. A Holder shall not be deemed to have received
     benefits of ownership with respect to shares subject to an Award merely
     because the Holder has voting rights with respect to such shares or where
     dividends accumulate with respect to such shares if such dividends are
     forfeited by the Holder when and if the underlying shares of Stock are
     forfeited.

          d.   Stock delivered by the Company in settlement under the Plan may
     be authorized and unissued Stock, Stock held in the treasury of the
     Company, Stock purchased on the open market, or Stock purchased by private
     purchase at prices no higher than the Fair Market Value as defined in
     Section 2(i) at the time of purchase.

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     6.   ELIGIBILITY

          Officers and key employees of the Company and its Subsidiaries and
other individuals who, in the opinion of the Committee, are mainly responsible
for the continued growth and development and financial success of the business
of the Company or one or more of its Subsidiaries shall be eligible to be
granted Awards under the Plan; provided, however, that only employees of the
Company or a Subsidiary shall be eligible to receive Incentive Stock Options
hereunder. Subject to the provisions of the Plan, the Committee shall, from time
to time, select from such eligible persons those to whom Awards shall be granted
and determine the size or amount of each such Award.

     7.   STOCK OPTIONS

          One or more Options can be granted to any Eligible Individual. Each
Option so granted shall be subject to the following conditions:

          a.   Option price. The option price per share of Stock shall be set by
     the grant, provided that in the case of an Incentive Stock Option, the
     option price per share shall not be less than (i) Fair Market Value at the
     Date of Grant, or (ii) in the case of a Grantee owning as of the Date of
     Grant stock possessing more than ten percent (10%) of the total combined
     voting power of all classes of stock of the Company or of its parent or any
     Subsidiary, an amount which is one hundred ten percent (110%) of the Fair
     Market Value of the Stock on the Date of Grant.

          b.   Form of payment. Upon the exercise of all or any part of an
     Option, the option price shall be payable in full by check, in shares of
     Stock owned by the Holder to the extent permitted by law, or in any
     combination thereof at the election of the Holder. Payment of the option
     price with shares of Stock owned by the Holder shall be made by assigning
     and delivering such shares to the Company. The shares shall be valued at
     Fair Market Value on the exercise date of the Option. Except as otherwise
     provided by law or the terms of the Stock Option Agreement, the option
     price may also be paid by the Holder directing the Company to withhold from
     the shares of Stock that would otherwise be issued upon exercise of the
     Option that number of shares having a Fair Market Value on the exercise
     date equal to the option price. A Holder who elects to exercise all or any
     part of his Option by directing the Company to withhold shares subject to
     the exercised Option shall notify the Company in writing of his intent to
     do so. A Holder electing to pay the option price in such manner shall
     receive the number of shares of Stock determined pursuant to the following
     formula:

          Number      Number of Shares     Fair Market Value         Option
            of    =   as to which the  x   on Exercise Date     -    Price
          Shares      Option is to be    ----------------------------------
                         exercised                 Fair Market Value
                                                   On Exercise Date

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          c.   Other terms and conditions. If the Holder has not died or
     terminated, the Option shall become exercisable in such manner and within
     such period or periods, not to exceed 10 years from its Date of Grant, as
     set forth in the Stock Option Agreement upon payment in full, in any manner
     permitted under Section 7 (b). Except as otherwise provided in this Plan or
     in the applicable Stock Option Agreement, any Option may be exercised in
     whole or in part at any time. An Option may lapse under the following
     circumstances:

               (i)   Prior to the Holder's Termination for any reason, the
          Option shall lapse ten (10) years after it is granted, unless an
          earlier time is set by the grant.

               (ii)  If the Holder separates from his employment or other
          relationship other than by Normal Termination, it shall lapse at the
          time of Termination.

               (iii) If the Holder's Termination is a Normal Termination, it
          shall lapse three months after his Normal Termination.

               (iv)  If the Holder dies within the option period or within three
          months after Normal Termination, the Option shall lapse unless it is
          exercised within the option period and in no event later than 15
          months after the date of the Holder's death. Upon the Holder's death,
          any exercisable Options may be exercised by the Holder's legal
          representative or representatives, by the person or persons entitled
          to do so under the Holder's last will and testament or, if the Holder
          shall fail to make testamentary disposition of such Option or shall
          die interstate, by the person or persons entitled to receive said
          Option under the applicable laws of descent and distribution.

          d.   Stock Option Agreement. Each Option granted under the Plan shall
     be evidenced by a "Stock Option Agreement" between the Company and the
     Holder of the Option containing such provisions as may be determined by the
     Committee, subject to the following terms and conditions.

               (i)   Any Option or portion thereof that is exercisable shall be
          exercisable for the full amount or for any part thereof, except as
          otherwise determined by the grant.

               (ii)  Every share purchased through the exercise of an Option
          shall be paid for in full at the time of the exercise. Each Option
          shall cease to be exercisable, as to any share, when the Holder
          purchases the share or exercises a related SAR or when the Option
          lapses.

               (iii) Options shall not be transferable by the Holder except by
          will or the laws of descent and distribution and shall be exercisable
          during the Holder's lifetime only by him.

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               (iv)  Notwithstanding any provision, in the event of a public
          tender for all or any portion of the Stock or in the event that a
          proposal to merge, consolidate, or otherwise combine with another
          company is submitted for shareholder approval, the Committee may in
          its sole discretion declare previously granted Options to be
          immediately exercisable.

          e.   Individual Dollar Limitations. The aggregate Fair Market Value
     (determined as of the time the Option is granted) of all shares of Stock
     with respect to which Incentive Stock Options are first exercisable by any
     Holder in any calendar year may not exceed $100,000.

     8.   STOCK APPRECIATION RIGHTS

          Any Option granted under the Plan may include a SAR, either at the
time of grant or by amendment. SARs may also be separately granted pursuant to
an Award. Such SARs shall be subject to such terms and conditions not
inconsistent with the Plan as the Committee shall impose, including the
following:

          a.   Right to exercise. A SAR issued pursuant to an Option shall be
     exercisable to the extent the Option is exercisable and only with the
     consent of the Committee. A SAR which is not issued pursuant to an Option
     shall only be exercisable during the Award period specified in the Stock
     rights agreement. Unless otherwise provided in the Stock rights agreement,
     the Holder's right to exercise any outstanding SARs shall terminate upon
     the Holder's termination of employment with the Company and its
     Subsidiaries for any reason, including but not limited to, resignation,
     discharge, death or disability.

          b.   Failure to exercise. If, on the last day of the option period or
     specified Award period, the Fair Market Value of the Stock exceeds the
     option price or SAR price determined at the time the Award is granted, and
     the Holder has not exercised such SAR, such right shall be deemed to have
     been exercised by the Holder on such last day.

          c.   Payment. An exercisable SAR granted pursuant to an Option shall
     entitle the Holder to surrender unexercised the Option in which it is
     included, or any portion thereof, and to receive in exchange therefor an
     amount equal to the excess of the "value", as hereinafter defined, of one
     share of Stock over the option price per share multiplied by the number of
     shares subject to the Option or portion thereof which is so surrendered.
     Upon exercise of a SAR not issued pursuant to an Option, the Holder shall
     receive Stock and/or cash in an amount equal to that number of shares of
     Stock having an aggregate value equal to the excess of the value of one
     share of Stock over the SAR price specified in the Stock rights agreement
     multiplied by the number of SARs exercised. The Committee may, in its sole
     discretion, elect to have the Company settle its obligation arising out of
     the exercise of a SAR by the payment of cash, the delivery of shares of
     Stock having an aggregate value equal to the amount of the Company's
     obligation as determined pursuant to this Section 8(c), or partially by the
     payment of cash and partially

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     by the delivery of shares. The Committee shall also have the right to place
     such limitations and restrictions on the Company's obligation to make such
     cash payments or deliver shares under SARs as the Committee, in its sole
     discretion, deems to be in the best interest of the Company. The term
     "value" as applied to shares shall be Fair Market Value on the trading day
     next preceding the date on which the SAR is exercised. To the extent that a
     SAR included in an Option is exercised, such Option shall be deemed to have
     been exercised, and shall not be deemed to have lapsed.

          d.   Other limitations. Such other limitations as the Committee and/or
     the Stock Option Agreement or Stock rights agreement shall impose.

     9.   GENERAL

          a.   Government and other regulations. The obligation of the Company
     to make payment of Awards in Stock or otherwise shall be subject to all
     applicable laws, rules, and regulations, and to such approvals by
     government agencies as may be required. The Company shall be under no
     obligation to register under the Securities Act of 1933, as amended (the
     "1933 Act"), any of the shares of Stock paid under the Plan. If the shares
     paid under the Plan may in certain circumstances be exempt from
     registration under the 1933 Act, the Company may restrict the transfer of
     such shares in such manner as it deems advisable to ensure the availability
     of any such exemption.

          b.   Tax withholding. The Company or a Subsidiary, as appropriate,
     shall have the right to deduct from all Awards paid in cash any federal,
     state or local taxes as required by law to be withheld with respect to such
     cash payments and, in the case of Awards paid in Stock, the Holder may be
     required to pay to the Company or a Subsidiary, by check, in shares of
     Stock owned by the Holder to the extent permitted by law, or in any
     combination thereof elected by the Holder, the amount of any such taxes
     which the Company or Subsidiary is required to withhold with respect to
     such Stock. Payment of taxes with shares of Stock owned by the Holder shall
     be made by assigning and delivering such shares to the Company. Such shares
     shall be valued at Fair Market Value on the business day immediately
     preceding the date on which such shares are assigned or delivered. Except
     as otherwise provided by law or the terms of the governing Award agreement,
     any taxes which are required to be withheld with respect to an Award paid
     in Stock may also be paid by the Holder directing the Company to withhold
     from the shares of Stock that would otherwise be issued pursuant to the
     Award, that number of shares having a Fair Market Value on the earlier of
     the date the Award is exercised or the date the Award is paid (the
     "Applicable Date") equal to the taxes due. A Holder who elects to pay any
     taxes due by directing the Company to withhold shares subject to the Award
     shall notify the Company in writing of his intent to do so. A Holder making
     such election shall receive the number of shares of Stock determined
     pursuant to the following formula.

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          Number        Number of         Fair Market Value       Taxes
            of    =   Shares Subject  x   on Applicable Date   -   Due
          Shares        to Award          -----------------------------
                                              Fair Market Value on
                                                 Applicable Date

          c.   Claim to Awards and employment rights. No employee or other
     person shall have any claim or right to be granted an Award under the Plan.
     Neither this Plan nor any action taken hereunder shall be construed as
     giving any employee any right to be retained in the employ of the Company
     or a Subsidiary.

          d.   Beneficiaries. Except as otherwise provided in Section 7, dealing
     with Options, or in the agreement evidencing an Award, any payment of
     Awards due under this Plan to a deceased Holder shall be paid to the
     beneficiary designated by the Holder and filed with the Committee provided
     that if the Holder is married, a designation of a person other than the
     Holder's spouse as his beneficiary with respect to more than 50 percent of
     the Holder's interest in the Award shall not be effective without the
     written consent of the Holder's spouse. If no such beneficiary has been
     designated or survives the Holder, payment shall be made to the person
     entitled thereto under the Holder's will or the laws of descent and
     distribution. Subject to the foregoing, a beneficiary designation may be
     changed or revoked by a Holder at any time provided the change or
     revocation is filed with the Committee.

          e.   Nontransferability. Subject to Sections 7(d) (iii) and 9(d), a
     person's rights and interests under the Plan, including amounts payable,
     may not be assigned, pledged, or transferred, provided that a person's
     rights and interests under the Plan may be assigned, pledged or transferred
     pursuant to a domestic relations order which satisfies the requirements for
     a "qualified domestic relations order" set forth in Section 414 (p) (1) (A)
     of the Internal Revenue Code.

          f.   Indemnification. Each person who is or shall have been a member
     of the Committee or of the Board shall be indemnified and held harmless by
     the Company against and from any loss, cost, liability, or expense that may
     be imposed upon or reasonably incurred by him in connection with or
     resulting from any claim, action, suit, or proceeding to which he may be a
     party or in which he may be involved by reason of any action or failure to
     act under the Plan and against and from any and all amounts paid by him in
     satisfaction of judgment in such action, suit, or proceeding against him.
     He shall give the Company an opportunity, at its own expense, to handle and
     defend the same before he undertakes to handle and defend it on his own
     behalf. The foregoing right of indemnification shall not be exclusive of
     any other rights of indemnification to which such persons may be entitled
     under the Company's Articles of Incorporation or By-Laws, as a matter of
     law, or otherwise, or any power that the Company may have to indemnify them
     or hold them harmless.

          g.   Reliance on reports. Each member of the Committee and each member
     of the Board shall be fully justified in relying or acting in good faith
     upon any report made

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     by the independent public accountants of the Company and its Subsidiaries
     and upon any other information furnished in connection with the Plan by any
     person or persons other than himself. In no event shall any person who is
     or shall have been a member of the Committee or of the Board be liable for
     any determination made or other action taken, including the furnishing of
     information, or failure to act, if in good faith.

          h.   Relationship to other benefits. No payment under the Plan shall
     be taken into account in determining any benefits under any pension,
     retirement, savings, profit sharing, group insurance, welfare or other
     benefit plan of the Company or any Subsidiary.

          i.   Expenses. The expenses of administering the Plan shall be borne
     by the Company and its Subsidiaries.

          j.   Pronouns. Masculine pronouns and other words of masculine gender
     shall refer to both men and women.

          k.   Titles and headings. The titles and headings of the sections in
     the Plan are for convenience of reference only, and in the event of any
     conflict, the test of the Plan, rather than such titles or headings, shall
     control.

          l.   Fractional shares. No fractional shares of stock shall be issued
     and the Committee shall determine, in its discretion, whether cash shall be
     given in lieu of fractional shares or whether such fractional shares shall
     be eliminated by rounding up or rounding down.

     10.  CHANGES IN CAPITAL STRUCTURE

          In the event a stock dividend is declared upon the Stock, the shares
of Stock then subject to each Award (and the number of shares subject thereto)
shall be increased proportionately without any change in the aggregate purchase
price therefor. In the event the Stock shall be changed into or exchanged for a
different number or class of shares of stock or stock of another corporation,
whether through reorganization, recapitalization, stock split-up, combination of
shares, merger or consolidation, there shall be substituted for each such share
of Stock then subject to each Award (and for each share of Stock then subject
thereto) the number and class of shares of Stock into which each outstanding
share of Stock shall be so exchanged, all without any change in the aggregate
purchase price for the shares then subject to each Award.

          Subject to any required action by the stockholders, if the Company
shall be the surviving or resulting corporation in any merger or consolidation,
any Award granted hereunder shall pertain to and apply to the securities or
rights to which a holder of the number of shares of Stock subject to the Award
would have been entitled; but a dissolution or liquidation of the Company or a
merger or consolidation in which the Company is not the surviving or resulting
corporation, shall, in the sole discretion of the Committee:

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          a.   Cause every Award outstanding hereunder to terminate, except that
     the surviving or resulting corporation, in its absolute and uncontrolled
     discretion, may tender an option or options to purchase its shares or
     exercise such rights on terms and conditions, as to the number of shares
     and rights and otherwise, which shall substantially preserve the rights and
     benefits of any Award then outstanding hereunder; or

          b.   Give each Holder the right to exercise Options and/or other
     Awards prior to the occurrence of the event otherwise terminating the
     Options and/or other Awards over such period as the Committee, in its sole
     and absolute discretion, shall determine.

     11.  AMENDMENTS AND TERMINATION

          The Board may at any time terminate the Plan.

          The Board may, at any time, or from time to time, amend or suspend
and, if suspended, reinstate, the Plan, in whole or in part, provided, however,
that without further shareholder approval, the Board shall not:

          a.   Increase the maximum number of shares which may be issued on
     exercise of Options or SARs, except as provided in Section 10;

          b.   Change the minimum option price;

          c.   Extend the maximum option term; or

          d.   Extend the termination date of the Plan.

          The Committee may cancel or reduce or otherwise alter a Holder's
outstanding Awards thereunder if, in its judgment, (a) such action is necessary
to comply with applicable securities laws, or (b) such action would be in the
best interests of the Company provided that it obtains the written consent of
the Holder.

          IN WITNESS WHEREOF, Providence Service Corporation, through approval
of its shareholders, has caused this document to be executed by its duly
authorized officer on is 16th day of April, l997.

                                                PROVIDENCE SERVICE CORPORATION


                                                By:   /s/ Fletcher J. McCusker
                                                     --------------------------
                                                Its:  Chief Executive Officer

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                                     FORM OF
                         PROVIDENCE SERVICE CORPORATION
                       NONQUALIFIED STOCK OPTION AGREEMENT

     This Option Agreement is made and entered into by and between Providence
Service Corporation (hereinafter referred to as the "Company") and Richard
Singleton, (hereinafter referred to as "Grantee"), as of the _____ day of
__________(which date is hereinafter referred to as the "Date of Grant").

                                   WITNESSETH
                                   ----------

     WHEREAS, the Company has adopted the Providence Service Corporation Stock
Option and Incentive Plan (the "Plan") as an incentive to encourage key
employees and officers of the Company to remain in its employment and to enhance
the ability of the Company to attract and retain new employees and other
individuals whose services are considered unusually valuable by providing an
opportunity to have a proprietary interest in the success of the Company.

     WHEREAS, the Committee established pursuant to the Plan (the "Committee")
believes that the granting of the Option herein described to Grantee is
consistent with the stated purposes for which the Plan was adopted.

     NOW, THEREFORE, In consideration of the mutual covenants and conditions
hereinafter set forth and for other good and valuable consideration, the Company
and Grantee agree as follows:

     1.   Grant of Option. The Company hereby grants to Grantee the right and
option (hereinafter referred to as the "Option") to purchase an aggregate of
_________shares (such number being subject to adjustment as provided in
Paragraph 10 hereof) of the Stock (as defined in the Plan) of Providence Service
Corporation, on the terms and conditions herein set forth. This Option may be
exercised in whole or in part and from time to time as hereinafter provided.

     2.   Purchase Price. The price at which Grantee shall be entitled to
purchase the Stock covered by the Option shall be $_______ per share.

     3.   Term of Option. The Option hereby granted shall remain in force and
effect for a period of ___________ years from the Date of Grant, through and
including the normal close of business of the Company on ___________
(hereinafter referred to as the "Expiration Date"), subject to earlier
termination as provided in Paragraphs 7, 8, 9, 10 and 19 hereof.

     4.   Exercise of Option. The Option may be exercised by Grantee with
respect to the shares specified below beginning on the dates specified below and
ending on the Expiration Date as to all or any part of the shares covered hereby
by delivery to the Company of written notice of exercise and payment of the
purchase price as provided in Paragraphs 5 and 6. The Option shall vest and
become exercisable as of the dates specified below:

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          (i)   _____________ with respect to one-third (1/3) of the shares of
          the Stock subject to the Option;

          (ii)  _____________ with respect to one-third (1/3) of the shares of
          the Stock subject to the Option; and

          (iii) _____________ with respect to the remaining one-third (1/3) of
          the shares of Stock subject to the Option.

     The Option shall cease to be exercisable as to any share when Grantee
exercises the Option and purchases the share or when the Option lapses as
provided in Paragraph 3.

     In the event of a public tender for all or any portion of the Stock of the
Company, or in the event that a proposal to merge, consolidate, or otherwise
combine with another company is submitted for shareholder approval, the
Committee may in its sole discretion declare the Option immediately exercisable
even if the original date for the exercise of the Option, as set forth in the
first paragraph of this Paragraph 4, has not yet passed.

     5.   Method of Exercising Option. Subject to the terms and conditions of
this Option Agreement, the Option may be exercised by timely delivery to the
Company of written notice, which notice shall be effective on the date received
by the Company (the "Effective Date"). The notice shall state Grantee's election
to exercise the Option, the number of shares in respect of which an election to
exercise has been made, the method of payment elected (see Paragraph 6 hereof),
the exact name or names in which the shares will be registered and Grantee's
Social Security number. Such notice shall be signed by Grantee and shall be
accompanied by payment of the purchase price of such shares. In the event the
Option shall be exercised by a person or persons other than Grantee pursuant to
Paragraph 8 hereof, such notice shall be signed by such other person or persons
and shall be accompanied by proof acceptable to the Company of the legal right
of such person or persons to exercise the Option. All shares delivered by the
Company upon exercise of the Option as provided herein shall be fully paid and
nonassessable upon delivery.

     6.   Method of Payment for Options. Payment for shares purchased upon
exercise of the Option shall be by check in the amount of the full purchase
price (the number of shares being purchased multiplied by the price per share).
In lieu of payment as above provided, Grantee may choose to pay all or any part
of the purchase price by surrendering to the Company shares of Stock of the
Company then owned by Grantee. Should Grantee elect to pay all or a part of the
purchase price by delivery of Stock, the Stock so delivered shall be valued, for
purposes of this Agreement, at the Fair Market Value of such shares on the
exercise date as determined pursuant to the Plan.

     In addition, Grantee may pay the Option exercise price by directing the
Company to withhold from the shares of Stock that would otherwise be issued upon
exercise of the Option that number of shares having a Fair Market Value on the
exercise date equal to the Option's purchase price. If Grantee elects to
exercise all or any part of his or her Option by directing the Company to
withhold shares subject to the exercised Option, Grantee must notify the Company

                                       2

<PAGE>

in writing of his or her intent to do so. In such case, the number of shares of
Stock received by Grantee shall be determined pursuant to the following formula:

                   Number of Shares       Fair Market Value  - Purchase
      Number    =  as to which the        on Exercise Date       Price
     of Shares     Option is to be   x   --------------------------------
                      Exercised                Fair Market Value on
                                                   Exercise Date

     If Grantee elects to pay for all or part of the shares purchased upon the
exercise of the Option in Stock, a share certificate or certificates, together
with a duly executed stock power authorizing the transfer of such shares to the
Company, shall be delivered to the Company with the notice of exercise. Should
the number of such shares delivered for credit against the purchase price have a
Fair Market Value less than the full purchase price, Grantee shall pay the
difference between the Fair Market Value of the Stock to be conveyed to the
Company and the full purchase price by check. Should the share certificate
delivered be for a number of shares in excess of that number to be conveyed to
the Company for credit against the full purchase price, the Company will issue
to Grantee a new share certificate representing the number of shares in excess
of the nearest whole number of shares having a Fair Market Value not in excess
of the amount required to pay the full purchase price. No fractional shares
shall be accepted in payment or be reissued by the Company under this provision.

     7.   Termination of Grantee. In the event that the services of Grantee
shall be terminated on account of a Normal Termination (as such term is defined
in the Plan), then Grantee may at any time within the three (3) month period
beginning on his Normal Termination Date exercise the Option to the extent that
Grantee was entitled to exercise the Option at the date of termination, provided
that in no event shall the Option, or any part thereof, be exercisable after the
Expiration Date.

     If Grantee terminates under circumstances which do not constitute a Normal
Termination, the Option shall lapse and terminate on the effective date of the
Grantee's Termination (as such term is defined in the Plan).

     8.   Death of Grantee. In the event of the death of Grantee within a period
during which the Option, or any part thereof, could have been exercised by
Grantee, including three (3) months after Normal Termination (the "Option
Period"), the Option shall lapse unless it is exercised within the Option
Period, but in no event later than fifteen (15) months after the date of
Grantee's death, by Grantee's legal representative or representatives or by the
person or persons entitled to do so under Grantee's last will and testament or
if Grantee fails to make a testamentary disposition of such Option or shall die
intestate, by the person or persons entitled to receive such Option under the
applicable laws of descent and distribution. An Option may be exercised
following the death of Grantee only if the Option was exercisable by Grantee
immediately prior to his death. In no event shall the Option, or any part
thereof, be exercisable after the Expiration Date. The Company shall have the
right to require evidence satisfactory to it of the rights of any person or
persons seeking to exercise the Option under this Paragraph 8 to exercise the
Option.

                                       3

<PAGE>

     9.   Nontransferability. The Option granted by this Agreement shall be
exercisable only during the term of the Option provided in Paragraph 3 hereof
and, except as provided in Paragraphs 7 and 8 above, only by Grantee during his
lifetime and while an employee. No Option granted by this Agreement shall be
transferable by Grantee other than by will or pursuant to applicable laws of
descent and distribution. The Option, and any rights and privileges in
connection therewith, shall not be transferred, assigned, pledged or
hypothecated by Grantee, or by any other person or persons, in any way, whether
by operation of law, or otherwise, and shall not be subject to execution,
attachment, garnishment or similar process. In the event of a violation of the
foregoing, this Agreement shall automatically be terminated and shall thereafter
be null and void.

     10.  Adjustments in Number of Shares and Option Price. In the event a stock
dividend is declared upon the Stock, the remaining shares of Stock then subject
to this Option shall be increased proportionately without any change in the
aggregate purchase price therefor. In the event the Stock shall be changed into
or exchanged for a different number or class of shares of stock of the Company
or of another corporation, whether through reorganization, recapitalization,
stock split, combination of shares, merger or consolidation, there shall be
substituted for each such remaining share of Stock then subject to this Option
the number and class of shares of stock into which each outstanding share of
Stock shall be so exchanged, all without any change in the aggregate purchase
price for the shares then subject to the Option.

     Subject to any required action by the stockholders, if the Company shall be
the surviving or resulting corporation in any merger or consolidation, the
Option granted hereunder shall pertain to and apply to the securities or rights
to which a holder of the number of shares of Stock subject to the Option would
have been entitled; but a dissolution or liquidation of the Company, or a merger
or consolidation in which the Company is not the surviving or resulting
corporation, shall, in the sole discretion of the Committee:

               (a)  Cause the Option outstanding hereunder to terminate as of
          the date specified by the Committee, except that the surviving or
          resulting corporation, in its absolute and uncontrolled discretion,
          may tender an option to purchase its shares or exercise such rights on
          terms and conditions, as to the number of shares and rights and
          otherwise, which shall substantially preserve the rights and benefits
          of the Option then outstanding hereunder; or

               (b)  Give Grantee the right to exercise this Option prior to the
          occurrence of the event otherwise terminating the Option over such
          period as the Committee, in its sole and absolute discretion, shall
          determine.

     11.  Delivery of Shares. No shares of Stock shall be delivered upon
exercise of the Option until (i) the purchase price shall have been paid in full
in the manner herein provided; (ii) applicable taxes required to be withheld
have been paid or withheld in full; (iii) approval of any governmental authority
required in connection with the Option, or the issuance of shares thereunder,
has been received by the Company; and (iv) if required by the Committee, Grantee

                                       4

<PAGE>

has delivered to the Committee an Investment Letter in form and content
satisfactory to the Company as provided in Paragraph 12 hereof.

     12.  Securities Act. The Company shall have the right, but not the
obligation, to cause the shares of Stock issuable upon exercise of the Option to
be registered under the appropriate rules and regulations of the Securities and
Exchange Commission.

     The Company shall not be required to deliver any shares of Stock pursuant
to the exercise of all or any part of the Option if, in the opinion of counsel
for the Company, such issuance would violate the Securities Act of 1933 or any
other applicable federal or state securities laws or regulations. The Company
may require that Grantee, prior to the issuance of any such shares pursuant to
exercise of the Option, sign and deliver to the Company a written statement
("Investment Letter") stating (i) that Grantee is acquiring the shares for
investment and not with a view to the sale or distribution thereof; (ii) that
Grantee will not sell any shares received upon exercise of the Option or any
other shares of the Company that Grantee may then own or thereafter acquire
except either (a) through a broker on a national securities exchange or (b) with
the prior written approval of the Company; and (iii) containing such other terms
and conditions as counsel for the Company may reasonably require to assure
compliance with the Securities Act of 1933 or other applicable federal or state
securities laws and regulations. Such Investment Letter shall be in form and
content acceptable to the Committee in its sole discretion.

     If shares of Stock or other securities issuable pursuant to the exercise of
the Option have not been registered under the Securities Act of 1933 or other
applicable federal or state securities laws or regulations, the certificates
representing such shares shall bear a legend restricting the transferability
thereof, such legend to be substantially in the following form:

               The shares represented by this certificate have not been
          registered or qualified under federal or state securities laws. The
          shares may not be offered for sale, sold, pledged or otherwise
          disposed of unless so registered or qualified, unless an exemption
          exists or unless such disposition is not subject to the federal or
          state securities laws, and the availability of any exemption or the
          inapplicability of such securities laws must be established by an
          opinion of counsel, which opinion and counsel shall both be reasonably
          satisfactory to the Company.

     13.  Federal and State Taxes. Upon exercise of the Option, or any part
thereof, Grantee may incur certain liabilities for federal, state or local taxes
and the Company may be required by law to withhold such taxes for payment to
taxing authorities. Upon determination by the Company of the amount of taxes
required to be withheld, if any, with respect to the shares to be issued
pursuant to the exercise of the Option, Grantee shall either pay to the Company
by check an amount equal to the taxes required to be paid on such transaction or
Grantee shall authorize the Company to withhold from moneys owing by the Company
to Grantee an amount equal to the amount of federal, state or local taxes
required to be withheld with respect to the shares to be issued upon exercise of
the Option.

                                       5

<PAGE>

     In addition, with respect to any federal, state or local taxes that the
Company may require to be withheld with respect to all or any part of an
exercised Option, Grantee may (i) direct the Company to withhold from the shares
of Stock to be issued to Grantee the number of shares necessary to satisfy the
Company's obligation, if any, to withhold federal, state or local taxes, such
determination to be based on the shares' Fair Market Value (as determined under
the Plan) as of the date the Option is exercised, or (ii) deliver to the Company
that number of shares of Stock having a Fair Market Value (as determined under
the Plan) on the business day immediately preceding the date of delivery
sufficient satisfy the Company's withholding obligations, if any.

     Authorization of Grantee to the Company to withhold taxes pursuant to this
Paragraph 13 shall be in form and content acceptable to the Company. Payment or
authorization to withhold taxes by Grantee shall be completed prior to the
delivery of any shares pursuant to this Option Agreement. An authorization to
withhold taxes pursuant to this provision shall be irrevocable unless and until
the tax liability of Grantee has been fully paid.

     14.  Definitions: Copy of Plan. To the extent not specifically provided
herein, all capitalized terms used in this Agreement shall have the same
meanings ascribed to them in the Plan. By the execution of this Agreement,
Grantee acknowledges receipt of a copy of the Plan.

     15.  Administration. This Agreement shall at all times be subject to the
terms and conditions of the Plan and shall in all respects be administered by
the Committee in accordance with the terms of and as provided in the Plan. The
Committee shall have the sole and complete discretion with respect to all
matters reserved to it by the Plan and decisions of the majority of the
Committee with respect thereto and to this Agreement shall be final and binding
upon Grantee and the Company. In the event of any conflict between the terms and
conditions of this Agreement and the Plan, the provisions of the Plan shall
control.

     16.  Continuation of Employment. This Agreement shall not be construed to
confer upon Grantee any right to continue in the employment or other
relationship with the Company (or any Subsidiary) and shall not limit the right
of the Company (or Subsidiary), in its sole discretion, to terminate such
relationship of Grantee at any time.

     17.  Obligation to Exercise. Grantee shall have no obligation to exercise
any option granted by this Agreement.

     18.  Governing Law. This Agreement shall be interpreted and administered
under the laws of the State of Arizona.

     19.  Amendment and Termination. Except as otherwise provided in this
Agreement and the Plan, this Agreement may be amended or terminated only by a
written agreement executed by the Company and Grantee. The Company may amend or
terminate this Agreement without the written consent of Grantee to the extent
necessary to comply with applicable securities laws.

                                       6

<PAGE>

     20.  Restriction on Shares. To the extent permitted by applicable
securities laws, the Company reserves to itself or its assignees in any grant
(a) a right of first refusal to purchase any shares of Stock which a Grantee may
propose to transfer to a third party and (b) a right to repurchase any and all
shares of Stock held by a Grantee upon the Grantee's Termination for any reason,
including death or disability, at the then Fair Market Value. Any shares of
Stock granted hereunder shall bear a legend referencing the transfer
restrictions herein.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by its officers thereunto duly authorized, and Grantee has hereunto set
his (her) hand as of the day and year first above written.

                                                PROVIDENCE SERVICE CORPORATION


                                                By:
                                                    ---------------------------
                                                Its:
                                                    ---------------------------

                                                Grantee

                                       7