a5459462-101.htm


     

    Exhibit
      10.1

     

    
      
      

      
        

        

      

       

      


       

      


       

      EMPLOYMENT
        AGREEMENT

       

      by
        and between

       

      ODYSSEY
        HEALTHCARE, INC.

       

      and

       

      CRAIG
        P. GOGUEN

       

      dated

       

      July
        26,
        2007

       

       

       

       

      
 

      
        

        

      

      


       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      


       

      
      

       

      TABLE
        OF CONTENTS

       

      
        
          
            	 	 	
                    Page

                  
	 	 	 
	1.	Certain
                    Definitions	
                    1

                  
	 	 	 
	
                    2.

                  	Term
                    of Employment; Non-Renewal of Term	
                    5

                  
	 	 	 
	
                    3.

                  	Terms
                    of Employment	
                    5

                  
	 	
                    (a)

                  	
                    Position
                      and Duties

                  	
                    5

                  
	 	
                    (b)

                  	
                    Compensation

                  	
                    6

                  
	 	 	 	 
	
                    4.

                  	Termination
                    of Employment	
                    9

                  
	 	
                    (a)

                  	
                    Death

                  	
                    9

                  
	 	
                    (b)

                  	
                    Disability

                  	
                    9

                  
	 	
                    (c)

                  	
                    Cause

                  	
                    9

                  
	 	
                    (d)

                  	
                    Resignation
                      by Employee

                  	
                    9

                  
	 	
                    (e)

                  	
                    Agreement
                      Not to Terminate

                  	
                    9

                  
	 	 	 	 
	
                    5.

                  	Compensation
                    Upon Termination Prior to a Change in Control of the Company
                    and After the
                    Second Anniversary of such Change in Control	
                    10

                  
	 	
                    (a)

                  	
                    Death
                      or Disability

                  	
                    10

                  
	 	
                    (b)

                  	
                    For
                      Cause; Resignation by Employee Without Good Reason; Non-Renewal
                      Election
                      by Employee

                  	
                    10

                  
	 	
                    (c)

                  	
                    Without
                      Cause; Resignation by Employee for Good Reason; Non-Renewal
                      Election by
                      the Company

                  	
                    11

                  
	 	 	 	 
	
                    6.

                  	Compensation
                    Upon Employment Termination Occurring On or Within Two Years
                    After a
                    Change in Control of the Company	
                    12

                  
	
                     

                  	(a)	
                    Compensation
                      Upon Termination

                  	
                    12

                  
	 	 	 	 
	
                    7.

                  	Other
                    Provisions Relating to Termination	
                    14

                  
	
                     

                  	
                    (a)

                  	
                    Notice
                      of Termination

                  	
                    14

                  
	
                     

                  	(b)	
                    Date
                      of Termination

                  	
                    15

                  
	
                     

                  	(c)	
                    Good
                      Reason

                  	
                    15

                  
	
                     

                  	(d)	
                    Cause

                  	
                    16

                  
	
                     

                  	(e)	
                    Full
                      Settlement; Mitigation

                  	
                    16

                  
	
                     

                  	(f)	
                    Release
                      and Other Agreements

                  	
                    16

                  
	
                     

                  	(g)	
                    409A
                      Compliance.

                  	
                    17

                  
	 	 	 	 
	
                    8.

                  	Disclosure
                    of, Access to and Entrustment of Confidential Information, Business
                    Opportunities and Business Goodwill	
                    17

                  
	 	 	 
	
                    9.

                  	Confidential
                    Information; Ownership of Property	
                    17

                  
	
                     

                  	(a)	
                    Obligations
                      to Maintain Confidentiality

                  	
                    17

                  
	
                     

                  	(b)	
                    Ownership
                      of Work Product

                  	
                    19

                  
	 	 	 	
                     

                  
	
                    10.

                  	Non-Competition;
                    Non-Solicitation; Non-Disparagement	
                    20

                  
	 	 	 
	
                    11.

                  	Successors;
                    Binding Agreement	
                    21

                  
	 	 	 
	
                    12.

                  	Effect
                    of Agreement on Plans and Agreements Governing Awards	
                    22

                  
	 	 	 
	
                    13.

                  	Miscellaneous	
                    22

                  
	 	
                    (a)

                  	
                    Construction

                  	
                    22

                  
	 	
                    (b)

                  	
                    Notices

                  	
                    22

                  
	 	
                    (c)

                  	
                    Severability

                  	
                    23

                  
	 	
                    (d)

                  	
                    Withholding

                  	
                    23

                  
	 	
                    (e)

                  	
                    No
                      Waiver

                  	
                    23

                  
	 	
                    (f)

                  	
                    Equitable
                      and Other Relief

                  	
                    24

                  
	 	
                    (g)

                  	
                    Entire
                      Agreement

                  	
                    24

                  
	 	
                    (h)

                  	
                    Arbitration

                  	
                    24

                  
	 	
                    (i)

                  	
                    Attorney
                      Fees

                  	
                    25

                  
	 	
                    (j)

                  	
                    Survival

                  	
                    25

                  
	 	
                    (k)

                  	
                    Governing
                      Law

                  	
                    25

                  
	 	
                    (l)

                  	
                    Amendments

                  	
                    25

                  
	 	
                    (m)

                  	
                    Employee
                      Acknowledgement

                  	
                    25

                  
	 	
                    (n)

                  	
                    Counterparts

                  	
                    25

                  


          

        

      

       

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      EMPLOYMENT
        AGREEMENT

       

      THIS
        EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into July 26,
        2007 to be effective as of August 20, 2007 (the “Effective Date”), by and
        between Odyssey HealthCare, Inc., a Delaware corporation (the “Company”),
        and Craig P. Goguen (“Employee”).

       

      RECITALS:

       

      A.  The
        Company is a national provider of hospice services and desires to employ
        Employee as the Senior Vice President and Chief Operating Officer of the
        Company.

       

      B.  The
        Company considers the establishment and maintenance of a sound and vital
        management group to be essential to protecting and enhancing its best interests
        and the best interests of its stockholders.

       

      C.  In
        order
        to induce Employee to accept employment by the Company as an officer of the
        Company and its Subsidiaries (as defined in Section 1(o) below), the
        Company is willing to agree to provide certain severance benefits to Employee
        in
        the event that Employee’s employment is terminated or changed under the
        circumstances described in this Agreement.

       

      D.  Employee
        is desirous of committing himself to serve the Company and its Subsidiaries
        on
        the terms herein provided.

       

      AGREEMENTS:

       

      NOW,
        THEREFORE, in consideration of the premises and of the mutual covenants and
        agreements contained herein, and other good and valuable consideration, the
        sufficiency of which is hereby acknowledged, the parties hereto agree as
        follows:

       

      1.  Certain
        Definitions.  As
        used in this Agreement, the following terms have the meanings set forth
        below:

       

      (a)           “Acquiring
        Person” means any Person or group of related Persons (within the meaning of
        Section 13(d)(3) or 14(d)(2) of the Exchange Act) other than (i) Employee
        or any
        Employee Affiliate, or (ii) the Company, any of the Company’s Subsidiaries, any
        employee benefit plan of the Company or of a Subsidiary of the Company or
        of a
        corporation owned directly or indirectly by the stockholders of the Company
        in
        substantially the same proportions as their ownership of stock of the Company,
        or any trustee or other fiduciary holding securities under an employee benefit
        plan of the Company or of a Subsidiary of the Company or of a corporation
        owned
        directly or indirectly by the stockholders of the Company in substantially
        the
        same proportions as their ownership of stock of the Company.

       

      (b)           “Affiliate”
        means, with respect to any Person, any other Person that directly or indirectly
        controls, is controlled by, or is under common control with the Person in
        question. As used in this definition of “Affiliate,” the term “control” means
        the possession, directly or indirectly, of the power to direct or cause the
        direction of the management and policies of a Person, whether through ownership
        of Voting Securities, by contract, or otherwise.

       

      
        
          
          

        

        
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      (c)           “Board”
        means the Board of Directors of the Company and any committee
        thereof.

       

      (d)           “Cause”
        means Employee’s

       

      (i)  continued
        failure to substantially perform Employee’s material obligations and duties
        under Section 3(a) (other than as a result of physical or mental
        incapacity), as reasonably determined by the Board, and which is not remedied
        within 30 days after receipt of written notice from the Company specifically
        identifying the manner in which the Company believes that Employee has not
        substantially performed Employee’s material obligations and duties under
Section 3(a);

       

      (ii)  commission
        of an act of fraud, embezzlement, misappropriation, willful misconduct, bad
        faith, dishonesty, breach of trust, or breach of fiduciary duty against the
        Company;

       

      (iii)  material
        breach of Sections 8, 9 or 10;

       

      (iv)  conviction,
        plea of no contest or nolo contendere, deferred adjudication or unadjudicated
        probation for any felony or any crime involving moral turpitude;

       

      (v)  failure
        to
        carry out, or comply with, in any material respect, any lawful directive
        of the
        Board or the Reporting Officer (as defined in Section 3(a)) consistent with
        the
        terms of this Agreement, which is not remedied within 30 days after receipt
        of
        written notice from the Company specifying such failure;

       

      (vi)  violation
        of the Company’s substance abuse policy; or

       

      (vii)  suspension
        or termination of Employee from participation in the Medicare or Medicaid
        programs.

       

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

       

      (i)  any
        of the
        events described in clauses (ii), (iii) and (iv) of the definition of “Change in
        Control” in the Odyssey HealthCare, Inc. 2001 Equity-Based Compensation Plan as
        in effect on the date of this Agreement; or

       

      (ii)  any
        Acquiring Person is or becomes the “beneficial owner” (as defined in Rule 13d-3
        under the Exchange Act), directly or indirectly, of securities of the Company
        representing fifty percent or more of the combined voting power of the then
        outstanding Voting Securities of the Company.

       

      (f)           “Competing
        Business” means a business that competes in any material respect with the
        business engaged in by the Company or any of its Subsidiaries, (A) at the
        time in question in respect of the Term of Non-Competition (as defined in
        Section 1(p)) occurring prior to the Date of Termination and (B) as
        of the Date of Termination (as defined in Section 7(b)) in respect of the
        Term of Non-Competition occurring on and after the Date of
        Termination.

       

      
        
          
          

        

        
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      (g)           “Competing
        Services” means services that, if provided to a business other than a
        Competing Business, would constitute the conduct of a Competing
        Business.

       

      (h)           “Disability”
        means Employee’s inability to perform, with or without reasonable
        accommodations, the essential functions of Employee’s position hereunder for a
        period of 180 consecutive days due to mental or physical incapacity, as
        determined by mutual agreement of a physician selected by the Company or
        its
        insurers and a physician selected by Employee; provided, however, that if
        the
        opinion of the Company’s physician and Employee’s physician conflict, the
        Company’s physician and Employee’s physician shall together agree upon a third
        physician, whose opinion shall be binding.  The foregoing definition
        of “Disability” is not intended to and shall not affect the definition of
“disability” or any similar term in any insurance policy the Company or any of
        its Subsidiaries may provide.

       

      (i)           “Employee
        Affiliate” means any Person directly or indirectly controlled by Employee.
        For purposes of this Agreement, a Person shall be presumed to be controlled
        by
        Employee if (i) Employee is a general partner of such Person (including any
        partnership in which Employee is a general partner or any trust in which
        Employee is a trustee or beneficiary), (ii) Employee directly or indirectly
        beneficially owns 10% or more of the outstanding Voting Securities of such
        Person or (iii) such Person is controlled by any Person contemplated in clauses
        (i) or (ii) of this definition.

       

      (j)           “Exchange
        Act” means the Securities Exchange Act of 1934, as amended, and the rules
        and regulations promulgated thereunder.

       

      (k)           “Geographic
        Area” means each city (including the 50-mile radius surrounding such city)
        in which the Company or any of its Subsidiaries has a facility that engages
        in
        its respective business or any line of its business (A) at the time in
        question in respect of the Term of Non-Competition occurring prior to the
        Date
        of Termination and (B) as of the Date of Termination in respect of the Term
        of Non-Competition occurring on and after the Date of Termination.

       

      (l)           “Good
        Reason” means, subject to the terms and provisions of this Agreement
        (including Sections 1(d) and 4(b)), the occurrence of one or more
        of the following events:

       

      (i)  any
        removal of Employee from the offices of Senior Vice President and Chief
        Operating Officer of the Company; provided, however, that Good Reason may
        not be
        asserted by Employee under this clause (i) after a Non-Renewal Notice has
        been
        given by either the Company or Employee;

       

      (ii)  any
        termination or material reduction of a material benefit under any Investment
        Plan or Welfare Plan in which Employee participates unless (A) there is
        substituted a comparable benefit that is economically substantially equivalent
        to the terminated or reduced benefit prior to such termination or reduction
        or
        (B) benefits under such Investment Plan or Welfare Plan are terminated or
        reduced with respect to all employees previously granted benefits
        thereunder;

       

      (iii)  any
        reduction in Employee’s Annual Base Salary;

       

      
        
          
          

        

        
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      (iv)  any
        failure by the Company to comply with any of the provisions of Section
        3(b), which failure is not contemplated previously within this
        definition;

       

      (v)  any
        failure by the Company to comply with Section 11(c);

       

      (vi)  the
        relocation or transfer of Employee’s principal office to a location more than 50
        miles from Employee’s work address as of the Effective Date in the city of
        Dallas, Texas, without Employee’s consent;

       

      (vii)  a
        change
        in Employee’s reporting relationship described in Section 3(a) which results in
        Employee reporting to an officer of the Company other than the Chief Executive
        Officer of the Company; or

       

      (viii)  without
        limiting the generality of the foregoing, any material breach by the Company
        or
        any of its Subsidiaries or other Affiliates of (A) this Agreement or (B)
        any
        other agreement between Employee and the Company or any such Subsidiary or
        other
        Affiliate,

       

      excluding,
        in the case of clauses (i) through (viii), any isolated, insubstantial and
        inadvertent failure not occurring in bad faith and which is remedied by the
        Company promptly after receipt of notice thereof given by Employee.

       

      (m)           “Person”
        means any individual, partnership, limited liability partnership, joint venture,
        corporation, limited liability company, trust, association, or other entity
        or
        organization.

       

      (n)           “Pro
        Rata Bonus” means the amount equal to the product of (i) the amount of the
        Annual Bonus (as defined in Section 3(b)(ii)), if any, to which Employee
        would have been entitled for the calendar year in which Employee’s Date of
        Termination occurs if Employee’s employment were not terminated during such
        calendar year, multiplied by (ii) a fraction, the numerator of which is
        the number of days that have elapsed since the beginning of such calendar
        year through (but not including) Employee’s Date of
        Termination, and the denominator of which is the total number of days in
        such
        calendar year.  The amount, if any, of the Annual Bonus to which
        Employee would have been entitled for the calendar year in which the Date
        of
        Termination occurs shall be determined by the Board in its sole good faith
        discretion; provided, however, that during the period on or within two years
        after a Change in Control, for purposes of determining the amount of the
        Pro
        Rata Bonus, Employee shall be deemed to have been entitled to an Annual Bonus
        of
        not less than the amount of the last Annual Bonus awarded to Employee prior
        to
        such Change in Control, and provided further however that any determination
        by
        the Board as to satisfaction of a performance standard shall be made in the
        same
        manner as such determination is made for the other executive officers of
        the
        Company.

       

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

       

      
        
          
          

        

        
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      (p)           
        “Term of Non-Competition” means the period of time beginning on the
        Effective Date and continuing until 5:00 p.m., Dallas, Texas time, on the
        first
        anniversary of the Date of Termination.

       

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

       

      (r)           “without
        Cause” means a termination by the Company of Employee’s employment during
        the Term at the Company’s sole discretion for any reason other than a
        termination based upon Cause, death or Disability; provided that, “without
        Cause” does not include termination of this Agreement and Employee’s employment
        pursuant to Section 2.

       

      2.  Term
        of Employment; Non-Renewal of Term.  Subject
        to the terms and provisions of this Agreement, the Company hereby agrees
        to
        employ Employee, and Employee hereby agrees to be employed by the Company,
        for
        the period (the “Term”) commencing on the Effective Date and, unless
        Employee’s employment hereunder is sooner terminated in accordance with the
        terms hereof, expiring at 5:00 p.m., Dallas Texas time, on August 19, 2010;
        provided, however, that commencing on August 19, 2010 (the Employment
        Expiration Date”), and on each August 19th occurring thereafter, the Term
        shall automatically (without any action by either party) be extended for
        one
        additional year unless, at least 90 days prior to the expiration of the Term,
        the Company or Employee shall have given written notice (a “Non-Renewal
        Notice”) that it or Employee, as applicable, does not wish to extend this
        Agreement (a “Non-Renewal”).  Either party may elect not to
        renew this Agreement.  The term “Term,” as utilized in this Agreement,
        shall refer to the Term as so automatically extended.  The Term shall
        expire as a result of any Non-Renewal at 5:00 p.m., Dallas, Texas time, on
        the
        August 19th of the extension period during which a
        Non-Renewal Notice is given, and Employee’s employment shall terminate at the
        expiration of the Term.

       

      3.  Terms
        of Employment.

       

      (a)  Position
        and Duties

       

      (i)  During
        the
        Term, Employee shall serve as Senior Vice President and Chief Operating Officer
        of the Company.  In so doing, Employee shall have such powers and
        duties (including holding officer positions with one or more Subsidiaries
        of the
        Company) as may be assigned from time to time by the Board, so long as such
        powers and duties are reasonable and customary for Senior Vice Presidents
        and
        Chief Operating Officers of an enterprise comparable to the
        Company.  Employee shall report to the Chief Executive Officer of the
        Company (the “Reporting Officer”).

       

      (ii)  During
        the
        Term, and excluding any periods of vacation and sick leave to which Employee
        is
        entitled, Employee agrees to devote all of Employee’s business time to the
        business and affairs of the Company and, to the extent necessary to discharge
        the responsibilities assigned to Employee hereunder, to (a) use Employee’s best
        efforts to perform diligently, faithfully, effectively and efficiently such
        responsibilities, (b) use Employee’s best efforts to promote the interests of
        the Company; (c) use Employee’s reasonable best efforts to maintain Employer’s
        status as a participating provider under the Medicare and Medicaid
        programs; and (d) perform such other duties appropriate
        for Employee’s position as the Board or the Reporting Officer may from time to
        time reasonably direct.

       

      
        
          
          

        

        
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      (iii)  Employee
        shall not engage, directly or indirectly, in any other business, investment,
        or
        activity that interferes with the performance of Employee’s duties under this
        Agreement, is contrary to the interests of the Company or requires any portion
        of Employee’s business time; provided, however, that during the Term, it shall
        not be a violation of this Agreement for Employee to (1) serve on the board
        of
        directors (or similar governing body) of one or more other companies that
        do not
        engage in a Competing Business if the Board has provided prior approval (which
        shall not be unreasonably withheld) for such service, (2) serve on
        corporate, civic, charitable or industry sector association boards or
        committees, (3) deliver lectures or fulfill speaking engagements and (4)
        manage
        personal investments, so long as such activities do not materially interfere
        with the performance of Employee’s responsibilities as an employee of the
        Company in accordance with this Agreement.

       

      (b)  Compensation.

       

      (i)  Annual
        Base Salary.  During the Term, Employee shall receive an annual
        base salary (“Annual Base Salary”), which shall be paid bi-weekly in
        accordance with the customary payroll practices for executive officers of
        the
        Company, in an amount at least equal to $310,000.00 per year.  At
        least annually (by no later than January 31 of each year) during the Term,
        the Board shall review the Annual Base Salary of Employee and may increase
        (but
        not decrease) the Annual Base Salary by such amount as the Board shall deem
        appropriate.  The term “Annual Base Salary” as used in this
        Agreement shall refer to the Annual Base Salary as it may be so
        increased.

       

      (ii)  Annual
        Bonus.  During the Term, Employee shall be eligible to receive, in
        addition to the Annual Base Salary, such annual bonus payments as the Board
        may
        specify in its sole discretion (each, an “Annual
        Bonus”).  Annually (by no later than March 15 of each calendar
        year during the Term), the Board shall determine the amount (or amount range)
        of
        the Annual Bonus that Employee shall be eligible to receive for the calendar
        year and the performance goals that must be achieved for Employee to become
        entitled to receive the Annual Bonus for such calendar year.  For each
        calendar year (or partial calendar year) during the Term, the Board shall
        determine in its sole good faith discretion whether the performance goals
        established for Employee for such calendar year have been achieved, such
        determination to be made by no later than the date on which the Company publicly
        announces its earnings for such calendar year in a press release in the
        immediately following calendar year.  Subject to the terms hereof, any
        Annual Bonus that Employee becomes entitled to receive shall be payable to
        Employee within fifteen days after such determination by the
        Board.  Notwithstanding anything to the contrary in this Agreement,
        Employee shall not be entitled to any Annual Bonus for the 2007 calendar
        year;
        provided, however, Employee’s Annual Bonus for the 2008 calendar year shall be
        determined by the Board based on Employee’s Annual Base Salary for the 2008
        calendar year plus the prorated amount of Employee’s Annual Base Salary earned
        for the 2007 calendar year and shall be subject to the achievement of the
        performance goals for the 2008 calendar year established by the Board in
        accordance with this Section 3(b)(ii).

       

      
        
          
          

        

        
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      (iii)  Stock
        Options.  On the Effective Date, the Company shall grant Employee
        an option to purchase an aggregate of 225,000 shares of the Company’s common
        stock, which grant shall be subject to the terms and provisions of the Odyssey
        HealthCare, Inc. 2001 Equity-Based Compensation Plan Management Stock Option
        Agreement, dated August 20, 2007, attached hereto as Exhibit A and the
        Odyssey HealthCare, Inc. 2001 Equity-Based Compensation Plan dated as of
        November 5, 2001, as amended by that certain First Amendment to the Odyssey
        HealthCare, Inc. 2001 Equity-Based Compensation Plan dated as of May 5, 2005
        and
        by that certain Second Amendment to the Odyssey HealthCare, Inc. 2001
        Equity-Based Compensation Plan dated as of May 5, 2005.

       

      (iv)  Incentive,
        Savings, Stock Option and Retirement Plans.  During the Term,
        Employee shall be entitled to participate in all incentive, savings, stock
        option, equity-based, profit sharing and retirement plans, practices, policies
        and programs applicable generally to other executive officers of the
        Company (“Investment Plans”), subject to all of the
        terms and conditions of such Investment Plans.

       

      (v)  Welfare
        Benefit Plans.  During the Term, Employee and/or Employee’s
        family, as the case may be, shall be eligible for participation in and shall
        receive all benefits under the welfare benefit plans, practices, policies
        and
        programs (“Welfare Plans”) provided by the Company (including, without
        limitation, medical, prescription, dental, short-term and long-term disability,
        salary continuance, employee life, group life, accidental death and travel
        accident insurance plans and programs) to the extent applicable generally
        to
        other executives of the Company, subject to all of the terms and conditions
        of
        such Welfare Plans.

       

      (vi)  Perquisites.  During
        the Term, Employee shall be entitled to receive (in addition to the benefits
        described above) such perquisites and fringe benefits appertaining to Employee’s
        position in accordance with any policies, practices, and procedures established
        by the Board.  In addition to the forgoing, Employee shall be entitled
        to receive a health club dues allowance of not more than $100.00 per month,
        as
        determined by the Board.

       

      (vii)  Expenses.  During
        the Term, Employee shall be entitled to receive prompt reimbursement for
        all
        reasonable business-related expenses incurred by Employee in the performance
        of
        Employee’s duties in accordance with the Company’s policies, practices and
        procedures.

       

      (viii)  Vacation
        and Holidays.  During the Term, Employee shall be entitled to paid
        vacation, in accordance with the plans, policies, programs and practices
        of the
        Company for its executive officers.  In addition, Employee shall be
        entitled to sick leave and paid holidays, in accordance with the plans,
        policies, programs and practices of the Company for its executive
        officers.

       

      (ix)  Proration.  Above,
        any payments or benefits payable to Employee hereunder in respect of any
        calendar year during which Employee is employed by the Company for less than
        the
        entire year, unless otherwise provided in the applicable plan or arrangement
        or
        by this Agreement, shall be prorated in accordance with the number of days
        in
        such calendar year during which Employee is so employed.

       

      
        
          
          

        

        
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      (x)  Relocation
        Expenses.  Company shall reimburse Employee for the following
        expenses related to his relocation to the Dallas, Texas metropolitan
        area:

       

      (A)  Reimbursement
        for reasonable out-of-pocket expenses incurred by Employee for packing, moving
        and unpacking Employee’s household goods, personal effects and two cars from his
        current residence in Simsbury, Connecticut (“Former Residence”) to his
        new residence in the Dallas, Texas metropolitan area up to a maximum amount
        of
        $30,000.00 and for the travel expenses of Employee and Employee’s wife and
        children in connection with such move, subject to the Company’s travel
        reimbursement policy;

       

      (B)  Reimbursement
        for reasonable out-of-pocket expenses incurred by Employee for up to two
        (2)
        house hunting trips for Employee and his wife to the Dallas, Texas metropolitan
        area, subject to the Company’s travel reimbursement policy; and

       

      (C)  Reimbursement,
        on a monthly basis, for reasonable out-of-pocket expenses incurred by Employee
        for interim living expenses from the Effective Date until the earlier of
        (1) the
        date Employee sells the Former Residence or (2) twelve (12) months after
        the
        Effective Date, in an amount equal to either (x) in the event Employee leases
        a
        temporary residence in the Dallas, Texas metropolitan area before selling
        the
        Former Residence, the sum of the actual monthly lease payment incurred by
        Employee to lease such temporary residence plus the actual monthly lease
        payment
        incurred by Employee to lease temporary storage for Employee’s household goods
        and personal effects or (y) in the event Employee purchases a permanent
        residence in the Dallas, Texas metropolitan area before selling the Former
        Residence, the sum of the regular monthly payment on the existing mortgage
        on
        the Former Residence less the portion of the monthly payment allocable to
        principal plus the monthly pro rata amount of the annual property insurance
        premium paid by Employee on the Former Residence; provided, however, the
        total
        monthly payments payable by Company to Employee under this Section
        3(b)(x)(C) shall not exceed $60,000.00.  The reimbursement
        provided for under this Section 3(b)(x)(C) is subject to Employee using
        reasonable efforts to sell the Former Residence.

       

      To
        the
        extent any payments made to Employee under (A), (B) and
(C), above, are not deductible by Employee for federal
        income tax
        purposes, Company shall gross up Employee’s salary by an amount equal to 36.45%
        of the non-deductible amount paid to Employee.  In addition to the
        reimbursement of actual relocation related expenses set forth above in this
        Section 3(b)(x), Company shall pay to Employee a miscellaneous relocation
        allowance of $20,000.00, payable within fourteen (14) days following the
        Effective Date, which amount shall not be subject to any gross-up for federal
        or
        state taxes.

       

       

      
        
          
          

        

        
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        4.  Termination
          of Employment.

         

        (a)  Death.  Employee’s
          employment hereunder shall terminate
          automatically upon Employee’s death during the Term.

      

       

      (b)  Disability.  If
        the Disability of Employee has occurred
        during the Term, the Company may give to Employee a written Notice of
        Termination (as defined in Section 7(a)) in accordance with Section
        7(a) of its intention to terminate Employee’s employment
        hereunder.  In such event, Employee’s employment shall terminate
        effective on the 30th day after receipt of such notice by Employee (the
“Disability Effective Date”); provided that, within 30 days after receipt
        of the Notice of Termination, Employee shall not have returned to perform,
        with
        or without reasonable accommodations, the essential functions of Employee’s
        position on a full-time basis.  During any period of Employee’s
        Disability, the Company may assign Employee’s duties to any other Employee of
        the Company or may engage or hire a third party to perform such duties and
        any
        such action shall not be deemed “Good Reason” for Employee to terminate this
        Agreement pursuant to Section 4(d)(i) so long as Employee continues to
        receive the compensation and benefits under Section 3 during such
        period.

       

      (c)  Cause.  Subject
        to Section 7(d), the Company may terminate Employee’s employment at any
        time during the Term for Cause or without Cause.

       

      (d)  Resignation
        by Employee.  At
        Employee’s option, Employee may terminate Employee’s employment hereunder (i)
        subject to Section 7(c), for Good Reason or (ii) without Good
        Reason.

       

      (e)  Agreement
        Not to Terminate.  Notwithstanding
        any provision to the contrary contained in this Agreement, the Company agrees
        that it shall not have the right to terminate Employee’s employment, other than
        for Cause, for a period of time commencing on the Effective Date and ending
        at
        5:00 p.m., Dallas, Texas time, on the 180th day following the Effective
        Date.

       

      5.  Compensation
        Upon Termination Prior to a Change in Control of the Company and After the
        Second Anniversary of such Change in Control.  Prior
        to the occurrence of a Change in Control of the Company and after the second
        anniversary of such Change in Control of the Company, conditioned on the
        execution and delivery of a Release (as defined in Section 7(f)) signed
        by Employee or Employee’s legal representative pursuant to Section 7(f),
        Employee shall, subject to the provisions of Section 7(g), be entitled to
        the following compensation from the Company upon the termination of Employee’s
        employment during the Term, which shall be in lieu of any other severance
        pay or
        employment benefits to which Employee might otherwise be entitled (whether
        contractual or under a severance plan, the WARN Act, any other applicable
        law,
        or otherwise):

       

      (a)  Death
        or Disability.  If
        Employee’s employment is terminated by
        reason of Employee’s death or Disability, the Company shall pay to Employee or
        Employee’s legal representatives (i) within 60 days after the Employee’s Date of
        Termination, a lump sum in cash equal to the sum of Employee’s Annual Base
        Salary through the Date of Termination to the extent not previously paid
        and any
        compensation previously deferred by Employee (together with any accrued interest
        or earnings thereon) (the “Accrued Obligations”); (ii) the amount of any
        Annual Bonus to which Employee was entitled for the calendar year ending
        prior
        to the Date of Termination to the extent not previously paid, which amount
        shall
        be paid at such time as the Company pays other executives of the Company
        annual
        bonuses for the prior calendar year (but in no event later than the fifteenth
        business day after the Company publicly announces its earnings for such calendar
        year in a press release); (iii) without duplication of any amount payable
        pursuant to clause (ii) above, the amount of any Pro Rata Bonus, which shall
        be
        paid at such time as the Company pays the other executives of the Company
        annual
        bonuses for the calendar year in which Employee’s Date of Termination occurs
        (but in no event later than the fifteenth business day after the Company
        publicly announces its earnings for such calendar year in a press release);
        (iv)
        any amounts arising from Employee’s participation in, or benefits under, any
        Investment Plan (the “Accrued Investments”), which amounts shall be paid
        in accordance with the terms and conditions of such Investment Plan; and
        (v) any
        amounts to which Employee or Employee’s spouse, beneficiaries or estate are
        entitled from Employee’s participation in, or benefits under, any Welfare Plan
        (“Accrued Welfare Benefits”), which amounts shall be paid in accordance
        with the terms and conditions of such Welfare Plan.  Except as
        described in this Section 5(a), in the event of Employee’s
        termination by reason of Employee’s death or Disability, Employee and Employee’s
        legal representatives, as applicable, shall forfeit all rights to any other
        compensation.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      (b)  For
        Cause; Resignation by Employee Without Good Reason; Non-Renewal Election
        by
        Employee.  If
        the Company shall terminate Employee’s
        employment for Cause or Employee resigns without Good Reason or Employee’s
        employment is terminated due to a Non-Renewal election by Employee, the Company
        shall have no further obligations to Employee other than the obligation for
        payment of:

       

      (i)  the
        Accrued Obligations, which shall be payable within 60 days after Employee’s Date
        of Termination;

       

      (ii)  the
        amount
        of any Annual Bonus to which Employee was entitled for the calendar year
        ending
        prior to the Date of Termination to the extent not previously paid, which
        amount
        shall be payable at such time as the Company pays other executive of the
        Company
        annual bonuses for the prior calendar year (but in no event later than the
        fifteenth business day after the Company publicly announces its earnings
        for
        such calendar year in a press release);

       

      (iii)  the
        Accrued Investments, which amounts shall be paid in accordance with the terms
        and conditions of the Investment Plans;

       

      (iv)  the
        Accrued Welfare Benefits, which amounts shall be paid in accordance with
        the
        terms and conditions of the Welfare Plans; and

       

      (v)  without
        duplication of any amount payable pursuant to clause (ii) above, solely in
        the
        case of a Non-Renewal by Employee, the amount of any Pro Rata Bonus, which
        shall
        be paid at such time as the Company pays the other executives of the Company
        annual bonuses for the calendar year in which Employee’s Date of Termination
        occurs (but in no event later than the fifteenth business day after the Company
        publicly announces its earnings for such calendar year in a press
        release).

       

      Except
        as
        described in this Section 5(b), in the event of Employee’s termination by
        the Company for Cause or by Employee without Good Reason or due to a Non-Renewal
        election by Employee, Employee shall forfeit all rights to any other
        compensation.

       

      
        
          
          

        

        
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      (c)  Without
        Cause; Resignation by Employee for Good Reason; Non-Renewal Election by the
        Company.  If
        the Company shall terminate Employee’s employment without Cause (other than by
        reason of Employee’s death or Disability or a Non-Renewal) or Employee resigns
        for Good Reason or Employee’s employment is terminated due to a Non-Renewal
        election by the Company, then the Company shall pay or provide
        Employee:

       

      (i)  within
        60
        days after Employee’s Date of Termination, a lump sum in cash equal to the
        aggregate of the following amounts: (A) the Accrued Obligations and (B) the
        amount of any Annual Bonus to which Employee was entitled for the calendar
        year
        ending prior to the Date of Termination to the extent not previously
        paid;

       

      (ii)  without
        duplication of any amount payable pursuant to clause (i)(B) above, the amount
        of
        any Pro Rata Bonus, which shall be paid at such time as the Company pays
        the
        other executives of the Company annual bonuses for the calendar year in which
        Employee’s Date of Termination occurs (but in no event later than the fifteenth
        business day after the Company publicly announces its earnings for such calendar
        year in a press release);

       

      (iii)  the
        Accrued Investments, which amounts shall be paid in accordance with the terms
        and conditions of the Investment Plans;

       

      (iv)  the
        Accrued Welfare Benefits, which amounts shall be paid in accordance with
        the
        terms and conditions of the Welfare Plans;

       

      (v)  the
        amount
        of Employee’s Annual Base Salary as of the Date of Termination, which amount
        shall be paid in bi-weekly payments, in accordance with the customary payroll
        practices of the Company, for the period from the Date of Termination through
        the first anniversary of the Date of Termination (such period, the “Severance
        Period”) in accordance with the customary payroll practices for executive
        officers of the Company; provided, however, that Employee shall be entitled
        to
        receive the amount payable pursuant to this Section 5(c)(v) only so long
        as Employee has not breached the provisions of Section 8, 9 or
10, at which time the Company’s payment obligations pursuant to this
Section 5(c)(v) shall immediately cease;

       

      (vi)  if
        Employee is entitled on the Date of Termination to coverage under the medical,
        prescription, and dental portions of the Welfare Plans, continuation of such
        coverage for Employee and Employee’s dependents for a period ending on the later
        to occur of (A) the first anniversary of the Date of Termination or (B) the
        Employment Expiration Date.  Employee will be responsible for paying,
        on an after tax basis, the active employee cost payable by Employee with
        respect
        to those costs paid by Employee prior to the Date of Termination and the
        balance
        of such costs shall be paid by the Company, with income applicable to such
        costs
        imputed to Employee; provided, however, that this coverage will count towards
        the depletion of any continued health care coverage rights that Employee
        and
        Employee’s dependents may have pursuant to the Consolidated Omnibus Budget
        Reconciliation Act of 1985, as amended (“COBRA”); provided, further,
        however, that Employee’s or Employee’s dependents’ rights to continued health
        care coverage pursuant to this Section 5(c)(vi) shall terminate at the
        time Employee or Employee’s dependents become covered, as described in COBRA,
        under another group health plan, and shall also terminate as of the date
        the
        Company ceases to provide coverage to its senior executives generally under
        any
        such Welfare Plan; and

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      (vii)  Employee
        shall be entitled to exercise Employee’s Awards (as defined in the Odyssey
        HealthCare, Inc. 2001 Equity-Based Compensation Plan) that are vested as
        of the
        Date of Termination pursuant to the terms of the plan or agreement governing
        such Awards.

       

      Except
        as
        described in this Section 5(c), in the event of Employee’s termination by
        the Company without Cause or by Employee for Good Reason or due to a Non-Renewal
        election by the Company, Employee shall forfeit all rights to any other
        compensation.

       

      6.  Compensation
        Upon Employment Termination Occurring On or Within Two Years After a Change
        in
        Control of the Company.

       

      (a)  Compensation
        Upon Termination.  After
        the occurrence of a Change in Control of the Company and on or before the
        second
        anniversary of such Change in Control, conditioned on the execution and delivery
        of a Release signed by Employee or Employee’s legal representative pursuant to
Section 7(f), Employee shall, subject to the provisions of Section
        7(g), be entitled to the following compensation from the Company upon the
        termination of Employee’s employment during the Term, which shall be in lieu of
        any other severance pay or employment benefits to which Employee might otherwise
        be entitled (whether contractual or under a severance plan, the WARN Act,
        any
        other applicable law, or otherwise):

       

      (i)  Death
        or Disability.  If Employee’s employment is terminated by reason
        of Employee’s death or Disability, then Employee or Employee’s legal
        representatives shall be entitled to the same compensation benefits from
        the
        Company as set forth in Section 5(a) to which Employee would have been
        entitled if the termination of Employee’s employment had occurred prior to the
        occurrence of a Change in Control or after the second anniversary of such
        Change
        in Control.  Except as described in this Section 6(a)(i),
        Employee’s death or Disability, Employee and Employee’s legal representatives,
        as applicable, shall forfeit all rights to any other compensation.

       

      (ii)  For
        Cause; Resignation by Employee Without Good Reason; Non-Renewal Election
        by
        Employee.  If the Company shall terminate Employee’s employment
        for Cause or Employee resigns without Good Reason or Employee’s employment is
        terminated due to a Non-Renewal election by Employee, then Employee or
        Employee’s legal representatives shall be entitled to the same compensation
        benefits from the Company as set forth in Section 5(b) to which Employee
        would have been entitled if the termination of Employee’s employment had
        occurred prior to the occurrence of a Change in Control or after the second
        anniversary of such Change in Control.  Except as described in this
Section 6(a)(ii), in the event of Employee’s termination by the Company
        for Cause or by Employee without Good Reason or due to a Non-Renewal election
        by
        Employee, Employee shall forfeit all rights to any other
        compensation.

       

      (iii)  Without
        Cause; Resignation by Employee for Good Reason; Non-Renewal Election by the
        Company.  If the Company shall terminate Employee’s employment
        without Cause (other than by reason of Employee’s death or Disability) or
        Employee resigns for Good Reason or Employee’s employment is terminated due to a
        Non-Renewal election by the Company, then the Company shall pay or provide
        Employee:

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (A)  within
        60
        days after Employee’s of Termination, a lump sum in cash equal to the aggregate
        of the following amounts: (1) the Accrued Obligations and (2) the amount
        of any
        Annual Bonus to which Employee was entitled for the calendar year ending
        prior
        to the Date of Termination to the extent not previously paid;

       

      (B)  the
        amount
        of any Pro Rata Bonus, which shall be paid at such time as the Company pays
        the
        other executives of the Company annual bonuses for the calendar year in which
        Employee’s Date of Termination occurs (but in no event later than the fifteenth
        business day after the Company publicly announces its earnings for such calendar
        year in a press release);

       

      (C)  the
        Accrued Investments, which amounts shall be paid in accordance with the terms
        and conditions of the Investment Plans;

       

      (D)  the
        Accrued Welfare Benefits, which amounts shall be paid in accordance with
        the
        terms and conditions of the Welfare Plans;

       

      (E)  bi-weekly
        payments each of which are equal to 1/26th of the highest Annual Base Salary
        to
        which Employee was entitled during the 24-month period ending on the Date
        of
        Termination, payable in accordance with the customary payroll practices of
        the
        Company, which payments shall continue from the Date of Termination through
        the
        later to occur of (1) the first anniversary of the Date of Termination or
        (2)
        the second anniversary of the date on which the Change of Control was
        consummated (such period, the “Change of Control Severance Period”); provided,
        however, that Employee shall be entitled to receive the amount payable pursuant
        to this Section 6(a)(iii)(E) only so long as Employee has not breached
        the provisions of Section 8, 9 or 10, at which time the
        Company’s payment obligations pursuant to this Section 6(a)(iii)(E) shall
        immediately cease; and

       

      (F)  if
        Employee is entitled on the Date of Termination to coverage under the medical,
        prescription, and dental portions of the Welfare Plans, continuation of such
        coverage for Employee and Employee’s dependents for a period ending on the later
        to occur of (1) the first anniversary of the Date of Termination or (2) the
        Employment Expiration Date.  Employee will be responsible for paying,
        on an after tax basis, the active employee cost by Employee with respect
        tot
        those costs paid by Employee prior to the Date of Termination and the balance
        of
        such costs shall be paid by the Company, with income applicable to such costs
        imputed to Employee; provided, however, that this coverage will count towards
        the depletion of any continued health care coverage rights that Employee
        and
        Employee’s dependents may have pursuant to COBRA; provided further, however,
        that Employee’s or Employee’s dependents’ rights to continued health care
        coverage pursuant to this Section 6(a)(iii)(F) shall terminate at the
        time Employee or Employee’s dependents become covered, as described in COBRA,
        under another group health plan, and shall also terminate as of the date
        the
        Company ceases to provide coverage to its senior executives generally under
        any
        such Welfare Plan; and

       

      
        
          
          

        

        
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      (G)  Employee
        shall be entitled to exercise Employee’s Awards (as defined in the Odyssey
        HealthCare, Inc. 2001 Equity-Based Compensation Plan) that are vested as
        of the
        Date of Termination pursuant to the terms of the plan or agreement governing
        such Awards.

       

      Except
        as
        described in this Section 6(a)(iii), in the event of Employee’s
        termination by the Company without Cause or by Employee for Good Reason or
        due
        to a Non-Renewal election by the Company, Employee shall forfeit all rights
        to
        any other compensation.

       

      7.  Other
        Provisions Relating to Termination.

       

      (a)  Notice
        of Termination.  Any
        termination by the Company for Cause or without Cause or by reason of Employee’s
        Disability, or by Employee’s resignation for Good Reason or without Good Reason,
        shall be communicated by Notice of Termination to the other party hereto
        given
        in accordance with Section 13(b).  For purposes of this
        Agreement, a “Notice of Termination” means a written notice which (i)
        indicates the specific termination provision in this Agreement relied upon
        and
        (ii) to the extent applicable, sets forth in reasonable detail the facts
        and
        circumstances claimed to provide a basis for termination of Employee’s
        employment under the provision so indicated.  The failure by the
        Company or Employee to set forth in the Notice of Termination any fact or
        circumstance which contributes to a showing of Cause or Good Reason shall
        not
        waive any right of the Company or Employee hereunder or preclude the Company
        or
        Employee from asserting such fact or circumstance in enforcing the Company’s or
        Employee’s rights hereunder.

       

      (b)  Date
        of
        Termination.  “Date
        of Termination” means (i) if Employee’s employment is terminated by reason
        of Employee’s death, the date of Employee’s death; (ii) if Employee’s employment
        is terminated by reason of Employee’s Disability, the Disability Effective Date
        (provided that Employee shall not have returned to perform, with or without
        reasonable accommodation, the essential functions of Employee’s position on a
        full-time basis during such 30-day period); (iii) if Employee’s employment is
        terminated by the Company without Cause or by Employee for Good Reason or
        without Good Reason, then, subject to Section 7(c), the date specified in
        the Notice of Termination (which date shall be a date between the date that
        the
        Notice of Termination is given and 30 days thereafter (inclusive)); (iv)
        if
        Employee’s employment is terminated by the Company for Cause then, subject to
Section 7(d), the date on which the Notice of Termination is given;
        and (v) if Employee’s employment is terminated due to a Non-Renewal
        election by Employee or the Company, the date on which the Term
        expires.

       

      (c)  Good
        Reason.  Upon
        Employee’s learning of the occurrence of
        any event described in the definition of Good Reason in Section 1(l),
        Employee may terminate Employee’s employment hereunder for Good Reason within 60
        days thereafter by giving a Notice of Termination to the Company to that
        effect,
        describing in reasonable detail the facts or circumstances giving rise to
        Employee’s right to terminate Employee’s employment for Good Reason (and, if
        applicable, the action required to cure same). If the effect of the occurrence
        of the event described in Section 1(l) may be cured, the Company shall
        have the opportunity to cure any such effect for a period of 60 days following
        receipt of Employee’s Notice of Termination. If within 60 days following the
        Company’s receipt of a Notice of Termination for Good Reason the Company has not
        cured the facts or circumstances giving rise to Employee’s right to terminate
        Employee’s employment for Good Reason, then the termination by Employee for Good
        Reason shall be effective as of the date specified in Employee’s Notice of
        Termination. If Employee does not give a Notice of Termination to the Company
        within 60 days after learning of the occurrence of an event giving rise to
        Good
        Reason, then this Agreement shall remain in effect; provided, however, that
        the
        failure of Employee to terminate this Agreement for Good Reason shall not
        be
        deemed a waiver of Employee’s right to terminate Employee’s employment for Good
        Reason upon the occurrence of a subsequent event described in Section
        1(l) in accordance with the terms of this Agreement. Notwithstanding the
        foregoing, the right of Employee to terminate Employee’s employment for Good
        Reason under Section 4(d)(i) shall not limit the Company’s right to
        terminate Employee’s employment for Cause under Section 4(c) if Cause is
        determined to exist prior to the time Good Reason is determined to
        exist.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      (d)  Cause.  Upon
        the Company learning of the occurrence of any event described in
Section 1(d), the Company may at any time terminate Employee’s
        employment hereunder for Cause within 60 days thereafter by giving Employee
        a
        Notice of Termination to that effect, describing in reasonable detail the
        facts
        or circumstances giving rise to the Company’s right to terminate Employee’s
        employment for Cause (and, if applicable, the action required to cure
        same).  If the Company does not give a Notice of Termination to
        Employee within 60 days after learning of the occurrence of an event giving
        rise
        to Cause, then this Agreement shall remain in effect; provided, however,
        that
        the failure of the Company to terminate this Agreement for Cause shall not
        be
        deemed a waiver of the Company’s right to terminate Employee’s employment for
        Cause upon the occurrence of a subsequent event described in Section 1(d)
        in accordance with the terms of this Agreement. Notwithstanding the foregoing,
        the right of the Company to terminate Employee’s employment for Cause under
Section 4(c) shall not limit Employee’s right to resign for Good Reason
        under Section 4(d)(i) if Good Reason is determined to exist prior to the
        time Cause is determined to exist.

       

      (e)  Full
        Settlement; Mitigation.  In
        no event shall Employee be obligated to seek other employment or take any
        other
        action by way of mitigation of the amounts payable to Employee under any
        of the
        provisions of this Agreement, and such amounts shall not be reduced whether
        or
        not Employee obtains other employment.  The Company shall not be
        liable to Employee for any damages for breach of this Agreement in addition
        to
        the amounts payable under Section 5 or 6 arising out of the
        termination of Employee’s employment prior to the end of the
        Term.  The Company shall be entitled to seek damages from Employee for
        any breach of Section 8, 9 or 10 by Employee or for
        Employee’s criminal misconduct.

       

      (f)  Release
        and Other Agreements.  Notwithstanding
        any other provision in this Agreement to the contrary, in consideration for
        receiving the severance benefits described in (i) Sections 5(c)(v),
5(c)(vi) and 5(c)(vii) or (ii) Sections 6(a)(iii)(E),
6(a)(iii)(F) and 6(a)(iii)(G), as the case may be, Employee
        hereby
        agrees to execute (and not revoke) a release in substantially the form attached
        hereto as Exhibit B (the “Release”).  If Employee fails
        to properly execute and deliver the Release (or revokes the Release), Employee
        agrees that Employee shall not be entitled to receive such severance
        benefits.  Without limiting the foregoing, in consideration for
        receiving such severance benefits, upon any termination of Employee’s employment
        (other than by reason of death), whether Employee’s employment is terminated by
        Employee or by the Company, Employee hereby agrees to resign in writing,
        in form
        and substance reasonably acceptable to the Company, from all officer and/or
        director positions with the Company or any Subsidiary or Affiliate thereof,
        effective on the Date of Termination.  For purposes of this Agreement,
        the Release and the resignation shall be considered to have been executed
        by
        Employee if it is signed by Employee’s legal representative in the case of
        Employee’s legal incompetence or on behalf of Employee’s estate in the case of
        Employee’s death.  Upon Employee’s execution and delivery of the
        Release, the Company shall also promptly execute and deliver the
        Release.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      (g)  409A
        Compliance.

       

      To
        the
        extent required by section 409A of the Code, if on Employee’s Date of
        Termination he is a “specified employee” within the meaning of section 409A of
        the Code, any amounts payable to Employee by reason of his termination of
        employment pursuant to Section 5 or Section 6 will be delayed for
        a period of six months following the Date of Termination.  In the case
        of any bi-weekly payments that would have been paid to Employee pursuant
        to
Section 5(c)(v) or Section 6(a)(iii)(E) during such six month
        period such amounts shall be paid to him in the form of a lump sum payment
        at
        the end of the six-month period and the remaining payments will be paid on
        a
        bi-weekly basis for the remainder of the period specified in Section
        5(c)(v) or Section 6(a)(iii)(E), as applicable.

       

      8.  Disclosure
        of, Access to and Entrustment of Confidential Information, Business
        Opportunities and Business Goodwill.  During
        the course of Employee’s employment with the Company (including during the
        180-day period following the Effective Date), the Company shall disclose
        to
        Employee, or place Employee in a position to have access to or develop,
        Confidential Information (as defined in Section 9(a)(i)), and/or shall
        entrust Employee with business opportunities of the Company, and/or shall
        place
        Employee in a position to develop business goodwill on behalf of the
        Company.  There is a need and desire on the part of the Company and
        Employee to specify the parties’ rights and obligations with respect to the
        ownership and protection of such Confidential Information, business
        opportunities and goodwill. Accordingly, as a material inducement to the
        Company
        to enter into this Agreement; in consideration for the compensation and other
        benefits payable hereunder to Employee; to protect the Company’s Confidential
        Information that has been and will be in the future disclosed or entrusted
        to
        Employee (the disclosure of which by Employee in violation of this Agreement
        would adversely affect the business goodwill of the Company), the business
        goodwill of the Company that has been and will in the future be developed
        in
        Employee and the business opportunities that have been and will in the future
        be
        disclosed or entrusted to Employee by the Company; and for other good and
        valuable consideration, Employee agrees to comply with, and be bound by,
        Sections 9 and 10.  As used in this Section 8,
“Company” shall include the Company and any of its Subsidiaries.

       

      9.  Confidential
        Information; Ownership of Property.

       

      (a)  Obligations
        to Maintain Confidentiality.

       

      (i)  Employee
        acknowledges that the Company has trade, business and financial secrets and
        other confidential and proprietary information regarding the Company and
        its
        business, in whatever form, tangible or intangible (collectively, the
“Confidential Information”), and that, during the course of Employee’s
        employment with the Company (including during the 180-day period following
        the
        Effective Date), Employee has received, shall receive or be placed in a position
        to have access to or develop Confidential Information.  Employee
        further acknowledges and agrees that Employee’s use of Confidential Information
        in the conduct of business on behalf of a competitor of the Company would
        constitute unfair competition with the Company and would adversely affect
        the
        business goodwill of the Company.  Confidential Information includes
        sales materials, technical information, processes and compilations of
        information, records, specifications and information concerning customers,
        prospective customers, customer and prospective customer lists, and information
        regarding methods of doing business.  As defined herein, Confidential
        Information shall not include information that is (i) obtained by Employee
        from
        a source other than the Company or its Affiliates, which source is not under
        a
        duty of non-disclosure in regard to such information or (ii) becomes generally
        available to the public other than through disclosure by Employee in violation
        of the provisions of this Agreement.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      (ii)  Employee
        is aware of those policies implemented by the Company to keep its Confidential
        Information secret, including those policies limiting the disclosure of
        information on a need-to-know basis and requiring the keeping of information
        in
        secure areas.  Employee acknowledges that the Confidential Information
        has been developed or acquired by the Company through the expenditure of
        substantial time, effort and money and provides the Company with an advantage
        over competitors who do not know or use such Confidential
        Information.

       

      (iii)  During
        and
        following Employee’s employment by the Company, Employee shall hold in
        confidence and not directly or indirectly disclose, use (for Employee’s
        commercial advantage or otherwise), copy, make lists of, or make available
        to
        others any Confidential Information except in Employee’s good faith performance
        of Employee’s duties to the Company as an executive of the Company or to the
        extent authorized in writing by the Board or required by law or compelled
        by
        legal process.  Employee agrees to use reasonable efforts to give the
        Company notice of any and all attempts to compel disclosure of any Confidential
        Information, in such a manner so as to provide the Company with written notice
        at least five days before disclosure or within three business days after
        Employee is informed that such disclosure is being or shall be compelled,
        whichever is earlier.  Such written notice shall include a description
        of the information to be disclosed, the court, government agency, or other
        forum
        through which the disclosure is sought, and the date by which the information
        is
        to be disclosed, and shall contain a copy of the subpoena, order or other
        process used to compel disclosure.

       

      (iv)  Employee
        further agrees not to use any Confidential Information for the benefit of
        any
        person or entity other than the Company.

       

      (v)  Employee
        agrees that all Confidential Information and other files, documents, materials,
        records, notebooks, customer lists, business proposals, contracts, agreements
        and other repositories containing information concerning the Company or the
        business of the Company, in whatever form, tangible or intangible (including
        all
        copies thereof), that Employee shall prepare, or use, or be provided with
        as a
        result of Employee’s employment with the Company, shall be and remain the sole
        property of the Company.  Upon termination of Employee’s employment
        hereunder, Employee agrees that all Confidential Information and other files,
        documents, materials, records, notebooks, customer lists, business proposals,
        contracts, agreements and other repositories containing information concerning
        the Company or the business of the Company (including all copies thereof)
        in
        Employee’s possession, custody or control, whether prepared by Employee or
        others, shall remain with or be returned to the Company promptly (within
        48
        hours) after the Date of Termination.  The materials required to be
        returned pursuant to this Section 9(a)(v) shall not include personal
        correspondence or other personal property of Employee that does not relate
        to
        the Company or the business of the Company.

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      (vi)  Notwithstanding
        anything herein to the contrary, Employee may disclose to any and all persons,
        without limitation of any kind, the U.S. federal income tax treatment and
        tax
        structure of the transactions contemplated in this Agreement and all materials
        of any kind (including opinions and other tax analyses) that are provided
        to
        Employee relating to such tax treatment and tax structure.  For this
        purpose, “tax structure” is limited to facts relevant to the U.S. federal income
        tax treatment of the transactions contemplated in this Agreement and does
        not
        include information relating to the identity of the parties hereto.

       

      (b)  Ownership
        of Work Product.  Employee
        acknowledges that all discoveries,
        concepts, ideas, inventions, innovations, improvements, developments, methods,
        processes, programs, designs, analyses, drawings, reports, patent applications,
        copyrightable work and mask work (whether or not including any confidential
        information) and all registrations or applications related thereto, all other
        proprietary information and all similar or related information (whether or
        not
        patentable) that relate to the Company’s or its Affiliates’ actual or
        anticipated business, research and development, or existing or future products
        or services and that are conceived, developed, contributed to, made, or reduced
        to practice by Employee (either solely or jointly with others) while employed
        by
        the Company (including any of the foregoing that constitutes any proprietary
        information or records) (“Work Product”) belong to the Company or its
        Affiliates, as applicable, and Employee hereby assigns, and agrees to assign,
        all of the above Work Product to the Company or its Affiliates, as
        applicable.  Any copyrightable work prepared in whole or in part by
        Employee in the course of Employee’s work for any of the foregoing entities
        shall be deemed a “work made for hire” under the copyright laws, and the Company
        or its Affiliates, as applicable, shall own all rights therein.  To
        the extent that any such copyrightable work is not a “work made for hire,”
Employee hereby assigns and agrees to assign to the Company all right, title,
        and interest, including without limitation, copyright in and to such
        copyrightable work.  Employee shall promptly disclose such Work
        Product and copyrightable work to the Board and perform all actions reasonably
        requested by the Board (whether during or after the Term) to establish and
        confirm the Company’s or its Affiliates’, as applicable, ownership (including,
        without limitation, assignments, consents, powers of attorney, and other
        instruments).

       

      (c)           As
        used in this Section 9“Company” shall include the Company and any of its
        Subsidiaries.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      10.  Non-Competition;
        Non-Solicitation; Non-Disparagement.

       

      (a)           For
        the reasons and consideration specified in Section 8, Employee hereby
        covenants and agrees that, during the Term of Non-Competition, Employee shall
        not, directly or indirectly, individually or as an officer, director, manager,
        employee, stockholder, consultant, contractor, partner, member, joint venturer,
        agent, equity owner or in any capacity whatsoever:

       

      (i)  own,
        engage in, manage, operate, join, control, be employed by, provide Competing
        Services to, or participate in the ownership, management, operation or control
        of or provision of Competing Services to, a Competing Business operating
        in the
        Geographic Area;

       

      (ii)  knowingly
        recruit, hire, assist in hiring, attempt to hire, or contact or solicit with
        respect to hiring any Person who, at any time during the 12 month period
        ending
        on the Date of Termination, was an employee of the Company; provided, that
        Employee may hire any Person that served as an administrative assistant assigned
        to Employee at the time Employee’s employment with the Company
        terminates;

       

      (iii)  induce
        or
        attempt to induce any employee of the Company to terminate, or in any way
        interfere with, the relationship between the Company and any employee thereof;
        or

       

      (iv)  induce
        or
        attempt to induce any customer, client, patient, supplier, service provider,
        or
        other business relation of the Company in the Geographic Area to cease doing
        business with the Company, or in any way interfere with the relationship
        between
        the Company and any such Person.

       

      Notwithstanding
        the foregoing, the Company agrees that Employee may own less than one percent
        of
        the outstanding voting securities of any publicly traded company that is
        a
        Competing Business so long as Employee does not otherwise participate in such
        competing business in any way prohibited by this Section
        10.  This Section 10(a) shall not apply in the event
        Company breaches any of its obligations under Section 5 or
6.

       

      (b)           Employee
        shall not make any negative or disparaging comments regarding the Company,
        its
        Subsidiaries or Affiliates or any of their respective officers, directors,
        shareholders, partners, members, managers, agents or employees (collectively,
        the “Representatives”), including regarding the performance of the
        Company, its Subsidiaries or Affiliates, or otherwise take any action that
        could
        reasonably be expected to adversely affect the Company, its Subsidiaries
        or
        Affiliates or the personal or professional reputation of any of their respective
        Representatives.  Information required to be disclosed by Employee
        pursuant to any applicable law, court order, subpoena, process or governmental
        decree shall not constitute a violation or breach of this Section 10(b);
        provided, that Employee delivers written notice of such required disclosure
        to
        the Company promptly before making such disclosure if such notice is not
        prohibited by applicable law, court order, subpoena, process or governmental
        decree.

       

      (c)           Employee
        acknowledges that the geographic boundaries, scope of prohibited activities,
        and
        time duration of the preceding paragraphs in this Section 10 (including
        the defined terms for “Competing Business,” “Geographic Area,” and “Term of
        Non-Competition” set forth in Section 1) are reasonable in nature
        and are no broader than are necessary to maintain the goodwill of the Company
        and the confidentiality of its Confidential Information and to protect the
        goodwill and other legitimate business interests of the Company, and also
        that
        the enforcement of such covenants would not cause Employee any undue hardship
        or
        unreasonably interfere with Employee’s ability to earn a
        livelihood.  If Employee violates the covenants and restrictions in
        this Section 10 and the Company brings legal action for injunctive or
        other equitable relief, Employee agrees that the Company shall not be deprived
        of the benefit of the full period of the restrictive covenant, as a result
        of
        the time involved in obtaining such relief.  Accordingly, Employee
        agrees that the provisions in Section 10(a) shall have a duration
        determined pursuant to Section 10(a), computed from the date the legal or
        equitable relief is granted.

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      (d)           If
        any court in any jurisdiction determines that any portion of this
Section 10 (including the defined terms for “Competing Business,”
“Geographic Area,” and “Term of Non-Competition” set forth in
Section 1) is invalid or unenforceable within such jurisdiction
        under circumstances then existing, the remainder of this Section 10
        (including the defined terms for “Competing Business,” “Geographic Area,” and
“Term of Non-Competition” set forth in Section 1) shall not thereby
        be affected and shall be given full effect without regard to the invalid
        or
        unenforceable provisions.  If any court in any jurisdiction construes
        any of the provisions of this Section 10 (including the defined terms for
“Competing Business,” “Geographic Area,” and “Term of Non-Competition” set forth
        in Section 1) to be invalid or unenforceable within such
        jurisdiction under circumstances then existing, because of the duration,
        scope
        or geographical area of such provision, such court shall be required to
        substitute the maximum duration, scope or geographical area reasonable under
        such circumstances within such jurisdiction for the stated period, scope
        or area
        with respect to such jurisdiction and such court shall be allowed to revise
        the
        restrictions contained herein to cover the maximum duration, scope and area
        permitted by law, and to enforce such provision as so revised.

       

      (e)           As
        used in this Section 10 (and the defined terms for “Competing Business,”
“Geographic Area,” and “Term of Non-Competition” set forth in
Section 1), “Company” shall include the Company and any of its
        Subsidiaries.

       

      11.  Successors;
        Binding Agreement.

       

      (a)           This
        Agreement is personal to Employee and shall not be assignable by Employee
        otherwise than by will or the by laws of descent and
        distribution.  This Agreement shall inure to the benefit of and be
        enforceable by Employee’s personal and legal representatives, executors,
        administrators, heirs, distributes, devisees and legatees.

       

      (b)           This
        Agreement shall inure to the benefit of and be binding upon the Company and
        its
        successors and assigns.

       

      (c)           The
        Company shall require any successor (whether direct or indirect, by purchase,
        merger, consolidation, sale of assets or otherwise) to all or substantially
        all
        of the business and/or assets of the Company, by a written agreement in form
        and
        substance reasonably satisfactory to Employee, to assume expressly and agree
        to
        perform this Agreement in the same manner and to the same extent that the
        Company would be required to perform it if no such succession had taken
        place.  Failure of the Company to obtain such agreement prior to the
        effectiveness of any such succession shall be a breach of this Agreement
        and
        shall entitle Employee to compensation from the Company in the same amount
        and
        on the same terms as Employee would be entitled to pursuant to
Section 6 if Employee terminated Employee’s employment for Good
        Reason after, but before the second anniversary of, the occurrence of a Change
        in Control, except that for purposes of implementing the foregoing, the date
        on
        which any such succession becomes effective shall be deemed the Date of
        Termination.  As used in this Agreement and after any such succession,
“Company” shall mean the Company as hereinbefore defined and any successor
        and/or assigns as aforesaid which assumes and agrees to perform this Agreement
        by operation of law, or otherwise.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      12.  Effect
        of Agreement on Plans and Agreements Governing
        Awards.  Notwithstanding
        anything to the contrary
        contained in any plan or agreement governing an Award granted to Employee
        prior
        to, on or after the date of this Agreement, the respective meanings of “Cause”
and “disability” as used in any such plans or agreements shall have the meaning
        ascribed to such terms by this Agreement for purposes of giving effect to
        such
        Awards on and after the date of this Agreement.

       

      13.  Miscellaneous.

       

      (a)  Construction.  This
        Agreement shall be deemed drafted equally by both the parties.  Its
        language shall be construed as a whole and according to its fair
        meaning.  Any presumption or principle that the language is to be
        construed against any party shall not apply.  The headings
        in this Agreement are only for convenience and are not intended to affect
        construction or interpretation. Any references to paragraphs, subparagraphs,
        sections, subsections or clauses are to those parts of this Agreement, unless
        the context clearly indicates to the contrary.  Also, unless the
        context clearly indicates to the contrary, (i) the plural includes the singular
        and the singular includes the plural; (ii) “and” and “or” are each used both
        conjunctively and disjunctively; (iii) “any,” “all,” “each,” or “every” means
“any and all”, and “each and every”; (iv) “includes” and “including” are each
“without limitation”; (v) “herein,” “hereof,” “hereunder” and other similar
        compounds of the word “here” refer to the entire Agreement and not to any
        particular paragraph, subparagraph, section or subsection; and (vi) all pronouns
        and any variations thereof shall be deemed to refer to the masculine, feminine,
        neuter, singular or plural as the identity of the entities or persons referred
        to may require.

       

      (b)  Notices.  All
        notices and other communications hereunder shall be in writing and shall
        be
        given by hand delivery to the other party or by registered or certified mail,
        return receipt requested, postage prepaid, addressed as follows:

       

      
        	
                if
                  to Employee:

              	
                if
                  to the Company:

              
	 	 
	
                Craig
                  P. Goguen

                3912
                  Wood Lake Drive

                Plano,
                  Texas  75093

              	
                Odyssey
                  HealthCare, Inc.

                717
                  North Harwood, Suite 1500

                Dallas,
                  Texas 75201

                Attn:  General
                  Counsel

              


      

      


      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

         

      

      
        	 	
                with
                  a copy to:

              
	 	 
	 	
                P.
                  Gregory Hidalgo

                Vinson
                  & Elkins L.L.P.

                3700
                  Trammell Crow Center

                2001
                  Ross Avenue

                Dallas,
                  Texas 75201

              


      

      


      or
        to such
        other address as either party shall have furnished to the other in writing
        in
        accordance herewith.  Notice and communications shall be effective
        when actually received by the addressee.

      


      (c)  Severability.  Except
        as otherwise provided in Section 10(d), 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 shall
        be
        fully severable; this Agreement shall be construed and enforced as if such
        illegal, invalid or unenforceable provision had never comprised a portion
        of
        this Agreement; and the remaining provisions of this Agreement shall remain
        in
        full force and effect and shall not be affected by the illegal, invalid or
        unenforceable provision or by its severance from this
        Agreement.  Furthermore, except as otherwise provided in
Section 10(d), in lieu of such illegal, invalid or unenforceable
        provision there shall be added automatically as 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.

       

      (d)  Withholding.  The
        Company may withhold from any amounts payable under this Agreement such Federal,
        state or local taxes as shall be required to be withheld pursuant to any
        applicable law or regulation.

       

      (e)  No
        Waiver.  Except
        as expressly set forth in this Agreement, no waiver by either party at any
        time
        of any breach by the other party of, or compliance with, any condition or
        provision of this Agreement to be performed by the other party shall be deemed
        a
        waiver of similar or dissimilar provisions or conditions at any
        time.

       

      (f)  Equitable
        and Other Relief.  Employee
        acknowledges that money damages would be both incalculable and an insufficient
        remedy for a breach of Sections 8, 9 or 10 by Employee and
        that any such breach would cause the Company irreparable
        harm.  Accordingly, the Company, in addition to any other remedies at
        law or in equity it may have, shall be entitled, without the requirement
        of
        posting of bond or other security, to equitable relief, including injunctive
        relief and specific performance, in connection with a breach of Sections
        8, 9 or 10 by Employee.  The parties agree that the
        only circumstances in which disputes between them will not be subject
        exclusively to arbitration pursuant to the provisions in Section 13(h)
        are in connection with a breach of Sections 8, 9 or 10 by
        Employee.  If the Company files a pleading with a court seeking
        immediate injunctive relief and this pleading is challenged by Employee and
        injunctive relief sought is not awarded, the Company shall pay all of Employee’s
        costs and attorneys’ fees.  The parties consent to venue in Dallas
        County, Texas and to the exclusive jurisdiction of competent state courts
        or
        federal courts in the state or district in Dallas County, Texas for all
        litigation which may be brought, subject to the requirement for arbitration
        in
Section 13(h), with respect to the terms of, and the transactions and
        relationships contemplated by, this Agreement.  The parties further
        consent to the non-exclusive jurisdiction of any state court located within
        a
        district which encompasses assets of a party against which a judgment has
        been
        rendered for the enforcement of such judgment or award against the assets
        of
        such party.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      (g)  Entire
        Agreement.  The
        provisions of this Agreement constitute the entire and complete understanding
        and agreement between the parties with respect to the subject matter hereof,
        and
        supersede all prior and contemporaneous oral and written agreements,
        representations and understandings of the parties, which are hereby
        terminated.  Employee and the Company acknowledge and represent that
        there are no other promises, terms, conditions or representations (or written)
        regarding any matter relevant hereto.

       

      (h)  Arbitration.  Except
        as otherwise provided in Section 13(f), in the event any claim, demand,
        cause of action, dispute, controversy or other matter in question
        (“Claim”) arises out of this Agreement (or its termination) or Employee’s
        employment (or termination of employment) by the Company or its Subsidiaries,
        then, upon the written request of Employee or the Company, such dispute or
        controversy will be submitted to binding arbitration.  Any arbitration
        will be conducted in accordance with the Federal Arbitration Act (“FAA”)
        and, to the extent an issue is not addressed by the FAA or the FAA does not
        apply, with the then-current National Rules for the Resolution of Employment
        Disputes of the American Arbitration Association (“AAA”) or other rules
        of the AAA as applicable to the claims asserted.  The results of
        arbitration will be binding and conclusive on the parties hereto.  All
        parties agree that venue for arbitration will be in Dallas County,
        Texas.  If Employee is the prevailing party, then Employee will be
        entitled to reimbursement by the Company for reasonable attorneys fees,
        reasonable costs and other reasonable expenses pertaining to the
        arbitration.  All proceedings conducted pursuant to this Section
        13(h) will be kept confidential by all parties.  THE
        ARBITRATORS SHALL HAVE NO AUTHORITY TO AWARD PUNITIVE DAMAGES UNDER ANY
        CIRCUMSTANCES (WHETHER IT BE EXEMPLARY DAMAGES, TREBLE DAMAGES, OR ANY OTHER
        PENALTY OR PUNITIVE TYPE OF DAMAGES).  REGARDLESS OF WHETHER SUCH
        DAMAGES MAY BE AVAILABLE UNDER TEXAS LAW, EMPLOYEE AND THE COMPANY EACH HEREBY
        WAIVE THE RIGHT, IF ANY, TO RECOVER PUNITIVE DAMAGES IN CONNECTION WITH ANY
        CLAIMS.  EMPLOYEE AND THE COMPANY ACKNOWLEDGE THAT BY SIGNING THIS
        AGREEMENT EMPLOYEE AND THE COMPANY ARE WAIVING ANY RIGHT THAT EMPLOYEE OR
        THE
        COMPANY MAY HAVE TO A JURY TRIAL OR, OTHER THAN AS EXPRESSLY PROVIDED BY
        SECTION 13(f), A TRIAL BEFORE A JUDGE
        IN CONNECTION WITH, OR RELATING TO, A CLAIM.

       

      (i)  Attorney
        Fees.  The
        prevailing party in any dispute or controversy under or in connection with
        this
        Agreement shall be entitled to reimbursement from the non-prevailing party
        for
        all costs and reasonable legal fees incurred by such prevailing
        party.

       

      (j)  Survival.  Sections
        1 and 4 through 13 of this Agreement shall survive the
        termination of this Agreement.

       

      (k)  Governing
        Law.  THIS
        AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
        OF THE
        STATE OF TEXAS WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS OF TEXAS
        OR
        ANY OTHER JURISDICTION, AND, WHERE APPLICABLE, THE LAWS OF THE UNITED
        STATES.

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      (l)  Amendments.  This
        Agreement may not be amended or modified at any time except by a written
        instrument approved by the Board and executed by the Company and
        Employee.

       

      (m)  Employee
        Acknowledgement.  Employee
        acknowledges that Employee has read and understands this Agreement, is fully
        aware of its legal effect, has not acted in reliance upon any representatives
        or
        promises made by the Company other than those contained in writing herein,
        and
        has entered into this Agreement freely based on Employee’s own
        judgment.

       

      (n)  Counterparts.  This
        Agreement may be executed in any number of counterparts, each of which shall
        be
        an original, but all of which together shall constitute one and the same
        instrument.  Any counterpart of this Agreement that has attached to it
        separate signature pages which together contain the signature of all parties
        hereto shall for all purposes be deemed a fully executed
        original.  Facsimile signatures shall constitute original
        signatures.

       

      [SIGNATURE
        PAGE FOLLOWS]

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

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

       

      
        	
                COMPANY:  

              
	 	 	 
	
                ODYSSEY
                  HEALTHCARE, INC.  

              
	
                a
                  Delaware corporation  

              
	 	 	 
	 	 	 
	By:	 
	 	
                Robert
                  A. Lefton, President and Chief 

              
	 	
                Executive
                  Officer 

              
	 	 	 
	 	 	 
	
                EMPLOYEE:  

              
	 	 	 
	 	 	 
	   
	
                Craig
                  P. Goguen  

              


      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
       

      EXHIBIT
        A

       

      THE
        SHARES ISSUABLE PURSUANT TO THIS AGREEMENT ARE SUBJECT TO THE PROVISIONS
        OF THE
        COMPANY'S 2001 EQUITY-BASED COMPENSATION PLAN AND THIS AGREEMENT IS ENTERED
        INTO
        PURSUANT THERETO.

       

      


      ODYSSEY
        HEALTHCARE, INC.

      2001
        EQUITY-BASED COMPENSATION PLAN

      MANAGEMENT

      NONSTATUTORY
        STOCK OPTION AGREEMENT

       

      This
        Agreement is made and entered into as of the Grant Date (as defined below)
        by
        and between Odyssey HealthCare, Inc., a Delaware corporation (the "Company")
        and
        Craig P. Goguen (the "Optionee"):

       

      WHEREAS,
        the Company in order to induce you to enter into and continue in service
        to the
        Company and to contribute to the success of the Company, agrees to grant
        you an
        option to acquire a priority interest in the Company through the purchase
        of
        shares of stock of the Company;

       

      WHEREAS,
        the Company adopted the Odyssey HealthCare, Inc. 2001 Equity-Based Compensation
        Plan as it may be amended from time to time (the "Plan") under which the
        Company
        is authorized to grant stock options to certain employees and directors of
        the
        Company;

       

      WHEREAS,
        a
        copy of the Plan has been furnished to you and shall be deemed a part of
        this
        common stock option agreement (the "Agreement") as if fully set forth herein;
        and

       

      WHEREAS,
        you desire to accept the option created pursuant to the Agreement.

       

      NOW,
        THEREFORE, in consideration of the mutual covenants set forth herein and
        for
        other valuable consideration hereinafter set forth, the parties agree as
        follows:

       

      1.  The
        Grant.  Subject to the conditions set forth below, the Company
        hereby grants to you, effective as of August ___, 2007 ("Grant Date"), as
        a
        matter of separate inducement and not in lieu of any salary or other
        compensation for your services for the Company, the right and option to purchase
        (the "Option"), in accordance with the terms and conditions set forth herein
        and
        in the Plan, an aggregate of 225,000 shares of the Company's Common Stock,
        $.001
        par value (the "Option Shares"), at the Exercise Price (as hereinafter
        defined).  As used herein, the term "Exercise Price" shall mean a
        price equal to $______ per share, subject to the adjustments and limitations
        set
        forth herein and in the Plan.  The Option granted hereunder is
        intended to constitute an Option which is not designed pursuant to section
        422
        of the Internal Revenue Code of 1986, as amended; however, you should consult
        with your tax advisor concerning the proper reporting of any federal, state
        or
        local tax liability that may arise as a result of the grant or exercise of
        the
        Option.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      2.  Exercise.

       

      (a)           For
        purposes of this Agreement, the Option Shares shall be deemed "Nonvested
        Shares"
        unless and until they have become "Vested Shares."  The Option shall
        in all events terminate at the close of business on the tenth (10) anniversary
        of the date of this Agreement.  Subject to other terms and conditions
        set forth herein, the Option may be exercised in cumulative installments
        as
        follows:

       

      


      
        	
                On
                  or After Each of the Following Vesting Dates

              	
                Cumulative
                  Percentage of Shares as to Which Option is
                  Exercisable

              
	
                First
                  Anniversary of the Grant Date

              	
                25%

              
	
                Second
                  Anniversary of the Grant Date

              	
                50%

              
	
                Third
                  Anniversary of the Grant Date

              	
                75%

              
	
                Fourth
                  Anniversary of the Grant Date

              	
                100%

              


      

      


      Option
        Shares shall constitute Vested Shares once they are exercisable.

       

      (b)           Subject
        to the relevant provisions and limitations contained herein and in the Plan,
        you
        may exercise the Option to purchase all or a portion of the applicable number
        of
        Vested Shares at any time prior to the termination of the Option pursuant
        to
        this Option Agreement.  In no event shall you be entitled to exercise
        the Option for any Nonvested Shares or for a fraction of a Vested
        Share.

       

      (c)           Notwithstanding
        any other provision of this Agreement as of the business day immediately
        preceding a Change in Control all Nonvested Shares shall become Vested
        Shares.

       

      (d)           Any
        exercise by you of the Option shall be in writing addressed to the Secretary
        of
        the Company at its principal place of business.  Exercise of the
        Option shall be made by delivery to the Company by you (or other person entitled
        to exercise the Option as provided hereunder) of (i) an executed "Notice
        of
        Exercise of Common Stock Option and Record of Common Stock Transfer", in
        the
        form attached hereto as Exhibit A and incorporated herein by reference, and
        (ii)
        payment of the aggregate purchase price for shares purchased pursuant to
        the
        exercise.

       

      (e)           Payment
        of the Exercise Price may be made, at your election, (i) in cash, by certified
        or official bank check or by wire transfer of immediately available funds,
        (ii)
        by delivery to the Company of a number of shares of Stock having a fair market
        value as of the date of exercise equal to the Exercise Price, or (iii) by
        net
        issue exercise, pursuant to which the Company will issue to you a number
        of
        Option Shares as to which the Option is exercised, less a number of shares
        with
        a fair market value as of the date of exercise, as determined in good faith
        by
        the Committee, equal to the Exercise Price.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      (f)           In
        the event that you shall cease to be employed by the Company or any Subsidiary
        or parent thereof for any reason other than Cause, the Option may only be
        exercised within 90 days after the date on which you ceased to be so employed,
        and only to the same extent that you were entitled to exercise the Option
        on the
        date on which you ceased to be so employed and had not previously done
        so.

       

      (g)           In
        the event that you shall cease to be employed by the Company or any Subsidiary
        or parent thereof due to a Cause termination, no portion of the Option shall
        continue to be exercisable as of your date of termination.

       

      (h)           If
        you are on leave of absence for any reason, the Company may, in its sole
        discretion, determine that you will be considered to still be in the employ
        of
        or providing services for the Company, provided that rights to the Option
        Shares
        will be limited to the extent to which those rights were earned or vested
        when
        the leave or absence began.

       

      (i)           The
        terms and provisions of the employment agreement, if any, between you and
        the
        Company or any Subsidiary (the "Employment Agreement") that relate to or
        affect
        the Option are incorporated herein by reference.  Notwithstanding the
        foregoing provisions of this Section 2, in the event of any conflict or
        inconsistency between the terms and conditions of this Section 2 and the
        terms
        and conditions of the Employment Agreement, the terms and conditions of the
        Employment Agreement shall be controlling.

       

      3.  Transferability.  The
        Option, and any rights or interests therein will be transferable by you only
        by
        will or the laws of descent and distribution.  However, in the
        Committee's discretion the Option may be transferable or assignable if such
        transfer complies with the rules promulgated in connection with a Form S-8
        registration statement; provided, however, that a transfer which is only
        allowed
        subject to the Committee's approval may only be made to a Permitted Transferee
        or subject to a domestic relations order entered or approved by a court of
        competent jurisdiction.

       

      4.  Registration.  From
        time to time, the Board and appropriate officers of the Company shall and
        are
        authorized to take whatever actions are necessary to file required documents
        with governmental authorities, stock exchanges, and other appropriate persons
        to
        make shares of Common Stock available for issuance pursuant to the exercise
        of
        Options and subsequent lapse of restrictions.

       

      5.  Withholding
        Taxes.  The Committee may, in its discretion, require you to pay
        to the Company at the time of the exercise of an Option or thereafter, the
        amount that the Committee deems necessary to satisfy the Company's current
        or
        future obligation to withhold federal, state or local income or other taxes
        that
        you incur by exercising an Option.  In connection with such an event
        requiring tax withholding, you may (a) direct the Company to withhold
        from the shares of Common Stock to be issued to you the number of shares
        necessary to satisfy the Company's obligation to withhold taxes, that
        determination to be based on the shares' fair market value as of the date
        of
        exercise; (b) deliver to the Company sufficient shares of Common Stock
        (based upon the fair market value as of the date of such delivery) to satisfy
        the Company's tax withholding obligation, which tax withholding obligation
        is
        based on the shares' fair market value as of the date of exercise; or (c)
        deliver sufficient cash to the Company to satisfy its tax withholding
        obligations.  If you elect to use a Common Stock withholding feature
        you must make the election at the time and in the manner that the Committee
        prescribes.  The Committee may, at its sole option, deny your request
        to satisfy withholding obligations through Common Stock instead of
        cash.  In the event the Committee subsequently determines that the
        aggregate fair market value (as determined above) of any shares of Common
        Stock
        withheld or delivered as payment of any tax withholding obligation is
        insufficient to discharge that tax withholding obligation, then you shall
        pay to
        the Company, immediately upon the Committee's request, the amount of that
        deficiency in the form of payment requested by the Committee.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      6.  Adjustments.  The
        terms of the Option shall be subject to adjustment from time to time, in
        accordance with the following provisions:

       

      (a)           If
        at any time, or from time to time, the Company shall subdivide as a whole
        (by
        reclassification, by a Common Stock split, by the issuance of a distribution
        on
        Common Stock payable in Common Stock or otherwise) the number of shares of
        Common Stock then outstanding into a greater number of shares of Common Stock,
        then (i) the number of shares of Common Stock (or other kind of securities)
        that
        may be acquired under the Option shall be increased proportionately and (ii)
        the
        price (including exercise price) for each share of Common Stock (or other
        kind
        of shares or securities) subject to then outstanding Options shall be reduced
        proportionately, without changing the aggregate purchase price or value as
        to
        which outstanding Options remain exercisable or subject to
        restrictions.

       

      (b)           If
        at any time, or from time to time, the Company shall consolidate as a whole
        (by
        reclassification, reverse Common Stock split or otherwise) the number of
        shares
        of Common Stock then outstanding into a lesser number of shares of Common
        Stock,
        (i) the number of shares of Common Stock (or other kind of shares or securities)
        that may be acquired under the Option shall be decreased proportionately
        and
        (ii) the price (including exercise price) for each share of Common Stock
        (or
        other kind of shares or securities) subject to then outstanding Options shall
        be
        increased proportionately, without changing the aggregate purchase price
        or
        value as to which outstanding Options remain exercisable or subject to
        restrictions.

       

      (c)           Whenever
        the number of shares of Common Stock subject to the Option and the price
        for
        each share of Common Stock subject to the Option are required to be adjusted
        as
        provided in this Section 6, the Committee shall promptly prepare a notice
        setting forth, in reasonable detail, the event requiring adjustment, the
        amount
        of the adjustment, the method by which such adjustment was calculated, and
        the
        change in price and the number of shares of Common Stock, other securities,
        cash, or property purchasable and held by you pursuant to the exercise of
        the
        Option or subject to the Option after giving effect to the
        adjustments.  The Committee shall promptly give you such a
        notice.

       

      (d)           Adjustments
        under this Section 6 shall be made by the Committee, and its determination
        as to
        what adjustments shall be made and the extent thereof shall be final, binding,
        and conclusive.  No fractional interest shall be issued under the Plan
        on account of any such adjustments.

       

      7.  Furnish
        Information.  You agree to furnish to the Company all information
        requested by the Company to enable it to comply with any reporting or other
        requirement imposed upon the Company by or under any applicable statute or
        regulation.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      8.  Remedies.  The
        Company shall be entitled to recover from you reasonable attorneys' fees
        incurred in connection with the enforcement of the terms and provisions of
        this
        Agreement whether by an action to enforce specific performance or for damages
        for its breach or otherwise.

       

      9.  No
        Liability for Good Faith Determinations.  The Company and the
        members of the Committee and the Board shall not be liable for any act, omission
        or determination taken or made in good faith with respect to this Agreement
        or
        the Option granted hereunder.

       

      10.  Execution
        of Receipts and Releases.  Any payment of cash or any issuance or
        transfer of shares of Common Stock or other property to you, or to your legal
        representative, heir, legatee or distributee, in accordance with the provisions
        hereof, shall, to the extent thereof, be in full satisfaction of all claims
        of
        such persons hereunder. The Company may require you or your legal
        representative, heir, legatee or distributee, as a condition precedent to
        such
        payment or issuance, to execute a release and receipt therefore in such form
        as
        it shall determine.

       

      11.  No
        Guarantee of Interests.  The Board and the Company do not
        guarantee the Common Stock of the Company from loss or
        depreciation.

       

      12.  Company
        Records.  Records of the Company regarding your service and other
        matters shall be conclusive for all purposes hereunder, unless determined
        by the
        Company to be incorrect.

       

      13.  Notice.  All
        notices required or permitted under this Agreement must be in writing and
        personally delivered or sent by mail and shall be deemed to be delivered
        on the
        date on which it is actually received by the person to whom it is properly
        addressed or if earlier the date it is deposited, postage paid in the United
        States mail. A notice shall be effective when actually received by the
        appropriate Company representative, in writing and in conformance with this
        Agreement and the Plan. 

       

      14.  Waiver
        of Notice.  Any person entitled to notice hereunder may, by
        written form, waive such notice.

       

      15.  Information
        Confidential.  As partial consideration for the granting of this
        Option, you agree that you will keep confidential all information and knowledge
        that you have relating to the manner and amount of your participation in
        the
        Plan; provided, however, that such information may be disclosed as required
        by
        law and may be given in confidence to your spouse, tax and financial advisors,
        or a financial institution to the extent that such information is necessary
        to
        obtain a loan.

       

      16.  Successors.  This
        Agreement shall be binding upon you, your legal representatives, heirs, legatees
        and distributees, and upon the Company, its successors and assigns.

       

      17.  Headings.  The
        titles and headings of paragraphs are included for convenience of reference
        only
        and are not to be considered in construction of the provisions
        hereof.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      18.  Governing
        Law.  All questions arising with respect to the provisions of this
        Agreement shall be determined by application of the laws of the State of
        Delaware except to the extent Delaware law is preempted by federal
        law.

       

      19.  Word
        Usage.  Words used in the masculine shall apply to the feminine
        where applicable, and wherever the context of this Agreement dictates, the
        plural shall be read as the singular and the singular as the
        plural.

       

      20.  No
        Assignment.  You may not assign this Agreement or any of your
        rights under this Agreement without the Company's prior written consent,
        and any
        purported or attempted assignment without such prior written consent shall
        be
        void.

       

      21.  Arbitration.  You
        and the Company agree, upon written request of either you or the Company,
        to the
        resolution by binding arbitration of all claims, demands, causes of action,
        disputes, controversies or other matters in question (“Claims”), whether or not
        arising out of this Agreement or your employment (or its termination), whether
        arising in contract, tort or otherwise and whether provided by statute, equity
        or common law, that the Company may have against you or that you may have
        against the Company or its parents, subsidiaries or affiliates, and each
        of the
        foregoing entities’ respective officers, directors, employees or agents in their
        capacity as such or otherwise, if such Claim is not resolved by the mutual
        written agreement between you and the Company, or otherwise, within 30 days
        after notice of the dispute is first given.  Claims covered by this
        Section 21 include without limitation claims by you for breach of this
        Agreement, wrongful termination, discrimination (based on age, race, sex,
        disability, national origin, sexual orientation, religion or any other factor),
        harassment and retaliation.  Any arbitration shall be conducted in
        accordance with the Federal Arbitration Act (“FAA”) and, to the extent an issue
        is not addressed by the FAA, with the then-current National Rules for the
        Resolution of Employment Disputes of the American Arbitration Association
        (“AAA”) or such other rules of the AAA as are applicable to the claims
        asserted.  If a party refuses to honor its obligations under this
        Section 21, the other party may compel arbitration in either federal or state
        court.  The arbitrators shall apply the substantive law of Delaware
        (excluding choice-of-law principles that might call for the application of
        some
        other jurisdiction’s law) or federal law, or both as applicable to the claims
        asserted.  The arbitrators shall have exclusive authority to resolve
        any dispute relating to the interpretation, applicability or enforceability
        or
        formation of this Agreement (including this Section 21), including any claim
        that all or part of the Agreement is void or voidable and any claim that
        an
        issue is not subject to arbitration.  The results of arbitration will
        be binding and conclusive on the parties hereto. Any arbitrators’ award or
        finding or any judgment or verdict thereon will be final and unappealable.
        All
        parties agree that venue for arbitration will be in Dallas, Texas, and that
        any
        arbitration commenced in any other venue will be transferred to Dallas, Texas,
        upon the written request of any party to this Agreement. In the event that
        an
        arbitration is actually conducted pursuant to this Section 21, the party
        in
        whose favor the arbitrator renders the award shall be entitled to have and
        recover from the other party all costs and expenses incurred, including
        reasonable attorneys’ fees, reasonable costs and other reasonable expenses
        pertaining to the arbitration and the enforcement thereof and such attorneys
        fees, costs and other expenses shall become a part of any award, judgment
        or
        verdict.  Any and all of the arbitrators’ orders, decisions and awards
        may be enforceable in, and judgment upon any award rendered by the arbitrators
        may be confirmed and entered by any federal or state court having
        jurisdiction.  All arbitrations will have three individuals acting as
        arbitrators: one arbitrator will be selected by you, one arbitrator will
        be
        selected by the Company, and the two arbitrators so selected will select
        a third
        arbitrator; provided that (a) you or the Company shall use reasonably diligent
        efforts to select its respective arbitrator within 60 days after a matter
        is
        submitted to arbitration and (b) the parties (including arbitrators) shall
        not
        be limited to selecting arbitrators from only the AAA’s lists of
        arbitrators.  Any arbitrator selected by a party will not be
        affiliated, associated or related to the party selecting that arbitrator
        in any
        matter whatsoever.  The arbitration hearing shall be conducted within
        60 days after the selection of the arbitrators.  All privileges under
        state and federal law, including attorney-client, work product and party
        communication privileges, shall be preserved and protected.  The
        decision of the majority of the arbitrators will be binding on all
        parties.  Arbitrations will be conducted in a manner so that the final
        decision of the arbitrators will be made and provided to you and the Company
        no
        later than 120 days after a matter is submitted to arbitration.  All
        proceedings conducted pursuant to this agreement to arbitrate, including
        any
        order, decision or award of the arbitrators, shall be kept confidential by
        all
        parties.  YOU ACKNOWLEDGE THAT BY SIGNING THIS AGREEMENT, YOU
        ARE WAIVING ANY RIGHT THAT YOU MAY HAVE TO A JURY TRIAL OR A COURT TRIAL,
        OF ANY
        EMPLOYMENT-RELATED CLAIM ALLEGED BY YOU.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      22.  Miscellaneous.

       

      (a)           This
        Agreement is subject to all the terms, conditions, limitations and restrictions
        contained in the Plan.  In the event of any conflict or inconsistency
        between the terms hereof and the terms of the Plan, the terms of the Plan
        shall
        be controlling.

       

      (b)           The
        Option may be amended by the Board of the Company or by the Committee at
        any
        time (i) if the Board or the Committee determines, in its sole discretion,
        that
        amendment is necessary or advisable in light of any addition to or change
        in any
        federal or state, tax or securities law or other law or regulation, which
        change
        occurs after the Grant Date and by its terms applies to the Option; or (ii)
        other than in the circumstances described in clause (i) or provided in the
        Plan,
        with your consent.  The foregoing notwithstanding, the Committee may,
        in its sole discretion, cancel the Option at any time prior to your exercise
        of
        the Option if, in the opinion of the Committee, you engage in activities
        contrary to the interests of the Company.

       

      (c)           For
        purposes of this Agreement, a Permitted Transferee refers to any child,
        stepchild, grandchild, parent, step-parent, grandparent, spouse, former spouse,
        sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
        daughter-in-law, brother-in-law, or sister-in-law including adoptive
        relationships in each case with respect to you, any person sharing your
        household (other than a tenant or employee of the Company), a trust in which
        these persons have more than fifty percent of the beneficial interest, a
        foundation in which these persons (or you) control the management of assets,
        and
        any other entity in which these persons (or you) own more than fifty percent
        of
        the voting interest.

       

      (d)           For
        purposes of this Agreement “Cause” shall have the meaning set forth in that
        certain Employment Agreement, dated as of August ___, 2007, by and between
        the
        Company and Employee.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      


       

      Please
        indicate your acceptance of all the terms and conditions of the award and
        the
        Plan by signing and returning a copy of this Agreement.

       

      
        
          	 	 	
                  ODYSSEY
                    HEALTHCARE, INC. 

                
	 	 	 	 
	 	 	 	 
	 	 	
                  By:

                	 
	 	 	
                  Name:

                	
                  Robert
                    A. Lefton

                
	 	 	
                  Title:

                	
                  President
                    & CEO

                
	
                  ACCEPTED:

                	 	 	 
	 	 	 	 
	
                   

                	 	 	 
	
                  Signature
                    of Optionee

                	 	 	 
	 	 	 	 
	 	 	 	 
	
                  Craig
                    P. Goguen

                	 	 	 
	
                  Name
                    of Optionee (Please Print)

                	 	 	 
	 	 	 	 
	
                  Date:  _________________,
                    ____

                	 	 	 
	 	 	 	 
	 	 	 	 


        

      

    

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      EXHIBIT
        B

       

      AGREEMENT
        AND MUTUAL RELEASE

       

      This
        Agreement and Mutual Release (this “Agreement”), dated as of _____________,
        20___, is entered into between Craig P. Goguen (“Employee”) and Odyssey
        HealthCare, Inc., a Delaware corporation (the “Company”), pursuant to the terms
        of that certain Employment Agreement, dated July 26, 2007 (the “Employment
        Agreement”), by and between Employee and the Company.  Pursuant to
        Section 7(f) of the Employment Agreement, Employee agreed that in consideration
        for receiving any of the severance benefits identified therein, that Employee
        would execute and deliver this Agreement to the Company.  Any
        capitalized term used herein and not otherwise defined shall have the meaning
        given such term in the Employment Agreement.

       

       1.  Definitions.

       

      a.  “Claims”
        means any and all claims, complaints, charges, demands, liabilities, suits,
        damages, losses, expenses, attorneys' fees, obligations or causes of
        action.

       

      b.   “Company
        Parties” means the Company and its predecessors, successors, assigns, parents,
        Subsidiaries and affiliates and each of the foregoing entities' respective
        past,
        present and future shareholders, members, partners, managers, directors,
        officers, employees, agents, representatives, principals, insurers, attorneys,
        employee benefit programs (and the trustees, administrators, fiduciaries
        and
        insurers of such programs), and any Person acting by, through, under or in
        concert with any of the foregoing entities).

       

      c.  “Employee
        Parties” means Employee and his family, attorneys, heirs, estate, agents,
        executors, representatives, administrators and each of their respective
        successors and assigns.

       

       2.  Employee’s
        General Release and Covenant Not to Sue.

       

      a.  Employee,
        on behalf of himself and each of the other Employee Parties, hereby generally
        releases and forever discharges the Company Parties from any and all Claims,
        known or unknown, of any kind and every nature whatsoever, and whether or
        not
        accrued or matured, which any of them may have, arising out of or relating
        to
        any transaction, dealing, relationship, conduct, act or omission, or any
        other
        matters or things occurring or existing at any time prior to and including
        the
        date of termination of Employee’s employment with the Company (including but not
        limited to any Claims against any of the Company Parties based on, relating
        to
        or arising under wrongful discharge, retaliation, breach of contract (whether
        oral or written), tort, fraud, defamation, slander, breach of privacy, violation
        of public policy, negligence, promissory estoppel, Title VII of the Civil
        Rights
        Act of 1964, The Age Discrimination in Employment Act, The Americans with
        Disabilities Act, the Employee Retirement Income Security Act of 1974, or
        any
        other federal, state or local law relating to employment (or unemployment),
        the
        payment of wages, salary or other compensation, civil or human rights, or
        discrimination in employment (based on age or any other factor)) in all cases
        arising out of or relating to Employee's employment by the Company or any
        Subsidiary thereof or Employee’s investment in the Company or any Subsidiary
        thereof or his services as an officer or employee of the
        Company or any Subsidiary thereof, or otherwise relating to the termination
        of
        such employment or services; provided, however, that this release will not
        limit
        or release (i) Employee's rights under this Agreement or Employee’s rights under
        the Employment Agreement that survive the date of termination of Employee’s
        employment with the Company, (ii) Employee's rights to indemnification from
        any
        Company Party in respect of his services as a director, officer or employee
        of a
        Company Party (or of any entity for which Employee has served in any such
        capacity or a similar capacity at the request of the Company) as provided
        by
        law, any indemnification agreements to which Employee and any Company Party
        are
        parties, or the certificates of incorporation or bylaws (or like constitutive
        documents) of any Company Party, (iii) subject to the terms of the Employment
        Agreement, Employee's rights under any Investment Plan or any agreement entered
        into to evidence rights granted pursuant to an Investment Plan, (iv) Employee’s
        entitlement, if any, to continued medical and dental insurance coverage under
        and pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985,
        or
        (v) any rights of Employee under any Welfare Plan.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      b.  Employee,
        on behalf of himself and each of the other Employee Parties, hereby covenants
        forever not to assert, file, prosecute, commence, institute (or sponsor or
        purposely facilitate any person in connection with the foregoing), any complaint
        or lawsuit or any legal, equitable, arbitral or administrative proceeding
        of any
        nature, against any of the Company Parties in connection with any released
        Claims, and represents and warrants that no other person or entity has initiated
        or, to the extent within his control, will initiate any such proceeding on
        his
        behalf, and that if such a proceeding is initiated, Employee shall accept
        no
        benefit therefrom.

       

       3.  Company’s
        General Release and Covenant Not to Sue.

       

      a.  The
        Company, on its own behalf and on behalf of the other Company Parties, hereby
        generally releases and forever discharges the Employee Parties from any and
        all
        Claims, known or unknown, of any kind and every nature whatsoever, and whether
        or not accrued or matured, which any of them may have, arising out of or
        relating to any transaction, dealing, relationship, conduct, act or omission,
        or
        any other matters or things occurring or existing at any time prior to and
        including the date of termination of Employee’s employment with the Company
        (including but not limited to any Claims based on, relating to or arising
        under
        breach of contract (whether oral or written), tort, fraud, defamation, slander,
        violation of public policy, negligence, promissory estoppel, or any other
        federal, state or local law relating to employment or discrimination in
        employment) in all cases arising out of or relating to Employee's employment
        by
        the Company or any Subsidiary thereof or Employee’s investment in the Company or
        any Subsidiary thereof or his services as a director, officer or employee
        of any
        Company Party (or of any entity for which Employee has served in any such
        capacity or a similar capacity at the request of the Company), or otherwise
        relating to the termination of such employment or services; provided, however,
        that this release will not limit or release (i) the Company's rights under
        this
        Agreement or the Company’s rights under the Employment Agreement that survive
        the date of termination of Employee’s employment with the Company, (ii) the
        Company's rights against Employee with respect to any breach of fiduciary
        or
        other legal duties as a director or officer, any fraudulent or criminal activity
        or any action or conduct that would constitute Cause under the Employment
        Agreement (other than an action that would constitute Cause only under clause
        (i) of the definition thereof), or (iii) the Company's rights under any
        Investment Plan or any agreement entered into to evidence rights granted
        pursuant to an Investment Plan.

       

      b.  The
        Company, on behalf of itself and the other Company Parties, hereby covenants
        forever not to assert, file, prosecute, commence, institute (or sponsor or
        purposely facilitate any person in connection with the foregoing), any complaint
        or lawsuit or any legal, equitable, arbitral or administrative proceeding
        of any
        nature, against any of the Employee Parties in connection with any released
        Claims, and represents and warrants that no other person or entity has initiated
        or to the extent within its control, will initiate any such proceeding on
        its
        behalf, and that if such a proceeding is initiated, the Company and the other
        Company Parties shall accept no benefit therefrom.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

       4.  Acknowledgments.  Employee
        acknowledges that, by entering into this Agreement, the Company does not
        admit
        to any wrongdoing in connection with Employee’s employment, and that this
        Agreement is intended as a compromise of any Claims that any Employee Party
        has
        or may have against the Company Parties.  Employee acknowledges that
        he has read and understands this Agreement, is fully aware of its legal effect,
        has not acted in reliance upon any representations or promises made by the
        Company other than those contained in writing herein, and has entered into
        this
        Agreement freely based on Employee’s own judgment.  Employee has been
        advised by the Company to consult with an attorney of Employee’s choosing before
        signing this Agreement.  Employee understands that he has 21 days to
        consider this Agreement, which Employee agrees is a reasonable amount of
        time.  In addition, Employee understands that he may revoke this
        Agreement within 7 days after Employee has signed it by written notice to
        the
        Company given in accordance with Section 13(b) of the Employment
        Agreement.  This Agreement shall not become effective or enforceable
        until the 7-day revocation period has expired without Employee’s
        revocation.  Employee acknowledges that if Employee accepts any of the
        severance benefits identified in the Employment Agreement after the expiration
        of the 7-day period, such acceptance shall constitute an acknowledgment by
        Employee that Employee did not revoke this Agreement during the 7-day
        period.

       

       5.  Resignation.  Employee
        hereby resigns from his positions as a director of the Company and each of
        its
        direct and indirect subsidiaries, effective as of the date of termination
        of
        Employee’s employment with the Company.

       

       6.  Injunctive
        Relief.  The parties hereto acknowledges that money damages would
        be both incalculable and an insufficient remedy for a breach of this Agreement
        by either party hereto and that any such breach would cause the nonbreaching
        party irreparable harm.  Accordingly, each party hereto, in addition
        to any other remedies at law or in equity it may have, shall be entitled,
        without the requirement of posting of bond or other security, to equitable
        relief, including injunctive relief and specific performance, in connection
        with
        a breach of this Agreement by the other party.  If either party hereto
        files a pleading with a court seeking immediate injunctive relief and this
        pleading is challenged by the other party and the injunctive relief sought
        is
        not awarded, the party seeking injunctive relief shall pay all of the costs
        and
        attorneys’ fees of the other party.

       

       7.  Severability.  If
        any provision of this Agreement is held to be illegal, invalid or unenforceable
        under present or future laws, such provision shall be fully severable; this
        Agreement shall be construed and enforced as if such illegal, invalid or
        unenforceable provision had never comprised a portion of this Agreement;
        and the
        remaining provisions of this Agreement shall remain in full force and effect
        and
        shall not be affected by the illegal, invalid or unenforceable provision
        or by
        its severance from this Agreement.  Furthermore, in lieu of such
        illegal, invalid or unenforceable provision there shall be added automatically
        as 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.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

       8.  Attorney’s
        Fees.  Employee agrees to pay the reasonable attorney’s fees,
        costs and any damages any Company Party may incur as a result of Employee
        breaching a promise Employee made in this Agreement (such as by suing a Company
        Party over a released Claim) or if any representation Employee made in this
        Agreement is false.  The Company agrees to pay the reasonable
        attorney’s fees, costs and any damages any Employee Party may incur as a result
        of the Company breaching a promise the Company made in this Agreement (such
        as
        by suing an Employee Party over a released Claim) or if any representation
        the
        Company made in this Agreement is false.

       

       9.  Counterparts.  This
        Agreement may be executed in any number of counterparts, each of which will
        be
        an original, but all of which together shall constitute one and the same
        instrument.  Any counterpart of this Agreement that has attached to it
        separate signature pages which together contain the signature of all parties
        hereto shall for all purposes be deemed a fully executed
        original.  Facsimile signatures shall constitute original
        signatures.

       

       10.  Governing
        Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
        ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REFERENCE TO PRINCIPLES
        OF CONFLICT OF LAWS OF TEXAS OR ANY OTHER JURISDICTION, AND, WHERE APPLICABLE,
        THE LAWS OF THE UNITED STATES.

       

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

       

       

      
        
          	
                   

                	 	
                   

                
	
                  Craig
                    P. Goguen

                	 	
                  Date

                
	 	 	 
	 	 	 
	 	 	 
	
                   

                	 	
                   

                
	
                  For
                    Odyssey HealthCare, Inc.

                	 	
                  Date

                


        



       

       

       

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