Exhibit 10.11


 


SEPARATION
AGREEMENT AND RELEASE


 


THIS SEPARATION AGREEMENT AND RELEASE (this “Agreement”)
is made as of March 31, 2005 by and among National Mentor Holdings, Inc.,
a Delaware corporation (the “Company”), National Mentor, Inc., a
Delaware corporation (“Employer”), and Donald Monack (“Executive”).


 


WHEREAS, as of the date hereof, Employer is a direct or indirect
subsidiary of the Company.


 


WHEREAS, Executive and Employer are party to an Employment Agreement
dated September 29, 1999, as amended by the First Amendment to Employment
Agreement, dated March 9, 2001 (as amended, the “Employment Agreement”).


 


WHEREAS, Executive was a participant in the National Mentor, Inc.
Equity Deferred Compensation Plan, adopted on March 9, 2001 (as amended,
the “2001 Equity Plan”) and in the National Mentor Services, LLC 2003
Deferred Compensation Plan, adopted on April 30, 2003 (as amended, the “2003
Equity Plan”), which plans have distributed all amounts owing or to become
owing thereunder to Executive.


 


WHEREAS, Executive is a participant in the National Mentor, Inc.
Executive Deferred Compensation Plan, adopted on March 9, 2001 (as
amended, the “Executive Plan”), the National Mentor, Inc. Executive
Deferral Plan (as amended, the “Deferral Plan”) and in a 401(k) plan of
Employer or one of its Subsidiaries (the “401(k) Plan”).


 


WHEREAS, in connection with Executive’s resignation referenced below,
pursuant to the terms and conditions of the Executive Plan, all amounts owing
or to become owing under the Executive Plan are to be paid in a lump-sum to
Executive.


 


WHEREAS, in connection with Executive’s resignation referenced below,
pursuant to the terms and conditions of the Deferral Plan, all amounts owing or
to become owing under the Deferral Plan are to be paid to Executive.


 


WHEREAS, pursuant to a Management Stock Purchase Agreement dated March 9,
2001 (as amended, the “First Purchase Agreement”), between the Company
and Executive, Executive acquired 116,577.52 shares of the Company’s Common
Stock, par value $.01 per share (“Common Stock”) at a price per share of
$1.00.


 


WHEREAS, pursuant to a Management Stock Purchase Agreement dated May 31,
2003 (as amended, the “Second Purchase Agreement” and together with the
First Purchase Agreement, the “Purchase Agreements”), between the
Company and Executive, Executive acquired 17,424.098 shares of Common Stock at
a price per share of $7.00.


 


1





















 


WHEREAS, pursuant to a Stock Option Agreement dated December 8,
2003 (as amended, the “Stock Option Agreement”), by and between the
Company and Executive, Executive was granted an option to acquire up to 10,000
shares of Common Stock at a price per share of $7.00.


 


WHEREAS, the Company, Executive and certain other stockholders of the
Company are parties to an Amended and Restated Stockholders Agreement dated as
of May 1, 2003 (as amended, the “Stockholders Agreement”).


 


WHEREAS, the Company, Executive and certain other stockholders of the
Company are parties to a Registration Agreement dated as of March 9, 2001
(as amended, the “Registration Agreement”).


 


WHEREAS, Executive wishes to resign his positions with the Company and
Employer and each of their respective subsidiaries and the Company and Employer
and each of their respective subsidiaries wish to accept such resignations, in
each case, effective as of March 31, 2005.


 


WHEREAS, on the date hereof and in connection herewith, Executive and
the Company are entering into a Stock Repurchase Agreement in the form attached
hereto as Exhibit A (as amended, the “Repurchase Agreement”).


 


WHEREAS, the Company and Executive have conditioned their execution of
this Agreement upon the concurrent execution of the Repurchase Agreement.


 


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


 


1.                                       Resignations.  Effective as of March 31, 2005 (the “Termination
Date”), Executive hereby irrevocably resigns (i) as an employee of the
Company, Employer and any of their respective subsidiaries, (ii) to the
extent he serves on the board of directors of the Company or any of its
subsidiaries, as a member of such boards of directors and (iii) to the
extent that he serves as an officer, trustee, manager or in a similar position
or office to the Company or any of its subsidiaries, as an officer, trustee,
manager or similar position or office to the Company or any of its
subsidiaries.  As used in this Agreement,
the term “subsidiary” and “subsidiaries” includes, without limitation, any
not-for-profit entities affiliated with the Company or any of its subsidiaries.


 


2.                                       Severance.  In exchange for the general release of all
claims pursuant to Section 4 and the Release (as defined below),
the provisions of Section 3 hereof, and the other promises,
covenants and agreements by Executive set forth herein, subject to Executive’s
execution and delivery of the Release as provided in Section 4
below (a) during the 24 month period commencing on the Termination Date
(the “Severance Period”), Employer shall pay Executive severance at a
rate equal to $280,000 per annum (subject to mandatory withholdings for taxes)
(“Base Severance”), payable in equal installments on the Company’s regular
salary payment dates (provided that the Board of Directors of the Company, in
its discretion, shall have the option to accelerate the date on which any
payment of any Base Severance payable to Executive would otherwise be paid at
any time, provided further than any such acceleration shall not be deemed to
have shortened the Severance Period), (b)


 


2





















 


on or about the date of the
Closing (as defined in the Repurchase Agreement), Employer shall pay to Executive
in cash a special bonus in the amount of $111,200 (subject to mandatory
withholdings for taxes), and (c) during the Severance Period, Executive
shall continue to participate in Employer’s group health, dental and vision
benefit plan(s) (excluding, for the avoidance of doubt, any bonus and incentive
compensation plans), on substantially the same terms and conditions as apply
from time to time to Employer’s then employed senior executives (except that
Employer shall pay the portion of the insurance premiums for such benefits
normally paid by Executive) (clauses  (a) through (c),
collectively, the “Severance Payments and Benefits”).  Following the Severance Period, as permitted
by the continuation coverage provisions of Section 4980B of the U.S.
Internal Revenue Code of 1986, as amended (the “Code”), Executive shall
be offered the opportunity to elect continuation coverage under Employer’s
group medical, dental and vision benefit plan(s) (“COBRA coverage”).  Employer shall provide Executive with the
appropriate COBRA coverage notice and election form for this purpose.  If Executive elects COBRA coverage, Executive
shall pay 100% of Executive’s (and his dependents’) health, dental and vision
insurance premiums under COBRA, for up to 18 months following the end of the
Severance Period; provided that Executive shall notify Employer immediately of
any change in his circumstances that would warrant discontinuation of his COBRA
coverage and benefits (including but not limited to Executive’s receipt of
group medical, dental or vision benefits from any other employer).  The existence and duration of Executive’s
rights and/or the COBRA rights of any of Executive’s eligible dependents shall
be determined in accordance with Section 4980B of the Code.  Except as set forth in this Section 2,
Executive agrees that he is not entitled to any other salary, bonus, severance,
reimbursement, benefit or expectation of remuneration or other monies from the
Company or Employer or any of their respective subsidiaries or Affiliates (as
defined in the Release) except as required by law and except for the
distribution of amounts to Executive pursuant to the terms of (i) the
Executive Plan in the aggregate amount of $109,368.89, (ii) the
Deferral Plan and (iii) amounts payable pursuant to the Repurchase
Agreement; provided that, for the avoidance of doubt, Executive may continue as
a participant in the 401(k) Plan to the extent permitted under the terms
thereof.  For purposes of the Stock
Option Agreement, the payments set forth in this Section 2 shall
constitute severance payments and the Noncompetition Period (as defined
therein) shall continue until the end of the Severance Period.  Following the Termination Date, pursuant to
the terms and conditions of the Executive Plan, Executive shall be distributed
his full balance under the Executive Plan in a lump-sum payment (subject to
mandatory withholdings for taxes) in the aggregate amount of $109,368.89.  Following the Termination Date, pursuant to
the terms and conditions of the Deferral Plan, Executive shall be distributed
his full balance under the Deferral Plan (subject to mandatory withholdings for
taxes).  In the event of a material
breach by Executive of this Agreement, the Release, the Repurchase Agreement or
the provisions of the other agreements that survive pursuant to Section 3
below, the Company shall, in addition to any other rights or remedies available
at law or in equity or under the Release, be entitled to cease making payments
pursuant to this Section 2.


 


3.                                       Termination
and Survival of Agreements.  (i) As of
the Closing, the First Purchase Agreement and the Second Purchase Agreement
shall terminate and be of no further force or effect, (ii) as of the
Closing, Section 1 through 14 of the Stock Option Agreement shall
terminate and be of no further force or effect and all other sections of the
Stock Option Agreement shall survive and remain in full force and effect and (iii) on
the Termination Date, Sections 1 through 7 and Section 13 of
the Employment Agreement shall terminate and be of no further force or effect
and all other


 


3





















 


sections of the Employment
Agreement shall survive and remain in full force and effect.  Executive hereby reaffirms his obligations
pursuant to (i) Sections 8 through 12 and Sections 14 through 19
of the Employment Agreement, which sections shall remain in full force and
effect after the Closing and (ii) Sections 15 through 28 of the
Stock Option Agreement, which sections shall remain in full force and effect
after the Closing.  As of the Closing,
Executive will no longer be deemed a party to or maintain any interest in the
Stockholders Agreement or the Registration Agreement.  On the date hereof, Executive and the Company
shall enter into the Repurchase Agreement. 
The Repurchase Agreement shall survive the execution of this Agreement
and remain in full force and effect after the Closing.


 


4.                                       Cooperation.  Executive agrees to reasonably cooperate with
the Company and its subsidiaries in any internal investigation, any
administrative, regulatory, or judicial proceeding or any dispute with a third
party.  Executive understands and agrees
that this cooperation may include, but not be limited to, making himself
available to the Company and its subsidiaries upon reasonable notice for
interviews and factual investigations; appearing at the Company’s or its
subsidiary’s request to give testimony without requiring service of a subpoena
or other legal process; volunteering to the Company and its subsidiaries
pertinent information; and turning over to the Company and its subsidiaries all
relevant documents which are or may come into his possession all at times and
on schedules that are reasonably consistent with his other permitted activities
and commitments.  Executive understands
that in the event the Company or its subsidiaries ask for his cooperation in
accordance with this provision, the Company or such subsidiary will reimburse
him solely for reasonable travel expenses, (including lodging and meals), upon
his submission of receipts.


 


5.                                       Non-Disparagement,
etc.  Executive agrees not to disparage
the Company, its past and present investors, officers, directors or employees
or its Affiliates (as defined in the Release) and to keep all confidential and
proprietary information about the past or present business affairs of the
Company and its Affiliates confidential unless a prior written release from the
Company is obtained.  Executive further
agrees that as of the Termination Date, Executive will return to the Company or
its subsidiaries any and all property, tangible or intangible, relating to its
business, which he presently possesses (including, but not limited to,
company-provided credit cards, building or office access cards, keys, computer
equipment, manuals, files, documents, records, software, customer data base and
other data) and that Executive shall not retain any copies, compilations,
extracts, excerpts, summaries or other notes of any such manuals, files,
documents, records, software, customer data base or other data or except as
mutually agreed between Executive and the Company.


 


6.                                       General
Release.  For the
consideration received (including but not limited to the promises, agreements
and payments), all as provided for in this Agreement and the Repurchase Agreement,
Executive agrees to execute and deliver to the Company on March 31, 2005,
the General Release, in the form attached hereto as Exhibit B,
which release shall constitute a part of this Agreement as if it were set forth
herein (the “Release”). The execution of the Release shall supplement
and shall not supersede the terms of this Agreement or the Repurchase
Agreement.


 


7.                                       Effective
Date and Revocation.  Executive agrees
that he has been given 21 days in which to consider whether to sign this
Agreement (including the Release) and the Repurchase Agreement and has either
used that full 21-day period or voluntarily decided to sign this Agreement
before the end of such period.  The
parties agree that Executive may revoke the Release at any time 


 


4





















 


within seven days after executing
it, at which time the Release and this Agreement and the Repurchase Agreement
will all revoked and will become null and void. 
The Release, this Agreement and the Repurchase Agreement will not be
effective or enforceable until the end of such seven-day period, but they shall
be fully effective and enforceable if the Release is not revoked within such
seven-day period.


 


8.                                       Notices.  All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by reputable express courier
service (charges prepaid) or mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid.  Such notices, demands and other
communications shall be sent to Executive, to the Company and to Employer at
the address indicated below:


 


If to Company
or Employer:


 


National
Mentor Holdings, Inc.


313 Congress
Street 6th Floor


Boston, MA
02210


Attention:
President


 


with a copy
to:


 


Madison
Dearborn Capital Partners, LLC


Three First
National Plaza, Suite 3800


Chicago,
Illinois 60602


Attention:
Timothy Sullivan


 


If to
Executive:


 


Donald Monack


177 Canton
Avenue


Milton, MA
02186


 


or to such other address or to the attention of such other person as
the recipient party has specified by prior written notice to the sending party.


 


9.                                       General
Provisions.


 


(a)                                  Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in
any jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or any other jurisdiction, but this Agreement will
be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.


 


5





















 


(b)                                 Complete Agreement.  This Agreement (including the Release once
executed), the Repurchase Agreement, and the provisions of the Stock Option
Agreement and the Employment Agreement which remain in full force and effect as
described in Section 3 above, embody the complete agreement and
understanding among the parties and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof or thereof in any
way.  For the avoidance of doubt, nothing
in this Agreement is intended to amend or modify the terms and conditions of
the Executive Plan or the Deferral Plan.


 


(c)                                  Counterparts.  This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.


 


(d)                                 Successors and Assigns.  Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by
Executive and the Company and Employer and each of their respective
subsidiaries and each of their respective successors and assigns; provided that
the rights and obligations of Executive under this Agreement will not be
assignable without the prior written consent of the Company.


 


(e)                                  Choice of Law.  All questions concerning the construction,
validity and interpretation of this Agreement will be governed by and construed
in accordance with the domestic laws of the Commonwealth of Massachusetts,
without giving effect to any choice of law or conflict of law provision or rule (whether
of the Commonwealth of Massachusetts or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the
Commonwealth of Massachusetts.


 


(f)                                    Amendment and Waiver.  The provisions of this Agreement may be
amended and waived only with the prior written consent of each of the parties
hereto.


 


(g)                                 Business Days.  If any time period for giving notice or
taking action hereunder expires on a day which is a Saturday, Sunday or holiday
in the state in which the Company’s chief executive office is located, the time
period shall be automatically extended to the business day immediately
following such Saturday, Sunday or holiday.


 


*     *    
*     *     *


 


6





















 


IN WITNESS WHEREOF, the parties
hereto have executed this Separation Agreement and Release on the date first
written above.


 


 


	
   

  	
  /s/ Donald
  Monack

  	
   

  
	
   

  	
  DONALD
  MONACK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIONAL
  MENTOR HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Edward
  Murphy

  	
   

  
	
   

  	
   

  
	
   

  	
  Its: 

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIONAL
  MENTOR, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Denis
  Holler

  	
   

  
	
   

  	
   

  
	
   

  	
  Its: 

  	
  Assistant
  Secretary

  	
   

  
								



 


7





















 


EXHIBIT A


 


STOCK
REPURCHASE AGREEMENT


 


THIS STOCK REPURCHASE AGREEMENT (this
“Agreement”) is made and entered into this 31st day of March, 2005, by
and between National Mentor Holdings, Inc., a Delaware corporation (the “Company”),
and Donald Monack (“Executive”).


 


WHEREAS, Executive and National Mentor, Inc., a Delaware
corporation (“Employer”), are party to an Employment Agreement dated September 29,
1999, as amended by the First Amendment to Employment Agreement, dated March 9,
2001 (as amended, the “Employment Agreement”).


 


WHEREAS, pursuant to a Management Stock Purchase Agreement dated March 9,
2001 (as amended, the “First Purchase Agreement”), between the Company
and Executive, Executive acquired 116,577.52 shares of the Company’s Common
Stock, par value $.01 per share (“Common Stock”) at a price per share of
$1.00.


 


WHEREAS, pursuant to a Management Stock Purchase Agreement dated May 31,
2003 (as amended, the “Second Purchase Agreement” and together with the
First Purchase Agreement, the “Purchase Agreements”), between the
Company and Executive, Executive acquired 17,424.098 shares of Common Stock at
a price per share of $7.00.


 


WHEREAS, the Company, Executive and certain other stockholders of the
Company are parties to an Amended and Restated Stockholders Agreement dated as
of May 1, 2003 (as amended, the “Stockholders Agreement”).


 


WHEREAS, the Company, Executive and certain other stockholders of the
Company are parties to a Registration Agreement dated as of March 9, 2001
(as amended, the “Registration Agreement”).


 


WHEREAS, Executive wishes to voluntarily resign his employment with the
Company and each of its subsidiaries effective as of March 31, 2005 (the “Termination
Date”).


 


WHEREAS, on the date hereof and in connection herewith, Executive and
the Company and Employer are entering into a Separation Agreement and Release
(as amended, the “Separation Agreement”), which provides for the parties
to enter into this Agreement.


 


WHEREAS, the Company and Executive wish to enter into this Agreement to
provide, in connection with execution of the Separation Agreement, for the full
vesting of Executive’s Common Stock, the repurchase of Executive’s shares of
Common Stock, and certain related matters.


 


NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally
bound hereby, covenant and agree as follows:


 


8





















 


1.               Vesting of
Shares.  Notwithstanding
anything in the Purchase Agreements to the contrary, all shares of Common Stock
purchased by Executive pursuant to the Purchase Agreements shall become vested
in full on the date of the Closing (as defined below).


 


2.               Sale and
Purchase of Stock.  At the Closing
(as defined below) and upon the terms and conditions set forth in this
Agreement, Executive agrees to sell, transfer and assign to the Company, and
the Company agrees to purchase, all of Executive’s right, title and interest in
all of Executive’s 134,001.618 shares of Common Stock (collectively, the “Shares”)
for an aggregate purchase price of $2,144,025.89 (the “Shares Purchase Price”).


 


3.               Purchase
Prices; Deliveries.  At the Closing,
Executive will deliver to the Company the certificates representing the Shares,
together with duly executed stock assignments to the Company, upon payment by
the Company of the Shares Purchase Price pursuant to Section 2
(less withholdings pursuant to Section 7 hereof) by check or wire
transfer of immediately available funds to an account designated in writing by
Executive.


 


4.               Closing.  Subject to the conditions contained in this
Agreement, the deliveries contemplated by Section 3 (the “Closing”)
will take place at the offices of Kirkland & Ellis LLP, 200 East Randolph
Drive, Chicago, Illinois 60601 at 10:00 a.m. on April 8, 2005, or
such other place or on such other date as is mutually agreeable to the Company
and Executive, but in any event not less than eight days after the Termination
Date and not greater than 14 days after the Termination Date.


 


5.               Representations
and Warranties of Executive.  Executive hereby
represents and warrants to the Company as follows:


 


(a)          Ownership.  All of the Shares are owned of record and
beneficially by Executive, and Executive has good and marketable title to the
Shares, free and clear of any security interest, claims, liens, pledges,
options, encumbrances, charges, agreements, voting trusts, proxies or other
arrangements or restrictions whatsoever (collectively, “Encumbrances”),
except for such legend and related transfer restrictions as are required under
the Securities Act of 1933 and the restrictions set forth in the Stockholders
Agreement or the Registration Agreement. 
Executive does not own and has no interest in any shares of the Company’s
capital stock or options or rights to acquire the Company’s capital stock other
than the Shares and the option (the “Option”) to acquire shares of
Common Stock pursuant to the Stock Option Agreement (as defined in the
Separation Agreement), which Option will terminate pursuant to the Separation
Agreement at the Closing.  All of the
Shares are validly issued, fully paid and nonassessable.  Executive has not exercised and will not
exercise prior to the Closing the Option, in whole or in part.  At the Closing, Executive will deliver to the
Company good and marketable title to the Shares, free and clear of any
Encumbrances.


 


(b)         Legal Capacity.  Executive has full legal capacity to enter
into and perform his obligations set forth in this Agreement.  This Agreement when executed and delivered
will constitute the valid and legally binding obligation of Executive,
enforceable in accordance with its terms.


 


(c)          Conflicts.  The execution, delivery and performance of
this Agreement by Executive does not conflict with or result in a breach of any
agreement, instrument, order, judgment, decree, law or governmental regulation
to which Executive or the Shares are subject.


 


9





















 


6.               Survival of
Representations and Warranties. 
All representations and warranties contained herein or made in writing
by any party in connection herewith will survive the execution and delivery of
this Agreement and the Closing hereunder, regardless of any investigation made
by the Company or on its behalf.


 


7.               Withholdings.  The Company and its subsidiaries shall be
entitled, to make mandatory withholdings for taxes from any amounts due and
payable by any of them hereunder to Executive.


 


8.               Indemnification.  Executive hereby agrees to indemnify the
Company and hold the Company harmless against and in respect of any and all
losses, liabilities, damages, obligations, claims, encumbrances, costs and
expenses (including costs of suit and attorneys’ fees and expenses) incurred by
the Company resulting from any breach of any representation, warranty, covenant
or agreement made by Executive herein or in any instrument, agreement or
document delivered to the Company pursuant hereto or in connection herewith.


 


9.               Termination
and Survival of Agreements.  The parties
hereto agree to the termination and survival provisions set forth in Section 3
of the Separation Agreement.  The
Separation Agreement shall survive the execution of this Agreement and remain
in full force and effect after the Closing.


 


10.         Revocation
of the Separation Agreement.  Notwithstanding
anything herein to the contrary, in the event that the Separation Agreement is
terminated pursuant to Section 4 thereof within seven days of the
date of the Separation Agreement, this Agreement shall immediately terminate
and be null and void.  This Agreement
will not be effective or enforceable until the end of such seven-day period,
but it shall be fully effective and enforceable if it is not revoked within such
seven-day period.


 


11.         Miscellaneous.


 


(a)          Notices.  All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given (i) three days
after the date of mailing by registered or certified mail, return receipt
requested, or (ii) when personally delivered (including by Federal Express
or other express courier service). 
Notices, demands and communications to the Company and Executive will,
unless another address is specified in writing, be sent to the address
indicated below:


 


If to Company:


 


National Mentor Holdings, Inc.


313 Congress Street 6th Floor


Boston, MA 02210


Attention: President


 


10





















 


with a copy to:


 


Madison Dearborn Capital Partners, LLC


Three First National Plaza, Suite 3800


Chicago, IL 60602


Attention: Timothy Sullivan


 


If to Executive:


 


Donald Monack


177 Canton Avenue


Milton, MA 02186


 


(b)         Expenses.  Each party hereto agrees to pay all of its
expenses arising in connection with the negotiation, execution and consummation
of the transactions contemplated by this Agreement (including attorneys’ fees
and expenses).


 


(c)          Complete Agreement.  This Agreement and the Separation Agreement,
together with the other agreements referred to herein, constitute the entire
agreement between the parties hereto regarding the subject matter of this
Agreement and supersedes and preempts any prior understandings, agreements or
representations, written or oral, which may have related to the subject matter
hereof.


 


(d)         Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in
any jurisdiction, such invalidity, illegality or unenforceability will not
affect any other provision or any other jurisdiction, but this Agreement will
be reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.


 


(e)          Counterparts.  This Agreement may be executed in
counterparts, each of which will be deemed to be an original and which taken
together will constitute one and the same agreement.


 


(f)            Further Assurances.  From and after the Closing, and when
requested by the Company, Executive will, without further consideration,
execute and deliver all such instruments of conveyance and transfer and will
take such further actions as the Company may reasonably deem necessary or
desirable in order to transfer the Shares to the Company and to carry out fully
the provisions and purposes of this Agreement.


 


(g)         Successors and Assigns.  This Agreement is intended to bind and inure
to the benefit of and be enforceable by the Company and Executive and their
respective successors and assigns; provided that the rights and obligations of
Executive under this Agreement will not be assignable without the prior written
consent of the Company.


 


11





















 


(h)         Governing Law.  All questions concerning the construction,
validity and interpretation of this Agreement will be governed by and construed
in accordance with the domestic laws of the Commonwealth of Massachusetts,
without giving effect to any choice of law or conflict of law provision or rule (whether
of the Commonwealth of Massachusetts or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the
Commonwealth of Massachusetts.


 


*  *  * 
*  *


 


12





















 


IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.


 


	
   

  	
  NATIONAL
  MENTOR HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Edward Murphy

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  President

  	
   

  
	
   

  
	
   

  
	
   

  	
  /s/
  Donald Monack

  	
   

  
	
   

  	
  DONALD
  MONACK

  
						



 


13





















 


EXHIBIT B


 


GENERAL RELEASE


 


I, Donald Monack, in consideration of and subject to the performance by
National Mentor Holdings, Inc., a Delaware corporation (the “Holdings”),
and National Mentor, Inc. (“Employer” and collectively with
Holdings and their respective subsidiaries, the “Company”), of their
obligations under the Separation Agreement and Release, dated as of the March 31,
2005 (as amended, the “Agreement”), and the Repurchase Agreement (as
defined in the Agreement), do hereby release and forever discharge as of the
date hereof the Company and its Affiliates (as defined below) and all present
and former directors, officers, agents, representatives, employees, successors
and assigns of the Company and its Affiliates and the Company’s direct or
indirect owners (collectively, the “Released Parties”) to the extent
provided below.  This release constitutes
a part of the Agreement.


 


1.               I
understand that any payments or benefits paid or granted to me under Section 2
of the Agreement represent, in part, consideration for signing this General
Release and are not salary, wages or benefits to which I was already entitled.
I understand and agree that I will not receive the payments and benefits
specified in Section 2 of the Agreement unless I execute this
General Release and do not revoke this General Release within the time period
permitted hereafter or breach this General Release.  I also acknowledge and represent that I have
received all payments and benefits that I am entitled to receive by virtue of
any employment by the Company.


 


2.               Except
(i) as provided in paragraph 4 below, (ii) for my rights under the
Repurchase Agreement (as defined in the Agreement), (iii) for the
provisions of the Employment Agreement (as defined in the Agreement) and the
Stock Option Agreement (as defined in the Agreement) which expressly survive
the termination of my employment with the Company in accordance with the
Agreement, (iv) for my rights under the Agreement to receive the Severance
Payments and Benefits (as defined in the Agreement), (v) for my rights to
be paid a lump-sum payment in the aggregate amount of $109,368.89 pursuant to
the Executive Plan (as defined in the Agreement) and for my rights to be paid
amounts pursuant to the Deferral Plan (as defined in the Agreement), and (vi) for
my rights under the 401(k) Plan, I knowingly and voluntarily (for myself, my
heirs, executors, administrators and assigns) release and forever discharge the
Company and the other Released Parties from any and all claims, suits,
controversies, actions, causes of action, cross-claims, counter-claims,
demands, debts, compensatory damages, liquidated damages, punitive or exemplary
damages, other damages, claims for costs and attorneys’ fees, or liabilities of
any nature whatsoever in law and in equity, both past and present (through the
date this General Release becomes effective and enforceable) and whether known
or unknown, suspected, or claimed against the Company or any of the Released
Parties which I, my spouse, or any of my heirs, executors, administrators or
assigns, may have, which arise out of or are connected with my employment with,
or my separation or termination from, the Company (including, but not limited
to, any allegation, claim or violation, arising under: the Purchase Agreements
(as defined in the Agreement); the Stockholders Agreement (as defined in the
Agreement); the Registration Agreement (as defined in the Agreement); the
sections of the Employment Agreement and the Stock Option Agreement that are
being terminated pursuant to Section 3 of the Agreement; the 2001
Equity Plan (as defined in the Agreement); the 2003 Equity Plan (as defined in
the Agreement); the Executive Plan (as defined in the Agreement); the Deferral
Plan (as defined in the Agreement); Title VII of the Civil Rights Act of 1964,
as amended; the Civil Rights Act of


 


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1991; the Age
Discrimination in Employment Act of 1967, as amended (including the Older
Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the
Americans with Disabilities Act of 1990; the Family and Medical Leave Act of
1993; the Worker Adjustment Retraining and Notification Act; the Employee
Retirement Income Security Act of 1974; any applicable Executive Order
Programs; the Fair Labor Standards Act; or their state or local counterparts;
or under any other federal, state or local civil or human rights law, or under
any other local, state, or federal law, regulation or ordinance; or under any
public policy, contract or tort, or under common law; or arising under any
policies, practices or procedures of the Company; or any claim for wrongful
discharge, breach of contract, infliction of emotional distress, defamation; or
any claim for costs, fees, or other expenses, including attorneys’ fees
incurred in these matters) (all of the foregoing collectively referred to
herein as the “Claims”).


 


3.               I
represent that I have made no assignment or transfer of any right, claim,
demand, cause of action, or other matter covered by paragraph 2 above.


 


4.               I
agree that this General Release does not waive or release any rights or claims
that I may have under the Age Discrimination in Employment Act of 1967 which
arise after the date I execute this General Release. I acknowledge and agree
that my separation from employment with the Company in compliance with the
terms of the Agreement shall not serve as the basis for any claim or action
(including, without limitation, any claim under the Age Discrimination in
Employment Act of 1967).


 


5.               In
signing this General Release, I acknowledge and intend that it shall be
effective as a bar to each and every one of the Claims hereinabove mentioned or
implied. I expressly consent that this General Release shall be given full
force and effect according to each and all of its express terms and provisions,
including those relating to unknown and unsuspected Claims (notwithstanding any
state statute that expressly limits the effectiveness of a general release of
unknown, unsuspected and unanticipated Claims), if any, as well as those
relating to any other Claims hereinabove mentioned or implied. I acknowledge
and agree that this waiver is an essential and material term of this General
Release and that without such waiver the Company would not have agreed to the
terms of the Agreement.  I further agree
that in the event I should bring a Claim seeking damages against the Company,
or in the event I should seek to recover against the Company in any Claim
brought by a governmental agency on my behalf, this General Release shall serve
as a complete defense to such Claims. I further agree that I am not aware of
any pending charge or complaint of the type described in paragraph 2 as of the
execution of this General Release.


 


6.               I
agree that neither this General Release, nor the furnishing of the
consideration for this General Release, shall be deemed or construed at any
time to be an admission by the Company, any Released Party or myself of any
improper or unlawful conduct.


 


7.               I
agree that I will forfeit all amounts payable by the Company pursuant to the
Agreement if I challenge the validity of this General Release. I also agree
that if I violate this General Release by suing the Company or the other
Released Parties, I will pay all costs and expenses of defending against the
suit incurred by the Released Parties, including reasonable attorneys’ fees,
and return all payments received by me pursuant to the Agreement.


 


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8.               I
agree that this General Release is confidential and agree not to disclose any
information regarding the terms of this General Release, except to my immediate
family and any tax, legal or other counsel I have consulted regarding the
meaning or effect hereof or as required by law, and I will instruct each of the
foregoing not to disclose the same to anyone. 
Any non-disclosure provision in this General Release does not prohibit
or restrict me (or my attorney) from responding to any inquiry about this
General Release or its underlying facts and circumstances by the Securities and
Exchange Commission (SEC), the National Association of Securities Dealers, Inc.
(NASD), any other self-regulatory organization or governmental entity or as
required by applicable law.


 


9.               Notwithstanding
anything in this General Release to the contrary, this General Release shall
not release, relinquish, diminish, or in any way affect any rights or claims
arising out of any breach by the Company or by any Released Party of the
Agreement or the Repurchase Agreement after the date hereof.


 


10.         Whenever
possible, each provision of this General Release shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this General Release is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or any other jurisdiction, but this General Release shall be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.


 


11.         As
used in the Agreement and herein, the term “Affiliate” of any particular
person means (a) any other person directly or indirectly controlling,
controlled by or under common control with such particular person, where “control”
means the possession, directly or indirectly, of the power to direct the
management and policies of a person whether through the ownership of voting
securities, contract or otherwise and (b) any stockholder, partner or
officer of such person or any person who has a management contract with such
person.


 


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


 


1.               I
HAVE READ IT CAREFULLY;


 


2.               I
UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS,
INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED;
THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;


 


3.               I
VOLUNTARILY CONSENT TO EVERYTHING IN IT;


 


4.               I
HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE
DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO SO
OF MY OWN VOLITION;


 


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


 


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


 


7.               I
HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE
OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND


 


8.               I
AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED,
WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN
AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.


 


 


	
  DATE: MARCH 31, 2005

  	
  /s/ Donald Monack

  	
   

  
	
   

  	
  DONALD MONACK

  



 


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To: The Board of Directors of National Mentor
Holdings, Inc. (the “Company”) and each of its subsidiaries:


 


Effective as of the Effective Date (defined
below), I hereby resign (i) as an employee of the Company and each of its
subsidiaries, (ii) to the extent I serve on the board of directors of the Company
or any of its subsidiaries, as a member of such boards of directors and (iii) to
the extent that I serve as an officer, trustee, manager or in a similar
position or office to the Company or any of its subsidiaries, as an officer,
trustee, manager or similar position or office to the Company or any of its
subsidiaries. For purposes of this resignation, the term “subsidiary” and “subsidiaries”
includes, without limitation, any not-for-profit entities affiliated with the Company
or any of its subsidiaries. The “Effective Date” for this resignation shall be March 31,
2005; provided that if the General Release being entered into on or about the
date hereof pursuant to the Separation Agreement and Release, by and among me,
the Company and National Mentor, Inc. is revoked by me in accordance with
its terms prior to April 8, 2005, this resignation letter shall also be
automatically revoked and will become null and void.


 


 


	
  Date: March 31, 2005

  	
  /s/ Donald Monack

  	
   

  
	
   

  	
  DONALD MONACK

  



 


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