Document:

exa101810k10.htm

  

  

  

EXHIBIT A 10.18

 

 

 

 

 

CENTRAL VERMONT PUBLIC SERVICE CORPORATION

MANAGEMENT INCENTIVE PLAN

2011

 

 

 

 

 

 

 

 

 

 

  

  

  

 

CENTRAL VERMONT PUBLIC SERVICE CORPORATION

MANAGEMENT INCENTIVE PLAN

Effective as of January 1, 2011 - December 31, 2011

 

 

TABLE OF CONTENTS

 

	
ARTICLE I

	
INTRODUCTION AND PURPOSE

	
 

	  	
1.1

	
Purpose of the Plan

	
 

	
ARTICLE II

	
DEFINITIONS

	  
	  	
2.1

2.2

2.3

2.4

2.5

2.6

	
"Annual Incentive Award"

"Award Payment Date"

"Base Salary"

"Board" or "Board of Directors"

"Change in Control"

"Code"

 

	 
	  	
2.7

2.8

2.9

2.10

2.11

	
"Committee"

"Company"

"Effective Date"

"Eligible Employees"

"For Cause"

 

	 
	  	
2.12

2.13

2.14

2.15

2.16

	
"Participant"

"Performance Goals"

"Performance Period"

"Permanent and Total Disability"

"Plan"

 

	 
	  	
2.17

	
"Target Potential"

 

	
 

	
ARTICLE III

	
PARTICIPATION

	  
	  	
3.1

	
Participation

 

	
 

	
ARTICLE IV

	
PERFORMANCE GOALS AND AWARD OPPORTUNITIES

	  
	  	
4.1

4.2

4.3

4.4

4.5

	
Performance Goals

Performance Levels

Participant Goals

Target Potential

Amount of Award

 

	 
	
ARTICLE V

	
DETERMINATION AND PAYMENT OF ANNUAL INCENTIVE AWARDS

	  
	  	
5.1

5.2

5.3

5.4

5.5

5.6

	
Timing and Determination of Annual Incentive Awards

Short Performance Year

Death or Permanent and Total Disability

Termination or Retirement

Change in Control

Limitation on Right to Payment of Award

	 

 

  

2

  

 

	
ARTICLE VI

	
ADMINISTRATION

	  
	  	
6.1

6.2

6.3

	
Committee

Authority of the Committee

Costs

 

	 
	
ARTICLE VII

	
MISCELLANEOUS

	  
	  	
7.1

7.2

7.3

7.4

7.5

 

7.6

7.7

7.8

7.9

 

7.10

7.11

7.12

7.13

7.14

	
Amendment

Termination

Employment Rights

Nonalienation of Benefits

No Funding

 

Tax Withholding

Controlling Laws

Gender and Number

Action by the Company

 

Mistake of Fact

Severability

Effect of Headings

No Liability

Successors

	 

 

 

  

3

  

	
ARTICLE I

 

INTRODUCTION AND PURPOSE

 

	
1.1

	
Purpose of the Plan. The Central Vermont Public Service Corporation Management Incentive Plan (the "Plan") is an incentive compensation program for eligible officers of Central Vermont Public Service Corporation (the "Company”).  The purpose of the Plan is to focus the efforts of the Executive Team on achieving challenging and demanding annual performance objectives.  The Plan is designed and intended to further the attainment of the customer service, financial, process improvement and employee related objectives of the Company, to assist the Company in attracting and retaining highly qualified executives, and to enhance the mutual interest of customers, shareholders and eligible officers of the Company.  In addition, this Plan supports the Company's performance oriented culture.

  

4

  

	
ARTICLE II

 

DEFINITIONS

 

	
2.1

	
"Annual Incentive Award" shall mean a cash incentive payable to a Participant under the terms of this Plan.

 

	
2.2

 

2.3

	
"Award Payment Date" shall mean, for each Performance Period, the date that the amount of the Annual Incentive Award for that Performance Period shall be paid to the Participant under Article V of the Plan.

 

"Base Salary" shall mean a Participant's annualized salary for the Performance Period for which the amount of an Annual Incentive Award is being determined.

 

	
2.4

	
"Board" or "Board of Directors" shall mean the Board of Directors of the Company.

 

	
2.5

	
"Change in Control" shall have, in the case of each Participant under the Plan, the meaning provided for in the Change in Control Agreement, if any, between each Participant and the Company.  In the absence of a Change in Control Agreement with a Participant, Change in Control shall have, with respect to such Participant, the meaning provided for in the standard Change in Control Agreement approved by the Board as the same may be amended from time to time.

 

	
2.6

	
"Code" shall mean the Internal Revenue Code of 1986, as amended, and references to particular provisions of the Code shall include any amendments thereto or successor provisions and any rules and regulations promulgated thereunder.

 

	
2.7

	
"Committee" shall mean the Compensation Committee of the Board of Directors of the Company or any other duly established committee or subcommittee appointed by the Board for purposes of this Plan.

 

	
2.8

	
"Company" shall mean Central Vermont Public Service Corporation, a Vermont corporation.

 

 

  

5

  

 

	
2.9

	
"Effective Date" means January 1, 2011 through December 31, 2011.

 

	
2.10

	
"Eligible Employee" shall mean the Chief Executive Officer (CEO) of Central Vermont Public Service Corporation and other executive officers of the Company.

 

	
2.11

	
"For Cause" shall mean, but is not limited to, (i) the willful failure by executive officer substantially to perform executive officer’s duties with Company or a Subsidiary, (other than any failure resulting from executive officer’s incapacity due to executive officer’s Permanent and Total Disability, or any actual failure after the issuance of a notice of termination for good reason by executive officer that continues for at least 30 calendar days after the Board delivers to executive officer a written demand for performance that identifies specifically and in detail the manner in which the Board believes that executive officer willfully has failed substantially to perform executive officer’s duties,

 

(ii) a conviction, guilty plea or plea of nolo contendere of executive officer for any felony,

 

(iii) the willful engaging by executive officer in misconduct that is demonstrably and materially injurious to Company or any Subsidiary, monetarily or otherwise,

 

(iv) a material violation by executive officer of the corporate governance guidelines and code of ethics of Company or any Subsidiary; or

 

(v) a material violation by executive officer of the requirements of the Sarbanes-Oxley Act of 2002 or other federal or state securities law, rule or regulation.

 

	
2.12

	
"Participant" for a Performance Period shall mean each Eligible Employee who is an Eligible Employee for that Performance Period.

 

	
2.13

	
"Performance Goals" shall mean the measures of the Company's performance as defined in Section 4.1 of this Plan that must be met for any Participant to receive any Annual Incentive Award under this Plan, as provided in Section 4.1.

 

	
2.14

	
"Performance Period" shall mean the taxable year of the Company with respect to which an Annual Incentive Award, if any, may be granted.  The Performance Period will be the one year period extending from January 1 through December 31 which coincides with the effective date per section 2.9.

 

 

  

6

  

 

	
2.15

	
"Permanent and Total Disability" shall mean any disability that would qualify as permanent and total disability under any long term disability policy sponsored by the Company.

 

	
2.16

	
Plan shall mean this Central Vermont Public Service Corporation Management Incentive Plan, as it may be amended from time to time.

 

	
2.17

	
Target Potential shall mean the targeted percentage of Base Salary for each Participant.

 

 

 

 

  

7

  

	
ARTICLE III

 

PARTICIPATION

 

	
3.1

	
Participation. An Eligible Employee will become a Participant in this Plan as of the later of the Effective Date, the Eligible Employee's date of hire or the date the individual becomes an Eligible Employee.

 

An Eligible Employee who is a Participant for the entire length of a Performance Period shall be eligible for consideration for an Annual Incentive Award, if any, with respect to that Performance Period.

 

The Committee may provide a prorated Annual Incentive Award for an Eligible Employee who becomes a Participant during the Performance Period.

 

  

8

  

	
ARTICLE IV

 

PERFORMANCE GOALS AND AWARD OPPORTUNITIES

 

	
4.1

	
Performance Goals. The measures of Performance Goals are established as follows:

 

(a) Company Balanced Business Performance.  Measures the overall company performance, through a balanced set of measures established annually, including customer satisfaction, financial performance, process improvement and employee measures.

 

(b) Individual Performance. Based on advice and recommendation from the Chief Executive Officer (CEO) for those reporting to him, the Committee and Board evaluate each Participant’s individual performance compared to performance objectives set early in the year.  The Chairman of the Board and Committee evaluate the CEO’s performance versus his performance objectives.  This individual performance measure is at the full discretion of the Board.

 

Company and Individual Performance Goals will be established in writing for each Performance Period by no later than the first quarter of the Performance Period.  The Company Balanced Business Performance is weighted 80%, and Individual Performance has a 20% weight.  The individual performance component is tied to the Company performance.

 

	
4.2

	
Performance Levels.  Company measures described in Section 4.1 will be established for three performance levels: threshold, target and maximum.  To the extent possible, these levels are set based on the following probabilities:  90% probability of achieving the threshold level; 50% probability of achieving target level; and 10% probability of achieving the maximum level.

 

	
4.3

	
Participant Goals. Participants will have a combination of Company Balanced Business Performance and Individual Performance measured goals used in determining any Annual Incentive Award as described in 4.1 above.

 

 

  

9

  

 

	
4.4

	
Target Potential.  For each Performance Period, the Committee and Board set the target potential measured as a percentage of Base Salary for each eligible employee.  The target level of incentive award for the Plan is as follows:

 

· 50% of Base Salary for the Company’s CEO;

· 30% of Base Salary for the Company’s Senior Vice Presidents;

· 25% of Base Salary for the Company’s Vice Presidents, and

· 20% of Base Salary for the Company’s Assistant Vice Presidents.

 

The maximum payout is capped at two times Target Potential.

 

	
4.5

	
Amount of Award.  Following the completion of the Performance Period, the Committee shall undertake or direct a calculation of actual performance for each of the Company and individual measures for such Performance Period, based on criteria used in the measures.  The actual award opportunity for each Participant will be determined as follows:

 

(a) For each measure in the scorecard for the Company Balanced Business Performance threshold, target and maximum performance levels are defined.  Actual performance is determined and linear interpolation is used between three points where achieving the threshold level of performance results in no payout; the target level of performance results in 100% of the target payout and achieving the maximum level of performance results in a 200% of the target payout.

(b) A weighted average of the target incentive multiplier for each component of the Company Balanced Business Performance measure will be determined.  A weighted average rating for each component of the Individual Performance measure will also be determined. The overall individual performance is then tied to Company performance where 3.0 is the threshold, 4.2 equals the Company Balanced Business Performance and 5.0 is the maximum.

 

A weighted average of the target incentive multiplier for the Company and individual

 

  

10

  

	 	
performance measures will be determined, based on the weightings described in Section 4.1 for Eligible Employees.

 

(c) The final target incentive multiplier will be multiplied by the Participant's Target potential to determine the Annual Incentive Award percentage.  Unless the financial thresholds are met and the results of the Company’s customer service quality and reliability as measured by our SERVE matrix meet at least 50% between the threshold and target, the final incentive multiplier cannot exceed 100% of the target incentive multiplier overall.  In addition, if the Company does not have enough liquid assets to pay all debts and liabilities resulting in default (i.e. cash flow insolvency), then there will be no payout.

 

(d) The Annual Incentive Award percentage will then be multiplied by the Participant's Base Salary as of the end of the prior year to determine the Participant's Annual Incentive Award, prior to any further reductions as described in this Plan, including Sections 5.2, 5.3, 5.4, 5.5, 5.6 and 6.2.

 

 

  

11

  

 

ARTICLE V

 

DETERMINATION AND PAYMENT OF ANNUAL INCENTIVE AWARDS

 

	
5.1

	
Timing and Determination of Annual Incentive Awards.  Following the completion of a Performance Period, the Committee shall undertake or direct an evaluation of performance results as compared to the appropriate performance criteria established for the Performance Period as determined in Article IV.  The Committee will report to the Board with respect to achievement of previously approved Company and individual performance targets for that Performance Period, and will submit to the Board its recommendations as to the appropriate award payment levels, if any, for each eligible participant.

 

Recommendations of the Committee, with such modifications as may be made by the Board, will be binding on all Participants.

 

No Annual Incentive Award may be paid without the prior approval of the Committee.

 

Annual Incentive Awards, if any, will be paid on the Award Payment Date, which shall be no later than March 15th following the Performance Period.

 

	5.2	

Short Performance Year.  In the event that a determination of an Annual Incentive Award must be made for a Performance Period of less than 12 months, and the year of termination of employment, the determination shall be made in accordance with the provisions of this Plan, except that:

 

(a) In the year of hire, if hired after the first date a Performance Period begins, or the year of death or permanent and total disability, the amount otherwise determined under the Plan shall be prorated to reflect the period of time during which the Participant was a Participant in the Plan compared to the total period of time of the Performance Period. In the event of termination or retirement of a Participant during the Performance Period, such Participant will not be eligible for a 

 

 

  

12

  

 

	5.2	

prorated Annual Incentive Award with respect to that Performance Period, unless the Committee deems appropriate.

 

(b) In the year of a Change in Control, the Company will be assumed to have achieved a target performance level prorated by time.

 

	5.3	

Death or Permanent and Total Disability. In the event of the death or Permanent and Total Disability of a Participant during a Performance Period, such Participant will be eligible for a prorated Annual Incentive Award at target with respect to that Performance Period. Said award shall be paid as close to the date of Death or Permanent and Total Disability as reasonably possible.

 

	5.4	Termination or Retirement. In the event of the termination or retirement of a Participant before the end of the Performance Period, such Participant will not be eligible for a prorated Annual Incentive Award with respect to that Performance Period, unless the Committee deems appropriate. If the Committee deems it appropriate to pay an award in this case, the award will be paid at target as close to the date of termination or retirement as reasonably possible.

 

	
5.5

	
Change-in-Control (CIC).  In the event of a CIC, a Participant shall receive the benefit, if any, as provided for in the CIC Agreement between the Participant and the Company. In the absence of a CIC Agreement, a Participant whose employment is terminated following a CIC shall be entitled to receive an Annual Incentive Award at the target performance level prorated, if necessary, to reflect termination of employment prior to the conclusion of the Performance Period all as more specifically provided for in the standard Change in Control Agreement approved by the Board as the same may be amended from time to time.  

 

	
5.6

	
Limitation on Right to Payment of Award. Notwithstanding any other Plan provision to the contrary, no Participant shall have a right to receive payment of an Annual Incentive Award under the Plan if, subsequent to the commencement of the Performance Period and prior to the date any award would otherwise be payable, is terminated For Cause.

 

 

 

  

13

  

 

	
ARTICLE VI

 

ADMINISTRATION

 

	
6.1

	
Committee.  The Plan shall be operated and administered by the Committee.

 

	
6.2

	
Authority of the Committee.  The Committee shall have full power except as limited by it’s Charter, the bylaws of the Company or any restrictions or directions imposed by the Board and subject to the provisions herein, to determine the Performance Goals during each Performance Period, to determine the terms, conditions and amounts of Annual Incentive Awards in a manner consistent with the Plan, and to establish, amend or waive rules and regulations as it deems appropriate for the Plan's administration in a manner consistent with the terms of this Plan. Further, the Committee shall make all other determinations that may be necessary or advisable for the administration of the Plan. The Committee's determinations and interpretations with respect to this Plan shall be binding on all parties. While the Committee may appoint individuals to act on its behalf in the administration of this Plan, the Committee will have the sole, final and conclusive authority to administer, construe and interpret this Plan.

 

The Committee may, for reasons it deems appropriate, in its discretion, determine to disapprove, reduce or eliminate any Participant's Annual Incentive Award as it deems warranted by the Company’s financial condition.

 

	
6.3

	
Costs.  The Company shall pay all costs of administration of the Plan.

 

  

14

  

 

	
ARTICLE VII

 

MISCELLANEOUS

 

	
7.1

	
Amendment. The Committee or the Board may at any time alter or amend any provision of the Plan, provided that no such amendment that would require the consent of the stockholders of the Company pursuant to the Code, or any other applicable law, rule or regulation, shall be effective without such consent.

 

	
7.2

	
Termination. The Board may suspend or terminate this Plan at any time, and in the case of such termination, the following provisions of this Section shall apply notwithstanding any other provisions of the Plan to the contrary.

 

	
7.3

	
Employment Rights. The Plan does not constitute a contract of employment and participation in this Plan will not give an Eligible Employee the right to be rehired or retained in the employ of the Company. This Plan is not a contract between the Company and its Eligible Employees or Participants. No Participant or other person shall have any claim or right to be granted an Annual Incentive Award under this Plan until such Annual Incentive Award is actually granted. Neither the establishment of this Plan, nor any action taken hereunder, shall be construed as giving any Participant any right to be retained in the employ of the Company. Nothing contained in this Plan shall limit the ability of the Company to make payments or awards to Participants under any other plan, agreement or arrangement. To the extent any provision of this Plan conflicts with any provision of a written agreement between an Employee and the Company, the provisions of the employment agreement shall control.

 

	
7.4

	
Nonalienation of Benefits. A Participant's right and interest under the Plan may not be assigned or transferred and any attempted assignment or transfer shall be null and void and shall extinguish, in the Company's sole discretion, the Company's obligation under the plan to pay Annual Incentive Awards with respect to the Participant.

 

 

  

15

  

 

	
7.5

	
No Funding. The Plan shall be unfunded. The Company shall not be required to establish any special segregation of assets to assure payment of Annual Incentive Awards.

 

	
7.6

	
Tax Withholding. The Company shall have the right to deduct from Annual Incentive Awards paid any taxes or other amounts required by law to be withheld.

 

	
7.7

	
Controlling Laws. All questions pertaining to the construction, regulation, validity and effect of the provisions of the plan shall be determined in accordance with the laws of the State of Vermont, except to the extent superseded by laws of the United States.

 

	
7.8

	
Gender and Number. Where the context admits, words in the masculine gender shall include the feminine gender, the plural shall include the singular and the singular shall include the plural.

 

	
7.9

	
Action by the Company. Any action required of or permitted by the Company under this Plan shall be by written resolution of the Board or by a person or persons authorized by written resolution of the Board.

 

	
7.10

	
Mistake of Fact. Any mistake of fact or misstatement of fact shall be corrected when it becomes known and proper adjustment made by reason thereof.

 

	
7.11

	
Severability. In the event any provision of this Plan shall be held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of this Plan, and this Plan shall be construed and endorsed as if such illegal or invalid provision had never been contained in this Plan.

 

	
7.12

	
Effect of Headings. The descriptive headings of the Articles and Sections of this Plan are inserted for convenience of reference and identification only and do not constitute a part of this Plan for purposes of interpretation.

 

 

  

16

  

 

	
7.13

	
No Liability. No member of the Board or the Committee or any officer or employee of the Company or an affiliate shall be personally liable for any action, omission or determination made in good faith in connection with this Plan. The Company shall indemnify and hold harmless the members of the Committee, the Board and the officers and employees of the Company and any affiliates, and each of them, from and against any and all loss which results from liability to which any of them may be subjected by reason of any act or conduct (except willful misconduct or gross negligence) in their official capacities in connection with the administration of this Plan, including all expenses reasonably incurred in their defense, in case the Company fails to provide such defense. By participating in this Plan, each Eligible Employee agrees to release and hold harmless each of the Company and any affiliates (and their respective directors, officers and employees), the Board and the Committee, from and against any tax or other liability, including without limitation, interest and penalties, incurred by the Eligible Employee in connection with his participation in the plan.

 

	
7.14

	
Successors. All obligations of the Company under the plan with respect to Annual Incentive Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is a result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business and/or assets of the Company.

 

IN WITNESS WHEREOF, the Employer has caused this instrument to be executed by its duly authorized officer as of the 3rd day of March, 2011.

CENTRAL VERMONT PUBLIC

SERVICE CORPORATION

By:       /s/ Joan Gamble                          

Title:   VP Strategic Change & Business Services

Attest:

By:   /s/ Jamie Falco             

 

  

17

  

 

 

 

	  	  2011 Measures	
Threshold

0%

	
Target

100%

	
Maximum

200%

	
MIP 2011

Weight

 

	
 EIP 2011

Weigh

	 	
Service Quality and Reliability as determined by the SERVE matrix.

 

	
3

	
4

	
5

 

	
20%

	
30%

	
Customer

MIP = 30%

EIP = 40%

	
Customer satisfaction compared to other East Region electric utilities measured by JD Power survey results (CV% of the East Region average)- [2005-2008 east region phone results- '05= 101%; '06= 105%; '07= 107%; '08= 109% (phone) and 99% (online); '09= 104% (online); '10= 103%]

 

	
 

 

 

100%

	
 

 

 

104%

	
 

 

 

108%

	
 

 

 

5%

	
 

 

 

5%

	 	
Maintain or improve overall "complete" satisfaction among large commercial and industrial customers (sample from approx. 300 customers on rate 4, 5, or 10 with 100 kw  or greater usage).  ['05= 52%; '07= 48%; '08= 65%; '09= 68%].

	
 

 65%

	
 

 75%

	
 

 80%

	
 

5%

	
 

 5%

 

	 	
Consolidated earnings available for common shareholders

 

	
ESAM floor

$20,909,541

	
Budget

$22,677,347

	
ESAM ceiling

$25,552,549

	
 

30%

	
 

35%

 

	 Financial 

MIP = 40%

EIP = 40%

	Reduce gap between the allowed ROE for 2011 and actual earned ROE for 2011 (excluding any impacts of the Rabbi Trust)	
108 basis point

gap

	
 90 basis point

gap

	
60 basis point

gap

	
10%

	
5%

 

	

Process &

Stake holder

MIP = 15%

EIP = 10%

	
 

 

2011 Smart Power project success based on Board discretion using Smart Power matrix as a guideline

	
 

 

3

	
 

 

4

	
 

 

5

	
 

 

15%

	
 

 

10%

 

	 	
Employee safety as measured by the aggregate of safety measures on the 2011 safety matrix

 

	
3

	
4

	
5

 

	
10%

	
10%

	 	
Overall employee survey result ('97= 56; '99= 60; '00= 66; '01= 68; '02= 67; '03= 65; '04= 71; '05= 72; '06= 73; '07= 75; '08= 76; '09= 78)

 

	
 

76

	
 

80

	
 

85

	
 

2.5%

	
 

0%

	 People 

MIP = 15%

EIP = 10%

	

Employee survey result for the question: "Management is leading the company in the right direction: ('03= 47; '04= 56; '05= 44; '06= 55; '07= 57; '08= 60; '09= 66)

	
 

 60

	
 

 68

	
 

 76

	
 

2.5%

	
 

 0%

	 	 	 	 	 	 100%	 100%

 

For both the MIP and EIP:

- If the average result of the SERVE matrix does not meet a hurdle of 50% of target then the overall payout can not be above target.

- If the company does not have enough liquid assets to pay all debts and liabilities resulting in default (i.e. cash flow insolvency) then no payout.

- If financial thresholds are not met then the payout will not be above target.

 

 

  

18ex10-10.htm

  
Exhibit 10.10

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT dated as of December 31, 2010 (the “Agreement”), is by and between Healthways, Inc., a Delaware corporation (the “Company”), and Thomas Cox (the “Executive”). This Agreement replaces and supersedes any other employment agreement between the Company and Executive.

WHEREAS, the Company desires that the Executive serve or continue to serve as Vice President and Chief Operating Officer, Domestic (“COO”) and the Executive desires to hold such position under the terms and conditions of this Agreement; and

 

 

WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions of the employment relationship of the Executive with the Company.

NOW, THEREFORE, intending to be legally bound hereby, the parties agree as follows:

	
I.

	
EMPLOYMENT. The Company hereby employs the Executive and the Executive hereby accepts employment with the Company, upon the terms and subject to the conditions set forth herein.

	
II.

	
TERM. Subject to termination as stated in Section VI, the term of employment of the Executive pursuant to this Agreement (as the same may be extended, the “Term”) shall commence on January 1, 2011 (the “Effective Date”), and shall have a continuous term of two (2) years thereafter.

	
III.

	
POSITION. During the Term, the Executive shall serve as COO of the Company performing duties commensurate with the position and such additional duties as the Company shall determine. If asked, the Executive agrees to serve, without any additional compensation, as a director on the Board of Directors of the Company (the “Board”) and/or the board of directors of any subsidiary of the Company, and/or in one or more officer positions with the Company and/or any subsidiary of the Company. If the Executive’s employment is terminated for any reason, whether such termination is voluntary or involuntary, the Executive shall resign as a director and officer of the Company (and any of its subsidiaries), such resignation to be effective no later than the date of termination of the Executive’s employment with the Company.

	
IV.

	
DUTIES. During the Term, the Executive shall devote his full time and attention during normal business hours to the business and affairs of the Company; provided, however, that it shall not be a violation of this Agreement for the Executive with the approval of the Company to devote reasonable periods of time to charitable and community activities and industry or professional activities, and/or to manage personal investments, so long as such activities do not interfere with the performance of the Executive’s responsibilities under this Agreement.

V.           COMPENSATION

	
  

	
A.

	
Base Salary. The Executive’s initial base salary as of the Effective Date is $425,000. Effective January 1 of each calendar year after the Effective Date during the Term of this Agreement, upon the recommendation of the Chief Executive Officer (“CEO”), the Board (or a committee of the Board) shall review the Executive’s base salary and may increase such amount if and as it may deem advisable. Such initial base salary, as it may be increased during the Term, is defined as the “Base Salary.” The Base Salary shall be payable in substantially equal installments in accordance with the Company’s normal payroll practices, and is subject to all proper taxes and withholding. The Base Salary rate at which the Executive is being compensated on the Date of Termination (as defined below) shall be the Base Salary rate used in determining all severance amounts payable to the Executive hereunder.

	
  

	
B.

	
Bonus Plan. Such bonus, if any, as shall be determined upon the recommendation of the CEO by the Board (or any designated Committee of the Board comprised solely of independent directors), shall be paid in accordance with the terms and conditions of the bonus plan established for the Company (“Bonus Plan”).

	
  

	
C.

	
Long Term Incentive Awards. During the Term, upon the recommendation of the CEO, the Board (or any designated committee of the Board comprised solely of independent directors) will consider, in its sole discretion, long term incentive awards to the Executive pursuant to the Company’s equity incentive plans.

	
  

	
D.

	
Other Benefits. In addition to the benefits specifically provided for herein, during the Term the Executive shall be entitled to participate in all benefit plans maintained by the Company for officers generally according to the terms of such plans.

	
VI.

	
TERMINATION OF AGREEMENT. The Executive’s employment under this Agreement shall not be terminated except as set forth in this Section. Any reference to the date of delivery of a notice of termination or resignation by either the Company or the Executive in this Section VI shall constitute the “Date of Termination,” unless otherwise set forth herein.  For purposes of this Agreement, the Executive will be deemed to have terminated employment when the Executive has a “separation from service” from the Company as determined in accordance with Treasury Regulation 1.409A-1(h).

	
  

	
A.

	
By Mutual Consent. The Executive’s employment pursuant to this Agreement may be terminated at any time by the mutual written agreement of the Company and the Executive upon such terms as are agreed upon between the parties.

	
  

	
B.

	
Death. If Executive dies during the Term of this Agreement, the Company shall pay his Base Salary due through the date of his death to the Executive’s designated beneficiary plus a pro-rata portion of any Bonus Plan or other compensation to which he is otherwise entitled as of the time of his death, which Bonus Plan amount will be determined and paid after the end of the fiscal year for which the Bonus Plan was in place.  The amount of Base Salary due through the date of the Executive’s death shall be paid to his designated beneficiary within thirty (30) days of the Executive’s death, with the date of such payment chosen by the Company in its sole discretion. Any bonus shall be paid at such time designated in the Bonus Plan. Furthermore, all outstanding stock options, restricted stock, restricted stock units and any other unvested equity incentives shall vest and/or remain exercisable for their stated terms solely in accordance with the terms of the award agreements to which the Company and the Executive are parties at the time of his death. In addition, all amounts contributed by the Company to the Capital Accumulation Plan (“CAP”) for the benefit of the Executive shall vest and thereafter be paid out in accordance with the terms of the CAP as in effect at the time of the Executive’s death. The Company shall then have no further obligations to the Executive or any representative of his estate or his heirs except that Executive’s estate or beneficiaries, as the case may be, shall be paid such amounts as may be payable under the Company’s life insurance policies and other plans as they relate to benefits following death then in effect.

	
  

	
C.

	
Disability

	
  

	
1.

	
The Executive’s employment may be terminated by written notice by either party to the other party, when:

	
  

	
a.

	
the Executive suffers a physical or mental disability entitling the Executive to long-term disability benefits under the Company’s long-term disability plan, if any, or

	
  

	
b.

	
in the absence of a Company long-term disability plan, the Executive is unable, as determined by the Board (or any designated Committee of the Board), to perform the essential functions of his regular duties and responsibilities, with or without reasonable accommodation, due to a medically determinable physical or mental illness which has lasted (or can reasonably be expected to last) for a period of six (6) consecutive months.

	
  

	
2.

	
If the Executive’s employment is terminated under this Section (C), the Executive shall be entitled to receive:

	
  

	
a.

	
all Base Salary and benefits due to the Executive through the Date of Termination (payable within thirty (30) days of the Date of Termination, with the date of such payment determined by the Company in its sole discretion) and a pro-rata portion of any Bonus Plan or other compensation to which he is otherwise entitled as of the Date of Termination, which Bonus Plan amount will be determined after the end of the fiscal year for which the Bonus Plan was in place and paid in accordance with the terms of such Bonus Plan;

	
  

	
b.

	
an amount equal to the Executive’s Base Salary for a total of eighteen (18) months following the Date of Termination; and

	
  

	
c.

	
if permitted under the Company’s group medical insurance, group medical benefits at the same rate as then in effect for the Company’s employees for two (2) years after the Date of Termination; provided, that if the Executive instead elects continuation of group benefits under COBRA, the Company shall pay the full cost of the premiums for two (2) years following the Date of Termination.  The costs of the Company’s portion of any premiums due under this clause (c) shall be included in the Executive’s gross income to the extent the provision of such benefits is deemed to be discriminatory under Section 105(h) of the Internal Revenue Code of 1986, as amended (the “Code”).

	
  

	
3.

	
The amounts in clause 2(b) above shall be reduced by any disability insurance payments the Executive receives as a result of his disability, and shall be paid to the Executive periodically at the regular payroll dates commencing as of the Date of Termination and for the remaining term of the non-compete covenant in Section IX hereof. In addition, the Executive will receive an enhanced severance amount consisting of six (6) additional months of the Executive’s Base Salary (payable periodically at regular payroll intervals) upon his or her execution of a full release of claims in favor of the Company.  Furthermore, all outstanding stock options, restricted stock, restricted stock units and any other unvested equity incentives shall vest and/or remain exercisable for their stated terms solely in accordance with the terms of the award agreements to which the Company and the Executive are parties on the Date of Termination. In addition, all amounts contributed by the Company to the CAP for the benefit of the Executive shall vest and thereafter be paid out in accordance with the terms of the CAP as in effect on the Date of Termination.

	
  

	
D.

	
By the Company for Cause

	
  

	
1.

	
The Executive’s employment may be terminated by the Board upon recommendation of the CEO, both acting in good faith, by written notice to the Executive specifying the event(s) relied upon for such termination upon the occurrence of any of the following events (each of which shall constitute “Cause” for termination):

	
  

	
a.

	
the continued failure by the Executive to substantially perform his duties after written notice and failure to cure within sixty (60) days;

	
  

	
b.

	
conviction of a felony or engaging in misconduct which is materially injurious to the Company, monetarily or to its reputation or otherwise, or which would damage Executive’s ability to effectively perform his duties;

	
  

	
c.

	
theft or dishonesty by the Executive;

	
  

	
d.

	
intoxication while on duty; or

	
  

	
e.

	
willful violation of Company policies or procedures after written notice and failure to cure within thirty (30) days.

	
  

	
2.

	
If the Executive’s employment is terminated under this Section (D), the Executive shall be entitled to receive all Base Salary and benefits to be paid or provided to the Executive under this Agreement through the Date of Termination, and no more.

	
  

	
3.

	
In addition, the Executive will receive an enhanced severance amount consisting of six (6) additional months of the Executive’s Base Salary (payable periodically at regular payroll intervals) upon his or her execution of a full release of claims in favor of the Company. Furthermore, all outstanding stock options, restricted stock, restricted stock units and any other vested equity incentives shall remain exercisable solely in accordance with the terms of the award agreements to which the Company and the Executive are parties on the Date of Termination. All unvested equity incentives shall terminate on the Date of Termination. In addition, all amounts contributed by the Company to the CAP for the benefit of the Executive that have vested shall be paid out in accordance with the terms of the CAP as in effect on the Date of Termination. The Executive shall not be entitled to receive any unvested Company contributions to the CAP.

	
  

	
E.

	
By the Company Without Cause

	
  

	
1.

	
The Executive’s employment may be terminated by the Board upon recommendation of the CEO at any time without Cause by delivery of a written notice of termination to the Executive. If the Executive’s employment is terminated under this Section (E), the Executive shall be entitled to receive:

	
  

	
a.

	
all Base Salary and benefits due to the Executive through the Date of Termination (payable within thirty (30) days of the Date of Termination, with the date of such payment determined by the Company in its sole discretion) and a pro-rata portion of any Bonus Plan or other compensation to which he is otherwise entitled as of the Date of Termination, which Bonus Plan amount will be determined after the end of the fiscal year for which the Bonus Plan was in place and paid in accordance with the terms of such Bonus Plan;

	
  

	
b.

	
an amount equal to the Executive’s Base Salary for a total of eighteen (18) months following the Date of Termination; and

	
  

	
c.

	
group medical benefits for eighteen (18) months after the Date of Termination. The costs of the Company’s portion of any premiums due under this clause (c) shall be included in the Executive’s gross income to the extent the provision of such benefits is deemed to be discriminatory under Section 105(h) of the Internal Revenue Code of 1986, as amended (the “Code”).

	
  

	
2.

	
The amount in clause 1(b) above shall be paid to the Executive periodically at the regular payroll dates commencing as of the Date of Termination and for the remaining term of the non-compete covenant in Section IX hereof.  In addition, the Executive will receive an enhanced severance amount consisting of six (6) additional months of the Executive’s Base Salary (payable periodically at regular payroll intervals) upon his or her execution of a full release of claims in favor of the Company. Furthermore, all outstanding stock options, restricted stock, restricted stock units and any other unvested equity incentives shall vest and/or remain exercisable for their stated terms solely in accordance with the terms of the award agreements to which the Company and the Executive are parties on the Date of Termination. In addition, all amounts contributed by the Company to the CAP for the benefit of the Executive shall vest and thereafter be paid out in accordance with the terms of the CAP as in effect on the Date of Termination.

	
  

	
F.

	
By the Executive for Good Reason

	
  

	
1.

	
The Executive’s employment may be terminated by the Executive by written notice of his resignation delivered within sixty (60) days after the occurrence of any of the following events, each of which shall constitute “Good Reason” for resignation:

	
  

	
a.

	
a material reduction in the Executive’s Base Salary (unless such reduction is part of an across the board reduction affecting all Company executives with a comparable title);

	
  

	
b.

	
a requirement by the Company to relocate the Executive to a location that is greater than twenty-five (25) miles from the location of the office in which the Executive performs his duties hereunder at the time of such relocation;

	
  

	
c.

	
in connection with a Change in Control, a failure by the successor person or entity, or the Board, either to honor this Agreement or to present the Executive with an employment agreement containing provisions substantially similar to this Agreement or otherwise satisfactory to the Executive and which is executed by the Executive; or

	
  

	
d.

	
a material reduction in the Executive’s title, or a material and adverse change in Executive’s status and responsibilities, or the assignment to Executive of duties or responsibilities which are materially inconsistent with Executive’s status and responsibilities.

	
  

	
2.

	
The Executive shall give the Company written notice of his intention to resign for Good Reason (stating the reason therefor) within sixty (60) days after the occurrence of one of the events stated in subparagraphs (a), (b), (c) or (d) above (the “Good Reason Events”) and the Company shall have sixty (60) days (the “Cure Period”) thereafter to rescind the Good Reason Event(s), in which event the Executive no longer shall have the right to resign for Good Reason. If the Company fails to rescind the Good Reason Event(s) before the expiration of the Cure Period, then the Executive may resign for Good Reason and receive the benefits described below so long as the resignation for Good Reason occurs within thirty (30) days following the expiration of the Cure Period, otherwise the right to resign on the basis of that Good Reason Event(s) shall be deemed to have been waived.   If the Executive resigns for Good Reason as defined in this Section (F), the Executive shall be entitled to receive:

	
  

	
a.

	
all Base Salary and benefits due to the Executive under this Agreement through the Date of Termination (payable within thirty (30) days of the Date of Termination, with the date of such payment determined by the Company in its sole discretion) and a pro-rata portion of any Bonus Plan or other compensation to which he is otherwise entitled as of the Date of Termination, which Bonus Plan amount will be determined after the end of the fiscal year for which the Bonus Plan was in place and paid in accordance with the terms of such Bonus Plan;

	
  

	
b.

	
an amount equal to Executive’s Base Salary for a total of eighteen (18) months following the Date of Termination; and

	
  

	
c.

	
group medical benefits for eighteen (18) months after the Date of Termination.  The costs of the Company’s portion of any premiums due under this clause (c) shall be included in the Executive’s gross income to the extent the provision of such benefits is deemed to be discriminatory under Section 105(h) of the Internal Revenue Code of 1986, as amended (the “Code”).

	
  

	
3.

	
The amount in clause 2(b) above shall be paid to the Executive periodically at the regular payroll dates commencing as of the Date of Termination and for the remaining term of the non-compete covenant in Section IX hereof. In addition, the Executive will receive an enhanced severance amount consisting of six (6) additional months of the Executive’s Base Salary (payable periodically at regular payroll intervals) upon his or her execution of a full release of claims in favor of the Company.  Furthermore, all outstanding stock options, restricted stock, restricted stock units and any other unvested equity incentives shall vest and/or remain exercisable for their stated terms solely in accordance with the terms of the award agreements to which the Company and the Executive are parties on the Date of Termination. In addition, all amounts contributed by the Company to the CAP for the benefit of the Executive shall vest and thereafter be paid out in accordance with the terms of the CAP as in effect on the Date of Termination.

	
  

	
G.

	
By the Executive Without Good Reason

	
  

	
1.

	
The Executive may terminate his employment at any time by delivery of a written notice of resignation to the Company no less than sixty (60) days and no more than ninety (90) days prior to the effective date of the Executive’s resignation. The Executive shall receive all Base Salary and benefits due under this Agreement through the next payroll date following the Date of Termination, and no more.

	
  

	
2.

	
Although the Executive is not entitled to any severance amount in the event of termination pursuant to this Section (G), the Executive may reduce the term of the non-compete and non-solicitation covenants in Section IX hereof, from twenty-four (24) months to eighteen (18) months, upon execution of a full release of claims in favor of the Company. Furthermore, all outstanding stock options, restricted stock, restricted stock units and any other vested equity incentives shall remain exercisable solely in accordance with the terms of the award agreements to which the Company and the Executive are parties on the Date of Termination. All unvested equity incentives shall terminate on the Date of Termination. In addition, all amounts contributed by the Company to the CAP for the benefit of the Executive that have vested shall be paid out in accordance with the terms of the CAP as in effect on the Date of Termination. The Executive shall not be entitled to receive any unvested Company contributions to the CAP.

	
  

	
H.

	
Following a Change in Control

	
  

	
1.

	
If the Executive’s termination of employment without Cause (pursuant to Section VI(E)) or for Good Reason (pursuant to Section VI(F)) occurs within twelve (12) months following a Change in Control, then the amounts payable pursuant to Section VI(E) or Section VI(F) above, as the case may be, shall be referred to as the “Change in Control Severance Amount,” and shall be paid to Executive in a lump sum no later than sixty (60) days following the Date of Termination, with the date of such payment determined by the Company in its sole discretion.  In addition, the Executive will receive an enhanced severance amount consisting of six (6) additional months of the Executive’s Base Salary (payable periodically at regular payroll dates) upon his or her execution of a full release of claims in favor of the Company. Payments pursuant to this Section VI(H) shall be made in lieu of, but not in addition to, any payment under any other paragraph of this Section VI. Furthermore, all outstanding stock options, restricted stock, restricted stock units and any other unvested equity incentives shall vest and/or remain exercisable for their stated terms solely in accordance with the terms of the award agreements to which the Company and the Executive are parties on the Date of Termination. In addition, all amounts contributed by the Company to the CAP for the benefit of the Executive shall vest and thereafter be paid out in accordance with the terms of the CAP as in effect on the Date of Termination.

	
  

	
2.

	
For the purposes of this Agreement, a “Change in Control” shall mean any of the following events:

	
  

	
a.

	
any person or entity, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than the Company or a wholly-owned subsidiary thereof or any employee benefit plan of the Company or any of its subsidiaries, becomes the beneficial owner of the Company’s securities having 35% or more of the combined voting power of the then outstanding securities of the Company that may be cast for the election of directors of the Company (other than as a result of an issuance of securities initiated by the Company in the ordinary course of business);

	
  

	
b.

	
as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sales of assets or contested election, or any combination of the foregoing transactions, less than a majority of the combined voting power of the then outstanding securities of the Company or any successor corporation or entity entitled to vote generally in the election of the directors of the Company or such other corporation or entity after such transaction are held in the aggregate by the holders of the Company’s securities entitled to vote generally in the election of directors of the Company immediately prior to such transaction; or

	
  

	
c.

	
during any period of two (2) consecutive years, individuals who at the beginning of any such period constitute the Board cease for any reason to constitute at least a majority thereof, unless the election, or the nomination for election by the Company’s stockholders, of each director of the Company first elected during such period was approved by a vote of at least two-thirds of the directors of the Company then still in office who were directors of the Company at the beginning of any such period.

	
  

	
3.

	
Excise Tax Payment. If, in connection with a Change in Control, the Internal Revenue Service asserts, or if the Executive or the Company is advised in writing by an established accounting firm, that any payment in the nature of compensation to, or for the benefit of, the Executive from the Company (or any successor in interest) constitutes an “excess parachute payment” under Section 280G of the Code, whether paid pursuant to this Agreement or any other agreement, and including property transfers pursuant to securities and other employee benefits that vest upon a Change in Control (collectively, the “Excess Parachute Payments”) the Company shall pay to the Executive, on demand, a cash sum equal to the amount of excise tax due under Section 4999 of the Code on the entire amount of the Excess Parachute Payments (excluding any payment pursuant to this Section VI(H)(3)) (the “Gross-up Amount”).  The payment of the ”Gross-up Amount“ due to the Executive under this Section VI(H)(3) shall be paid as soon as reasonably possible following demand of payment by the Executive, but in no event later than December 31 of the year following the year (A) any tax is paid to the Internal Revenue Service regarding this Section VI(H)(3) or (B) any tax audit or litigation brought by the Internal Revenue Service or other relevant taxing authority related to this Section VI(H)(3) is completed or resolved.

 

	
  

	
I.

	
Delay of Payments Pursuant to Section 409A.  It is intended that (1) each installment of the payments provided under this Agreement is a separate “payment” for purposes of Section 409A of the Code and (2) that the payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(9)(iii), and 1.409A-1(b)(9)(v).  Notwithstanding anything to the contrary in this Agreement, if the Company determines (i) that on the date the Executive’s employment with the Company terminates or at such other time that the Company determines to be relevant, the Executive is a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)) of the Company and (ii) that any payments to be provided to the Executive pursuant to this Agreement are or may become subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A of the Code if provided at the time otherwise required under this Agreement then such payments shall be delayed until the date that is six months after the date of the Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)) with the Company, or, if earlier, the date of the Executive’s death.  Any payments delayed pursuant to this Section VI(I) shall be made in a lump sum on the first day of the seventh month following the Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)), or, if earlier, the date of the Executive’s death. In addition, to the extent that any reimbursement, fringe benefit or other, similar plan or arrangement in which the Executive participates during the term of Executive’s employment under this Agreement or thereafter provides for a "deferral of compensation" within the meaning of Section 409A of the Code, (i) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement or payment in any other calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), and (ii) subject to any shorter time periods provided herein or the applicable plans or arrangements, any reimbursement or payment of an expense under such plan or arrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred.

	
VII.

	
REPRESENTATIONS. The Executive represents and warrants that he is not a party to any agreement or instrument which would prevent him from entering into or performing his duties in any way under this Agreement.

	
VIII.

	
ASSIGNMENT, BINDING AGREEMENT. This Agreement is a personal contract and the rights and interests of the Executive hereunder may not be sold, transferred, assigned, pledged, encumbered, or hypothecated by him, except as otherwise expressly permitted by the provisions of this Agreement. This Agreement shall inure to the benefit of and be enforceable by the Executive and his personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amount would still be payable to him hereunder had the Executive continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to his devisee, legatee or other designee or, if there is no such designee, to his estate.

IX.           CONFIDENTIALITY, NON-COMPETITION, NON-SOLICITATION

	
  

	
A.

	
The Executive acknowledges that:

	
  

	
1.

	
the business of providing care support services and health support services in which the Company is engaged (the “Business”) is intensely competitive and that the Executive’s employment by the Company will require that the Executive have access to and knowledge of confidential information of the Company relating to its business plans, financial data, marketing programs, client information, contracts and other trade secrets, in each case other than as and to the extent such information is generally known or publicly available through no violation of this Agreement by the Executive;

	
  

	
2.

	
the use or disclosure of such information other than in furtherance of the Business may place the Company at a competitive disadvantage and may do damage, monetary or otherwise, to the Business; and

	
  

	
3.

	
the engaging by the Executive in any of the activities prohibited by this Section shall constitute improper appropriation and/or use of such information. The Executive expressly acknowledges the trade secret status of the Company’s confidential information and that the confidential information constitutes a protectable business interest of the Company. Other than as may be required in the performance of his duties, Executive expressly agrees not to divulge such confidential information to anyone outside the Company without prior permission.

	
  

	
B.

	
The “Company” (which shall be construed to include the Company, its subsidiaries and their respective affiliates) and the Executive agree that for a period of eighteen (18) months after the Date of Termination if the Executive’s employment is terminated under Sections VI(C), (D), (E), (F) or (H), and for a period of twenty-four (24) months after the Date of Termination if the Executive’s employment is terminated under Section VI(G), the Executive shall not:

	
  

	
1.

	
engage in Competition, as defined below, with the Company or its subsidiaries within any market where the Company is conducting the Business at the time of termination of the Executive’s employment hereunder. For purposes of this Agreement, “Competition” by the Executive shall mean the Executive’s being employed by or acting as a consultant or lender to, or being a director, officer, employee, principal, agent, stockholder, member, owner or partner of, or permitting his name to be used in connection with the activities of any entity engaged in the Business, provided that, it shall not be a violation of this sub-paragraph for the Executive to become the registered or beneficial owner of less than five percent (5%) of any class of the capital stock of any one or more competing corporations registered under the 1934 Act, provided that, the Executive does not participate in the business of such corporation until such time as this covenant expires; and

	
  

	
2.

	
The Executive further agrees that he will not, directly or indirectly, for his benefit or for the benefit of any other person or entity, do any of the following:

	
  

	
a.

	
solicit from any customer, doing business with the Company as of the Executive’s termination, business of the same or of a similar nature to the Business of the Company with such customer;

	
  

	
b.

	
solicit from any known potential customer of the Company business of the same or of a similar nature to that which, to the knowledge of the Executive, has been the subject of a written or oral bid, offer or proposal by the Company, or of substantial preparation with a view to making such a bid, proposal or offer, within eighteen (18) months prior to the Executive’s termination; or

	
  

	
c.

	
recruit or solicit the employment or services of any person who was employed by the Company upon termination of the Executive’s employment and is employed by the Company at the time of such recruitment or solicitation.

	
  

	
3.

	
The Executive acknowledges that the services to be rendered by him to the Company are of a special and unique character, which causes this Agreement to be of significant value to the Company, the loss of which may not be reasonably or adequately compensated for by damages in an action at law, and that a breach or threatened breach by him of any of the provisions contained in this Section will cause the Company irreparable injury. The Executive therefore agrees that the Company will be entitled, in addition to any other right or remedy, to a temporary, preliminary and permanent injunction, without the necessity of proving the inadequacy of monetary damages or the posting of any bond or security, enjoining or restraining the Executive from any such violation or threatened violations. The Executive acknowledges that the terms of this Section IX and its obligations are reasonable and will not prohibit him from being employed or employable in the health care industry.

	
  

	
C.

	
If any one or more of the provisions contained in this Agreement shall be held to be excessively broad as to duration, activity or subject, such provisions shall be construed by limiting and reducing them so as to be enforceable to the fullest extent permitted by law.

	
X.

	
ENTIRE AGREEMENT. This Agreement, together with Exhibit A attached hereto, contains all the understandings between the parties pertaining to the matters referred to herein, and supersedes any other undertakings and agreements, whether oral or written, previously entered into by them with respect thereto. The Executive represents that, in executing this Agreement, he does not rely and has not relied upon any representation or statement not set forth herein made by the Company with regard to the subject matter or effect of this Agreement or otherwise and that Executive has had the opportunity to be represented by counsel of his choosing.

	
XI.

	
AMENDMENT OR MODIFICATION; WAIVER. No provision of this Agreement may be amended or waived, unless such amendment or waiver is agreed to in writing, signed by the Executive and by a duly authorized officer of the Company. No waiver by any party hereto of any breach by another party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of a similar or dissimilar condition or provision at the same time, any prior time or any subsequent time.

	
XII.

	
NOTICES. Any notice to be given hereunder shall be in writing and shall be deemed given when delivered personally, sent by courier, facsimile or registered or certified mail, postage prepaid, return receipt requested, addressed to the party concerned at the address indicated below or to such other address as such party may subsequently give notice in writing:

           To the Executive at:                                                                           To the Company at:

Thomas Cox                                                                         Chief Executive Officer

                                                                       Healthways, Inc.

                                                                             701 Cool Springs Boulevard

 Franklin, TN 37067

	 	
Any notice delivered personally or by courier shall be deemed given on the date delivered. Any notice sent by facsimile, registered or certified mail, postage prepaid, return receipt requested, shall be deemed given on the date transmitted by facsimile or mailed.

	
XIII.

	
SEVERABILITY. If any provision of this Agreement or the application of any such provision to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this Agreement or the application of such provision to such person or circumstances other than those to which it is so determined to be invalid and unenforceable, shall not be affected thereby, and each provision hereof shall be validated and shall be enforced to the fullest extent permitted by law.

	
XIV.

	
SURVIVORSHIP. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.

	
XV.

	
GOVERNING LAW; VENUE. This Agreement will be governed by and construed in accordance with the laws of the State of Tennessee, without regard to the principles of conflicts of law thereof, and venue shall be the United States District Court for the Middle District of Tennessee.

	
XVI.

	
HEADINGS. All descriptive headings of sections and paragraphs in this Agreement are intended solely for convenience, and no provision of this Agreement is to be construed by reference to the heading of any section or paragraph.

	
XVII.

	
COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement effective as of date set forth above.

                                                                                                     HEALTHWAYS, INC.

By:  /s/ Ben R. Leedle, Jr.      

Name:  Ben R. Leedle, Jr.      

Title:   CEO            

EXECUTIVE

/s/ Thomas F. Cox            

                          Thomas Cox

 

 

  

  

  

EXHIBIT A

Exceptions

Notwithstanding anything in the Agreement to the contrary, the following terms are also part of the Agreement and supersede any contradictory term contained therein:

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