Document:

Exhibit 10.18

MAGELLAN
HEALTH SERVICES

Management Bonus Plan

2005

Purpose

The purpose of Magellan Health Services’ Management
Bonus Plan is to reward employees for achieving specific performance objectives
contributing to the overall results of the Company. Business units with
function specific plans, such as sales, and recovery functions, are covered
under separate plans.

Eligible Participants

·       Must
be full time employees not participating in any other incentive program.

·       Must
be currently meeting or exceeding performance standards.

·       Must
have received a minimum performance review score of 3.0.

·       Must
not have submitted a verbal or written resignation of employment.

·       Must
have been hired on or before January 31, 2005 to be eligible to receive
100% of bonus award.

·       Must
have been hired between February 1 through April 30, 2005 to be
eligible to receive 75% of bonus award.

·       Must
have been hired between May 1 through June 30, 2005 to be eligible to
receive 50% of the bonus award.

Plan Funding

The plan is funded based on the company meeting or
exceeding its Segment Profit target.

	
   

  	
  Segment Profit

  	
   

  	
   

  	
   

  	
  Funding Percentage

  	
   

  
	
  $215 Million

  	
   

  	
  100%

  

 

·       Segment
Profit to be as defined and reported the Company’s financial reports to its
shareholders.

·       The
Targeted Segment Profit will be adjusted as follows: (i) if the Company’s
contract with TennCare is terminated or reduced in scope the budgeted revenue
and expenses will be adjusted for the revenue and expenses relating to such
termination or reduction ; and (ii) if the Company makes additional
investments to accelerate growth, the budgeted expenses will be adjusted to
reflect such additional investments.

The Target Funding Pool will equal the total of the
Target Bonuses (salary times Target Bonus Percentage, see below) of the
eligible employees. The Funding Percentage is the portion or increment of the
Target Funding Pool that will determine the Funding Pool.

If the Segment Profit Target is met, the Funding Percentage will equal
100%.

If the Segment Profit Target is not met, the Target
Funding Pool for incentives will be reduced dollar for dollar until the Segment
Profit Target can be met, or the Target Funding Pool is exhausted, whichever
comes first. Any funds remaining after the Segment Profit Target is met will be
the Maximum Funding Pool for incentives under the Plan. In such case, the
Funding Percentage will equal the percentage of the Maximum Funding Pool to the
Target Funding Pool.

If the Segment Profit target is exceeded, the Funding
Pool will be increased by increasing the Funding Percentage by an amount
determined by the Compensation Committee in its discretion.

Performance Factor

In addition to the Funding Percentage, the other
factor that determines the bonus amount for each employee the Individual
Performance Factor.

 1
 

Individual
Performance Percentage

In order to receive an incentive bonus, individuals
must be recommended by their immediate supervisor, based on the achievement of
their Individual Performance Goals. The Individual Performance Percentage will
be determined by each employee’s immediate supervisor based on the extent to
which the employee met and exceeded their personal Individual Performance Goals.
 Generally, percentages can range from 0%
to 200% of target bonus with a percentage of 100% assigned to an employee whose
score is between consistently meets to consistently exceed expectations with
respect to their Individual Performance Goals. In general, employees with a
performance rating lower than 3.0 will not be eligible to receive a bonus. All
recommendations for incentive awards will be substantiated by appropriate
documentation of performance goals and assessment, and will be reviewed and
approved by each level of management above the immediate supervisor, up to and
including the CEO.

Target Bonus Percentage

Each employee in Grades 37 and above has a Target
Bonus Percentage. The Target Bonus Percentages by Grade are as follows:

Grades 37 and Above
Target Bonus Percentage Levels

	
  Level in Organization

  	
   

  	
   

  	
   

  	
  Target Bonus

  % of Base Salary

  	
   

  
	
  Chairman and CEO

  	
   

  	
   

  	
  100%

  	
   

  	
   

  
	
  President &
  Chief Operating Officer

  	
   

  	
   

  	
  75%

  	
   

  	
   

  
	
  Chief Officers

  	
   

  	
   

  	
  40 to 60%

  	
   

  	
   

  
	
  SVPs

  	
   

  	
   

  	
  25 to 40%

  	
   

  	
   

  
	
  CCO &
  Grades 42 to 44

  	
   

  	
   

  	
  20 to 25%

  	
   

  	
   

  
	
  Grades 39 to 41

  	
   

  	
   

  	
  15%

  	
   

  	
   

  
	
  Assoc MD, Medical
  Directors, and Vice President of Medical Services

  	
   

  	
   

  	
  10%

  	
   

  	
   

  
	
  Grades 37 and 38

  	
   

  	
   

  	
  8%

  	
   

  	
   

  

 

Payout
Formula

An
employee’s bonus under the Management Bonus Plan will be determined pursuant to
the following formula:

Salary  ́
Target Bonus Percentage  ́ Individual
Performance

Percentage
 ́ Funding Percentage.

For
example, if the Segment Profit target was met but not exceeded, an employee in
Grade 42 with a salary of $110,000 and a 20% Bonus Target and who received an
Individual Performance Percentage of 105% would receive a Bonus of $23,100,
determined as follows:

$110,000  ́
20%  ́ 105%  ́ 100% = $23,100.

Condition of Payout

No bonus will be paid to any employee if employment is
terminated, whether voluntary or involuntary, prior to the actual payment date
(unless otherwise provided in the employee’s Employment Agreement).

Payout
Approval

The
Compensation Committee of the Board must separately approve any payout for
officers of the Company for whom the Compensation Committee must approve salary
and/or benefits under the Compensation Committee approval policy.

 2Exhibit 4.1

 

[EXECUTION COPY]

 

AMENDMENT TO RIGHTS AGREEMENT

 

This AMENDMENT, dated as
of March 7, 2006 (this “Amendment”) to the Rights Agreement,
dated as of June 24, 2005 (the “Rights Agreement”), by and between
SOURCECORP, Incorporated, a Delaware corporation (the “Company”)
and American Stock Transfer & Trust Company, as rights agent (the “Rights Agent”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings ascribed to such terms in the Rights Agreement.

 

WHEREAS,
the Company and the Rights Agent have heretofore executed and entered into the
Rights Agreement;

 

WHEREAS,
the Company proposes to enter into the Agreement and Plan of Merger, dated as
of the date hereof (the “Merger Agreement”), among CorpSource Holdings,
LLC (“Purchaser”), CorpSource MergerSub, Inc. (“Merger Sub”)
and the Company;

 

WHEREAS,
the board of directors of the Company has determined that the Merger Agreement
and the terms and conditions set forth therein and the transactions
contemplated thereby are fair to and in the best interests of the Company and
the stockholders of the Company; and

 

WHEREAS,
Section 27 of the Rights Agreement permits the Company, in its sole and
absolute discretion, to amend the Rights Agreement in the manner provided therein
at any time prior to the Distribution Date, and there has not been a
Distribution Date.

 

NOW,
THEREFORE, the Rights Agreement is hereby amended as follows:

 

Section 1. The
definition of “Acquiring Person” set forth in Section 1(a) of the
Rights Agreement is hereby amended to add the following before the last
sentence of Section 1(a):

 

“Notwithstanding
anything to the contrary in this Agreement, none of CorpSource Holdings, LLC (‘Purchaser’), CorpSource MergerSub, Inc. (‘Merger Sub’),
or any of their Affiliates, Jana Piranha Master Fund Ltd. (“Jana”), or any
director, employee, or officer of the Company or any of its Subsidiaries, shall
be deemed to be an Acquiring Person as a result of (i) the approval,
execution, delivery or performance of the Agreement and Plan of Merger dated as
of March 7, 2006 (as amended, modified or supplemented from time to time,
the ‘Merger
Agreement’), among the Company, Parent and Merger Sub, (ii) the
merger of the Merger Sub with and into the Company, (iii) the consummation
of any other transaction contemplated by the Merger Agreement (including, without
limitation, the execution, delivery or performance of their respective
obligations under the Support Agreement to be entered into between the
Purchaser and Jana) or (iv) at all times prior to the termination of the
Merger Agreement, any investment or commitment to invest in securities of
Purchaser (each of (i) – (iv) being a “Permitted Event” and
collectively referred to herein as the ‘Permitted Events’).”

 

Section 2.    The
Rights Agreement is hereby amended and supplemented by adding the following
sentence to the end of Section 1(l) of the Rights Agreement:  “Notwithstanding 

 

 

anything in this Rights Agreement to the
contrary, a Share Acquisition Date shall not occur or be deemed to occur as a
result of any Permitted Event.”

 

Section 3.    
The Rights Agreement is hereby amended and supplemented by adding the following
sentence to the end of Section 1(n) of the Rights Agreement:  “Notwithstanding anything in this Rights
Agreement to the contrary, a Triggering Event shall not occur or be deemed to
occur as a result of any Permitted Event.”

 

Section 4. The Rights
Agreement is hereby amended and supplemented by adding the following sentence
to the end of Section 3(a) of the Rights Agreement:  “Notwithstanding anything to the contrary in
this Agreement, a Distribution Date shall not occur or be deemed to occur as a
result of any Permitted Event.”

 

Section 5. The Rights
Agreement is hereby further amended by deleting and replacing clause (i) of
Section 7(a) of the Rights Agreement in its entirety with the
following:

 

“(i) (A) June 24,
2015 or (B) the moment in time immediately prior to the Effective Time (as
such term is defined in the Merger Agreement) (the earliest to occur of the events
described in clauses (A) or (B) of this Section 7(a) shall
be referred to as the ‘Final Expiration Date’)”

 

Section 6. This Section 6
shall constitute a certificate from an appropriate officer of the Company for
purposes of Section 27 of the Rights Agreement, and the Company and the
officer of the Company signing this Amendment below, on behalf of the Company, (i) hereby
certify that to their knowledge this Amendment is in compliance with the terms
of Section 27 of the Rights Agreement and (ii) request and direct
that the Rights Agent execute and deliver this Amendment, in accordance with Section 27
of the Rights Agreement.

 

Section 7. Except as
expressly amended hereby, the Rights Agreement shall continue in full force and
effect unamended and in accordance with the provisions thereof on the date
hereof. This Amendment and the Rights Agreement, as hereby amended, shall
constitute one and the same instrument.

 

Section 8. If any term,
provision, covenant or restriction of this Amendment is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Amendment shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.

 

Section 9. This
Amendment shall be deemed to be a contract made under the laws of the State of
Delaware without regards to conflicts of laws, and for all purposes shall be
governed by and construed in accordance with the laws of such State applicable
to contracts made and to be performed entirely within such State.

 

Section 10. This
Amendment may be executed in any number of counterparts, each of which
shall be deemed an original, and all of which together shall constitute one and
the same instrument.

 

[Signature
Page Follows]

 

2

 

IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed as of the date
and year first written above.

 

 

	
   

  	
  SOURCECORP,
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas C. Walker

  	
   

  
	
   

  	
   

  	
  Name:  Thomas C. Walker

  
	
   

  	
   

  	
  Title:    Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  AMERICAN
  STOCK TRANSFER & TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Herbert J. Lemmer

  	
   

  
	
   

  	
   

  	
  Name:  Herbert J. Lemmer

  
	
   

  	
   

  	
  Title:    Vice President

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