Document:

exhibit10_1.htm

    EMPLOYMENT
AGREEMENT

     

    THIS
EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of the 1st day of
March, 2009, (the “Effective Date”) by and between Flint
Telecom Group. Inc, a Nevada corporation (the “Company”), and Steve Keaveney,
whose residence address is _____________________________________________________
(the “Executive”).

     

    The
Company wishes to employ the Executive and the Executive wishes to enter into
the employ of the Company as Chief Financial Officer and Board Member of
the Company.

     

    This
Agreement shall become effective immediately upon the execution
hereof.

     

    NOW,
THEREFORE, in consideration of the premises and mutual covenants set forth
herein, the parties hereby agree as follows:

     

    1.      Employment.

     

    1.1           Employment and
Term.  The Company shall employ the Executive and the Executive
shall continue to serve the Company, on the terms and conditions set forth
herein, for the period (the “Term”) from the Effective Date and expiring on the
second anniversary of the Effective Date, unless sooner terminated as
hereinafter set forth. The Agreement will automatically renew for subsequent six
month period(s), unless terminated at least 60 days prior to the expiration of
the applicable six month period.

     

    1.2           Duties of
Executive.  The Executive shall serve as Chief Financial
Officer of the Company and shall perform the duties of an executive commensurate
with such position, shall diligently perform all services as may be assigned to
him by the Company’s Board of Directors.  The Executive shall devote
his working time and attention to the business and affairs of the Company,
directing the operations and business
development functions of the company by performing the following duties
personally or through subordinate supervisors:  establishing,
recommending or making decisions on all aspects of
the business. The Executive
shall report to the Company’s President. The Company agrees that Executive is
not required to relocate from Atlanta, Georgia. The Company further agrees that
Executive may have other non-competitive business interests and may continue as
a Partner of Redquartz Atlanta, LLC.

     

    1.3           The
Company.  As used herein the term the “Company” shall be deemed
to include any and all present and future subsidiaries, divisions and affiliates
of the Company.

     

    2.      Compensation.

     

    2.1           Base
Salary.  During the term, the Executive shall receive a base
salary of $15,000.00 per month paid bi-weekly. The Board of Directors may also pay cash, stock or
stock option bonuses based on performance if the Company has achieved the goals
set by the Board.

     

    2.2           Equity.  Upon
the execution of this Agreement, the Company will issue to the Executive three
and one half million (3,500,000) shares of restricted common stock of the
Company, vesting over a period of four years, such that 1⁄4 of the shares shall
vest at the first annual anniversary of the Effective Date, and quarterly
thereafter so that 100% of the shares shall be fully vested at the Executive’s
four year anniversary with the Company.  If the Executive

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    resigns
from the Company at any time prior to the Executive’s four year anniversary, the
Executive shall be entitled to all vested shares as of the date of resignation.
If the Executive’s Employment is discontinued after the initial term of this
agreement or if the Executive is terminated without cause, the Executive shall
be entitled to receive full vesting of all 3,500,000 shares.

     

    2.3           Stock Option Grants. 
Subject to the approval of the Company’s Board of Directors, the Executive shall
be entitled to receive a grant based on the
Executive’s performance during the applicable year. The amount of the stock
option grant in any year shall be
determined by reference to the profitability of the Company and such other
measures as the Board of Directors and the Executive may agree.  The
terms and conditions relating to the stock option grant shall be negotiated in
good faith.

     

    3.      Expense Reimbursement and
Other Benefits.

     

    3.1           Expense
Reimbursement.  During the Term, upon the submission of
supporting documentation by the Executive, and in accordance with Company
policies for its executives, the Company shall reimburse the Executive for
all expenses actually paid or incurred by the Executive in the course of and
pursuant to the business of the Company, including expenses for travel, auto and
entertainment.

     

    3.2           Other
Benefits.  During the term, Company shall provide Executive
with major medical and dental insurance. The Company shall pay for 100% of the
costs to provide the Executive with “family” coverage for medical and dental
insurance.  

     

    3.3           Vacation.  Executive
shall be entitled to four weeks of paid vacation during each calendar year,
taking into consideration the business needs of the Company.

     

    3.4           D&O Insurance.
The Company agrees to provide Executive with D&O insurance in a suitable
amount agreeable to Executive and the Company will be responsible for
maintaining and continuing this coverage throughout the term of Executive’s
employment.

     

    4.      Termination for
Cause.  Notwithstanding anything contained in this Agreement to
the contrary, the Company may terminate this Agreement for Cause.  As
used in this Agreement “Cause” shall mean (i) an
act of fraud, embezzlement or theft of funds or property of the Company or any
of its clients/customers; (ii) any intentional wrongful disclosure of
proprietary information or trade secrets of the Company or its affiliates or any
intentional form of self-dealing detrimental to the Interests of the Company;
(iii) the habitual and debilitating use of alcohol or drugs; (iv) continued
failure to comply with the reasonable
written directives of the Board of
Directors; insubordination or abandonment of position (after written notice and
a reasonable opportunity to cure); or (v) failure to comply in any material
respect with the terms of this Agreement (after written notice and a reasonable
opportunity to cure).  Upon any
termination pursuant to this Section (4) the Company shall pay to the Executive
any unpaid Base Salary at the rate then in effect accrued through the effective
date of termination specified in such notice.  Except as provided
above, the Company shall have no further liability hereunder other than for
reimbursement for reasonable business expenses incurred prior to the date of
termination outlined in Sections 3.1.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.1           Termination Without
Cause.  The Company may terminate
this Agreement without cause at any time by giving Executive sixty (60) day
prior written notice of its desire to terminate. In the event the Company elects
to terminate the Agreement pursuant to this Section 4.1, the Company shall
have no further liability hereunder other than for the payment to Executive on
the termination date of any unpaid Base Salary through the termination date,
reimbursement of reasonable business expenses incurred prior to the
termination date, a lump
sum of two hundredthousand dollars
($200,000) in cash. The
Executive shall be released from all restrictive covenants within Section 7 of
this Agreement related to competition if terminated without cause, but the
Executive shall not disclose any Company “Confidential Information” (as defined
within Section 7), to any third party.

     

    5.      Resignation by
Executive.  The Executive upon delivery of notice may terminate
this Agreement therefore upon not less than
60 days prior notice of such
termination.  Upon receipt of such notice, the Company may, in its
sole discretion, release the Executive of his duties and his employment
hereunder prior to the expiration of the 60 day notice
period.  Notwithstanding anything contained in this Agreement to the
contrary, in the event of a termination by the Executive pursuant to this
Section 5, the Company shall have no further liability hereunder other than for
reimbursement for reasonable business expenses incurred prior to the date of
termination outlined in Sections 3.1.

     

    5.1           Disability.  Notwithstanding
anything contained in this Agreement to the contrary, the Company, by 30 days
written notice to the Executive shall at all times have the right to terminate
this Agreement, and the Executive’s employment hereunder, if the Executive
shall, as the result of mental or physical incapacity, illness or disability,
fail to perform his duties and responsibilities provided for herein for a period
of more than 60 days in any 12 month period.  Upon the termination
pursuant to this Section, the Company shall continue (i) to pay to the Executive
Base Salary at the rates then in effect for a period of 6 months after the
effective date of termination (the “Severance Period”), (ii) employee benefit
programs as to the Executive for the Severance Period and (iii) the Company
shall be responsible for making payments on behalf of the Executive and his
family to maintain coverage of health and other benefits under COBRA, for the
maximum period allowed.  Except as provided above, the Company shall
have no further liability hereunder other than for reimbursement for reasonable
business expenses, incurred prior to the date of termination, subject, however
to the provisions of Section 3.1.

     

    5.2           Changes in
Control.  For the purposes of this Agreement, a “Change of
Control” shall be deemed to have taken place if : (i) any person, including a
“group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended, becomes the owner of beneficial owner of Company securities, after
the date of this Agreement, having 50% 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 or (ii) the persons who were directors of the
Company before such transactions shall cease to constitute a majority of the
Board of Directors of the Company.

     

    (a)           The
Company and Executive hereby agree that, if Executive is affiliated with the
Company on the date on which a Change of Control occurs, (the “Change of Control
Date”), and this Agreement is in full force and effect, the Company (or, if
Executive is affiliated with a subsidiary, the subsidiary) will continue to
retain Executive and Executive will remain affiliated with the Company (or
subsidiary), subject to the terms and conditions of this
Agreement,  for the

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    period
commencing on the Change of Control Date and ending on the expiration date of
this Agreement (which date shall then become the “Change of Control Termination
Date”) to exercise such authority and perform such executive duties as are
commensurate with the authority being exercised and duties being performed by
the Executive immediately prior to the Change of Control Date.  If
after the Change of Control, Executive is requested, and, in his sole and
absolute discretion, consents to change his principal business location, the
Company will reimburse the Executive for his reasonable relocation expenses,
including, without limitation, moving expenses, temporary living and travel
expenses for a reasonable time while arranging to move his residence to the
changed location, closing costs, if any, associated with the sale of his
existing residence and the purchase of a replacement residence at the changed
location, plus an additional amount representing a gross-up of any state or
federal taxes payable by Executive as a result of any such
reimbursement.  If the Executive shall not consent to change his
business location, the Executive may continue to provide the services required
of him hereunder from his then residence and/or business address until the
Change of Control Termination Date, at which time this Agreement shall
terminate, unless sooner terminated or extended as set forth
herein.

     

    (b)           During
the remaining term hereof after the Change of Control Date, the Company (or
subsidiary) will (i) continue to pay Executive a salary and benefits at not less
than the level applicable to Executive on the Change of Control Date, (ii) pay
Executive bonuses as set forth herein, and (iii) continue employee benefit
programs as to Executive at levels in effect on the Change of Control
Date.

     

    (c)           The
Company hereby agrees that, if Change of Control
occurs prior to the termination of this Agreement, any Shares owned by the Executive shall become
registered.

     

    6.      Death.  In
the event of the death of the Executive during the Term of his employment
hereunder, the Company shall pay to the personal representative of the estate of
the deceased Executive any unpaid Base Salary accrued through the date of his
death.  Except as provided above, the Company shall have no further
liability hereunder other than for reimbursement for reasonable business
expenses incurred prior to the date of the Executive’s death, subject, however
to the provisions of Section 3.1.

     

    7.      Restrictive
Covenants.

     

    7.1           Nondisclosure.  During
the Term and following termination of the Executive’s employment with the
Company, Executive shall not divulge, communicate, use to the detriment of the
Company or for the benefit of any other person or persons, or misuse in any way,
any Confidential Information (as hereinafter defined) pertaining to the business
of the Company.  Any Confidential Information or data now or hereafter
acquired by the Executive with respect to the business of the Company (which
shall include, but not be limited to, information concerning the Company’s
financial condition, prospects, technology, customers, suppliers, methods of
doing business and promotion of the Company’s products and services) deemed a
valuable, special and unique asset of the Company that is received by the
Executive in confidence and as a fiduciary.  For purposes of this
Agreement “Confidential Information” means information disclosed to the
Executive or known by the Executive as a consequence of or through his
employment by the Company (including information conceived, originated,
discovered or developed by the Executive) prior to or after the date hereof and
not generally known or in the public domain, about the Company or its
business.  Notwithstanding the foregoing, nothing

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    herein
shall be deemed to restrict the Executive from disclosing Confidential
Information to the extent required by law.

     

    7.2           Books and
Records.  All books, records, accounts and similar repositories
of Confidential Information of the Company, whether prepared by the Executive or
otherwise coming into the Executive’s possession, shall be the exclusive
property of the Company and shall be returned immediately to the Company on
termination of this Agreement.

     

    7.3           Certain
Activities.  The Executive shall not, while employed by the
Company and for a period of 12 months following the date of termination,
directly or indirectly, hire, offer to hire, entice away or in any other manner
persuade or attempt to persuade any officer, employee, agent, customer, lessor,
lessee, licensor, licensee or supplier of Employer or any of its subsidiaries to
discontinue or alter his or its relationship with Employer or any of its
subsidiaries.

     

    7.4           Non-Competition.  The
Executive shall not in any manner, directly or indirectly, including through
entities controlled by such Executive, while employed by the Company and for a
period of two (2) years following the Executive’s resignation or fulfillment of
the initial term of this agreement (i) engage or participate in a business, or
otherwise perform services for third parties which are competitive with those
performed by the Company, or (ii) own or operate any business which engages or
participates in the same or similar business or businesses conducted by the
Company which performs competitive services.  Executive shall be
deemed to be engaged in the Business or performing competitive services if the
Executive engages in such business or performs such services directly or
indirectly, whether for the Executive’s own account or for that of another
person, firm or corporation, or whether as a stockholder, principal, partner,
member, agent, investor, proprietor, director, officer, employee or consultant,
except as an employee, director or consultant of the Company; provided, however, that the
Executive may hold an investment of no more than 5% of the equity securities of
any publicly traded entity without violating this Agreement. It is understood
and agreed that the business of China Voice Holding Corp is excluded from this
Non-Competition clause.

     

    7.5           Property Rights; Assignment
of Inventions.  With respect to information, inventions and
discoveries or any interest in any copyright and/or other property right
developed, made or conceived of by Executive, either alone or with others, at
any time during his employment by Employer and whether or not within working
hours, arising out of such employment or pertinent to any field of business or
research in which, during such employment, Employer is engaged or (if such is
known to or ascertainable by Executive) is considering engaging, Executive
hereby agrees:

     

    (a)           that
all such information, inventions and discoveries or any interest in any
copyright and/or other property right, whether or not patented or patentable,
shall be and remain the exclusive property of the Employer;

     

    (b)           to
disclose promptly to an authorized representative of Employer all such
information, inventions and discoveries or any copyright and/or other property
right and all information in Executive’s possession as to possible applications
and uses thereof;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

              (c)           not
to file any patent application relating to any such invention or discovery
except with the prior written consent of an authorized officer of Employer
(other than Executive);

     

    (d)           that
Executive hereby waives and releases any and all rights Executive may have in
and to such information, inventions and discoveries, and hereby assigns to
Executive and/or its nominees all of Executive’s right, title and interest in
them, and all Executive’s right, title and interest in any patent, patent
application, copyright or other property right based
thereon.  Executive hereby irrevocably designates and appoints
Employer and each of its duly authorized officers and agents as his agent and
attorney-in-fact to act for him and on his behalf and in his stead to execute
and file any document and to do all other lawfully permitted acts to further the
prosecution, issuance and enforcement of any such patent, patent application,
copyright or other property right with the same force and effect as if executed
and delivered by Executive; and

     

    (e)           at
the request of Employer, and without expense to Executive, to execute such
documents and perform such other acts as Employer deems necessary or
appropriate, for Employer to obtain patents on such inventions in a jurisdiction
or jurisdictions designated by Employer, and to assign to Employer or its
designee such inventions and any and all patent applications and patents
relating thereto.

     

    7.6           Injunctive
Relief.  The parties hereby acknowledge and agree that (a)
Employer will be irreparably injured in the event of a breach by Executive under
this Section 7; (b) monetary damages will not be an adequate remedy for any
such breach; (c) Employer will be entitled to injunctive relief, in addition to
any other remedy which it may have, in the event of any such breach; and (d) the
existence of any claims that Executive may have against Employer, whether under
this Agreement or otherwise, will not be a defense to the enforcement by
Employer of any of its rights under this Section 7.

     

    7.7           Non-Exclusivity and
Survival.  The covenants of the Executive contained in this
Section 7 are in addition to, and not in lieu of, any obligations that
Executive may have with respect to the subject matter hereof, whether by
contractor by law, and such covenants and their enforceability shall survive any
termination of the Employment Term by either party and any investigation made
with respect to the breach thereof by Employer at any time.

     

    8.      Withholding.  Anything
to the contrary notwithstanding, all payments required to be made by the Company
hereunder to the Executive or the Executive’s estate or beneficiaries shall be
subject to the withholding of such amounts, if any, relating to tax and other
payroll deductions as the Company may reasonably determine it should withhold
pursuant to any applicable law or regulation

     

    9.      Arbitration.  Any
controversy or claim arising out of or relating to this Agreement, or the breach
thereof, shall be settled by arbitration in accordance herewith, and judgment
upon the award rendered by the arbitrators may be entered in any Court having
jurisdiction thereof.  Venue of the arbitration shall be in Palm Beach
County, Florida.  Any controversy or claim shall be submitted to three
arbitrators selected from the panels of the arbitrators of the American
Arbitration Association.  The arbitrators, in addition to any award
made, shall have the discretion to award the prevailing party the costs of the
proceedings, together with reasonable attorneys’ fees, provided that absent such
award, each party shall bear the costs of its own counsel and

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    presentation
of evidence, and each party shall share equally the cost of such arbitration
proceeding.  Any award made hereunder may be docketed in a court of
competent jurisdiction in Palm Beach County, Florida, and all parties hereby
consent to the personal jurisdiction of such court for purposes of the
enforcement of the arbitration award.

     

    10.           Binding
Effect.  Except as herein otherwise provided, this Agreement
shall inure to the benefit of and shall be binding upon the parties hereto,
their personal representatives, successors, heirs and assigns.  The
Executive may not assign his rights or benefits, or delegate any of his duties,
hereunder without the prior written consent of the Company.

     

    11.           Further
Assurances.  At any time, and from time to time, each party
will take such action as may be reasonably requested by the other party to carry
out the intent and purposes of this Agreement.

     

    12.           Entire
Agreement.  This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter
hereof.  It supersedes all prior negotiations, letters and
understandings relating to the subject matter hereof.

     

    13.           Amendment.  This
Agreement may not be amended, supplemented or modified in whole or in part
except by an instrument in writing signed by the party or parties against whom
enforcement of any such amendment, supplement or modification is
sought.

     

    14.           Choice of
Law.  This Agreement will be interpreted, construed and
enforced in accordance with the laws of the State of Florida, without giving
effect to the application of the principles pertaining to conflicts of
laws.

     

    15.           Effect of
Waiver.  The failure of any party at any time or times to
require performance of any provision of this Agreement will in no manner affect
the right to enforce the same.  The waiver by any party of any breach
of any provision of this Agreement will not be construed to be a waiver by any
such party of any succeeding breach of that provision or a waiver by such party
of any breach of any other provision.

     

    16.           Construction.  The
parties hereto and their respective legal counsel participated in the
preparation of this Agreement; therefore, this Agreement shall be construed
neither against nor in favor of any of the parties hereto, but rather in
accordance with the fair meaning thereof.

     

    17.           Severability.  The
invalidity, illegality or unenforceability of any provision or provisions of
this Agreement will not affect any other provision of this Agreement, which will
remain in full force and effect, nor will the invalidity, illegality or
unenforceability of a portion of any provision of this Agreement affect the
balance of such provision.  In the event that any one or more of the
provisions contained in this Agreement or any portion thereof shall for any
reason be held to be invalid, illegal or unenforceable in any respect, this
Agreement shall be reformed, construed and enforced as if such invalid, illegal
or unenforceable provision had never been contained herein.

     

    18.           No Third-Party
Beneficiaries.  No person shall be deemed to possess any
third-party beneficiary right pursuant to this Agreement.  It is the
intent of the parties hereto that no direct benefit to any third party is
intended or implied by the execution of this Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    19.           Counterparts.  This
Agreement may be executed in one or more counterparts, each of which will be
deemed an original.

     

    20.           Notice.  Any
notice required or permitted to be delivered hereunder shall be in writing and
shall be deemed to have been delivered when hand delivered, sent by facsimile
with receipt confirmed or when deposited in the United States mail, postage
prepaid, registered or certified mail, return receipt requested, or by overnight
courier, addressed to the parties at the addresses first stated herein, or to
such other address as either party hereto shall from time to time designate to
the other party by notice in writing as provided herein.

     

    IN
WITNESS WHEREOF, this Agreement has been duly signed by the parties hereto on
the day and year first above written.

     

    Flint
Telecom Group, Inc.

     

     

    By: /s/ Vincent
Browne                                                                

     

    Vincent
Browne,  CEO

     

    

     

    

     

    /s/ Steve
Keaveney                                                                

     

    Steve
Keaveneyexv10w1

Exhibit 10.1

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of March 1, 2009, by and between HMS
HOLDINGS CORP., a New York corporation (the “Company”), and ROBERT M. HOLSTER (the “Employee”).

WITNESSETH:

     WHEREAS the Company, as the successor to Health Management Systems, Inc., and the Employee
have entered into an Employment Agreement, dated as of April 1, 2001, as amended as of February 11,
2004 and as of July 16, 2007 (as so amended, the “Prior Agreement”); and

     WHEREAS the Company and the Employee desire to amend and restate the Prior Agreement in its
entirety; and

     WHEREAS the Company desires to continue the employment of the Employee for the period provided
in this Agreement, and the Employee is willing to continue such employment with the Company, all in
accordance with the terms and conditions set forth below;

     NOW, THEREFORE, for and in consideration of the premises hereof and the mutual covenants
contained herein, the parties hereto hereby covenant and agree to amend and restate the Prior
Agreement as follows:

          1. Employment.

          (a) The Company hereby agrees to employ the Employee, and the Employee hereby agrees to accept
such employment with the Company, beginning on the date hereof and continuing for the period set
forth in Section 2 hereof, all upon the terms and conditions hereinafter set forth.

          (b) The Employee affirms and represents that as of the commencement of his employment by the
Company on the date hereof he is under no obligation to any former employer or other party that is
in any way inconsistent with, or that imposes any restriction upon, the Employee’s acceptance of
employment hereunder with the Company, the employment of the Employee by the Company, or the
Employee’s undertakings under this Agreement.

          2. Term of Employment.

          (a) Unless earlier terminated as provided in this Agreement, the term of the Employee’s
employment under this Agreement shall be for a period beginning on the date hereof and ending on
February 28, 2011 (the “Term”).

          (b) The period from the date hereof until February 28, 2011 or, in the event that the
Employee’s employment hereunder is earlier terminated as provided herein, such shorter period, as
the case may be, is hereinafter called the “Employment Term”.

 

 

          3. Duties. The Employee shall be employed as the Chairman of the Board of the
Company, shall faithfully and competently perform such duties as inhere in such position and as are
specified in the By-laws of the Company and, specifically, shall advise and assist the Chief
Executive Officer of the Company with regard to strategic planning, corporate development,
regulatory affairs, dispute resolution and investor and governmental relations. The Employee shall
also perform and discharge such other executive employment duties and responsibilities as the Board
of Directors of the Company (the “Board of Directors”) shall from time to time determine. The
Employee shall perform his duties principally at such offices of the Company and its subsidiaries
as their respective businesses shall require, from time to time, with such travel to such other
locations from time to time as the Board of Directors may reasonably prescribe, but the Employee
shall not be required to perform his obligations hereunder from any particular location. Except as
may otherwise be approved in advance by the Board of Directors, and except during vacation periods
and reasonable periods of absence due to sickness, personal injury or other disability, the
Employee shall devote sufficient business time throughout the Employment Term to properly perform
the services required of him hereunder, but shall not be obligated to devote more than 50% of his
business time to the performance of such services. The Employee shall use his best efforts,
judgment and energy to improve and advance the business and interests of the Company and its
subsidiaries in a manner consistent with the duties of his positions. Nothing contained in this
Section 3 shall preclude the Employee from serving on the boards of directors of other companies or
from performing services for charitable or not-for-profit community organizations, provided that
such activities do not interfere with the Employee’s performance of his duties and responsibilities
under this Agreement.

          4. Salary and Bonus.

          (a) Salary. As compensation for the performance by the Employee of the services to be
performed by the Employee hereunder during the Employment Term, the Company shall pay the Employee
a base salary at the annual rate of Two Hundred Fifty Thousand Dollars ($250,000) (said amount,
together with any increases thereto as may be determined from time to time by the Board of
Directors in its sole discretion, being hereinafter referred to as “Salary”). Any Salary payable
hereunder shall be paid in regular intervals in accordance with the Company’s payroll practices
from time to time in effect.

          (b) Bonus. The Employee shall be eligible to receive bonus compensation from the
Company in respect of each fiscal year (or portion thereof) during the Employment Term, in each
case as may be determined by the Board of Directors in its sole discretion on the basis of
performance-based or such other criteria as may be established from time to time by the Board of
Directors in its sole discretion. The Employee’s target bonus shall be equal to 65% of his Salary
with award ranges calculated in a manner consistent with those established by the Board of
Directors for the Chief Executive Officer of the Company.

          5. Other Benefits. During the Employment Term, the Employee shall:

          (a) be eligible to participate in employee fringe benefits and pension and/or profit sharing
plans that may be provided by the Company for its senior executive employees in accordance with the
provisions of any such plans, as the same may be in effect from time to time;

2

 

          (b) be eligible to participate in any medical and health plans or other employee welfare
benefit plans that may be provided by the Company for its senior executive employees in accordance
with the provisions of any such plans, as the same may be in effect from time to time;

          (c) be entitled to all paid holidays given by the Company to its senior executive officers;

          (d) be eligible for consideration by the Board of Directors for awards of stock options under
any stock option plan that may be established by the Company for its and its subsidiaries’ key
employees, the amount, if any, of shares for which options may be granted to Employee to be in the
sole discretion of the Board of Directors;

          (e) be entitled to sick leave, sick pay and disability benefits in accordance with any Company
policy that may be applicable to senior executive employees from time to time; and

          (f) be entitled to reimbursement for all reasonable and necessary out-of-pocket business
expenses incurred by the Employee in the performance of his duties hereunder in accordance with the
Company’s normal policies from time to time in effect.

          6. Confidential Information. The Employee hereby covenants, agrees and acknowledges
as follows:

          (a) The Employee has and will have access to and will participate in the development of or be
acquainted with confidential or proprietary information and trade secrets related to the business
of the Company and any present or future subsidiaries or affiliates of the Company (collectively
with the Company, the “Companies”), including but not limited to (i) customer lists; claims
histories, adjustments and settlements and related records and compilations of information; the
identity, lists or descriptions of any new customers, referral sources or organizations; financial
statements; cost reports or other financial information; contract proposals or bidding information;
business plans; training and operations methods and manuals; personnel records; software programs;
reports and correspondence; and management systems, policies or procedures, including related forms
and manuals; (ii) information pertaining to future developments such as future marketing or
acquisition plans or ideas, and potential new business locations; (iii) confidential or non-public
information relating to business operations and strategic plans of third parties with which the
Companies have or may be assessing commercial arrangements (“Third Party Information”) and (iv) all
other tangible and intangible property, that are used in the business and operations of the
Companies but not made public. The information and trade secrets relating to the business of the
Companies described hereinabove (including Third Party Information) in this paragraph (a) are
hereinafter referred to collectively as the “Confidential Information”, provided that the term
Confidential Information shall not include any information (x) that is or becomes generally
publicly available (other than as a result of violation of this Agreement by the Employee), (y)
that the Employee receives on a nonconfidential basis from a source (other than the Companies or
their representatives) or, in the case of Third Party Information, from a source (other than the
Companies, the third parties to which such information relates or their respective representatives)
that is not known by him to be

3

 

bound by an obligation of secrecy or confidentiality to any of the Companies (or such third
parties, in the case of Third Party Information) or (z) that was in the possession of the Employee
prior to disclosure by the Companies (or such third parties, in the case of Third Party
Information).

          (b) The Employee shall not disclose, use or make known for his or another’s benefit any
Confidential Information or use such Confidential Information in any way except as is in the best
interests of the Companies in the performance of the Employee’s duties under this Agreement. The
Employee may disclose Confidential Information when required by a third party and applicable law or
judicial process, but only after providing immediate notice to the Company at any third party’s
request for such information, which notice shall include the Employee’s intent with respect to such
request.

          (c) The Employee acknowledges and agrees that a remedy at law for any breach or threatened
breach of the provisions of this Section 6 would be inadequate and, therefore, agrees that the
Companies shall be entitled to injunctive relief in addition to any other available rights and
remedies in case of any such breach or threatened breach by the Employee (and the Employee hereby
waives any requirement that any of the Companies provide a bond or other security in connection
with the issuance of any such injunction); provided, however, that nothing contained herein shall
be construed as prohibiting the Companies from pursuing any other rights and remedies available for
any such breach or threatened breach.

          (d) The Employee agrees that, upon termination of his employment with the Company for any
reason, the Employee shall forthwith return to the Company all Confidential Information in whatever
form maintained (including, without limitation, computer discs and other electronic media).

          (e) The obligations of the Employee under this Section 6 shall, except as otherwise provided
herein, survive the termination of the Employment Term and the expiration or termination of this
Agreement.

          (f) Without limiting the generality of Section 10 hereof, the Employee hereby expressly agrees
that the foregoing provisions of this Section 6 shall be binding upon the Employee’s heirs,
successors and legal representatives.

          7. Termination.

          (a) The Employee’s employment hereunder shall be terminated upon the occurrence of any of the
following:

          (i) the death of the Employee;

          (ii) the Employee’s inability to perform his duties on account of disability or incapacity for
a period of one hundred eighty (180) or more days, whether or not consecutive, within any period of
twelve (12) consecutive months;

          (iii) the Company giving written notice, at any time, to the Employee that the Employee’s
employment is being terminated “for cause” (as defined below);

4

 

          (iv) the Company giving written notice, at any time, to the Employee that the Employee’s
employment is being terminated other than pursuant to clause (i), (ii) or (iii) above; or

          (v) the Employee terminates his employment hereunder for any reason whatsoever (whether by
reason of retirement, resignation or otherwise).

          The following actions, failures and events by or affecting the Employee shall constitute
“cause” for termination within the meaning of clause (iii) above: (A) a conviction of the Employee
of, or the entering of a plea of nolo contendere by the Employee with respect to, a felony, (B)
dependence on, or habitual abuse of, controlled substances or alcohol (in the case of alcohol
abuse, that has a material adverse affect on Employee’s performance of his obligations under this
Agreement) or acts of dishonesty by the Employee that are materially detrimental to one or more of
the Companies, (C) willful misconduct by the Employee that materially damages the business of one
or more of the Companies, (D) gross negligence by the Employee in the performance of, or willful
disregard by the Employee of, his material obligations under this Agreement or otherwise relating
to his employment, which gross negligence or willful disregard continues unremedied for a period of
fifteen (15) days after written notice thereof to the Employee or (E) failure by the Employee to
obey the reasonable and lawful orders and policies of the Board of Directors that are material to
and consistent with the provisions of this Agreement (provided that, in the case of an indictment
described in clause (A) above, and in the case of clauses (B), (C) and (E) above, the Employee
shall have received written notice of such proposed termination (which notice shall state the
Sections of this Agreement pursuant to which such termination is being effected and a description
of the facts supporting such termination) and a reasonable opportunity (together with the
Employee’s counsel) to discuss the matter with the Board of Directors, followed by a notice that
the Board of Directors adheres to its position).

          (b) In the event that (1) the Employee’s employment terminates pursuant to clause (i) or (ii)
of Section 7(a) above or (2) is terminated by the Company pursuant to clause (iv) of Section 7(a)
above, or the Employee terminates his employment, in the case of either event described in this
clause (2), within 45 days of a Change of Control Transaction (as hereinafter defined), then (i)
during the period beginning on the date of such termination and ending on the last day of the
Applicable Period (as defined in Section 9(a)), the Company shall pay to the Employee, as severance
pay or liquidated damages or both, monthly payments equal to one-twelfth of the rate per annum of
his Salary at the time of such termination, provided, however, that no such payments shall be
required to be made if the Employee fails to comply with his obligations under Section 9 below; and
(ii) the Company shall continue to provide the Employee with the health insurance benefits provided
to other employees of the Company (including employer contributions) from the date of such
termination through February 28, 2011. For avoidance of doubt, the Company and the Employee
acknowledge that the obligations of the Company under the preceding sentence do not apply in the
event the Employee’s employment is terminated pursuant to Section 7(a)(iii) for “cause” or
voluntarily by the Employee other than in connection with a Change of Control Transaction. If the
successor company, in a Change of Control Transaction, does not offer post termination health
benefits to the Employee, the Company will pay 135% of the COBRA cost for family coverage for 18
months for health plan continuation in the plan the Employee was participating in at the time of
termination. As well, the Company will provide for a period of six months 135% of the cost of
premiums for a non-

5

 

group family health plan of comparable benefits to the Company’s plan that Employee was
participating at the time of termination. The cost of such non-group family health plan will be
determined at the time of termination. Both the cost of 18 months of COBRA continuation coverage
and six months non-group family health coverage will be paid in a lump sum at time of closing of
the Change of Control Transaction.

     For purposes of this Agreement, a “Change of Control Transaction” means the sale or transfer
of all or substantially all of the assets of the Company or any merger, consolidation or other
transaction that would result in the transfer, directly or indirectly, of more than 50% of the then
outstanding capital stock of the Company to holders who were not holders of its capital stock
immediately prior to such merger. It is understood by the Company and the Employee that “a sale of
substantially all” the Company’s assets may occur, for purposes of the New York Business
Corporation Law, but that such an event will not constitute a “Change of Control Transaction” for
purposes of this Agreement unless the Company has sold all its significant lines of business and
intends to limit its future activities to the distribution of the proceeds of such transaction.

          (c) Notwithstanding anything to the contrary expressed or implied herein, except as required
by applicable law and except as set forth in Section 7(b) above, the Company (and its affiliates)
shall not be obligated to make any payments to the Employee or on his behalf of whatever kind or
nature by reason of the Employee’s cessation of employment (including, without limitation, by
reason of termination of the Employee’s employment by the Company for “cause”), other than (i) such
amounts, if any, of his Salary as shall have accrued and remained unpaid as of the date of said
cessation and (ii) such other amounts, if any, that may be then otherwise payable to the Employee
pursuant to the terms of the Company’s benefits plans.

          (d) No interest shall accrue on or be paid with respect to any portion of any payments
hereunder.

          8. Non-Assignability.

          (a) Neither this Agreement nor any right or interest hereunder shall be assignable by the
Employee or his beneficiaries or legal representatives without the Company’s prior written consent;
provided, however, that nothing in this Section 8(a) shall preclude the Employee from designating a
beneficiary to receive any benefit payable hereunder upon his death or incapacity.

          (b) Except as required by law, no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or
hypothecation or to exclusion, attachment, levy or similar process or to assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and
of no effect.

          9. Restrictive Covenants.

          (a) Competition. During the Employment Term and during the Applicable Period (as
defined below), the Employee shall not directly or indirectly (as a director, officer, executive
employee, manager, consultant, independent contractor, advisor or otherwise) engage

6

 

in competition with, or own any interest in, perform any services for, participate in or be
connected with any business or organization that engages in competition with the Company or any of
its subsidiaries within the meaning of Section 9(d), provided, however, that the provisions of this
Section 9(a) shall not be deemed to prohibit the Employee’s ownership of not more than two percent
(2%) of the total outstanding shares of common stock of any publicly held company, or ownership,
whether through direct or indirect stock holdings or otherwise, of one percent (1%) or more of the
equity of any other business. For purposes of this Agreement, the “Applicable Period” shall mean
the period from the termination of the Employee’s employment hereunder for any reason whatsoever
through and including February 28, 2011.

          (b) Non-Solicitation. During the Employment Term and during the Applicable Period, the
Employee shall not directly or indirectly induce or attempt to induce any employee of the Company
or any of its subsidiaries to leave the employ of the Company or such subsidiary, or in any way
interfere with the relationship between the Company or any of its subsidiaries and any employee
thereof.

          (c) Non-Interference. During the Employment Term and during the Applicable Period, the
Employee will not directly or indirectly hire, engage, send any work to, place orders with, or in
any manner be associated with any supplier, contractor, subcontractor or other business relation of
the Company or any of its subsidiaries if such action would be known by him to have a material
adverse effect on the business, assets or financial condition of the Company or any of its
subsidiaries or materially interfere with the relationship between any such person or entity and
the Company or any of its subsidiaries.

          (d) Certain Definitions. For purposes of this Section 9, a person or entity
(including, without limitation, the Employee) shall be deemed to be a competitor of the Company or
any of its subsidiaries, or a person or entity (including, without limitation, the Employee) shall
be deemed to be engaging in competition with the Company or any of its subsidiaries, if such person
or entity engages in any business engaged in by the Company or such subsidiary at the time of
termination of the Employee’s employment with the Company, in either case in the geographic region
encompassing the service areas in which the Company or any of its subsidiaries conduct, or had an
established plan to begin conducting, their businesses at the time of termination of the Employee’s
employment with the Company.

          (e) Certain Representations of the Employee. In connection with the foregoing
provisions of this Section 9, the Employee represents that his experience, capabilities and
circumstances are such that such provisions will not prevent him from earning a livelihood. The
Employee further agrees that the limitations set forth in this Section 9 (including, without
limitation, time and territorial limitations) are reasonable and properly required for the adequate
protection of the current and future businesses of the Company and its subsidiaries. It is
understood and agreed that the covenants made by the Employee in this Section 9 (and in Section 6
hereof) shall survive the expiration or termination of this Agreement.

          (f) Injunctive Relief. The Employee acknowledges and agrees that a remedy at law for
any breach or threatened breach of the provisions of Section 9 hereof would be inadequate and,
therefore, agrees that the Company and any of its subsidiaries shall be entitled to injunctive
relief in addition to any other available rights and remedies in cases of any such

7

 

breach or threatened breach (and the Employee hereby waives any requirement that the Company
or any such subsidiary provide a bond or other security in connection with the issuance of any such
injunction); provided, however, that nothing contained herein shall be construed as prohibiting the
Company or any of its subsidiaries from pursuing any other rights and remedies available for any
such breach or threatened breach.

          10. Binding Effect. Without limiting or diminishing the effect of the provisions
affecting assignment of this Agreement, this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, successors, legal representatives and assigns.

          11. Notices. All notices that are required or may be given pursuant to the terms of
this Agreement shall be in writing and shall be sufficient in all respects if given in writing and
(i) delivered personally, (ii) mailed by certified or registered mail, return receipt requested and
postage prepaid, (iii) sent via a nationally recognized overnight courier or (iv) sent via
facsimile confirmed in writing to the recipient, if to the Company at the Company’s principal place
of business, and if to the Employee, at his home address most recently filed with the Company, or
to such other address or addresses as either party shall have designated in writing to the other
party hereto, provided, however, that any notice sent by certified or registered mail shall be
deemed delivered on the date of delivery as evidenced by the return receipt.

          12. Law Governing. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.

          13. Severability. The Employee agrees that in the event that any court of competent
jurisdiction shall finally hold that any provision of Section 6 or 9 hereof is void or constitutes
an unreasonable restriction against the Employee, the provisions of such Section 6 or 9 shall not
be rendered void but shall apply with respect to such extent as such court may judicially determine
constitutes a reasonable restriction under the circumstances. If any part of this Agreement other
than Section 6 or 9 is held by a court of competent jurisdiction to be invalid or incapable of
being enforced in whole or in part by reason of any rule of law or public policy, such part shall
be deemed to be severed from the remainder of this Agreement for the purpose only of the particular
legal proceedings in question and all other covenants and provisions of this Agreement shall in
every other respect continue in full force and effect and no covenant or provision shall be deemed
dependent upon any other covenant or provision.

          14. Waiver. Failure to insist upon strict compliance with any of the terms, covenants
or conditions hereof shall not. be deemed a waiver of such term, covenant or condition, nor shall
any waiver or relinquishment of any right or power hereunder at any one or more times be deemed a
waiver or relinquishment of such right or power at any other time or times.

          15. Arbitration. With the exception of any dispute regarding the Employee’s
compliance with the provisions of Sections 6 and 9 above, any dispute relating to or arising out of
the provisions of this Agreement shall be decided by arbitration in New York, New York, in
accordance with the Expedited Arbitration Rules of the American Arbitration Association then
obtaining, unless the parties mutually agree otherwise in a writing signed by both parties. This
undertaking to arbitrate shall be specifically enforceable. The decision rendered by the arbitrator

8

 

will be final and judgment may be entered upon it in accordance with appropriate laws in any
court having jurisdiction thereof. Each of the parties shall pay his or its own legal fees
associated with such arbitration.

          16. Entire Agreement; Modifications. This Agreement constitutes the entire and final
expression of the agreement of the parties with respect to the subject matter hereof and supersedes
all prior agreements, oral and written, between the parties hereto with respect to the subject
matter hereof. This Agreement may be modified or amended only by an instrument in writing signed by
both parties hereto.

          17. Counterparts. This Agreement may be executed in two or more 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 Company and the Employee have duly executed and delivered this
Agreement as of the day and year first above written.

	 	 	 	 	 
	 	 	HMS HOLDINGS CORP.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William C. Lucia
	 

	 	 	 	 
	 	 	Name: William C. Lucia
	 	 	Title: Chief Executive Officer
	 
	 	 	 	 
	 	 	/s/ Robert M. Holster
	 	 	 
	 	 	Robert M. Holster

9

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