Document:

Exhibit 10.13

 

SEPARATION AGREEMENT AND RELEASE

THIS
SEPARATION AGREEMENT AND RELEASE (this “Agreement”)
is made as of September 30, 2005 by and among
National Mentor Holdings, Inc., a Delaware corporation (the “Company”),
National Mentor, Inc., a Delaware corporation (“Employer”), and
Elizabeth V. Hopper (“Executive”).

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

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

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

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

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

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

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

WHEREAS,
pursuant to a Management Stock Purchase Agreement dated May 31, 2003 (as
amended, the “Second Purchase Agreement” and together with the First
Purchase Agreement, the “Purchase Agreements”), between the Company and
Executive, Executive acquired 15,666.296 shares of Common Stock at a price per
share of $7.00.

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

 

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

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

WHEREAS,
Executive wishes to resign her positions with the Company and Employer and each
of their respective subsidiaries and the Company and Employer and each of their
respective subsidiaries wish to accept such resignations, in each case,
effective as of September 30, 2005 (the “Termination Date”).

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

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

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

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

2.             Severance.  In exchange for the general release of all
claims pursuant to Section 6 and the Release (as defined below), the
provisions of Section 3 hereof, and the other promises, covenants and
agreements by Executive set forth herein, subject to Executive’s execution and
delivery of the Release as provided in Section 6 below (a) during the
24-month period commencing on the Termination Date (the “Severance Period”),
Employer shall pay Executive severance at a rate equal to $280,000 per annum (subject to withholdings for
taxes) (“Base Severance”), payable in equal installments on the
Company’s regular salary payment dates, (b) notwithstanding that Executive will
resign her employment effective on the Termination Date, Executive shall be
entitled to receive any bonus for the fiscal year ending on the Termination
Date to which she would otherwise be entitled pursuant to the terms and conditions
of The Mentor Executive Leadership Incentive Plan (as amended, the “Bonus
Plan”), any such bonus to be paid at the time(s) provided in the Bonus Plan
or, if such time(s) are not set forth in the Bonus Plan, at the time(s) that
other officers of Employer are paid bonuses for fiscal year 2005 under the
Bonus Plan, and (c) on or about the date of the Closing 

2

(as
defined in the Repurchase Agreement), Employer shall pay to Executive in cash a
special bonus in the amount of $56,944.26 (subject to withholdings for taxes) (clauses
(a) through (c), collectively, the “Severance Payments and
Benefits”).  During the 25-month
period commencing on the Termination Date (the “Benefits Continuation Period”),
at Executive’s option, Executive shall continue to participate in Employer’s
group health and dental benefit plan(s) (excluding, for the avoidance of doubt,
any bonus or incentive compensation plans) on substantially the same terms and
conditions as apply from time to time to Employer’s then employed senior executives;
provided that Executive shall pay all costs for coverage under such plans
(including, without limitation, Executive’s costs and Employer’s and its
affiliates’ costs under such plans), which costs shall be substantially the
same as the applicable premium rates that would be paid by an employee
receiving such benefit plan coverage following a termination of employment
pursuant to COBRA (as defined below); provided further that Employer shall be
entitled to withhold any amounts owed by Executive pursuant to this sentence
from any amounts otherwise owed to Executive pursuant to this Agreement.  In addition to the foregoing, Employer may,
at its option and in its sole discretion and subject to the approval of the Company’s
board of directors, award an additional cash bonus to Executive, any such
additional bonus to be paid on or about December 20, 2005.  Following the Benefits Continuation Period,
to the extent permitted by the continuation coverage provisions of Section
4980B of the U.S. Internal Revenue Code of 1986, as amended (the “Code”),
Executive shall be offered the opportunity to elect continuation coverage under
Employer’s group medical and dental benefit plan(s) (“COBRA coverage”).  Employer shall provide Executive with the
appropriate COBRA coverage notice and election form, if any, for this
purpose.  If Executive is permitted to
and elects COBRA coverage, Executive shall pay 100% of Executive’s (and her
dependents’) health and dental insurance premiums under COBRA, for up to 18
months following the end of the Benefits Continuation Period; provided that
Executive shall notify Employer immediately of any change in her circumstances
that would warrant discontinuation of her COBRA coverage and benefits
(including but not limited to Executive’s receipt of group medical, dental or
vision benefits from any other employer). 
The existence and duration of Executive’s COBRA rights and/or the COBRA
rights of any of Executive’s eligible dependents shall be determined in
accordance with Section 4980B of the Code. 
Except as set forth in this Section 2, Executive agrees that she
is not entitled to any other salary, bonus, severance, reimbursement, benefit
or expectation of remuneration or other monies from the Company or Employer or
any of their respective subsidiaries or Affiliates (as defined in the Release)
except as required by law and except for the distribution of amounts to
Executive pursuant to the terms of (i) the Executive Plan in the aggregate
amount of $120,307.18 (the “Executive Plan Balance Amount”), (ii) the
Deferral Plan in the aggregate amount of $19,282.11 (the “Deferral Plan
Balance Amount”) and (iii) amounts payable pursuant to the Repurchase
Agreement; provided that, for the avoidance of doubt, Executive may continue as
a participant in the 401(k) Plan to the extent permitted under the terms
thereof.  For purposes of the Stock
Option Agreement, the payments set forth in this Section 2 shall
constitute severance payments and the Noncompetition Period (as defined
therein) shall continue until the end of the Severance Period.  Within 15 days following the Termination
Date, pursuant to the terms and conditions of the Executive Plan, Executive
shall be distributed her full balance under the Executive Plan in a lump-sum
payment (subject to withholdings for taxes) in an aggregate amount equal to the
Executive Plan Balance Amount.  Within 15
days following the Termination Date, pursuant to the terms and conditions of
the Deferral Plan, Executive shall be distributed her full balance under the
Deferral Plan in a lump-sum payment (subject to withholdings for taxes) in an
aggregate amount equal to the Deferral Plan Balance

3

Amount.  In the event of a material breach by
Executive of this Agreement, the Release, the Repurchase Agreement or the
provisions of the other agreements that survive pursuant to Section 3
below, the Company shall, in addition to any other rights or remedies available
at law or in equity or under the Release, be entitled to cease making payments
pursuant to this Section 2.

3.             Termination
and Survival of Agreements.  (i) As
of the Closing, Sections 2, 3 and 4 of the First Purchase Agreement and Sections
2, 3 and 4 of the Second Purchase Agreement shall terminate and be of no
further force or effect and all other sections of the First Purchase Agreement
and the Second Purchase Agreement shall survive and remain in full force and
effect, (ii) as of the Closing, Section 1 through 14 of the Stock Option
Agreement shall terminate and be of no further force or effect and all other
sections of the Stock Option Agreement shall survive and remain in full force
and effect and (iii) on the Termination Date, Sections 1 through 7 and Section
13 of the Employment Agreement shall terminate and be of no further force
or effect and all other sections of the Employment Agreement shall survive and
remain in full force and effect. 
Executive hereby reaffirms her obligations pursuant to (i) Section 5
of the First Purchase Agreement and Section 5 of the Second Purchase
Agreement, which sections shall remain in full force and effect after the
Closing,  (ii) Sections 8 through 12
and Sections 14 through 19 of the Employment Agreement, which sections
shall remain in full force and effect after the Closing,  (iii) Sections 15 through 28 of the
Stock Option Agreement, which sections shall remain in full force and effect
after the Closing and (iv) the Stockholders Agreement and the Registration
Agreement, which agreements shall remain in full force and effect after the
Closing.  On the date hereof, Executive
and the Company shall enter into the Repurchase Agreement.  The Repurchase Agreement shall survive the
execution of this Agreement and remain in full force and effect after the
Closing.

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

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

4

compilations, extracts, excerpts, summaries or other notes of any such
manuals, files, documents, records, software, customer data base or other data.

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

7.             Effective
Date and Revocation.  Executive
agrees that she has been given 21 days in which to consider whether to sign
this Agreement (including the Release) and the Repurchase Agreement and has
either used that full 21-day period or voluntarily decided to sign this
Agreement before the end of such period. 
The parties agree that Executive may revoke the Release at any time
within seven days after executing it, at which time the Release and this
Agreement and the Repurchase Agreement will all revoked and will become null
and void.  The Release, this Agreement
and the Repurchase Agreement will not be effective or enforceable until the end
of such seven-day period, but they shall be fully effective and enforceable if
the Release is not revoked within such seven-day period.

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

If to the Company or Employer:

 

National Mentor Holdings, Inc.

313 Congress Street 6th Floor

Boston, MA 02210

Attention: President

 

with a copy to:

 

Madison Dearborn Capital Partners, LLC

Three First National Plaza, Suite 3800

Chicago, Illinois 60602

Attention: Timothy Sullivan

 

 

5

 

If to Executive:

 

Elizabeth V. Hopper

917 D Avenue

West Columbia, South Carolina 29169

 

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

9.             General
Provisions.

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

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

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

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

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

6

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

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

 

*     *     *    
*     *

 

 

7

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

 

 

/s/ Elizabeth V. Hopper

ELIZABETH V. HOPPER

 

 

NATIONAL MENTOR HOLDINGS, INC.

 

By:  /s/ Denis
Holler

 

Its:  Assistant
Secretary

 

 

NATIONAL MENTOR, INC.

 

By:  /s/ Denis
Holler

 

Its:  Assistant
Secretary

 

 

8

EXHIBIT A

STOCK REPURCHASE AGREEMENT

THIS
STOCK REPURCHASE AGREEMENT (this “Agreement”) is
made and entered into as of September 30, 2005, by and between National Mentor
Holdings, Inc., a Delaware corporation (the “Company”), and Elizabeth V.
Hopper (“Executive”).

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

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

WHEREAS,
pursuant to a Management Stock Purchase Agreement dated May 31, 2003 (as
amended, the “Second Purchase Agreement” and together with the First
Purchase Agreement, the “Purchase Agreements”), between the Company and
Executive, Executive acquired 15,666.296 shares of Common Stock at a price per
share of $7.00.

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

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

WHEREAS,
Executive wishes to voluntarily resign her employment with the Company and each
of its subsidiaries effective as of September 30, 2005 (the “Termination
Date”).

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

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

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

9

10.   Vesting of Shares. 
Notwithstanding anything in the Purchase Agreements to the contrary, all
shares of Common Stock purchased by Executive pursuant to the Purchase
Agreements to the extent not already vested shall become vested in full on the
date of the Closing (as defined below).

11.   Sale and Purchase of Stock. 
At the Closing and upon the terms and conditions set forth in this
Agreement, Executive agrees to sell, transfer and assign to the Company, and
the Company agrees to purchase, all of Executive’s right, title and interest in
66,121.908 shares of Common Stock (collectively, the “Shares”) for an
aggregate purchase price of $1,057,950.53 (the “Shares Purchase Price”).

12.   Purchase Prices; Deliveries.  At the Closing, Executive will deliver to the
Company the certificates representing the Shares, together with duly executed
stock assignments to the Company, upon payment by the Company of the Shares
Purchase Price pursuant to Section 2 (less required withholdings
pursuant to Section 9 hereof) by check or wire transfer of immediately
available funds to an account designated in writing by Executive.

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

14.   Purchase Price Adjustment. 
The Shares Purchase Price shall be adjusted following the Closing as set
forth in this Section 5.  After
October 15, 2005 and on or before December 10, 2005, the Company’s board of
directors shall determine the aggregate Fair Market Value (as defined below),
as of the date of such determination, of a number of shares of Common Stock
equal to the number of Shares (the “Post-Closing Valuation”).  On or before December 10, 2005, the Company
shall notify Executive of the results of such determination of the Post-Closing
Valuation.  If the amount of the
Post-Closing Valuation exceeds the Shares Purchase Price, on December 15, 2005,
the Company shall pay to Executive (without interest and less withholdings
pursuant to Section 9 hereof) by check or wire transfer of immediately
available funds to an account designated in writing by Executive an amount
equal to such excess.  If the Shares
Purchase Price exceeds the amount of the Post-Closing Valuation, on December
15, 2005, Executive shall pay to the Company (without interest) by check or
wire transfer of immediately available funds to an account designated in
writing by the Company an amount equal to such excess.  The Company and its subsidiaries shall be
entitled to offset any amounts owing by the Company or its subsidiaries to
Executive pursuant to this Agreement or the Separation Agreement from any
amounts owing by Executive to the Company or its subsidiaries pursuant to this
Agreement.  For purposes of this
Agreement, “Fair Market Value” means, with respect to shares of Common
Stock, the fair value of such shares determined by the Company’s board of
directors in its sole discretion taking into account all relevant factors
determinative of value (including the lack of liquidity of such securities due
to the Company’s status as a privately held company, but without regard to any
discounts for minority interests), using valuation techniques then prevailing
in the securities industry (e.g.,
discounted cash flows and/or comparable companies) and assuming full disclosure
of all relevant information and a reasonable period of time for effectuating
such sale.

10

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

(a)   Ownership.  All of
the Shares are owned of record and beneficially by Executive, and Executive has
good and marketable title to the Shares, free and clear of any security
interest, claims, liens, pledges, options, encumbrances, charges, agreements,
voting trusts, proxies or other arrangements or restrictions whatsoever
(collectively, “Encumbrances”), except for such legend and related
transfer restrictions as are required under the Securities Act of 1933 and the
restrictions set forth in the Stockholders Agreement or the Registration
Agreement.  Executive does not own and
has no interest in any shares of the Company’s capital stock or options or
rights to acquire the Company’s capital stock other than (i) the Shares, (ii)
the other 66,121.908 shares of Common Stock purchased by Executive pursuant to
the Purchase Agreements and (iii) the option (the “Option”) to acquire
shares of Common Stock pursuant to the Stock Option Agreement (as defined in
the Separation Agreement), which Option will terminate pursuant to the
Separation Agreement at the Closing.  All
of the Shares are validly issued, fully paid and nonassessable.  Executive has not exercised, and will not
exercise prior to the Closing, the Option, in whole or in part.  At the Closing, Executive will deliver to the
Company good and marketable title to the Shares, free and clear of any
Encumbrances.

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

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

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

17.   Additional Call Rights.

(a)   Right of Repurchase. 
In addition to the repurchase of the Shares to occur at the Closing, all
of the shares of Common Stock purchased by Executive pursuant to the Purchase
Agreements (whether held by Executive or one or more of Executive’s
transferees) (other than any such shares previously purchased pursuant to this
Agreement) (the “Call Shares”) shall be subject to repurchase from time
to time pursuant to the terms and conditions set forth in this Section 8
(the “Call Option”).

(b)   Purchase Price.  The
purchase price for any Call Shares purchased pursuant to this Section 8
shall be the Fair Market Value thereof as of the date of the Call Notice or a
notice of repurchase under Section 8(d).

11

(c)   Repurchase by the Company. 
The Company may, in its sole discretion, elect from time to time to
purchase all or any portion of the Call Shares for cash by delivering written
notice (the “Call Notice”) to the holder or holders of the Call Shares
at any time or from time to time after September 30, 2007.  The Call Notice shall set forth the number of
Call Shares to be acquired from each holder of Call Shares, the aggregate
consideration to be paid for such shares and the time and place for the closing
of the transaction.

(d)   Repurchase by MDCP. 
If for any reason the Company does not elect to purchase all of the Call
Shares pursuant to Section 8(c) above on or before December 31, 2007,
then Madison Dearborn Capital Partners III, L.P., a Delaware limited
partnership or its affiliates (“MDCP”) shall be entitled to exercise the
Call Option at any time and from time to time for all or any portion of the
Call Shares the Company has not elected to purchase by such date (the “MDCP
Available Shares”). The Company and Executive and her transferees shall
take such actions as reasonably requested by MDCP to complete any purchase
contemplated by this Section 8(d).

(e)   Manner of Payment. 
If the Company purchases all or any part of the Call Shares, including
Call Shares held by one or more transferees, pursuant to Section 8(c)
above, the Company shall pay for such Call Shares by check or wire transfer of
funds.  If MDCP purchases all or any part
of the Call Shares, including Call Shares held by one or more transferees,
pursuant to Section 8(d) above, then MDCP shall pay for such Call Shares
by check or wire transfer of funds.

(f)    Representations and Releases.  In connection with any purchase of Call
Shares pursuant to this Section 8 and as a condition thereto, the
purchasers of Call Shares shall be entitled to receive from the sellers (i) substantially
the same representations and warranties as set forth in Section 6 with
respect to the Call Shares and (ii) a limited release covering any and all
claims related to the ownership of the Call Shares or the exercise of the Call
Option through the date of such purchase.

18.   Withholdings.  The
Company and its subsidiaries shall be entitled, if necessary or desirable, to
withhold any withholding (including, without limitation, for the costs of
benefits provided by Employer or its affiliates) or other tax due from any
amounts due and payable by any of them hereunder to Executive.

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

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

21.   Revocation of the Separation Agreement.  Notwithstanding anything herein to the
contrary, in the event that the Separation Agreement is terminated pursuant to Section
7 thereof 

12

within seven days of the date of the
Separation Agreement, this Agreement shall immediately terminate and be null
and void.  This Agreement will not be
effective or enforceable until the end of such seven-day period, but it shall
be fully effective and enforceable if it is not revoked within such seven-day
period.

22.   Miscellaneous.

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

If to Company:

National Mentor Holdings, Inc.

313 Congress Street 6th Floor

Boston, MA 02210

Attention: President

 

with a copy to:

Madison Dearborn Capital Partners, LLC

Three First National Plaza, Suite 3800

Chicago, IL 60602

Attention: Timothy Sullivan

 

If to Executive:

Elizabeth V. Hopper

917 D Avenue

West Columbia, South Carolina 29169

 

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

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

(d)   Severability. 
Whenever possible, each provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of 

13

this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

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

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

(g)   Successors and Assigns. 
This Agreement is intended to bind and inure to the benefit of and be
enforceable by the Company and Executive and their respective successors and assigns;
provided that the rights and obligations of Executive under this Agreement will
not be assignable without the prior written consent of the Company.  Without limiting the foregoing, the Company
may assign its rights pursuant to Section 8 to any person including
Madison Dearborn Capital Partners III, L.P. or its affiliates.

(h)   Third Party Beneficiaries.  
Certain provisions of this Agreement are entered into for the benefit of
and shall be enforceable by MDCP.

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

*  * 
*  *  *

14

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

NATIONAL MENTOR HOLDINGS, INC.

By:      /s/ Denis Holler

Its:      Assistant Secretary

 

/s/
Elizabeth V. Hopper

ELIZABETH V. HOPPER

15

EXHIBIT
B

GENERAL
RELEASE

I,
Elizabeth V. Hopper, in consideration of and subject to the performance by
National Mentor Holdings, Inc., a Delaware corporation (the “Holdings”),
and National Mentor, Inc. (“Employer” and collectively with Holdings and
their respective subsidiaries, the “Company”), of their obligations
under the Separation Agreement and Release, dated as of the September 30, 2005 (as amended, the “Agreement”), and the Repurchase
Agreement (as defined in the Agreement), do hereby release and forever
discharge as of the date hereof the Company and its Affiliates (as defined
below) and all present and former directors, officers, agents, representatives,
employees, successors and assigns of the Company and its Affiliates and the
Company’s direct or indirect owners (collectively, the “Released Parties”)
to the extent provided below.  This
release constitutes a part of the Agreement.

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

2.               Except (i) as provided in
paragraph 4 below, (ii) for my rights under the Repurchase Agreement (as
defined in the Agreement), (iii) for the provisions of the Employment Agreement
(as defined in the Agreement), the Stock Option Agreement (as defined in the
Agreement), the First Purchase Agreement (as defined in the Agreement), the
Second Purchase Agreement (as defined in the Agreement), the Stockholders
Agreement (as defined in the Agreement) and the Registration Agreement (as
defined in the Agreement) which expressly survive the termination of my
employment with the Company in accordance with the Agreement, (iv) for my
rights under the Agreement, (v) for my rights to be paid a lump-sum payment in
an aggregate amount equal to the Executive Plan Balance Amount (as defined in
the Agreement) pursuant to the Executive Plan (as defined in the Agreement) and
for my rights to be paid an aggregate amount equal to the Deferral Plan Balance
Amount (as defined in the Agreement) pursuant to the Deferral Plan, and (vi)
for my rights under the 401(k) Plan, I knowingly and voluntarily (for myself,
my heirs, executors, administrators and assigns) release and forever discharge
the Company and the other Released Parties from any and all claims, suits,
controversies, actions, causes of action, cross-claims, counter-claims,
demands, debts, compensatory damages, liquidated damages, punitive or exemplary
damages, other damages, claims for costs and attorneys’ fees, or liabilities of
any nature whatsoever in law and in equity, both past and present (through the
date this General Release becomes effective and enforceable) and whether known
or unknown, suspected, or claimed against the Company or any of the Released
Parties which I, my spouse, or any of my heirs, executors, administrators or
assigns, may have, which arise out of or are connected with my employment with,
or my separation or termination from, the Company 

1

(including, but not limited to, any
allegation, claim or violation, arising under: the sections of the Purchase
Agreements (as defined in the Agreement) being terminated pursuant to Section
3 of the Agreement; the sections of the Employment Agreement and the Stock
Option Agreement that are being terminated pursuant to Section 3 of the
Agreement; the 2001 Equity Plan (as defined in the Agreement); the 2003 Equity
Plan (as defined in the Agreement); the Executive Plan (as defined in the Agreement);
the Deferral Plan (as defined in the Agreement); Title VII of the Civil Rights
Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination
in Employment Act of 1967, as amended (including the Older Workers Benefit
Protection Act); the Equal Pay Act of 1963, as amended; the Americans with
Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker
Adjustment Retraining and Notification Act; the Employee Retirement Income
Security Act of 1974; any applicable Executive Order Programs; the Fair Labor
Standards Act; or their state or local counterparts; or under any other
federal, state or local civil or human rights law, or under any other local,
state, or federal law, regulation or ordinance; or under any public policy,
contract or tort, or under common law; or arising under any policies, practices
or procedures of the Company; or any claim for wrongful discharge, breach of
contract, infliction of emotional distress, defamation; or any claim for costs,
fees, or other expenses, including attorneys’ fees incurred in these matters)
(all of the foregoing collectively referred to herein as the “Claims”).

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

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

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

2

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

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

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

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

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

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

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

1.               I HAVE READ IT CAREFULLY;

2.               I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I
AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE
AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII 

3

OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963,
THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED;

3.               I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

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

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

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

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

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

 

DATE:  SEPTEMBER 30, 2005                                                           /s/
Elizabeth V. Hopper

                                                                                                                ELIZABETH
V. HOPPER

 

4Exhibit 10.14

 

NATIONAL MENTOR HOLDINGS, INC.

STOCK OPTION PLAN

 

ARTICLE I

 

Purpose of Plan

 

The
Stock Option Plan (the “Plan”) of National Mentor Holdings, Inc.
(the “Company”), adopted by the Board of Directors of the Company on November 7,
2001, for directors, officers and key employees of, and certain other key
individuals who perform services for, the Company is intended to advance the
best interests of the Company by providing those persons who have
responsibility for its management and growth with additional incentives by
allowing them to acquire an ownership interest in the Company and thereby
encouraging them to contribute to the success of the Company and to continue to
provide their services to the Company. 
The availability and offering of stock options under the Plan also
increases the Company’s ability to attract and retain individuals of
exceptional managerial talent upon whom, in large measure, the sustained
progress, growth and profitability of the Company depends.  The Plan is a compensatory benefit plan
within the meaning of Rule 701 of the Securities Act of 1933, as amended,
and, unless and until the Common Stock is publicly traded, the issuance of
options to purchase Common Stock pursuant to the Plan and the issuance of
Common Stock pursuant to such options is intended to qualify for the exemption
from registration under the Securities Act provided by Rule 701.

 

ARTICLE II

 

Definitions

 

For
purposes of the Plan, except where the context clearly indicates otherwise, the
following terms shall have the meanings set forth below:

 

“Board”
shall mean the Board of Directors of the Company.

 

“Cause”
shall mean any of the following: (i) theft or embezzlement, or attempted
theft or embezzlement, of money or property of the Company or any subsidiary, perpetration
or attempted perpetration of fraud, or participation in a fraud or attempted
fraud, on the Company or any subsidiary or unauthorized appropriation of, or
attempt to misappropriate, any tangible or intangible assets or property of the
Company or any subsidiary, (ii) any act or acts of disloyalty, misconduct
or moral turpitude injurious to the interest, property, operations, business or
reputation of the Company or any subsidiary or conviction of a crime the
commission of which results in injury to the Company or any subsidiary or (iii) failure
or inability (other than by reason of Disability) to carry out effectively a
Participant’s duties and obligations to the Company and its subsidiaries or to
participate effectively and actively in the management of the Company and its
subsidiaries, as determined in the reasonable judgment of the Board.

 

1

 

“Code”
shall mean the Internal Revenue Code of 1986, as amended, and any successor
statute.

 

“Committee”
shall mean the committee of the Board which may be designated by the Board to
administer the Plan.  The Committee shall
be composed of two or more directors as appointed from time to time to serve by
the Board.

 

“Common
Stock” shall mean the Company’s Common Stock, par value $.01 per share, or
if the outstanding Common Stock is hereafter changed into or exchanged for
different stock or securities of the Company, such other stock or securities.

 

“Company”
shall mean National Mentor Holdings, Inc., a Delaware corporation, and
(except to the extent the context requires otherwise) any subsidiary
corporation of National Mentor Holdings, Inc., a Delaware corporation, as
such term is defined in Section 425(f) of the Code.

 

“Disability”
shall mean the inability, due to illness, accident, injury, physical or mental
incapacity or other disability, of any Participant to carry out effectively his
duties and obligations to the Company or to participate effectively and
actively in the management of the Company for a period of at least 90
consecutive days or for shorter periods aggregating at least 90 days (whether
or not consecutive) during any 180-day period, as determined in the reasonable
judgment of the Board.

 

“Fair
Market Value” of the Common Stock shall be determined by the Committee or,
in the absence of the Committee, by the Board.

 

“Participant”
shall mean any director, officer or key employee of, or any other key
individual who performs services for, the Company who has been selected to
participate in the Plan by the Committee or the Board.

 

“Person”
shall mean an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.

 

“Sale
of the Company” shall mean the sale to a third party or affiliated group of
third parties, as determined by the Committee in its discretion, of (i) capital
stock of the Company possessing the voting power to elect a majority of the
Company’s board of directors (whether by merger, consolidation or sale or
transfer of the Company’s capital stock) or (ii) more than 50% of the
Company’s assets determined on a consolidated basis; provided that in any
event, the term “Sale of the Company” shall not include an offering of
securities to the public.

 

2

 

ARTICLE III

 

Administration

 

The
Plan shall be administered by the Committee; provided that if for any reason
the Committee shall not have been appointed by the Board, all authority and
duties of the Committee under the Plan shall be vested in and exercised by the
Board.  Subject to the limitations of the
Plan, the Committee shall have the sole and complete authority to: (i) select
Participants, (ii) grant Options (as defined in Article IV below) to
Participants in such forms and amounts as it shall determine (including,
without limitation, with respect to designating Options as Incentive Stock
Options (as defined in Article V below) or nonqualified stock options), (iii) impose
such limitations, restrictions and conditions upon such Options as it shall
deem appropriate, (iv) interpret the Plan and adopt, amend and rescind
administrative guidelines and other rules and regulations relating to the
Plan, (v) correct any defect or omission or reconcile any inconsistency in
the Plan or in any Option granted hereunder and (vi) make all other
determinations and take all other actions necessary or advisable for the
implementation and administration of the Plan, subject to such limitations as
may be imposed by the Code on the grant of Incentive Stock Options or other
applicable law.  The Committee’s
determinations on matters within its authority shall be conclusive and binding
upon the Participants, the Company and all other Persons.  All expenses associated with the
administration of the Plan shall be borne by the Company.  The Committee may, as approved by the Board
and to the extent permissible by law, delegate any of its authority hereunder
to such persons as it deems appropriate.

 

ARTICLE IV

 

Limitation on Aggregate Shares

 

The
number of shares of Common Stock with respect to which options may be granted
under the Plan (the “Options”) and which may be issued upon the exercise
thereof shall not exceed, in the aggregate, 284,063 shares; provided that the
type and the aggregate number of shares which may be subject to Options shall
be subject to adjustment in accordance with the provisions of Section 6.8
below, and further provided that to the extent any Options expire unexercised
or are canceled, terminated or forfeited in any manner without the issuance of
Common Stock thereunder, or if any Options are exercised and the shares of
Common Stock issued thereunder are repurchased by the Company, such shares
shall again be available under the Plan. 
The 284,063 shares of Common Stock available under the Plan may be
either authorized and unissued shares, treasury shares or a combination
thereof, as the Committee shall determine.

 

3

 

ARTICLE V

 

Awards

 

5.1                                 Options.  The Committee may grant Options to
Participants in accordance with this Article V.   In no event shall the aggregate Fair Market
Value per share of all Common Stock (determined at the time the Option is
awarded) with respect to which Incentive Stock Options are exercisable for the
first time by an individual during any calendar year (under all plans of the
Company and its subsidiaries) exceed $100,000.

 

5.2                                 Form of
Option.  Options granted under this
Plan may be “Incentive Stock Options” within the meaning of Section 422
of the Code or nonqualified stock options. 
Unless otherwise indicated, references herein to “Options” shall
include Incentive Stock Options and nonqualified stock options.

 

5.3                                 Exercise
Price.  The option exercise price per
share of Common Stock shall be fixed by the Committee at the date of
grant.    If the Option is intended to be
an Incentive Stock Option, the option exercise price per share of Common Stock
shall be fixed by the Committee at not less than 100% of the Fair Market Value
of a share of Common Stock on the date of grant (or 110% of such Fair Market
Value if the holder of such Incentive Stock Option owns Common Stock possessing
more than ten percent (10%) of the combined voting power of all classes of
stock of the Company or any subsidiary determined with regard to the
attribution rules of Section 424(d) of the Code).

 

5.4                                 Exercisability.  Options shall be exercisable at such time or
times as the Committee shall determine at or subsequent to grant.

 

5.5                                 Payment
of Exercise Price.  Options shall be
exercised in whole or in part by written notice to the Company (to the
attention of the Company’s Secretary) accompanied by payment in full of the
option exercise price.  Payment of the
option exercise price shall be made in cash (including check, bank draft or
money order) or, in the discretion of the Committee, by delivery of a
promissory note or by payroll deductions (if in accordance with policies
approved by the Board).

 

5.6                                 Terms
of Options.  The Committee shall
determine the term of each Option, which term shall in no event exceed ten
years from the date of grant.    If the
holder of an Incentive Stock Option owns Common Stock possessing more than ten
percent (10%) of the combined voting power of all classes of stock of the
Company or any subsidiary, determined with regard to the attribution rules of
Section 424(d) of the Code, the term of such Incentive Stock Option
shall not exceed five years from the date of grant.

 

5.7                                 Stockholder
Approval. The Plan shall be submitted to the Company’s stockholders for
approval.  The Committee may grant
Options under the Plan prior to the time of stockholder approval, which Options
will be effective when granted, but if for any reason the stockholders of the
Company do not approve the Plan prior to one year from the date of adoption of
the Plan by the Board, all Options granted under the Plan will be terminated
and of no effect, and no Option may be exercised in whole or in part prior to
such stockholder approval.

 

4

 

ARTICLE VI

 

General Provisions

 

6.1                                 Conditions
and Limitations on Exercise.  Options
may be made exercisable in one or more installments, upon the happening of
certain events, upon the passage of a specified period of time, upon the
fulfillment of certain conditions or upon the achievement by the Company of
certain performance goals, as the Committee shall decide in each case when the
Options are granted.

 

6.2                                 Sale
of the Company.  In the event of a
Sale of the Company, the Committee may provide, in its discretion, that the
Options then outstanding shall become immediately exercisable and that such
Options shall terminate if not exercised as of the date of the Sale of the
Company or other prescribed period of time.

 

6.3                                 Written
Agreement.  Each Option granted
hereunder to a Participant shall be embodied in a written agreement (an “Option
Agreement”) which shall be signed by the Participant and by the President
of the Company or his designee for and in the name and on behalf of the Company
and shall be subject to the terms and conditions of the Plan prescribed in the
Option Agreement (including, but not limited to, (i) the right of the
Company and such other Persons as the Committee shall designate (“Designees”)
to repurchase from each Participant, and such Participant’s transferees, all
shares of Common Stock issued or issuable to such Participant on the exercise
of an Option in the event of such Participant’s termination of employment (or,
in the case of a Participant who is not an employee of the Company, upon such
other event(s) as the Committee shall determine), (ii) rights of first
refusal granted to the Company and Designees, (iii) holdback and other
registration right restrictions in the event of a public registration of any
equity securities of the Company and (iv) any other terms and conditions
which the Committee shall deem necessary and desirable).

 

6.4                                 Listing,
Registration and Compliance with Laws and Regulations.  Options shall be subject to the requirement
that if at any time the Committee shall determine, in its discretion, that the
listing, registration or qualification of the shares subject to the Options
upon any securities exchange or under any state or federal securities or other
law or regulation, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition to or in connection with the
granting of the Options or the issuance or purchase of shares thereunder, no
Options may be granted or exercised, in whole or in part, unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.  The holders of such Options shall supply the
Company with such certificates, representations and information as the Company
shall request and shall otherwise cooperate with the Company in obtaining such
listing, registration, qualification, consent or approval.  In the case of officers and other Persons
subject to Section 16(b) of the Securities Exchange Act of 1934, as
amended, the Committee may at any time impose any limitations upon the exercise
of an Option that, in the Committee’s discretion, are necessary or desirable in
order to comply with such Section 16(b) and the rules and
regulations thereunder.  If the Company,
as part of an offering of securities or otherwise, finds it desirable 

 

5

 

because of federal or
state regulatory requirements to reduce the period during which any Options may
be exercised, the Committee, may, in its discretion and without the Participant’s
consent, so reduce such period on not less than 15 days written notice to the
holders thereof.

 

6.5                                 Nontransferability.  Options may not be transferred other than by
will or the laws of descent and distribution and, during the lifetime of the
Participant, may be exercised only by such Participant (or his legal guardian
or legal representative).  In the event
of the death of a Participant, exercise of Options granted hereunder shall be
made only:

 

(i)                           by
the executor or administrator of the estate of the deceased Participant or the
Person or Persons to whom the deceased Participant’s rights under the Option
shall pass by will or the laws of descent and distribution; and

 

(ii)                        to
the extent that the deceased Participant was entitled thereto at the date of
his death, unless otherwise provided by the Committee in such Participant’s
Option Agreement.

 

6.6                                 Expiration
of Options.

 

(a)                                  Normal
Expiration.  In no event shall any
part of any Option be exercisable after the date of expiration thereof (the “Expiration
Date”), as determined by the Committee pursuant to Section 5.6 above.

 

(b)                                 Early
Expiration Upon Termination of Employment; etc..  Except as otherwise provided by the Committee
or the Option Agreement, any portion of a Participant’s Option that was not
vested and exercisable on the date of the termination of such Participant’s
employment (or, in the case of a Participant who is not an employee of the
Company, upon such other event(s) as the Committee shall determine) shall
expire and be forfeited as of such date, and any portion of a Participant’s
Option that was vested and exercisable on the date of the termination of such Participant’s
employment (or, in the case of a Participant who is not an employee of the
Company, upon such other event(s) as the Committee shall determine) shall
expire and be forfeited as of such date, except that: (i) if any
Participant dies or becomes subject to any Disability, such Participant’s
Option shall expire 180 days after the date of his death or Disability, but in
no event after the Expiration Date, and (ii) if any Participant is
discharged other than for Cause, such Participant’s Option shall expire 30 days
after the date of his discharge, but in no event after the Expiration Date.

 

6.7                                 Withholding
of Taxes.  The Company shall be
entitled, if necessary or desirable, to withhold from any Participant from any
amounts due and payable by the Company to such Participant (or secure payment
from such Participant in lieu of withholding) the amount of any withholding or
other tax due from the Company with respect to any shares issuable under the
Options, and the Company may defer such issuance unless indemnified to its
satisfaction.  Upon the disposition
(within the meaning of Section 424(c) of the Code) of shares of
Common Stock acquired pursuant to the exercise of an Incentive Stock Option
prior to the expiration of the holding period requirements of Section 422(a)(1) of
the Code, the Participant shall be required to give notice to the Company of
such disposition and the Company shall have the right 

 

6

 

to require the payment of
the amount of any taxes that are required by law to be withheld with respect to
such disposition.

 

6.8                                 Adjustments.  In the event of a reorganization,
recapitalization, stock dividend or stock split, or combination or other change
in the shares of Common Stock, the Board or the Committee may, in order to
prevent the dilution or enlargement of rights under outstanding Options, make
such adjustments in the number and type of shares authorized by the Plan, the
number and type of shares covered by outstanding Options and the exercise prices
specified therein as may be determined to be appropriate and equitable.  The issuance by the Company of shares of
stock of any class, or options or securities exercisable or convertible into
shares of stock of any class, for cash or property, or for labor or services
either upon direct sale, or upon the exercise of rights or warrants to
subscribe therefor, or upon exercise or conversion of other securities, shall
not affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock then subject to any Options.  No adjustments to any Incentive Stock Option
shall be made pursuant to this Section 6.8 which consist of a modification
of such Incentive Stock Option under Section 422(h)(3)(C) of the
Code.

 

6.9                                 Rights
of Participants.  Nothing in this
Plan or in any Option Agreement shall interfere with or limit in any way the
right of the Company to terminate any Participant’s employment or other
engagement at any time (with or without Cause), nor confer upon any Participant
any right to continue in the employ or engagement of the Company for any period
of time or to continue his present (or any other) rate of compensation, and
except as otherwise provided under this Plan or by the Committee in the Option
Agreement, in the event of any Participant’s termination of employment or
engagement (including, but not limited to, the termination by the Company
without Cause) any portion of such Participant’s Option that was not previously
vested and exercisable shall expire and be forfeited as of the date of such
termination.  No employee or other person
shall have a right to be selected as a Participant or, having been so selected,
to be selected again as a Participant.

 

6.10                           Amendment,
Suspension and Termination of Plan. 
The Board or the Committee may suspend or terminate the Plan or any
portion thereof at any time and may amend it from time to time in such respects
as the Board or the Committee may deem advisable; provided that no such
amendment shall be made without stockholder approval to the extent such
approval is required by law, agreement or the rules of any exchange upon
which the Common Stock is listed, and no such amendment, suspension or
termination shall materially and adversely impair the rights of Participants
under outstanding Options without the consent of the Participants affected
thereby. No Options shall be granted hereunder after the tenth anniversary of
the adoption of the Plan.

 

6.11                           Amendment,
Modification and Cancellation of Outstanding Options.  The Committee may amend or modify any Option
in any manner to the extent that the Committee would have had the authority
under the Plan initially to grant such Option; provided that no such amendment
or modification shall materially and adversely impair the rights of any
Participant under any Option without the consent of such Participant.  With the Participant’s consent, the Committee
may cancel any Option and issue a new Option to such Participant.

 

7

 

6.12                           Indemnification.  In addition to such other rights of
indemnification as they may have as members of the Board or the Committee, the
members of the Committee shall be indemnified by the Company against all costs
and expenses reasonably incurred by them in connection with any action, suit or
proceeding to which they or any of them may be party by reason of any action
taken or failure to act under or in connection with the Plan or any Option
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding; provided that any such Committee member shall be entitled
to the indemnification rights set forth in this Section 6.12 only if such
member has acted in good faith and in a manner that such member reasonably
believed to be in or not opposed to the best interests of the Company and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe that such conduct was unlawful, and further provided that upon the
institution of any such action, suit or proceeding a Committee member shall
give the Company written notice thereof and an opportunity, at its own expense,
to handle and defend the same before such Committee member undertakes to handle
and defend it on his own behalf.

 

*      *      *     
*

 

8

 

AMENDMENT
TO NATIONAL MENTOR HOLDINGS, INC. STOCK OPTION PLAN

 

On November 11, 2003
Article IV of the Stock Option Plan was amended to increase the number of
shares of Common Stock for which Options (as defined in the Stock Option Plan)
may be granted thereunder to an aggregate of 1,197,952 shares of Common Stock
(from an aggregate of 284,063 shares of Common Stock prior to such amendment).

 

9

 

SECOND
AMENDMENT TO NATIONAL MENTOR HOLDINGS, INC. STOCK
OPTION PLAN

 

On September 7, 2004
Article IV of the Stock Option Plan was amended to increase the number of
shares of Common Stock for which Options (as defined in the Stock Option Plan)
may be granted thereunder to an aggregate of 1,292,952 shares of Common Stock
(from an aggregate of 1,197,952 shares of Common Stock prior to such
amendment).

 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00092-of-00352.parquet"}]]