Document:

Exhibit
10.4

AMENDMENT
TO EMPLOYMENT AGREEMENT

This Amendment to
Employment Agreement between Magellan Health Services, Inc. (“Employer”)
and                     
(“Employee”) entered into on this        
day of                  ,
2006.

WHEREAS,
Employer and Employee desire to amend the terms of the Employment Agreement
currently in effect between Employer and Employee (the “Employment Agreement”).

NOW THEREFORE,
Employer or Employee agree that the Employment Agreement is hereby amended as
follows:

I.  New Change in Control
Provisions — Add the following new paragraphs:

1.                                       Termination Without Cause by the Company or With Good Reason By
Executive In connection With, Or Within Two Years After, A Change In Control:  If Employer terminates this Agreement and Employee’s
employment without cause, or if Employee terminates this Agreement and Employee’s
employment with Good Reason, in connection with a Change in Control (as defined
below) (whether before or at the time of such Change in control) or within two
years after a change in Control, Employee shall receive the following, in lieu
of the amounts and benefits described in Section 6:

(i)                                     Base
Salary through the date of termination;

(ii)                                  pro-rata
Target Bonus for the year in which termination occurs, payable in a single
installment immediately after termination;

(iii)                               2
times the sum of (a) Base Salary plus (b) Target bonus, payable in a single
cash installment immediately after termination;

(iv)                              if
employee elects COBRA coverage for health, dental and vision benefits, Employer
shall pay Employer’s contributions for health insurance and Employee shall pay
Employee’s contributions rate for health, dental and vision insurance for up to
eighteen (18) months after termination.

(v)                                 any
other amounts earned, accrued or owing to Executive but not yet paid;

(vi)                              other
payments, entitlements or benefits, if any, that are payable in accordance with
applicable plans, programs, arrangements or other agreements of the company or
any affiliate; and

(vii)                           all
stock options granted to Employee from January 4, 2004 and prior to March 10,
2005 shall vest and become immediately exercisable.

 

2.                         Definitions:

A.  Change in Control:

A “Change in Control” of
the Company shall mean the first to occur after the date hereof of any of the
following events:

(i)                                     any
“person,” as such term is used in Sections 3(a)(9) and 13(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), becomes a “beneficial
owner,” as such term is used in Rule 13d-3 promulgated under the Exchange
Act, of 51% or more of the Voting Stock (as defined below) of the Company;

(ii)                                  the
majority of the Board of Directors of the Company consists of individuals other
than “Continuing Directors,” which shall mean the members of the Board on the
date hereof, provided that any person becoming a director subsequent to the
date hereof whose election or nomination for election was supported by a vote
of the directors who then comprised the Continuing Directors, shall be
considered to be a Continuing Director;

(iii)                               the
Board of Directors of the Company adopts and, if required by law or the
certificate of incorporation of the Corporation, the shareholders approve the
dissolution of the Company or a plan of liquidation or comparable plan
providing for the disposition of all or substantially all of the Company’s
assets;

(iv)                              all
or substantially all of the assets of the Company are disposed of pursuant to a
merger, consolidation, share exchange, reorganization or other transaction
unless the shareholders of the Company immediately prior to such merger,
consolidation, share exchange, reorganization or other transaction beneficially
own, directly or indirectly, in substantially the same proportion as they
previously owned the Voting Stock or other ownership interests of the Company,  51% of the Voting Stock or other ownership
interests of the entity or entities, if any, that succeed to the business of
the Company; or

(v)                                 the
Company merges or combines with another company and, immediately after the
merger or combination, the shareholders of the Company immediately prior to the
merger or combination own, directly or indirectly, 50% or less of the Voting
Stock of the successor company, provided that in making such determination
there shall be excluded from the number of shares of Voting Stock held by such
shareholders, but not from the Voting 

 

                                                Stock
of the successor company, any shares owned by Affiliates of such other company
who were not also Affiliates of the Company prior to such merger or
combination.

B. “Cause” in connection with a Change in Control
shall mean:

(i)                                     Employee
is convicted of (or pleads guilty or nolo contendere to) a felony or a crime
involving moral turpitude;

(ii)                                  Employee’s
commission of an act of fraud or dishonesty involving his or her duties on
behalf of the Company;

(iii)                               Employee’s
willful failure or refusal to faithfully and diligently perform duties lawfully
assigned to Employee as an officer or employee of the Company or other willful
breach of any material term of any employment agreement at the time in effect
between the Company and Employee; or

(iv)                              Employee’s
willful failure or refusal to abide by the Company's policies, rules,
procedures or directives, including any material violation of the Company’s
Code of Ethics.

C.  “Good Reason”
shall mean:

(i)                                     a
reduction in Employee’s salary in effect at the time of a Change in Control,
unless such reduction is comparable in degree to the reduction that takes place
for all other employees of the Company of comparable rank, or a reduction in
Employee’s target bonus opportunity for the year in which or any year after the
year in which the Change of Control occurs from Employee’s target bonus
opportunity for the year in which the Change in Control occurs (if any) as
established under any employment agreement Employee has with the Company or any
bonus plan of the Company applicable to Employee (or, if no such target bonus
opportunity has yet been established for Employee under a bonus plan applicable
to Employee for the year in which the Change of Control has occurred, the  target bonus opportunity so established for
Employee for the immediately preceding year, if any);

(iii)                               a
material diminution in Employee’s position, duties or responsibilities as in
effect at the time of a Change in Control, or the assignment to Employee of
duties which are materially inconsistent with such position, duties and
authority, unless in either case such change is made with the consent of the
Employee; or

(iv)                              the
relocation by more than 50 miles of the offices of the Company which constitute
at the time of the Change in Control Employee’s principal location 

 

                                                for
the performance of his or her services to the Company;

                                    provided
that, in each such case, such event or condition continues uncured for a period
of more than 15 days after Employee gives notice thereof to the Company.

D.                      “Company”
shall include any entity that succeeds to all or substantially all of the
business of the Company,

E.                          “Affiliate”
of a person or other entity shall mean a person or other entity that directly
or indirectly controls, is controlled by, or is under common control with the
person or other entity specified,

F.                          “Voting
Stock” shall mean any capital stock of any class or classes having general
voting power under ordinary circumstances, in the absence of contingencies, to
elect the directors of a corporation and reference to a percentage of Voting
Stock shall refer to such percentage of the votes that all such Voting Stock is
entitled to cast.

3                  Tax Gross-Up.  The
following provisions shall apply with respect to any excise tax imposed under
Section 4999 of the Internal Revenue Code as amended (the “Code”), (the “Excise
Tax):

a.                           If any
of the payments or benefits received or to be received by Employee in
connection with a Change in Control or Employee’s termination of employee
(whether pursuant to the terms of this Agreement or any other plan, arrangement
of agreement with the Company, any person whose actions result in a Change on
Control of the Company or any person affiliated with the Company or such person
(the “Total Payments”)) will be subject to the Excise Tax, the Company shall
pay to Employee an additional amount (the “Gross-Up Payment”) such that the net
amount retained by Employee after payment of (a) the Excise Tax, if any, on the
Total Payments and (b) any Excise Tax and income tax due in respect of the
Gross-Up Payment, shall equal the Total Payments.  Such payment shall be made in a single lump
sum within 10 days following the date of a determination that only such payment
is required.

b.                          For purposes
of determining whether any of the Total payments will be subject to Excise Tax
and the amount of such Excise Tax, (i) any Total Payments shall be treated as “parachute
payments” (within the meaning of Section280G(b) (2) of the Code) unless, in the
opinion of tax counsel selected by the Company and reasonably acceptable to
Employee, such payments or benefits (in whole or in part) should not constitute
parachute payments, including by reason of Section 280G (b) (4) (A) of the
Code, and all “excess parachute payments” (within the meeting of Section
280G(b) (1) of the Code) shall be treated as subject to the Excise Tax unless,
in the opinion of such tax counsel, such excess parachute payments (in whole or
in part) represent reasonable compensation for services actually rendered 

 

                                    (within
the meaning of Section 280G(b) (4) (B) of the Code), or are otherwise not
subject to the Excise Tax, and (ii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the Company’s independent
auditors in accordance with the principles of Section 280G(d) (3) of the Code. For
purposes of determining the amount of the Gross-Up payment, Employee shall be
deemed to pay federal income and employment taxes at the highest marginal rate
of federal income and employment taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income and employment taxes
at the highest marginal rate of taxation in the state and locality of Employee’s
residence on the date of termination of employment (or such other time as
hereinafter described), net of the maximum reduction in federal income or
employment taxes which could be obtained from deduction of such state and local
taxes.

            In the event that the Excise Tax is subsequently determined
to be less than the amount taken into account hereunder at the time of
termination of Employee’s employment (or such other time as is hereinafter
described), Employee shall repay to the Company, at the time that the amount of
such reduction in Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction plus interest on the amount of such
repayment at the applicable federal rate, as defined in Section 1274(b) (2) (B)
of the Code.  In the event that the
Excise Tax is determined to exceed the amount taken into account hereunder at
the time of the termination of Employee’s employment (or such other time as is
hereinafter described) (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up Payment), the
Company shall make an additional Gross-Up Payment in respect of such excess
(plus any interest at the applicable federal rate, penalties or additions
payable by Employee with respect to such excess) at the time that the amount of
such excess is finally determined. 
Employee and the Company shall each reasonably cooperate with the other
in connection with any administrative or judicial proceedings concerning the
existence or amount of liability for Excise Tax with respect to the Total
payments.

II.  Other Changes

1.                                                   Amendment
to Section 6(c)

Section 6 (c) in the Employment Agreement is hereby amended to change
the reference in the fifth line from “35 miles” to “50 miles”.

2.                                                   Amendment
to Section 7(b)(i):

Section 7(b)(i) is hereby amended to delete it and insert the following
in place thereof:

(i)        Employee covenants and
agrees that during any period in which Base Salary is continued after
termination of this Agreement (or in respect of which Base Salary is paid in a
lump sum) or for one year after Employee’s voluntary termination of employment
without Good Reason or termination of Employee’s employment for cause, he or
she will not, on his or her own behalf or as a partner, officer, director,
employee, agent, or consultant of any other person or entity, directly or
indirectly, engage or attempt to engage in the business of providing or selling
services in the United States that are services offered by Employer at the time
of the termination of this Agreement, unless waived in writing by Employer in
its sole discretion.  Employee recognizes
that the above restriction is reasonable and necessary to protect the interest
of the Employer and its controller subsidiaries and affiliates.

 

IN WITNESS WHEREOF,
Employer and Employee have executed this Amendment to Employment Agreement as
of the date first above written.

	
  Magellan Health Services, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By 

  	
   

  	
   

  
	
   

  	
  Duly Authorized

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EmployeeExhibit 10.1

PACKAGING
CORPORATION OF AMERICA

Amended and
Restated

EXECUTIVE
INCENTIVE COMPENSATION PLAN

Effective:   July
26, 2006

 Page 1 of 6
 

 

PACKAGING
CORPORATION OF AMERICA

AMENDED AND
RESTATED EXECUTIVE INCENTIVE COMPENSATION PLAN

Section 1 — Establishment and Purpose

1.1                                 Establishment of this Plan.  Packaging Corporation of America hereby
establishes the “PACKAGING CORPORATION OF AMERICA AMENDED AND RESTATED
EXECUTIVE INCENTIVE COMPENSATION PLAN” (the “Plan”), set forth herein,
effective April 12, 1999, and amended and restated as of July 26, 2006.

1.2                                 Purpose.  The purpose of this Plan is to create value
for the shareholders of Packaging Corporation of America by:

(a)                                  Reinforcing a results-oriented management culture by
providing cash incentive opportunities focused on the Company’s performance
against the annual operating plan, industry economic conditions, and industry
competitive comparisons.

(b)                                 Providing special awards to individuals in recognition of
both accomplishment of longer-term objectives and to reward significant
accomplishments.  These accomplishments
may include items such as market share improvement, debt reduction, mergers,
acquisitions, divestitures, safety and environmental awards and performance, or
industry-wide recognition of Company results and performance.

Section 2 — Plan Definitions

(a)                                  Company means
Packaging Corporation of America and any successor employer, which adopts or
assumes this Plan (collectively, “PCA”), and any subsidiary corporation
designated by the Board as eligible to participate in this Plan; except that
when used with reference to authority under this Plan, Company shall mean PCA
exclusively.

(b)                                 Board means the
Board of Directors of PCA.

(c)                                  Compensation Committee
means those members of the Compensation Committee of the Board who are not
employees of the Company.  This Committee
is charged with the overall authority for this Plan.

 Page 2 of 6
 

 

(d)                                 Effective Date means
April 12, 1999, and as amended and restated on July 26, 2006.

(e)                                  Executive Officer means any
person elected by the Board to serve as an executive officer of the Company.

(f)                                    Participants mean the
group of all persons who have been approved for participation in this Plan.

(g)                                 Performance Period means
each consecutive twelve-month period commencing January 1 of each year.

(h)                                 Incentive Target Award Pool means,
with respect to each Performance Period, the targeted amount of dollars as
determined by the Compensation Committee to be paid as incentive awards to all
Participants.  

(i)                                     Incentive Actual Award Pool
means, with respect to each Performance Period, the total amount of dollars as
determined by the Compensation Committee to be paid as incentive awards to all
Participants, which shall be between 0 and 200% of the Incentive Target Award
Pool.   

(j)                                     Special Award Pool means,
with respect to each Performance Period, the total amount of dollars as
determined by the Compensation Committee to be paid to Participants who have
been granted a Special Award in recognition of their efforts as described in
1.2(b).

(k)                                  Individual Incentive Target Award means, for each Participant, the anticipated individual
incentive award determined as either a percentage of their base salary, or as a
percentage of their salary grade midpoint or based upon their position within
the Company.  The Individual Incentive
Target Award does not include the amount of any Individual Special Award. 

(l)                                     Individual Incentive Actual Award means the actual incentive award to be paid to each
Participant.

(m)                               Individual Special Award
means an award paid to a Participant from the Special Award Pool in addition to
their Individual Incentive Actual Award.

Section 3 — Eligibility and Participation

3.1                                 Eligibility and Participation.
Eligibility for participation in this Plan will be limited to those individuals
who, by the nature and scope of their positions, significantly impact the
overall results of the Company. The Company will 

 Page 3 of 6
 

 

determine which individuals are eligible to participate in
this Plan by virtue of their position with the Company and will determine for
each Performance Period the individual Participants.

3.2                                 Cessation of Participation.  The Company may withdraw its approval of an
existing position at any time during the Performance Period.  Participants whose employment is terminated
during the Performance Period for reasons other than disability, death, or
retirement under a Company retirement plan shall forfeit participation in this
Plan unless otherwise authorized by the Company.  At the sole discretion of the Company,
participation may be prorated for Participants who become disabled, die, retire
or are assigned to a non-eligible position during the Performance Period.

Section 4 — Awards

4.1                                 Incentive Target Award Pool.  Within 90 days after the commencement of each
Performance Period the Compensation Committee shall establish the Incentive
Target Award Pool.  The Company may
adjust the Incentive Target Award Pool during the Performance Period to
accommodate for the admission or elimination of Participants to or from this
Plan, or to incorporate adjustments to the Individual Incentive Target Awards
of Participants whose salary grade changes during the Performance Period.

4.2                                 Determination of Individual Incentive Target Awards.  Annually, the
Compensation Committee shall determine the Individual Incentive Target Awards
applicable to the Chairman and Chief Executive Officer and each other Executive
Officer of the Company, and the Company shall determine the Individual
Incentive Target Awards applicable to all other Participants.

4.3                                 Determination of Incentive Actual Award Pool.  The Compensation
Committee shall, promptly after the date on which all necessary financial and
other information becomes available, certify the degree to which Company
performance was achieved based upon actual performance against the annual
operating plan, industry economic comparisons, and industry competitive
comparisons. In exercising its sole discretion, the Compensation Committee may
use such objective or subjective factors as it determines to be appropriate in
the decision-making process, including the recommendations of the Company, and
will determine the total amount of incentive actual awards payable under this
Plan for the Performance Period.

4.4                                 Determination of Individual Incentive Actual Awards.   The Compensation
Committee shall approve the Individual Incentive Actual Awards for the Chairman
and Chief Executive Officer and each other Executive Officer of the Company,
and the Company shall approve the Individual Incentive Actual Awards for all
other Participants.

 Page 4 of 6
 

 

4.5                                 Determination of Special Award Pool.  The Compensation
Committee shall, at the conclusion of each Performance Period, determine the
amount to be paid as Individual Special Awards to individual Participants.

4.6                                 Determination of Individual Special Awards.  The Compensation
Committee, at the conclusion of each Performance Period, shall determine the
amount of any Individual Special Awards to be paid to the Chairman and Chief
Executive Officer and each other Executive Officer of the Company, and the
Company shall approve the Individual Special Awards for all other Participants
in recognition of their accomplishments under the criteria set forth in Section
1.2(b).  An Individual Special Award is
in addition to a Participant’s Individual Incentive Actual Award.

Section 5 — Compensation Committee Authority.  The Compensation
Committee shall have the right at any time in its sole discretion to modify,
eliminate or withdraw for such Performance Period or any other periods as it
may determine, any payments under Section 4 hereof, in part or in whole.

Section 6 — Payment of Individual Awards.  Actual awards will
be paid to Participants in cash as soon as practical following approval of the
Incentive Actual Award Pool, the Special Award Pool, the Individual Incentive
Actual Awards, and the Individual Special Awards.  The Company shall have the right to deduct
from all payments made under this Plan to a Participant or to a Participant’s
beneficiary or beneficiaries any federal, state, foreign, city or local taxes
required by law to be withheld with respect to such payments.

Section 7 — Administration.  This Plan shall be
administered by the Compensation Committee. 
Any interpretation of this Plan and any decision on any matter
pertaining to this Plan made by the Compensation Committee in its discretion
shall be final, binding, and conclusive upon all persons.

Section 8 — Employment Rights and Other Benefit
Programs.  This Plan does not constitute a contract of
employment, and participation in this Plan will not give a Participant the
right to continue in the employ of the Company on a full-time, part-time, or
any other basis.  In the absence of any
specific agreement to the contrary, this Plan shall not affect any right of the
Company to terminate, with or without cause, any Participant’s employment at
any time.   Participation in this Plan
will not give any Participant any right or claim to any benefit under this
Plan, unless such right or claim has specifically been granted by the
Compensation Committee in writing under the terms of this Plan.

 Page 5 of 6
 

 

Section 9 — Amendment and Termination.  The
Compensation Committee, in its absolute discretion and without notice, may at
any time and from time to time modify or amend, in whole or in part, any or all
of the provisions of this Plan, or suspend or terminate this Plan entirely.

Section 10 — Applicable Laws.  This Plan
shall be construed, administered and governed in all respects under and by the
laws of the State of Illinois, without regard to its conflict of laws
principles.

Section 11 — Interests Not Transferable.  Any interests of
Participants under this Plan may not be voluntarily sold, transferred,
alienated, assigned or encumbered, other than by will or pursuant to the laws
of descent and distribution.

Section 12 — Severability.  In the event any
provision of this Plan shall be held to be illegal or invalid for any reason,
such illegality or invalidity shall not affect the remaining parts of this
Plan, and this Plan shall be construed and enforced as if such illegal or
invalid provisions had never been contained in this Plan.

Section 13 — Effect on Other Plans or Agreements.  Payments or benefits
provided to a Participant under any stock, deferred compensation, savings,
retirement or other employee benefit plan are governed solely by the terms of
such plan.

 

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