Document:

EX-10.4

 Exhibit 10.4 

ARMO BIOSCIENCES, INC. 

2018 EMPLOYEE STOCK PURCHASE PLAN 

(AS ADOPTED EFFECTIVE AS OF THE
DATE OF THE INITIAL PUBLIC OFFERING) 
  

 ARMO BIOSCIENCES, INC. 

2018 EMPLOYEE STOCK PURCHASE PLAN 

SECTION 1. PURPOSE OF THE PLAN. 
 The
Board adopted the Plan effective as of the IPO Date. The purpose of the Plan is to provide Eligible Employees with an opportunity to increase their proprietary interest in the success of the Company by purchasing Stock from the Company on favorable
terms and to pay for such purchases through payroll deductions or other approved contributions. 
 SECTION 2. ADMINISTRATION OF THE PLAN. 

(a) General. The Plan may be administered by the Board or one or more Committees. Each Committee shall comply with rules and regulations
applicable to it, including under the rules of any exchange on which the Stock is traded, and shall have the authority and be responsible for such functions as have been assigned to it. 

(b) Powers of the Administrator. Subject to the terms of the Plan, and in the case of a Committee, subject to the specific duties
delegated to the Committee, the Administrator shall interpret the Plan and make all other policy decisions relating to the operation of the Plan. The Administrator may adopt such rules, guidelines and forms as it deems appropriate to implement the
Plan. 
 (c) Effects of Administrator’s Decisions. The Administrator’s decisions, determinations and interpretations shall
be final and binding on all interested parties. 
 (d) Governing Law. The Plan shall be governed by, and construed in accordance with,
the laws of the State of Delaware (except its choice of law provisions). 
 SECTION 3. STOCK OFFERED UNDER THE PLAN. 

(a) Authorized Shares. The number of shares of Stock available for purchase under the Plan shall be 317,586 shares of the Company’s
Stock (subject to adjustment pursuant to Subsection (c) below), plus the additional shares described in Subsection (b) below. Shares of Stock issued pursuant to the Plan may be authorized but unissued shares or treasury shares. 

(b) Annual Increase in Shares. On the first day of each fiscal year of the Company during the term of the Plan, commencing on
January 1, 2019 and ending on (and including) January 1, 2038, the aggregate number of shares of Stock that may be issued under the Plan shall automatically increase by a number equal to the least of (i) 1% of the total number of shares of
Stock actually issued and outstanding on the last day of the preceding fiscal year, (ii) 476,380 shares of Stock (subject to adjustment pursuant to Subsection (c) below), or (iii) a number of shares of Stock determined by the Board.

 (c) Anti-Dilution Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, stock or other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, reclassification, repurchase, or exchange of Stock or other securities of the Company, or other similar change in the corporate structure of the Company affecting the Stock and effected
without receipt or payment of consideration by the Company occurs, then in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, there will be a proportionate adjustment of the
number and class of Stock that may be delivered under the Plan, the Purchase Price per share and the number and class of Stock covered by each option under the Plan which has not yet been exercised, and the numerical limits of Sections 3(a),
3(b)(ii) and 9(c). 
 (d) Reorganizations. In the event of a Corporate Reorganization, any Offering Period then in progress may be
continued, assumed or substituted by the surviving entity or its parent. If such acquirer refuses to continue, assume or substitute for any such Offering Period, then a new Purchase Date for such Offering Period(s) will be set prior to the effective
time of the Corporate Reorganization, the Participants’ accumulated contributions will be applied to purchase Stock on such date, and any such Offering Periods shall terminate immediately after such purchase. In the event a new Purchase Date is
set under this Section 3(d), Participants will be given notice of the new Purchase Date. The Plan shall in no event be construed to restrict in any way the Company’s right to undertake a dissolution, liquidation, merger, consolidation or
other reorganization. 
 SECTION 4. ENROLLMENT AND PARTICIPATION. 

(a) Offering Periods and Purchase Periods. 
  

	 	(i)	Initial Offering Period and Base Offering Periods. Unless changed by the Administrator, the initial Offering Period (the “Initial Offering Period”) shall begin on the IPO Date and end on
February 15, 2020 and shall consist of four consecutive Purchase Periods beginning on the IPO Date, August 16, 2018, February 16, 2019 and August 16, 2019 and ending on August 15, 2018, February 15, 2019,
August 15, 2019 and February 15, 2019 as applicable. Following commencement of the Initial Offering Period, a new Offering Period of 24 months’ duration shall begin on each February 16 and August 16 and end on the
February 15 or August 15, as applicable, in the second calendar year after the start of such Offering Period (each, a “Base Offering Period”). Each Base Offering Period shall consist of four consecutive Purchase
Periods, each of 6 months’ duration, commencing on each February 16 and August 16 in the Base Offering Period and ending on the earlier of the next August 15 or February 15, as applicable. Notwithstanding the foregoing, the
Administrator may determine that the first Base Offering Period applicable to the Eligible Employees of a new Participating Company shall commence on any other date specified by the Administrator. The Administrator may change the frequency and
duration of the Base Offering Periods as deemed appropriate from time to time; provided that a Base Offering Period shall in no event be longer than 27 months (or such other period as may be imposed under applicable tax law). The Initial Offering
Period and Base Offering Periods are intended to qualify under Code Section 423. 

  
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	 	(ii)	Additional Offering Periods. At the discretion of the Administrator, additional Offering Periods (the “Additional Offering Periods”) may be conducted under the Plan or, if necessary or
advisable, in the sole discretion of the Administrator, under a separate sub-plan or sub-plans permitting grants to Eligible Employees of certain Participating Companies
(each, a “Sub-Plan”). Such Additional Offering Periods will be designed to achieve desired tax objectives in particular locations outside the United States or to comply with local laws
applicable to offerings in such foreign jurisdictions and will not be intended to qualify under Code Section 423. The Administrator shall determine the commencement and duration of each Additional Offering Period, and Additional Offering
Periods may be consecutive or overlapping. The other terms and conditions of each Additional Offering Period shall be those set forth in this Plan document or in the applicable Sub-Plan, with such changes or
additional features as the Administrator determines necessary to comply with local law. Each Sub-Plan shall be considered a separate plan from the Plan (the “Statutory Plan”). The total
number of Shares authorized to be issued under the Plan as provided in Section 3 above applies in the aggregate to both the Statutory Plan and any Sub-Plan. Unless otherwise superseded by the terms of
such Sub-Plan, the provisions of this Plan document shall govern the operation of such Sub-Plan. 

 

	 	(iii)	Separate Offerings. The Initial Offering Period, each Base Offering Period and each Additional Offering Period conducted under the Plan or any Sub-Plan is intended to
constitute a separate “offering” for purposes of Code Section 423. 

  

	 	(iv)	Equal Rights and Privileges. To the extent an Offering Period is intended to qualify under Code Section 423, all participants in such Offering Period shall have the same rights and privileges with respect to
their participation in such Offering Period in accordance with Code Section 423 and the regulations thereunder except for differences that may be mandated by local law and are consistent with the requirements of Code Section 423(b)(5).

 (b) Enrollment at IPO. Each individual who qualifies as an Eligible Employee on the IPO Date shall automatically
become a Participant on such day, and shall be considered to have been granted an option to participate in the Initial Offering Period under the Plan at the maximum applicable participation rate. To maintain participation in the Initial Offering
Period, each Participant who was automatically enrolled on the IPO Date must file the prescribed enrollment form with the Company. The enrollment form shall be filed at the prescribed location by a date specified by the Company, but in no event
later than 10 business days after the IPO Date. If a Participant who was automatically enrolled on the IPO Date fails to file such form in a timely manner, then such Participant shall be deemed to have withdrawn from the Plan under
Section 6(a). 
 (c) Enrollment After IPO. In the case of any individual who qualifies as an Eligible Employee on the first day
of any Offering Period other than the Initial Offering Period, he or she may elect to become a Participant on such day by filing the prescribed enrollment form with the Company. The enrollment form shall be filed at the prescribed location at least
10 business days (or such other period as the Administrator may designate) prior to such day. 

  
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 (d) Duration of Participation. Once enrolled in the Plan, a Participant shall continue to
participate in the Plan until he or she: 
  

	 	(i)	Reaches the end of the Offering Period or Purchase Period, as applicable, in which his or her employee contributions were discontinued under Section 5(c) or 9(b); 

 

	 	(ii)	Is deemed to withdraw from the Plan under Subsection (b) above; 

  

	 	(iii)	Withdraws from the Plan under Section 6(a); or 

  

	 	(iv)	Ceases to be an Eligible Employee. 

 A Participant whose employee contributions were discontinued automatically
under Section 9(b) shall automatically resume participation as described therein. In all other cases, a former Participant may again become a Participant, if he or she then is an Eligible Employee, by following the procedure described in
Subsection (c) above. 
 (e) Applicable Offering Period. For purposes of calculating the Purchase Price under Section 8(b),
the applicable Offering Period shall be determined as follows: 
  

	 	(i)	Once a Participant is enrolled in the Plan for an Offering Period, such Offering Period shall continue to apply to him or her until the earliest of (A) the end of such Offering Period, (B) the end of his or
her participation under Subsection (d) above, or (C) re-enrollment for a subsequent Offering Period under Paragraph (ii) or (iii) below. 

 

	 	(ii)	In the event that the Fair Market Value of a Share on the first day of the Offering Period for which the Participant is enrolled is higher than on the first day of any subsequent Offering Period, the Participant shall
automatically be re-enrolled for such subsequent Offering Period. 

  

	 	(iii)	Any other provision of the Plan notwithstanding, the Administrator (at its sole discretion) may determine prior to the commencement of any new Offering Period that all Participants shall be re-enrolled for such new Offering Period. 

  

	 	(iv)	When a Participant reaches the end of an Offering Period but his or her participation is to continue, then such Participant shall automatically be re-enrolled for the Offering
Period that commences immediately after the end of the prior Offering Period. 

  
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 SECTION 5. EMPLOYEE CONTRIBUTIONS. 

(a) Commencement of Payroll Deductions. A Participant may purchase shares of Stock under the Plan by means of payroll deductions or (if
so approved by the Administrator with respect to all Participants in a Base Offering Period) other approved contributions in form and substance satisfactory to the Administrator. Payroll deductions or other approved contributions shall commence as
soon as reasonably practicable after the Company has received the prescribed enrollment form. In jurisdictions where payroll deductions are not permitted under local law, Participants may purchase shares of Stock by making contributions in the form
that is acceptable and approved by the Administrator. 
 (b) Amount of Payroll Deductions. An Eligible Employee shall designate on the
prescribed enrollment form the portion of his or her Compensation that he or she elects to have withheld for the purchase of Stock. Such portion shall be a whole percentage of the Eligible Employee’s Compensation, but not less than 1% nor more
than 15%. 
 (c) Reducing Withholding Rate or Discontinuing Payroll Deductions. If a Participant wishes to reduce his or her rate of
payroll withholding, such Participant may do so by filing a new enrollment form with the Company at the prescribed location at any time. The new withholding rate shall be effective as soon as reasonably practicable after the Company has received
such form. The new withholding rate may be 0% or any whole percentage of the Participant’s Compensation, but not more than his or her old withholding rate. No Participant shall make more than one election under this Subsection (c) during
any Purchase Period. (In addition, employee contributions may be discontinued automatically pursuant to Section 9(b).) 
 (d)
Increasing Withholding Rate. If a Participant wishes to increase his or her rate of payroll withholding, such Participant may do so by filing a new enrollment form with the Company at the prescribed location at any time. The new withholding
rate may be effective on the first day of the next-upcoming Purchase Period in which the Participant participates, provided that the Participant has filed the enrollment form with the Company at the prescribed location at least 10 business days (or
such other period as the Administrator may designate) prior to such day. The new withholding rate may be any whole percentage of the Participant’s Compensation, but not less than 1% nor more than 15%. An increase in a Participant’s rate of
payroll withholding may not take effect during a Purchase Period. 
 SECTION 6. WITHDRAWAL FROM THE PLAN. 

(a) Withdrawal. A Participant may elect to withdraw from the Plan (or, if applicable, from an Offering Period) by filing the prescribed
form with the Company at the prescribed location at any time before a Purchase Date. As soon as reasonably practicable thereafter, payroll deductions or other approved contributions shall cease and the entire amount credited to the
Participant’s Plan Account with respect to such Offering Period shall be refunded to him or her in cash, without interest (except as otherwise required by the laws of the local jurisdiction). No partial withdrawals from an Offering Period shall
be permitted. 
 (b) Re-Enrollment After Withdrawal. A former Participant who has withdrawn
from the Plan shall not be a Participant until he or she re-enrolls in the Plan under Section 4(c). Re-enrollment may be effective only at the commencement of an
Offering Period. 

  
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 SECTION 7. CHANGE IN EMPLOYMENT STATUS. 

(a) Termination of Employment. Termination of employment as an Eligible Employee for any reason, including death, shall be treated as an
automatic withdrawal from the Plan under Section 6(a). 
 (b) Transfers of Employment. If a Participant transfers employment from
a Participating Company that is participating in the Initial Offering Period or a Base Offering Period to a Participating Company that is participating in an Additional Offering Period, he or she will immediately cease to participate in the Initial
Offering Period or Base Offering Period as applicable; however, such Participant’s Plan Account will be transferred to the Additional Offering Period, and such Participant will immediately join such Additional Offering Period on the terms and
conditions applicable to such Additional Offering Period, except for any modifications required by applicable law. If a Participant transfers employment from a Participating Company that is participating in an Additional Offering Period to a
Participating Company that is participating in the Initial Offering Period or a Base Offering Period, he or she will continue to participate in the Additional Offering Period until the earlier of (i) the end of such Additional Offering Period,
or (ii) the commencement of the first Base Offering Period in which he or she is eligible. If a Participant transfers employment from a Participating Company to a Related Corporation that is not a Participating Company, he or she shall be
deemed to have withdrawn from the Plan pursuant to Section 6(a). 
 (c) Leave of Absence. For purposes of the Plan, employment
shall not be deemed to terminate when the Participant goes on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing. Employment, however, shall be deemed to terminate on the
first day following three months after the Participant goes on a leave, unless a contract or statute guarantees his or her right to return to work. Employment shall be deemed to terminate in any event when the approved leave ends, unless the
Participant immediately returns to work. 
 (d) Death. In the event of the Participant’s death, the amount credited to his or her
Plan Account shall be paid to a beneficiary designated by him or her for this purpose on the prescribed form or, if none, to the Participant’s estate. Such form shall be valid only if it was filed with the Company at the prescribed location
before the Participant’s death. 
 SECTION 8. PLAN ACCOUNTS AND PURCHASE OF SHARES. 

(a) Plan Accounts. The Company shall maintain a Plan Account on its books in the name of each Participant. Whenever an amount is
deducted from the Participant’s Compensation under the Plan, such amount shall be credited to the Participant’s Plan Account. Amounts credited to Plan Accounts shall not be trust funds and may be commingled with the Company’s general
assets and applied to general corporate purposes. Unless otherwise required by the laws of the local jurisdiction, no interest shall be credited to Plan Accounts. 

(b) Purchase Price. The Purchase Price for each share of Stock purchased on a Purchase Date shall be the lower of: 

 

	 	(i)	85% of the Fair Market Value of such share on the first day of such Offering Period; or 

  

	 	(ii)	85% of the Fair Market Value of such share on the Purchase Date. 

  
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 (c) Number of Shares Purchased. On each Purchase Date, each Participant shall be deemed to
have elected to purchase the number of shares of Stock calculated in accordance with this Subsection (c), unless the Participant has previously elected to withdraw from the Offering Period in accordance with Section 6(a). The amount then
in the Participant’s Plan Account shall be divided by the Purchase Price, and the number of shares that results shall be purchased from the Company with the funds in the Participant’s Plan Account. The foregoing number of shares of Stock
purchasable by a Participant are subject to the limitations set forth in Section 9. The Administrator may determine with respect to all Participants that any fractional share, as calculated under this Subsection (c), shall be
(i) rounded down to the next lower whole share or (ii) credited as a fractional share. 
 (d) Available Shares Insufficient.
In the event that the aggregate number of shares that all Participants elect to purchase with respect to a particular Purchase Period exceeds (i) the number of shares of Stock that were available under Section 3 above for sale under the
Plan on the first day of the applicable Offering Period, or (ii) the number of shares that were available under Section 3 above for sale under the Plan on the applicable Purchase Date, then the number of shares to which each Participant is
entitled shall be determined by multiplying the number of shares available for issuance by a fraction. The numerator of such fraction is the number of shares that such Participant has elected to purchase, and the denominator of such fraction is the
number of shares that all Participants have elected to purchase. The Company may make a pro rata allocation of the shares available on the first day of an applicable Offering Period pursuant to the preceding sentence, notwithstanding any
authorization of additional shares for issuance under the Plan by the Company’s stockholders subsequent to such date. In the event of a pro-rata allocation under this Section (d), the Administrator may
determine in its discretion to continue all Offering Periods then in effect or terminate all Offering Periods then in effect pursuant to Section 14. 

(e) Issuance of Stock. The shares of Stock purchased by a Participant under the Plan may be registered in the name of such Participant,
or jointly in the name of such Participant and his or her spouse as joint tenants with the right of survivorship or as community property (with or without the right of survivorship). The Company may permit or require that shares be deposited
directly with a broker designated by the Company or to a designated agent of the Company, and the Company may utilize electronic or automated methods of share transfer. The Company may require that shares be retained with such broker or agent for a
designated period of time and/or may establish other procedures to permit tracking of disqualifying dispositions of such shares. (The two preceding sentences shall apply whether or not the Participant is required to pay income tax in the United
States.) 
 (f) Tax Withholding. To the extent required by applicable federal, state, local or foreign law, a Participant shall make
arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The Company shall not be required to issue any shares of Stock under the Plan until such obligations, if any,
are satisfied. 

  
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 (g) Unused Cash Balances. Subject to the final sentence of Section 8(c), an amount
remaining in the Participant’s Plan Account that represents the Purchase Price for any fractional share shall be carried over in the Participant’s Plan Account to the next Purchase Period. Any amount remaining in the Participant’s
Plan Account that represents the Purchase Price for whole shares that could not be purchased by reason of Subsections (c) or (d) above or Section 9(b) shall be refunded to the Participant in cash, without interest (except as otherwise
required by the laws of the local jurisdiction). 
 (h) Stockholder Approval. Any other provision of the Plan notwithstanding, no
shares of Stock shall be purchased under the Plan unless and until the Company’s stockholders have approved the adoption of the Plan. 
 SECTION 9.
PLAN LIMITATIONS. 
 (a) Five Percent Limit. Any other provision of the Plan notwithstanding, no Participant shall be granted a
right to purchase Stock under the Plan if, immediately after such right is granted, such Participant would own stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or any Related Corporation,
applying the stock attribution rules of Code Section 424(d), and including any stock in which the Participant may purchase under outstanding options as stock owned by such Participant. 

(b) Dollar Limit. As specified by Code Section 423(b)(8), no Participant shall be entitled to accrue rights to purchase Stock
pursuant to any such rights outstanding under the Plan if and to the extent such accrual, when aggregated with (i) rights to purchase Stock accrued under any other right to purchase Stock under the Plan, and (ii) similar rights accrued
under other employee stock purchase plans (within the meaning of Code Section 423) of the Company or any Related Corporation, would otherwise permit such Participant to purchase more than $25,000 worth of Stock of the Company or any Related
Corporation (determined on the basis of the Fair Market Value per share on the date such rights are granted, and which, with respect to the Plan, will be determined as of the beginning of the respective Offering Period) for each calendar year such
rights are at any time outstanding. 
 If a Participant is precluded by this Subsection (b) from purchasing additional Stock under the
Plan, then his or her employee contributions shall automatically be discontinued and shall automatically resume at the beginning of the next Purchase Period with a scheduled Purchase Date in the next calendar year, provided that he or she is an
Eligible Employee at the beginning of such Purchase Period. 
 (c) Purchase Period Share Purchase Limit. Any other provision of the
Plan notwithstanding, no Participant shall purchase more than 3,500 shares of Stock with respect to any Purchase Period; provided that the Administrator may, for future Offering Periods, increase or decrease in its absolute discretion, the maximum
number of shares of Stock that a Participant may purchase during each Purchase Period. 
 SECTION 10. RIGHTS NOT TRANSFERABLE. 

The rights of any Participant under the Plan, or any Participant’s interest in any Stock or moneys to which he or she may be entitled
under the Plan, shall not be transferable by voluntary or involuntary assignment or by operation of law, or in any other manner other than by beneficiary designation or the laws of descent and distribution. If a Participant in any manner attempts to
transfer, assign or otherwise encumber his or her rights or interest under the Plan, other than by beneficiary designation or the laws of descent and distribution, then such act shall be treated as an election by the Participant to withdraw from the
Plan under Section 6(a). 

  
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 SECTION 11. NO RIGHTS AS AN EMPLOYEE. 

Nothing in the Plan or in any right granted under the Plan shall confer upon the Participant any right to continue in the employ of a
Participating Company for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Participating Companies or of the Participant, which rights are hereby expressly reserved by each, to terminate his or her
employment at any time and for any reason, with or without cause. 
 SECTION 12. NO RIGHTS AS A STOCKHOLDER. 

A Participant shall have no rights as a stockholder with respect to any shares of Stock that he or she may have a right to purchase under the
Plan until such shares have been purchased on the applicable Purchase Date. 
 SECTION 13. SECURITIES LAW REQUIREMENTS. 

Shares of Stock shall not be issued, and the Company shall have no liability for failure to issue shares of Stock, under the Plan unless the
issuance and delivery of such shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws
and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded. 

SECTION 14. AMENDMENT OR DISCONTINUANCE. 

(a) General Rule. The Administrator, in its sole discretion, may amend, suspend, or terminate the Plan, or any part thereof, at any time
and for any reason. If the Plan is terminated, the Administrator, in its discretion, may elect to terminate all outstanding Offering Periods either immediately or upon completion of the purchase of shares of Stock on the next Purchase Date, or may
elect to permit Offering Periods to expire in accordance with their terms (and subject to any adjustment pursuant to Section 3(c) or (d)). If the Offering Periods are terminated prior to expiration, all amounts then credited to
Participants’ accounts which have not been used to purchase shares of Stock will be returned to the Participants (without interest thereon, except as otherwise required by the laws of the local jurisdiction) as soon as administratively
practicable. 
 (b) Administrator’s Discretion. Without stockholder consent and without limiting Section 14(a), the
Administrator will be entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S.
dollars, permit payroll withholding in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and
adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Stock for each Participant properly correspond with amounts withheld from the Participant’s Compensation, and establish such
other limitations or procedures as it determines in its sole discretion advisable which are consistent with the Plan. 

  
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 (c) Accounting Consideration. In the event the Administrator determines that the ongoing
operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may, in its discretion and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or eliminate such accounting
consequence including, but not limited to: 
  

	 	(i)	Amending the Plan to conform with the safe harbor definition under Financial Accounting Standards Board Accounting Standards Codification Topic 718, including with respect to an Offering Period underway at the time;

  

	 	(ii)	Altering the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price; 

 

	 	(iii)	Shortening any Offering Period by setting a new Purchase Date, including an Offering Period underway at the time of the Administrator’s action; 

 

	 	(iv)	Reducing the maximum percentage of Compensation a Participant may elect to set aside as payroll deductions; and 

  

	 	(v)	Reducing the maximum number of shares of Stock a Participant may purchase during any Purchase Period. 

 Such
modifications or amendments will not require stockholder approval or the consent of any Plan Participants. 
 (d) Stockholder
Approval. Except as provided in Section 3, any increase in the aggregate number of shares of Stock that may be issued under the Plan shall be subject to the approval of the Company’s stockholders. In addition, any other amendment of
the Plan shall be subject to the approval of the Company’s stockholders to the extent required under Section 14(e) or by any applicable law or regulation. 

(e) Plan Termination. The Plan shall terminate automatically 20 years after its adoption by the Board, unless (i) the Plan is
extended by the Board and (ii) the extension is approved within 12 months by a vote of the stockholders of the Company. 
 SECTION 15. DEFINITIONS.

 (a) “Administrator” means the Board or any Committee administering the Plan in accordance with Section 2. 

(b) “Board” means the Board of Directors of the Company, as constituted from time to time. 

(c) “Code” means the Internal Revenue Code of 1986, as amended. 

  
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 (d) “Committee” means a committee of one or more members of the Board, or of
other individuals satisfying applicable laws, appointed by the Board to administer the Plan. 
 (e) “Company” means ARMO
BioSciences, Inc., a Delaware corporation. 
 (f) “Compensation” means, unless otherwise determined by the Administrator,
(i) cash base salary or base hourly pay (which, for avoidance of doubt, shall exclude any overtime pay or shift differentials) paid to a Participant by a Participating Company plus (ii) any pre-tax
contributions on such amounts made by the Participant under Code Sections 401(k) or 125. “Compensation” shall exclude all cash items other than base salary or base hourly pay and shall exclude all
non-cash items, moving or relocation allowances, cost-of-living equalization payments, car allowances, tuition reimbursements,
imputed income attributable to cars or life insurance, severance pay, fringe benefits, contributions or benefits received under employee benefit plans, income attributable to equity compensation awards of the Company, and similar items. The
Administrator shall determine whether a particular item is included in Compensation. 
 (g) “Corporate Reorganization”
means: 
  

	 	(i)	The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization; or 

  

	 	(ii)	The sale, transfer or other disposition of all or substantially all of the Company’s assets or the complete liquidation or dissolution of the Company. 

(h) “Eligible Employee” means, unless otherwise determined by the Administrator prior to the commencement of an Offering
Period, a common law employee of a Participating Company who is customarily employed for more than five months per calendar year. The foregoing notwithstanding, an individual shall not be considered an Eligible Employee if his or her participation
in the Plan is prohibited by the law of any country that has jurisdiction over him or her. 
 (i) “Exchange Act” means the
Securities Exchange Act of 1934, as amended. 
 (j) “Fair Market Value” means the price at which Stock was last sold in the
principal U.S. market for the Stock on the applicable date or, if the applicable date was not a trading day, on the last trading day prior to the applicable date. If Stock is no longer traded on a public U.S. securities market, the Fair Market Value
shall be determined by the Administrator in good faith on such basis as it deems appropriate. The Administrator’s determination shall be conclusive and binding on all persons. For purposes of the Initial Offering Period, the Fair Market Value
on the first day of such Initial Offering Period shall be the price at which one share of Stock is offered to the public in the IPO. 
 (k)
“IPO” means the Company’s initial offering of Stock to the public. 
 (l) “IPO Date” means the
effective date of the registration statement filed by the Company with the Securities and Exchange Commission for its initial offering of Stock to the public. 

  
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 (m) “Offering Period” means any period, including as the context requires the
Initial Offering Period, Base Offering Periods and Additional Offering Periods, with respect to which the right to purchase Stock may be granted under the Plan, as determined pursuant to Section 4(a). 

(n) “Participant” means an Eligible Employee who participates in the Plan or any
Sub-Plan, as provided in Section 4. 
 (o) “Participating Company” means
(i) the Company and (ii) each present or future Subsidiary designated by the Administrator as a Participating Company. 
 (p)
“Plan” means this ARMO Biosciences, Inc. 2018 Employee Stock Purchase Plan, as it may be amended from time to time. 
 (q)
“Plan Account” means the account established for each Participant pursuant to Section 8(a). 
 (r) “Purchase
Date” means the last trading day of a Purchase Period. 
 (s) “Purchase Period” means a period within an Offering
Period (which for an Offering Period with only a single Purchase Period would be coterminous with the Offering Period) during which contributions may be made toward the purchase of Stock under the Plan, as determined pursuant to Section 4(a).

 (t) “Purchase Price” means the price at which Participants may purchase Stock under the Plan, as determined pursuant to
Section 8(b). 
 (u) “Related Corporation” means any “parent corporation” of the Company as defined in Code
Section 424(e) or any Subsidiary. 
 (v) “Stock” means the common stock of the Company. 

(w) “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the
Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 

  
 12Exhibit

AMENDED & RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED & RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), is entered into as of this 9th day of January, 2018 (the “Effective Date”) by and between The Providence Service Corporation, a Delaware corporation, with its corporate headquarters located at 700 Canal Street, Third Floor, Stamford, Connecticut 06902, its successors and assigns (the “Company”), and David Shackelton, an individual currently residing at [    ] (“Employee”).
BACKGROUND
WHEREAS, the Company and Employee desire to enter into this Agreement to reflect the terms upon which Employee shall provide services to the Company, which shall supersede and replace the Employment Agreement dated as of September 28, 2015 (the “Prior Employment Agreement”);
WHEREAS, the Company’s Board of Directors (the “Board”) previously appointed Employee as Senior Vice President and Chief Financial Officer of the Company, and Company and Employee desire that Employee continue such employment and position; and
WHEREAS, the Company and Employee are entering into this Agreement to set out the agreement between them regarding the terms of Employee’s employment.
NOW, THEREFORE, in consideration of the facts, mutual promises and covenants contained herein and intending to be legally bound hereby, the parties hereto agree as of the Effective Date:
1.Employment and Term.  The Company hereby agrees to employ Employee and Employee
hereby agrees to work in the employ of the Company.  Such employment will have a term (the “Term”) commencing as of the Effective Date and, if not previously terminated in accordance with the terms of this Agreement, ending at the close of business on December 31, 2018.  Following the Term, Employee’s employment may continue hereunder, provided, however, that continuation of Employee’s employment following the Term shall not be deemed a renewal or extension of the Term.  Employee’s employment, whether during the Term or thereafter, shall be subject in all respects to the terms and conditions set forth in this Agreement, as well as to all of the Company’s policies and rules that are binding on executive employees generally.

2.Office and Duties.

(a)During the Term, Employee shall serve as Senior Vice President and Chief Financial Officer of the Company, and shall report directly to the Company’s Chief Executive Officer (the “CEO”) and be subject to the CEO’s supervision and direction.

(b)In Employee’s capacity as Senior Vice President and Chief Financial Officer of the Company, Employee shall have such authority, perform such duties, discharge such responsibilities and render such services as are designated from time to time by the CEO or the Board of Directors of the Company (the “Board”).

(c)While employed by the Company or any Affiliate (as hereinafter defined), Employee shall render Employee’s services diligently, faithfully and to the best of Employee’s ability, and shall devote substantially all of Employee’s working time, energy, skill and best efforts to the performance of Employee’s duties hereunder, in a manner that will further the business and interests of the Company.

(d)While employed by the Company or any Affiliate, Employee shall not be engaged in any business activity which, in the reasonable judgment of the CEO or the Board, conflicts with Employee’s duties hereunder, whether or not such activity is in breach of Section 7 or pursued for pecuniary advantage.

3.Compensation.

(a)Base Salary.  In consideration of the services rendered by Employee to the Company during the Term, effective as of the Effective Date, Employee shall receive an annual base salary of Four Hundred Fifty Thousand and 00/100 Dollars ($450,000) (the “Base Salary”), payable in equal periodic installments in accordance with the Company’s regular payroll practices in effect from time to time.

(b)Bonus Plans/Incentive Compensation Programs.
(i)In addition to the annual Base Salary, during the Term, Employee shall be eligible to participate in annual bonus plans or incentive compensation programs, if any, as may be approved by the Board from time to time (“Bonus”) with a target amount equal to at least seventy-five percent (75%) of the Base Salary for such year, and a maximum amount equal to one-hundred-fifty percent (150%) of the Base Salary for such year, upon the achievement of goals to be determined by the Board or its Compensation Committee.  Unless otherwise specified in respect of a Bonus, the Bonus shall be paid, net of any required withholdings, in a lump sum in accordance with the Company’s policies promptly following the completion and filing of the Company’s annual audited financial statements for the year to which the Bonus relates and no later than June 30 of the year following the year to which the Bonus relates.  Employee’s rights to receive the Bonus shall be contingent upon Employee’s being employed by the Company on the date that payment of the Bonus is made, except as otherwise expressly provided in this Agreement.  

(ii)In addition to an annual bonus or incentive compensation programs described in Section 3(b)(i), during the Term, Employee shall be eligible to participate in the Providence Service Corporation 2006 Long-Term Incentive Plan (the “LTIP”) or any other long-term incentive or equity-based incentive plan applicable to the Company’s executives, under the terms and conditions approved by the Board or its Compensation Committee.

(c)Benefits.

(i)During Employee’s employment hereunder, Employee also shall be entitled to participate in all fringe benefits, if any, as may be in effect from time to time that are generally available to the Company’s senior executive officers, and such other fringe benefits as the Board and/or Compensation Committee shall deem appropriate, subject to eligibility requirements thereof (collectively, the “Benefits”).

(ii)During Employee’s employment hereunder, in addition to the foregoing Benefits, the Company shall, subject to the terms hereof (including as set forth in Section 3(c)(iii)), use its reasonable efforts to procure and maintain term life insurance (“Life Insurance”) on the life of Employee (if such term insurance is not already in effect on the date of this Agreement).  Such Life Insurance shall be in the amount of Nine Hundred Thousand and 00/100 Dollars ($900,000.00).  Employee shall be the owner of the Life Insurance policy and shall have the absolute right to designate the beneficiaries thereunder.  The premiums in respect of such Life Insurance policy shall be paid by the Company for the period Employee is employed by the Company hereunder; premiums in respect thereof shall thereafter be paid by Employee.

(iii)Employee agrees to submit to any physical examination required by the insurer of any such Life Insurance policy and will otherwise cooperate with the Company in connection with any life insurance on Employee’s life the Company may wish to obtain, provided, however, that the results of any such physical examination shall not be shared with the Company or used in any way in connection with Employee’s employment other than the procurement of insurance pursuant to this Subsection.  Employee agrees to execute any HIPAA or other privacy waiver in favor of the Company that the Company considers necessary or appropriate for sharing of such information, or to waive the coverage otherwise under this Section 3(c).  In the event Employee is determined to be suffering from a congenital defect or other illness or condition which would preclude the Company from obtaining the insurance referred to in the preceding paragraph at a cost substantially equivalent to the cost of obtaining such insurance for a healthy individual of Employee’s age and gender, the Company shall, in lieu of purchasing the insurance in the amount set forth in the preceding paragraph, purchase the amount of insurance, if any, that can be purchased at a cost substantially equivalent to the cost of obtaining such insurance for a healthy individual of Employee’s age and gender.

(d)Vacation.  During Employee’s employment hereunder, Employee shall be entitled to the number of paid vacation days in each calendar year as determined by the Company from time to time for its senior executive officers.  Vacation days which are not used during any calendar year may not be accrued or carried over to the next year, nor shall Employee be entitled to compensation for unused vacation days.

(e)Business Expenses.  During Employee’s employment hereunder, the Company shall pay or reimburse Employee for all reasonable expenses incurred or paid by Employee in the performance of Employee’s duties hereunder, upon timely presentation of expense statements or vouchers and such other information as the Company may reasonably require and in accordance with the generally applicable policies and practices of the Company, in each case to the extent such expenses are consistent with Company policies; provided that the Company may at any time, further limit, or eliminate, Employee’s right to incur such expenses.  Any reimbursement due hereunder shall be separately requested and paid as soon as practicable in accordance with the Company’s policies and practices, and in any case no later than December 31 of the calendar year after the calendar year Employee incurs the expense for which reimbursement is requested; expenses eligible for reimbursement in one calendar year shall not affect the amount of expenses eligible for reimbursement in any other calendar year; and reimbursements shall not be subject to liquidation or exchange for another benefit.

(f)Withholding.  All payments made pursuant to this Agreement shall be subject to such withholding taxes as may be required by any applicable law and other withholdings pursuant to Employee’s elections.

4.Representations of Employee.  Employee represents to the Company that:  (a) there are no restrictions, agreements or understandings whatsoever to which Employee is a party that would prevent, or make unlawful, Employee’s execution of this Agreement and Employee’s employment hereunder; (b) Employee’s execution of this Agreement and Employee’s employment hereunder shall not constitute a breach of any contract, agreement or understanding, oral or written, to which Employee is a party, or by which Employee is bound; and (c) Employee is of full capacity, free and able to execute this Agreement and to enter into this Agreement with the Company.

5.Termination.  This Agreement and Employee’s employment hereunder shall continue during the Term and thereafter until terminated as provided herein.  Upon termination of this Agreement and Employee’s employment hereunder, Employee shall immediately resign from any officer, director or other position in which Employee is serving on behalf of the Company or any Affiliate, and shall tender Employee’s resignation as a director of any and all Affiliates of the Company.

(a)Termination by Company for Cause.  The Company shall have the right, during the Term and thereafter, to terminate this Agreement and Employee’s employment hereunder at any time for “Cause”, effective immediately or as of a date specified by the Company in a notice of termination.  For purposes of this Agreement, the term “Cause” shall mean the following, as reasonably determined solely by the Board:

(i)Employee commits fraud or theft against the Company or any of its subsidiaries, affiliates, joint ventures and related organizations, including any entity managed by the Company (collectively referred to as “Affiliates”), or is convicted of, or pleads guilty or nolo contendere to, either a felony or any crime involving fraud or moral turpitude;

(ii)In carrying out Employee’s duties hereunder, Employee engages in conduct that constitutes gross neglect or willful misconduct and that results, in either case, in material financial or reputational harm to the Company or its Affiliates;

(iii)Employee either materially breaches any provision of this Agreement (including but not limited to the restrictive covenants contained in Section 7) or breaches any fiduciary duty or duty of loyalty owed to the Company or its Affiliates or shareholders;

(iv)Employee engages in any wrongful or questionable conduct which does or which is reasonably likely to bring the Company or its Affiliates into public disgrace or embarrassment, or which is reasonably 

likely to cause one or more of its customers or clients to cease doing business with, or reduce the amount of business with, the Company or its Affiliates;

(v)Employee repeatedly neglects or refuses to perform Employee’s duties or responsibilities as directed by the CEO or the Board or any committee established by the Board, or violates any express direction of any lawful rule, regulation or policy established by the Company, the CEO, the Board or any committee established by the Board which is consistent with the scope of Employee’s duties under this Agreement, and such failure, refusal or violation continues uncured for a period ten (10) days after written notice from the Company to Employee specifying the failure, refusal or violation and the Company’s intention to terminate this Agreement for Cause;

(vi)Employee commits any act or omission resulting in or intended to result in direct material personal gain to Employee at the expense of the Company or its Affiliates; or

(vii)Employee materially compromises trade secrets or other confidential and proprietary information of the Company or its Affiliates.

Action or inaction by Employee shall not be considered “willful” unless done or omitted by Employee intentionally and without Employee’s reasonable belief that Employee’s action or inaction was in the best interests of the Company or its Affiliates, and shall not include failure to act by reason of total or partial incapacity due to physical or mental illness.
(b)Termination upon Death/Termination by Company upon Disability of Employee.  Employee’s employment will terminate upon Employee’s death.  The Company shall have the right to terminate this Agreement and Employee’s employment hereunder at any time upon the Disability of Employee.  The term, “Disability”, as used herein, means any physical or mental illness, disability or incapacity which prevents Employee from performing the essential functions of Employee’s job, with or without reasonable accommodations, hereunder for a period of not less than one hundred fifty (150) consecutive days or for an aggregate of one hundred eighty (180) days during any period of twelve (12) consecutive months.  Periods where Employee can perform the essential functions of Employee’s job with a reasonable accommodation shall not be included in the determination of a Disability hereunder.  During any period of Disability, Employee agrees to submit to reasonable medical examinations upon the reasonable request, and at the expense, of the Company.

(c)Termination By Company Without Cause.  The Company shall have the right to terminate this Agreement and Employee’s employment hereunder at any time without Cause and/or without the occurrence of Employee’s death or Disability by giving written notice which shall be effective on the date specified in such notice of termination.

(d)Termination by Employee.  In the event Employee terminates Employee’s employment for any reason, whether or not during the Term, and whether or not for Good Reason, Employee shall give the Company not less than sixty (60) days prior written notice of termination, provided the notice of Good Reason (as defined below) shall constitute notice of termination for purposes of the sixty (60) day notice period only.  Upon a termination of Employee’s employment with the Company under this Section 5(d), the effective date of termination shall be the date set forth in Employee’s resignation notice (assuming such date is in compliance with the notice provisions of this Section 5(d)) or an earlier date as determined by the Company after the Company’s receipt of such notice, in its sole discretion, but not earlier than the date on which the Company learned of Employee’s decision to terminate Employee’s employment.  For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following, without Employee’s consent, that is not cured by the Company within thirty (30) days of the Company’s receipt of Employee’s written notice that the occurrence constitutes Good Reason: (i) a material reduction of Employee’s position, duties, or responsibilities with the Company, (ii) a reduction of Employee’s Base Salary provided in Section 3(a) of this Agreement, other than a reduction which is generally applicable to all executives of the Company, (iii) a material breach by Company of this Agreement; or (iv) requiring Employee to move or relocate Employee’s primary place of employment or relocation of the Company’s headquarters more than seventy-five (75) miles from the then current 

place of employment or headquarters; provided that (A) any resignation for Good Reason must be made within sixty (60) days of the occurrence set forth in (i) - (iv) above and (B) any resignation by Employee while the Company has “Cause” for termination of Employee shall not be considered to be a resignation without Good Reason.  Employee shall not have the right to terminate Employee’s employment for Good Reason unless Employee actually terminates employment within ninety (90) days following receipt of, and in accordance with, Employee’s written notice.  

(e)Notice of Termination.  Any termination, except for death, pursuant to this Section 5 shall be communicated by a Notice of Termination.  For purposes of this Agreement, a “Notice of Termination” shall mean a written notice which shall indicate those specific termination provisions in this Agreement relied upon and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee’s employment under the provisions so indicated.  The Notice of Termination shall also set forth that Employee’s employment is terminated and be delivered in accordance with the terms of this Agreement.

Notwithstanding anything to the contrary set forth herein, Sections 7, 8 and 9 shall survive the end of the Term and/or the termination of Employee’s employment hereunder for any reason, and shall remain in full force and effect thereafter.
6.Payments Upon Termination and Change in Control.

(a)Termination for Cause.  In the event Employee’s employment hereunder is terminated for Cause at any time, whether or not during the Term, all of Employee’s rights to Employee’s Base Salary, Benefits and Bonus, if any, shall immediately terminate as of the date of such termination, except that Employee shall be entitled to any earned and unpaid portion of Employee’s Base Salary and accrued Benefits up to the date of termination, less all deductions or offsets for amounts owed by Employee to the Company.  Employee shall not be entitled to any Bonus, prorated or otherwise.  The Company shall have no further obligations to Employee under this Agreement.

(b)Termination Due to Death or Disability.  In the event Employee’s employment hereunder is terminated at any time, whether or not during the Term, due to Employee’s death or Disability, all of Employee’s rights to Employee’s Base Salary, Benefits (except to the extent that any Benefits are expressly available following termination of employment) and Bonus, if any, shall immediately terminate as of the effective date of such termination, except that Employee (or, in the event that Employee’s employment hereunder is terminated due to Employee’s death, Employee’s heirs, personal representatives or estate) shall be entitled to any earned and unpaid portion of Employee’s Base Salary, any Bonus (if earned) relating to a fiscal year which was completed before Employee’s death or Disability and accrued Benefits up to the date of termination, in each case less all deductions or offsets for amounts owed by Employee to the Company.  Subject to the provisions of the applicable Company stock option or stock incentive plan, should Employee’s death occur within one (1) year following Employee’s termination for Disability, but prior to Employee’s exercise of any options vested at the date of termination, Employee’s estate shall be entitled to exercise Employee’s options for the earlier of (i) the remainder of the one (1) year period or (ii) the date upon which the option would have expired by its terms.    The Company shall have no further obligations to Employee under this Agreement.

(c)Termination By the Company Without Cause or By Employee for Good Reason.  If, during the Term, the Company terminates Employee’s employment other than for Cause or the occurrence of Employee’s death or Disability or Employee terminates Employee’s employment for Good Reason, Employee shall be entitled to continue to receive (i) any Bonus (if earned) relating to a fiscal year which was completed before the effectiveness of such termination (payable as set forth in Section 3(b)), (ii) any Bonus relating to the fiscal year during the date of effectiveness of such termination, to the extent earned, payable in a lump sum following the completion and filing of the Company’s annual audited financial statements in respect of such fiscal year in accordance with the Company’s Bonus payment policies under its annual bonus plans or incentive compensation programs, and (iii) an amount equal to Employee’s Base Salary commencing within sixty (60) days following the date of such termination for Good Reason or termination other than for Cause, due to Employee’s death or due to Disability and continuing for twelve (12) months after the effective date of termination (the “Post Employment Payment Period”) payable in substantially equal consecutive installment payments which correspond to the Company’s regular payroll periods; provided, however, that if such sixty (60) day period begins in one calendar year and ends in the next calendar year, Employee shall not 

have the right to designate the calendar year of commencement of installment payments; and provided further that the first such payment shall be in an amount equal to the total amount which Employee would otherwise have been entitled during the period following the effective date of termination through such payment commencement date if delay had not been required by the foregoing provision or by the amount of time Employee properly takes to review and execute the General Release (as defined below) and the revocation period relating to the General Release, as applicable.  Notwithstanding the foregoing, the Company’s obligations to make such payments of such Bonus or Base Salary are conditioned upon (x) Employee’s execution and delivery to the Company of a general release of all claims relating to Employee’s employment and termination from employment (the “General Release”) in a form provided by the Company (which General Release shall not affect any rights Employee may have under COBRA or under any vested award previously issued to Employee by the Company under any Company benefit plan) and the executed and delivered General Release is not revoked during the applicable revocation period, and (y) Employee not otherwise breaching Employee’s obligations under this Agreement (including, without limitation, the Covenants).  Employee understands that if the conditions set forth in the preceding sentence are not met, Employee shall not be entitled to a Bonus or any payments of Base Salary relating to periods of time following the effective date of the termination of Employee’s employment under this Section 6(c) or otherwise.  The Company shall have no further obligations to Employee under this Agreement.  Notwithstanding any other provision in this Agreement to the contrary, by notice to Employee during the Post-Employment Payment Period, the Company may, to the extent compliant with Section 409A of the Internal Revenue Code of 1986, as amended (“Code”) or an exception thereto, elect to continue to pay Employee’s Base Salary for any additional period ending no later than the second anniversary of the effectiveness of termination of Employee’s employment hereunder by the Company without Cause or if Employee terminates Employee’s employment for Good Reason (“Continuing Payment Period”).  For the avoidance of doubt, Employee shall not be entitled to any payments or benefits under this Section 6(c) in the event of non-renewal of the Term of this Agreement, including any termination of Employee’s employment upon or following such non-renewal.

(d)Termination By Employee During Term.  In the event Employee terminates Employee’s employment during the Term other than for Good Reason, all of Employee’s rights to Employee’s Base Salary, Benefits (except to the extent any Benefits are expressly available following such event) and Bonus, if any, shall immediately terminate as of the effective date of termination, except that Employee shall be entitled to any earned and unpaid portion of Employee’s Base Salary and accrued Benefits up to the date of termination.  Employee shall not be entitled to any Bonus, prorated or otherwise.  The Company shall have no further obligations to Employee under this Agreement.

(e)Payment Upon Change in Control.  Notwithstanding any other provision in this Agreement to the contrary, but subject to Section 6(e)(ii), if a “Change in Control” of the Company (as defined herein) shall occur during the Term, and after such Change in Control but effective prior to eighteen (18) months following the date of the Change in Control, the Company terminates Employee’s employment without Cause or Employee terminates Employee’s employment for Good Reason, in lieu of any other amounts payable under this Agreement, Employee shall be entitled to receive (i) any Bonus (if earned) relating to a fiscal year which was completed before the effectiveness of such termination (payable as set forth in Section 3(b), (ii) an amount equal to twelve (12) months of Employee’s Base Salary in effect immediately prior to such Change in Control in a lump sum payment, payable immediately upon cessation of employment, and (iii) a pro-rata portion of the Bonus, contingent on the Company’s achievement of any performance criteria relating to such Bonus, payable in a lump sum promptly following completion and filing of the Company’s year-end audit for the applicable year but in no event later than December 31 of the year following the applicable year (such payments shall be net of appropriate tax and other withholdings, and are referred to collectively as the “Change in Control Payments”).  A Change in Control will have no other effect on this Agreement, which will remain in full force and effect.

(i)Definition of Change in Control.  For purposes of this Agreement, the term “Change in Control” shall mean an event or events, in which:

(A)any “person” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “1934 Act”) (other than (1) the Company, (2) any subsidiary of the Company, (3) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or of any subsidiary of the Company or (4) any company owned, directly or indirectly, by the stockholders of the Company in substantially the 

same proportions as their ownership of stock of the Company), is or becomes the “beneficial owner” (as defined in Section 13(d) of the 1934 Act), together with all affiliates and Associates (as such terms are used in Rule 12b-2 of the General Rules and Regulations under the 1934 Act) of such person, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities;

(B)the consummation of a merger or consolidation of the Company with any other company, other than (1) a merger or consolidation which would result in the holders of voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, having at least 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (2) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) after which no “person” (with the method of determining “beneficial ownership” used in clause (A) of this definition) owns more than 50% of the combined voting power of the securities of the Company or the surviving entity of such merger or consolidation; or

(C)the Company consummates its liquidation or sale or disposition by the Company of all or substantially all of the Company’s assets.

(ii)Section 280G of the Code.  

(A)Notwithstanding anything to the contrary contained in this Agreement or any other agreement between Employee and the Company or any of its Affiliates, if any payment or benefit Employee would receive from the Company or any of its Affiliates, whether pursuant to this Agreement or otherwise, would constitute a “parachute payment” (a “Parachute Payment”) under Section 280G of the Code, then if reducing the amount of such payment or benefit, in whole or in part, would result, after taking into account all applicable federal, state and local employment taxes, income taxes and any excise tax that are, and that would otherwise have been, payable, in Employee’s receipt of a greater net after-tax amount than Employee would otherwise have received on a net-after tax basis had the payment or benefit been made in full, then such payment or benefit shall be reduced to the amount (the “Reduced Amount”) that results in Employee receiving the greatest net-after tax amount from such payment or benefit, notwithstanding that all or some portion of the payment or benefit may be subject to the excise tax.  If any payment or benefit is to be reduced to the Reduced Amount, any reduction therein shall occur in the following order: (x) cash payments shall be reduced first and in reverse chronological order such that the cash payment owed on the latest date following the occurrence of the event triggering such excise tax will be the first cash payment to be reduced; (y) accelerated vesting of stock awards shall be cancelled/reduced next and in the reverse order of the date of grant for such stock awards; and (z) employee benefits shall be reduced last and in reverse chronological order; provided that within any category of payments and benefits (that is, clause (x), (y) or (z) above), a reduction will occur first with respect to amounts that are not “deferred compensation” within the meaning of Section 409A of the Code prior to amounts that are “deferred compensation”.  As used herein, “net after-tax amount” shall mean the present value (as determined in accordance with Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of a Parachute Payment net of all taxes imposed on Employee with respect thereto under Sections 1 and 4999 of the Code and under applicable state and local laws (including, for clarity, Social Security, Medicare and other payroll or employment taxes), determined by applying the highest marginal rate under Section 1 of the Code and under state and local laws which applied to Employee’s taxable income for the immediately preceding taxable year, or such other rate(s) as the Accounting Firm (as hereinafter defined) determined to be likely to apply to Employee in the relevant tax year(s).

(B)The underlying economic determinations pursuant to this Section 6(e)(ii) shall be made by a nationally recognized accounting firm as shall be designated by the Company (the “Accounting Firm”).  All determinations made by the Accounting Firm under this Section 6(e)(ii) shall be made at least fifteen (15) days prior to the date of the first to be made of any of the Parachute Payments (the “Accounting Determination”), and Employee shall be delivered a copy of the Accounting Determination (including interim drafts, if any) at the same time as it is delivered to the Company.  The Accounting Determination shall expressly set out the assumptions used in the preparation thereof (including the value attributable to any noncompetition or similar restrictions to which 

Employee is subject and the cost of any non-cash benefits).  All fees and expenses of the Accounting Firm shall be borne solely by the Company.  

(C)Notwithstanding any other provision of this Section 6(e)(ii), the Company shall have no liability to Employee if the factual assumptions used in the Accounting Determination ultimately differ from the actual facts that occur, or if there is an Overpayment (as hereinafter defined) that cannot be corrected pursuant to Section 6(e)(ii)(D), or in the event of a successful challenge by the federal tax authorities to all or any part of the Accounting Determination.  In such event, the Company makes no representation that the foregoing reduction will not result in the incurrence by Employee of the excise tax under Section 4999 of the Code; provided, however, that in such event the Company shall pay to Employee any amount that was previously not paid when reducing the Parachute Payments to the Reduced Amount.

(D)As a result of the uncertainty in the application of Section 4999 of the Code at the time of the Accounting Determination, it is possible that amounts will have been paid or distributed by the Company to or for the benefit of Employee which should not have been so paid or distributed (“Overpayment”) or that additional amounts which will have not been paid or distributed by the Company to or for the benefit of Employee could have been so paid or distributed (“Underpayment”), in each case, consistent with the calculation of the Reduced Amount hereunder.  In the event that the Company or Employee shall determine that an Overpayment or an Underpayment has occurred, the Company and Employee shall cooperate reasonably and in good faith to correct such Overpayment or Underpayment.

(f)Recognition.  Employee recognizes and accepts that the Company shall not, in any case, be responsible for any additional amount, severance pay, termination pay, severance obligation or other payments or damages whatsoever arising from the termination of Employee’s employment above and beyond those specifically provided for herein.

7.Restrictive Covenants.
(a)Business of the Company.  The term “Business of the Company”, as used in this Section 7, shall mean the provision by the Company or its Affiliates of social services, counseling, case management and network management services to governmental agencies and provider networks, educational tutoring, job readiness, apprenticeship and placement, private parole, probation and offender rehabilitation services, non-emergency medical transportation, health risk assessments, and any other business in which the Company or its Affiliates have been or have taken active steps toward engaging in during Employee’s employment with the Company or its Affiliates.

(b)Non-Competition.  During Employee’s employment with the Company or any of its Affiliates and during the one (1) year period following the effectiveness of the termination of Employee’s employment by the Company or Employee for any reason, Employee will not, in any capacity (including, but not limited to, owner, partner, member shareholder, consultant, advisor, financier, agent, employee, officer, director, manager or otherwise), directly or indirectly, for Employee’s own account or for the benefit of any natural person, corporation, partnership, trust, estate, joint venture, sole proprietorship, association, cooperative or other entity (any of the foregoing, a “Person”), establish, engage in, finance, advise, work for, or be connected with, except as an employee of the Company, any business in competition with the Business of the Company if such business competes with the Business of the Company or any Affiliate in any country, State, county, or municipality where the Company or its Affiliates conduct business, are preparing to conduct business or have conducted business during Employee’s employment with the Company or any of its Affiliates (a “Competitive Business”).  Notwithstanding the foregoing, (A) nothing in this Section 7(b) shall preclude Employee from serving in any capacity (i.e., whether as an employee, partner, principal, member, investor, consultant or otherwise) to or in respect of a business or entity (including, without limitation, an investment trust or investment partnership) that provides investment services or is otherwise engaged in the business of investing capital for third parties, or any manager or affiliate of any of the foregoing (any such entity, manager or affiliate hereafter called an “Investment Firm”) or that provides legal or accounting services, so long as Employee does not have personal, direct and material responsibilities for the day to day operations of any Competitive Business in which such Investment Firm has made or directed an investment, and (B) this Section 7(b) shall not apply, and therefore Employee shall not be subject to any covenant in this Section 7(b), in the event that, within one (1) year following the effectiveness of a 

Change in Control (I) Employee is terminated by the Company during or following the Term without Cause or employee resigns Employee’s employment for Good Reason or (II) the Term has expired and Employee’s employment with the Company is terminated due to resignation by Employee at a time that the Company has no basis to terminate Employee with Cause.

(c)Non-Solicitation/Non-Piracy.  During Employee’s employment with the Company or any of its Affiliates and for a period of two (2) years thereafter, Employee will not, directly or indirectly, for Employee’s own account or for the benefit of any Person or entity:

(i)solicit, service, supply or sell to, contact, or aid in the solicitation, servicing, supplying or selling to any Person or entity which is or was a customer, prospective customer, client, prospective client, contractor, subcontractor or supplier of the Company or its Affiliates within three (3) years prior to Employee’s termination of employment (“Company Customers/Clients”), for the purpose of (A) selling services or goods in competition with the Business of the Company; (B) inducing Company Customers/Clients to cancel, transfer or cease doing business in whole or in part with the Company or any of its Affiliates or (C) inducing Company Customers/Clients to do business with any Person in competition with the Business of the Company; or

(ii)solicit, aid in solicitation of, induce, contact for the purpose of, encourage or in any way cause any employee of the Company or any of its Affiliates to leave the employ of the Company or its Affiliates, or otherwise interfere with such employee’s relationship with the Company or any of its Affiliates.  Nothing in this Section 7(c)(ii) shall preclude the Employee from making good faith generalized solicitations for employees through advertisements or search firms not specifically directed at such persons.

(d)Non-Disclosure.  Other than in furtherance of the business of the Company, in the ordinary course in Employee’s capacity as an employee hereunder, Employee will not, at any time, except with the express prior written consent of the Board, directly or indirectly, disclose, communicate or divulge to any Person, or use for the benefit of any Person, any secret, confidential or proprietary knowledge or information relating to the Company or any of its Affiliates including, but not limited to, customer and client lists, customer and client accounts and information, prospective client, customer, contractor or subcontractor lists and information, services, techniques, methods of operation, pricing, costs, sales, sales strategies or methods, marketing, marketing strategies or methods, products, product development, research, know-how, policies, financial information, financial condition, business strategies or plans or other information of the Company or its Affiliates which is not generally available to the public.  Upon the expiration or termination of Employee’s employment with the Company or any Affiliate, Employee shall immediately deliver to the Company all memoranda, books, papers, letters and other data (whether in written form or computer stored), and all copies of same, which were made by Employee or came into Employee’s possession or under Employee’s control at any time prior to the expiration or termination of Employee’s employment, and which in any way relate to the business, assets or properties of the Company or any of its Affiliates as conducted or as planned to be conducted by the Company or its Affiliates; provided that Employee can keep such documents and information as are pertinent to the terms of Employee’s employment and the compensation payable to Employee in respect thereof subject to other restrictions and provisions set forth in this Section 7.  Employee acknowledges that Employee shall be immunized against criminal and civil liability under federal or state trade secret laws if Employee discloses a trade secret for the purpose of reporting a suspected violation of law and that immunity is available if Employee discloses a trade secret in either of following two circumstances: (i) Employee discloses the trade secret (A) in confidence, (B) directly or indirectly to a government official (federal, state or local) or to a lawyer, (C) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a legal proceeding, Employee discloses the trade secret in the complaint or other documents filed in the case, so long as the document is filed under seal.  Further, notwithstanding the foregoing, this Agreement is not intended to, and shall be interpreted in a manner that does not, limit or restrict Employee from exercising any legally protected whistleblower right (including pursuant to Rule 21F under the Securities Exchange Act of 1934).

(e)Intellectual Property.  Employee will promptly communicate to the Company, in writing when requested, all software, designs, techniques, concepts, methods and ideas, other technical information, marketing strategies and other ideas and creations pertaining to the Business of the Company which are conceived of or developed 

by Employee alone or with others, at any time (during or after business hours) while Employee is employed by the Company or any of its Affiliates.  Employee acknowledges that all of those ideas and creations are inventions and works for hire, and will be the Company’s or its Affiliates’ exclusive property.  Employee will sign any documents which the Company deems necessary to confirm its ownership of those ideas and creations and Employee will cooperate with the Company to facilitate the ability of the Company to own or exploit all of those ideas and creations.

(f)Non-Disparagement.  Employee will not at any time publish or communicate disparaging or derogatory statements or opinions about the Company or its Affiliates, including but not limited to, disparaging or derogatory statements or opinions about the Company’s or its Affiliates’ management, products or services to any third party.  It shall not be a breach of this Section 7(f) for Employee to testify truthfully in any judicial or administrative proceeding or to make statements or allegations in legal filings, including, without limitation, any such filings made by Employee to enforce Employee’s rights against the Company or any of its affiliates, that are based on Employee’s reasonable belief and are not made in bad faith.

(g)Enforcement.  Employee acknowledges that the covenants and agreements of this Section 7 (the “Covenants”) herein are of a special and unique character, which gives them peculiar value, the loss of which cannot be reasonably or adequately compensated for in an action at law.  Employee further acknowledges that any breach or threat of breach by Employee of any of the Covenants will result in irreparable injury to the Company for which money damages could not be adequate to compensate the Company.  Therefore, in the event of any such breach or threatened breach, the Company shall be entitled, in addition to all other rights and remedies which the Company may have at law or in equity, to have an injunction issued by any competent court enjoining and restraining Employee and/or all other Persons involved therein from committing a breach or continuing such breach.  The remedies granted to the Company in this Agreement are cumulative and are in addition to remedies otherwise available to the Company at law or in equity.  The Covenants contained in this Section 7 are independent of any other provision of this Agreement, and the existence of any claim or cause of action which Employee or any such other Person may have against the Company shall not constitute a defense or bar to the enforcement of any of the Covenants.  If the Company is obliged to resort to litigation to enforce any of the Covenants which has a fixed term, then such term shall be extended for a period of time equal to the period during which a breach of such Covenant was occurring, beginning on the date of a final court order (without further right of appeal) holding that such a breach occurred, or, if later, the last day of the original fixed term of such Covenant.

(h)Acknowledgements.  Employee expressly acknowledges that the Covenants are a material part of the consideration bargained for by the Company and, without the agreement of Employee to be bound by the Covenants, the Company would not have agreed to enter into this Agreement.  Employee further acknowledges and agrees that the Business of the Company and its services are highly competitive, and that the Covenants contained in this Section 7 are reasonable and necessary to protect the Company’s legitimate business interests.  In addition, Employee acknowledges that in the event Employee’s employment with the Company terminates, Employee will still be able to earn a livelihood without violating this Agreement, and that the Covenants contained in this Section 7 are material conditions to Employee’s employment and continued employment with the Company.

(i)Scope.  If any portion of any Covenant or its application is construed to be invalid, illegal or unenforceable, then the remaining portions and their application shall not be affected thereby, and shall be enforceable without regard thereto.  If any of the Covenants is determined to be unenforceable because of its scope, duration, geographical area or similar factor, then the court or other trier of fact making such determination shall modify, reduce or limit such scope, duration, area or other factor, and enforce such Covenant to the extent it believes such factor(s) to be lawful and appropriate.  For purposes of this Section 7, the term “Affiliates” excludes all entities or persons other than those controlled or partially owned by the Company.

(j)Costs; Expenses in the Event of Breach.  In the event that Employee breaches or attempts to breach the Covenants, the Company shall be entitled to reimbursement from Employee for all costs and expenses associated with any successful action to enforce any of the Covenants, including but not limited to reasonable attorneys’ fees and costs of litigation.  Should the Company file an action against Employee relating to a breach of the Covenants, and a court of competent jurisdiction determines that Employee did not breach any of the Covenants, Employee shall 

be entitled to reimbursement from the Company of all costs and expenses associated with defending against such action asserting a breach, including reasonable attorneys’ fees and costs.

8.Section 409A of the Code.  
(a)Amounts payable under this Agreement are intended either to be exempt from the rules of Section 409A of the Code or to satisfy those rules and shall be construed accordingly.  The Company shall not be liable to Employee with respect to any adverse tax consequences arising under Section 409A or other provision of the Code by reason of the operation of this Agreement or any benefit provided to Employee under any employee benefit plan sponsored or maintained by the Company, in either case, in accordance with its terms.  For purposes of Section 409A, each payment under this Agreement will be deemed to be a separate payment as permitted under Treasury Regulation Section 1.409A-2(b)(2)(iii).

(b)If any provision of this Agreement contravenes any regulations or Treasury guidance promulgated under Code Section 409A or could cause an amount payable hereunder to be subject to the interest and penalties under Code Section 409A, such provision of this Agreement shall be deemed automatically modified to maintain, to the maximum extent practicable, the original intent of the applicable provision without violating the provisions of Code Section 409A.  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “Separation from Service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean Separation from Service.

(c)Notwithstanding any provisions of this Agreement to the contrary, if Employee is a “specified employee” (as such term is defined for purposes of Code Section 409A), no payment of amounts not exempt from Code Section 409A shall be made under Section 6(c) or 6(e) hereof prior to the six (6) month anniversary of Employee’s separation of service to the extent such six (6) month delay in payment is required to comply with Code Section 409A.  To the extent that this Section 8(c) applies to any payment under Section 6(c) hereof (“Severance Payment”), and the actions described in this sentence do not cause adverse tax consequences to be imposed under the Code, the Company shall, as soon as practicable following Employee’s termination of employment, and after Employee executes and does not revoke the General Release, deposit an amount equal to the gross amount of such Severance Payment into an irrevocable Rabbi Trust in the form prescribed by Internal Revenue Service Revenue Procedure 92-64.  Such Rabbi Trust shall be established and maintained by the Company, at its own expense, pending the distribution of such amount to Employee under this Agreement.  The Trustee shall be a financial institution selected by the Company and the Trustee shall invest all amounts deposited therein with the purpose of preserving the Trust principal.  All principal and income from the Rabbi Trust shall be paid to Employee on the first day following the six-month anniversary of Employee’s Separation from Service.  The Trustee shall withhold or cause to be withheld all withholding taxes as may be required by applicable law.  Neither the Employee nor any of Employee’s creditors or beneficiaries shall have the right to subject any deferred compensation (within the meaning of Code Section 409A) payable under this Agreement to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment.  Except as permitted under Section 409A, any deferred compensation (within the meaning of Section 409A) payable to the Employee or for Employee’s benefit under this Agreement may not be reduced by, or offset against, any amount owing by the Employee to the Company or any of its Affiliates.

9.Miscellaneous.

(a)Indulgences, Etc.  Neither the failure, nor any delay, on the part of either party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same, or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.  No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

(b)Controlling Law; Consent to Arbitration; Service of Process.

(i)This Agreement and all questions relating to its validity, interpretation, performance and enforcement (including, without limitation, provisions concerning limitations of actions), shall be governed by and construed in accordance with the laws of the State of New York (notwithstanding any conflict of laws doctrines of such state or other jurisdiction to the contrary), and without the aid of any canon, custom or rule of law requiring construction against the draftsman.

(ii)Except to the extent provided for in Section 7 above (relating to injunctive relief and other equitable remedies), the Company and Employee agree that any claim, dispute or controversy arising under or in connection with this Agreement, or otherwise in connection with Employee’s employment by the Company or termination of Employee’s employment (including, without limitation, any such claim, dispute or controversy arising under any federal, state or local statute, regulation or ordinance or any of the Company’s employee benefit plans, policies or programs) shall be resolved solely and exclusively by binding, confidential, arbitration.  The arbitration shall be held in New York, New York (or at such other location as shall be mutually agreed by the parties).  The arbitration shall be conducted in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (the “AAA”) in effect at the time of the arbitration, except that the arbitrator shall be selected by alternatively striking from a list of five arbitrators supplied by the AAA.  All fees and expenses of the arbitration, including a transcript if either requests, shall be borne equally by the parties, however, all costs for the services of the arbitrator shall be borne solely by the Company.

(iii)Each party is responsible for the fees and expenses of its own attorneys, experts, witnesses, and preparation and presentation of proofs and post-hearing briefs (unless the party prevails on a claim for which attorney’s fees are recoverable under law).  In rendering a decision, the arbitrator shall apply all legal principles and standards that would govern if the dispute were being heard in court.  This includes the availability of all remedies that the parties could obtain in court.  In addition, all statutes of limitation and defenses that would be applicable in court, will apply to the arbitration proceeding.  The decision of the arbitrator shall be set forth in writing, and be binding and conclusive on all parties.  Any action to enforce or vacate the arbitrator’s award shall be governed by the Federal Arbitration Act, if applicable, and otherwise by applicable state law.  If either the Company or Employee improperly pursues any claim, dispute or controversy against the other in a proceeding other than the arbitration provided for herein, the responding party shall be entitled to dismissal or injunctive relief regarding such action and recovery of all costs, losses and attorney’s fees related to such action.

(iv)Each of the parties hereto hereby consents to process being served in any suit, action or proceeding of any nature, by the mailing of a copy thereof by registered or certified first-class mail, postage prepaid, return receipt requested, to them at their respective addresses set forth in Section 9(c) hereof.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, all claims of error by reason of any such service pursuant to the terms hereof (but does not waive any right to assert lack of subject matter jurisdiction) and agrees that such service shall (A) be deemed in every respect effective service of process in any such suit, action or proceeding and (B) to the fullest extent permitted by applicable law, be taken and held to be valid personal service.

(v)Nothing in this Section 9(b) shall affect the right of any party hereto to serve process in any manner permitted by law or affect the right of any party to bring proceedings against any other party in the courts of any jurisdiction or jurisdictions.

(c)Notices.  All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made and received only when delivered (personally, by courier service such as Federal Express, or by other messenger) or when deposited in the United States mails, registered or certified mail, postage prepaid, return receipt requested, addressed as set forth below.

(i)If to Employee:
[        ]

If to the Company:
The Providence Service Corporation
700 Canal Street, Third Floor
Stamford, Connecticut 06902
Attention:  Chief Executive Officer

In addition, notice by mail shall be by air mail if posted outside of the continental United States.
Any party may alter the addresses to which communications or copies are to be sent by giving notice of such change of address in conformity with the provisions of this Section 9(c) for the giving of notice.
(d)Assignment of Agreement.  The rights and obligations of both parties under this Agreement shall inure to the benefit of and shall be binding upon their heirs, successors and assigns.  The Company may assign or otherwise transfer its rights under this Agreement, including but not limited to all Covenants contained in Section 7 above, to any successor or affiliated business or corporation whether by sale of stock, merger, consolidation, sale of assets or otherwise.  This Agreement may not, however, be assigned by Employee to a third party, nor may Employee delegate Employee’s duties under this Agreement.

(e)Execution in Counterparts.  This Agreement may be executed in any number of counterparts, including by a counterpart in electronic format, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument.  This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

(f)Provisions Separable.  The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

(g)Entire Agreement.  This Agreement contains the entire understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings between the parties, inducements or conditions, express or implied, oral or written, except as herein contained.  The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.  This Agreement may not be modified or amended other than by an agreement in writing.

(h)Section Headings.  The section headings in this Agreement are for convenience only; they form no part of this Agreement and shall not affect its interpretation.

(i)Gender, Etc.  Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context indicates is appropriate.

(j)Independent Review and Consultation.  Employee is hereby advised to consult with an attorney before signing this Agreement.  Employee acknowledges that it is Employee’s decision whether or not to do so.

(k)Number of Days.  In computing the number of days for purposes of this Agreement, all days shall be counted, including Saturdays, Sundays and holidays; provided, however, that if the final day of any time period falls on a Saturday, Sunday or holiday on which entities which are provincially regulated are or may elect to be closed, then the final day shall be deemed to be the next day which is not a Saturday, Sunday or such holiday.

[Signature Page Follows]

        

IN WITNESS WHEREOF, the parties have executed and delivered this Agreement, intending to be legally bound hereby, as of the date first above written.
THE PROVIDENCE SERVICE CORPORATION

By:    /s/ Richard A. Kerley    
Name:    Richard A. Kerley
Title:     Director    

DAVID SHACKELTON

/s/ David Shackelton

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