Document:

Service Agreement of Adrian Hennah

 Exhibit 4 (c) (ii) 
  
 27 January 2006 
  
 Private & Confidential 
  
 Mr. Adrian Hennah, 
 Speen House, 
 Bath Road, Newbury, 
 Berkshire RG14 1RH 
  
 Dear Adrian, 
  
 Please find enclosed an Employment Agreement (two copies), containing our offer of employment. The role is a Smith & Nephew plc Board level position but the employing
company is Smith & Nephew UK Limited. 
  
 In addition to the terms and
conditions set out in the attached, this letter confirms two additional special remuneration terms as previously discussed: 
  

	1.	An agreement that Smith & Nephew will underwrite any shortfall in relation to the annual bonus payable (to a maximum of £300,000) by your present employer with respect to
the current fiscal year ending 31 March 2006. Our understanding is that you will qualify for this bonus which should be endorsed by the Remuneration Committee of your current employer. We would expect your assurance that all reasonable steps will be
taken to ensure that this bonus is paid by your current employer in line with the rules of the scheme. 

  

	2.	An agreement to make a special restricted stock award to the value of £250,000 (as of the date of your joining Smith & Nephew) which will vest on the earlier of either the
third anniversary of your employment with the Company or your termination date if we terminate your employment under clause 23.1. There are no performance conditions attached to this special restricted stock award which we will justify under
Sections 9.4.2 and 9.4.3 of the London Stock Exchange Listing Rules. We will therefore need to report this at the appropriate time to shareholders in the annual report. 

  
 In addition, I can confirm that provided your employment commences by the half-year you will be granted a full award for 2006 under the 2004
Senior Executive Share Incentive Plan. If for some reason your employment starts later then a pro-rata award would be made. 
  
 I can also confirm that we will be recommending to the Remuneration Committee that in the event that an executive is terminated by the Company (except for cause) the
pro-rating of awards under the 2004 Senior Executive Share Incentive Plan should include any notice period whether or not the notice period has been served in full. 
  
 We look forward to receiving, as soon as possible, one copy of the Employment Agreement duly signed, dated and witnessed, indicating your
agreement to our offer. Please feel free to contact Paul Williams if you wish to discuss the Agreement. 
  
 I understand that you have discussed with Paul the timing of announcements and communications. We will let you have sight of the Smith & Nephew draft early next week. 
  
 Yours sincerely, 
  
 Sir Christopher O’Donnell 
 Chief Executive 

  
 Dated 1 February 2006

  
 EMPLOYMENT AGREEMENT 
  
 BETWEEN 
  
 (1)    SMITH & NEPHEW UK LIMITED 
  
 And 
  
 (2)    ADRIAN HENNAH 

 DATE OF EMPLOYMENT AGREEMENT 1 FEBRUARY 2006 
  
 PARTIES 
  

	(1)	SMITH & NEPHEW UK LIMITED whose registered office is at 15 Adam Street, London WC2N 6LA (“We”) 

  

	(2)	ADRIAN HENNAH of Speen House, Bath Road, Newbury, Berkshire RG14 1RH (“You”) 

  

	A	This Agreement sets out the terms and conditions that apply to your employment with us. We also have a staff handbook (enclosed) that contains provisions relevant to your
employment. If there is any conflict between that handbook and this Agreement, however, this Agreement prevails. 

  

	B	The final section of the Agreement sets out definitions and general provisions that apply throughout the Agreement. 

  

	C	Our offer of employment under this Agreement is conditional on your not being subject to any restrictive covenants or other legal obligations which would prevent you from carrying
out your job for us. 

  
 If this condition is not
satisfied then we have the right to terminate your employment without notice within a reasonable period of our discovering this. 
  

	D	You confirm that by entering into this Agreement and working for us that you are not in breach of any obligation to any third party or of any court order. 

 

	E	You also confirm that you have disclosed to us in writing details of all previous criminal convictions (other than those that are spent). 

  

 INDEX 
  

					
	Section

	  	 Description

	  	Page

	1	  	 Your Job
	  	 
	2	  	 Your Remuneration
	  	 
	3	  	 Protecting the Company Whilst You Are Employed
	  	 
	4	  	 Discipline and Grievance.
	  	 
	5	  	 Sickness and Absence from Work
	  	 
	6	  	 Termination of Employment
	  	 
	7	  	 Protecting the Company After Your Employment Has Ended
	  	 
	8	  	 Miscellaneous and General Provisions
	  	 

  

 SECTION ONE: YOUR JOB 
  

	1.	THE APPOINTMENT 

  

	 1.1
	 You are employed by us as Finance Director of Smith & Nephew UK Limited and will be appointed as Finance
Director of Smith & Nephew plc from 1st June 2006 or such other date before or after that date being
the earliest date on which you are able to secure a release from your existing employment contract, which you shall use reasonable endeavours to achieve. For statutory purposes, you have been continuously employed by us since the same date.

  

	1.2	We can make reasonable changes to your job title, your duties and responsibilities provided always that such changes do not diminish your status and responsibilities or
substantially alter the capacity and role in which you are employed. 

  

	1.3	You must comply with all of our rules, regulations, policies and procedures. 

  

	1.4	You must carry out all the assigned duties and functions consistent with your role; exercise all the powers and comply with all our instructions in connection with the business that
we reasonably require. You must use your reasonable endeavours to promote our interests. 

  

	1.5	If we ask you for any information or explanations about your employment or our business or affairs, you must give it to us as soon as reasonably practicable (in writing if
required). 

  

	1.6	You must comply with any restrictions that we may properly impose on you or other directors. In particular, you must not without our written consent: 

  

	 	(a)	Incur any capital expenditure or liability on our behalf in excess of the authorisation limits that have been set for you; and 

  

	 	(b)	Enter into any contract or obligation on our behalf that is outside the normal course of our business or your duties or is of an unusual, onerous or long-term nature.

  

	1.7	If we ask, you will accept any directorship, trusteeship or other position of responsibility in the Group that we may reasonably require which is generally consistent with your
role. 

  

	2.	HOURS OF WORK 

  

	2.1	Our normal office hours are currently 9 am to 5 pm Monday to Friday but you are expected to work whatever hours we reasonably require of you. 

  

	2.2	Unless you are off sick or on holiday, you must devote as much of your time, attention and skill to our business as we reasonably require. 

  

	2.3	We acknowledge that (as a managing executive) the duration of your working time is not measured or predetermined or you can determine it yourself. Nevertheless, if the Working Time
Regulations 1998 do govern your working hours, you agree that if we need you to do so that you will work in excess of an average 48 hour working week and that you therefore agree to opt-out of the 48 hour average limit set out in those Regulations.
If the law in future permits, you agree that your average working hours should be measured against whatever reference period we may reasonably decide should apply. 

  

	3.	PLACE OF WORK 

  

	3.1	Your normal place of work is 15 Adam Street, London WC2N 6LA. Your normal place of work will not be moved from 15 Adam Street or another Greater London location without your prior
written agreement which shall not be unreasonably withheld if the new location is within reasonable commuting distance of your home at the time. However, we may require you to work elsewhere within the United Kingdom on a temporary basis; i.e. for a
period (or periods in aggregate) not exceeding two months in any calendar year. 

  

	3.2	You are required to travel in the UK, Europe or worldwide as part of your duties. 

  

	3.3	For the purposes of Part I of the Employment Rights Act 1996, it is not expected that you will be required to work outside the United Kingdom for more than one month at a time.

  

 SECTION TWO: ABOUT YOUR REMUNERATION 
  

	4.	SALARY 

  

	4.1	Your basic annual salary is £450,000. This accrues daily and is payable in equal monthly instalments in arrears on or before the last working day of each month.

  

	4.2	Your salary will be reviewed not less than annually on or about 1 April. The first review date for you will be 1 April 2007. We are not under any obligation to increase it at
each review but it shall not be reduced. 

  

	4.3	There is no additional remuneration for any directorship, trusteeship or other position of responsibility that you may hold in the Group. 

  

	5.	SENIOR EXECUTIVE BONUS SCHEME 

  

	5.1	You will be eligible to participate in the Group Executive Bonus Scheme. Full details will be sent to you under separate cover. The Scheme is performance-based and for target
achievement the current bonus payment is 40% of basic salary; for out performance the current maximum bonus payment is 100% of basic salary. Your annual bonus under this Scheme shall not be less than 40% of basic salary in respect of 2006, pro rated
to reflect the proportion of that year during which you are employed. 

  

	6.	EXECUTIVE STOCK INCENTIVE PLANS 

  

	6.1	You will be eligible to participate in the Executive 2004 Stock Incentive Plans at the discretion of the board of Smith & Nephew plc. This comprises a Performance Share
Plan, a Share Option Plan and a Co-Investment Plan. The last of these elements (the Co-investment Plan) provides the opportunity to set aside a portion of annual bonus to earn share matching rights based on the achievement of performance targets.
Full details are included in the attached communication document dated May 2004. 

  

	7.	EMPLOYEE SHARE OPTION SCHEME 

  

	7.1	Following completion of 3 months service, you will be eligible to join the savings related Employee Share Option Scheme. Further details will be sent to you under separate cover.

  

	8.	COMPANY CAR 

  

	8.1	You will be provided with benefits in accordance with the Smith & Nephew UK Car Policy. Details of approved drivers and insurance cover are as follows:

  

	 	(a)	Approved drivers: Company cars may be driven by the designated company car driver, his / her spouse, children over 21, any other authorised nominated driver, and any
other Smith & Nephew employee who is a company car driver or is on the list of Approved Drivers. Nominated drivers must hold a valid full UK driving licence, and must have received prior company authorisation.

  
 The car holder’s children may only drive
company cars provided they are aged over 21 and have held a full driving licence for one year. They should at all times be accompanied by one parent with the exception of legitimate business use, e.g. dropping off at airports, medical emergencies.

  
 It is a requirement that any employees entitled to a company
car must sign a Driver Obligation Form prior to driving a company car. 
  
 Any variation to the above arrangements can only be authorised by the Chief Executive by written request. 
  
 In all schemes (including but not limited to the Car Policy) referred to in this Agreement where there are provisions for a spouse, we will use all
reasonable endeavours to procure that the definition of spouse shall include your co-habiting partner. 
  

	 	(b)	Insurance cover: Employees are responsible for taking care of their assigned vehicle and its contents. 

  
 The insurance policy arranged by the company covers all company car
drivers, their spouses, and other authorised nominated drivers and any children over 21, subject to the conditions above. All company cars are insured for comprehensive cover, including third party, fire and theft. A copy of the insurance
certificate will normally be issued every year. 
  
 The
insurance cover relates only to company cars, and not to any other personal vehicle, whether or not being used on company business. 

 Any personal loss will be covered only to a maximum of (under current policy) £100. Any claim
above this amount should be made through the employee’s home or personal insurance. 
  
 In the event of accidents, damage, theft or vandalism occurring that is due wholly or in part to the employee’s negligence, then the employee may be subject to company disciplinary procedures. 
  

	 	(c)	The current company car lease value for your position is £1,030 per month. Examples of cars currently at this level are: 

  
 Jaguar XJ type 
 BMW 730 series 
 Mercedes E350 series 
 Audi A8 
 Lexus R300 
  
 You can trade-up, and down (in which case you would receive the difference between the car lease value and the actual cost of the vehicle as cash less
Tax and National Insurance). 
  
 If you select the option of a
company car you will be reimbursed for the cost of business and private mileage (except that used for annual holidays) or receive a monthly petrol allowance of under current policy £100 less tax and national insurance. 
  

	 	(d)	Company car cash alternative: you will be eligible to choose cash payments as an alternative to a company car. The allowance is not pensionable, but is subject to tax and
national insurance. Each cash alternative “contract” will last for a minimum period of 12 months. 

  
 You are entitled to reimbursement of petrol costs for business and private mileage (unless incurred during any holiday period) as if you had opted for a
company car. This is paid at the prevailing standard reimbursement rate through payroll, less tax and national insurance. 
  

	9.	PENSIONS, LIFE ASSURANCE AND INCOME PROTECTION 

  

	9.1	Pensions, Life Assurance and Income Protection policy is subject to continuous review by the board of Smith & Nephew plc and the Remuneration Committee and may be amended
from time to time at their discretion. However, you shall be eligible for cover under any such schemes or policies from time to time in force for the benefit of directors and senior executives. 

  

	9.2	Normal retirement age is 62. 

  

	9.3	Pension Plan 

  
 In lieu of pension you will receive a cash supplement of 30% of basic salary which will be non-pensionable and non-bonusable. 
  

	9.4	Life Assurance 

  

	 	(a)	In addition to the company contribution to the Stakeholder Pension Plan, we will also provide you with life assurance cover under the Smith & Nephew Stakeholder Group Death
in Service Plan (the “Death in Service Plan”). The cover is provided through an insurance company (the “relevant insurer”). The benefit provided on death in service is (subject to the terms of the relevant insurer) 7 x base
salary, of which 4 x will be paid as a lump sum to your dependants and 3 x will be used to purchase a pension for your dependants. 

  

	 	(b)	You will be enrolled automatically as a member of the Death in Service Plan from the date of commencement of employment for the first 12 weeks of your employment.

  

	9.5	Income Protection 

  
 Subject to the provisions below, we will make provision for an Income Protection Plan provided by an insurance company (the “relevant insurer”)
offering an income protection benefit, whilst you are an employee, of 75% of base pay (including any State Invalidity Benefits) in the event that you are unable to work due to sickness or injury after an initial period of absence of 26 weeks.

  

	9.6	 Your participation in the Income Protection Plan is subject always to the rules of the relevant insurer’s scheme for the time being in force (details of which
are available from Human Resources) and to the approval of the relevant insurer. In the event that the relevant insurer declines to provide or continue to provide benefits, as the case may be, under the Income Protection Plan, we shall not be liable
to provide any benefit or compensation in lieu thereof. Further, we shall be entitled at any time (after giving you reasonable notice and reasonable assistance in implementing alternative arrangements) to terminate the Income Protection Plan or the
Death in Service Plan or your participation in it and/or to withdraw or 

	 	 
change the rules or benefits of the Income Protection Plan or the Death in Service Plan provided that such variation withdrawal or termination applies to all
our employees who are employed at a comparable level to you, in which case we shall not be liable to provide any benefit or compensation in lieu thereof. It is a condition of your participation and continuing participation that you agree to undergo
any medical examinations that might be required from time to time. 

  
 Further details regarding the Stakeholder Pension Plan, the Death in Service cover and the Income Protection Plan are attached. 
  

	10.	PRIVATE MEDICAL INSURANCE 

  

	10.1	Private health cover on London scale benefits is provided from the date of joining for yourself, and if applicable, your spouse and any of your unmarried children who are under age
21. Full details will be sent under separate cover. 

  

	11.	HOLIDAYS 

  

	11.1	Our holiday year runs from 1 January to 31 December. In addition to bank holidays, you are entitled to 25 days’ paid holiday. 

  

	11.2	Holidays accrue pro-rata in each holiday year. 

  

	11.3	Holidays must be taken at times agreed with us. Holidays may not be carried forward from one holiday year to the next without our approval. There is no pay in lieu of untaken
holiday at the end of the holiday year. 

  

	11.4	We may decide whether or not any holiday that you have taken forms part of your entitlement under the Working Time Regulations. Unless we decide otherwise, it is assumed that
holidays accruing under those Regulations are taken first. 

  

	11.5	It may be necessary to set aside a certain number of days each year to cover the closure of the office at the Christmas and New Year periods and you will be informed if this is the
case. 

  

	12.	EXPENSES 

  

	12.1	We will reimburse you for all business expenses that are properly and reasonably incurred and claimed by you in accordance with our expenses policy. Expense claims must be supported
by whatever receipts or vouchers we require. 

  

	12.2	If we make a company credit card available to you, you must: 

  

	 	(a)	Take good care of it and immediately report if it is lost or stolen; 

  

	 	(b)	Only use the card for our business and in accordance with any applicable policy; and 

  

	 	(c)	Surrender it immediately on our request. 

 SECTION THREE: PROTECTING THE COMPANY WHILST YOU ARE EMPLOYED 
  

	13	GENERAL DUTIES 

  

	13.1	At all times during your employment (including any period of suspension or while on garden leave) you are subject to a duty of goodwill, trust and confidence, exclusive service and
good faith towards us. Without limitation, these duties require that you must not: 

  

	 	(a)	compete with the Group; 

  

	 	(b)	make preparations (during hours when you are required to work) to compete with the Group after your employment has terminated; 

  

	 	(c)	solicit business from customers or potential customers of the Group; 

  

	 	(d)	encourage employees to leave employment with the Group against the Group’s wishes; and/or 

  

	 	(e)	copy information relating to the Group for a purpose other than for the benefit of the Group. 

  

	13.2	As a director, you must notify the Board, the board of Smith & Nephew plc and the board of any other Group company of which you are a member, immediately if you act (or
omit to act) in a way that may amount to a breach of your obligations to the Group or if you become aware of or suspect any wrongdoing on the part of Group staff or contractors or any acts (or omissions) of third parties which might reasonably be
expected to be harmful to the Group. 

  

	14.	OTHER INTERESTS 

  

	14.1	You must devote all of your working time to the Group. You must not undertake any activity or do anything that might reasonably be expected to affect the full and proper performance
of your duties unless we agree first. Without limitation, you must not undertake any other employment or hold any other office without our prior formal agreement (such agreement not to be unreasonably withheld). 

  

	14.2	You may invest in publicly traded competitors or suppliers, provided the investment is minimal in relation to your net worth, and is formally pre-authorised by the Chief Executive.
Ownership of a substantial amount of stock, however, in a publicly traded competitor or ownership of an interest in a privately held company that competes with Smith & Nephew is prohibited. 

  

	14.3	You confirm that you have informed us (and will continue to keep us informed) of any conflict that may exist between your (or your immediate family’s) interests and those of
the Group. 

  

	14.4	You are not entitled to receive any discount, rebate, commission or other benefit in respect of business carried out by the Group (whether carried out by you or not) and you must
immediately disclose to and account to us for any such benefit if you do receive it. 

  

	14.5	You must comply with our Code of Business Principles at all times. 

  

	15.	MARKET ABUSE 

  

	15.1	You acknowledge the legal and regulatory duties that arise in relation to Inside Information (without limitation) under the Financial Services and Markets Act 2000, the Market Abuse
Directive Instrument 2005 and the Market Abuse Directive (Disclosure Rules) Instrument 2005. You agree to use your best endeavours to assist us in complying with our obligations under that and any related legislation or codes, including without
limitation the Criminal Justice Act 1993 and the Takeover Code. 

  

	15.2	You acknowledge that misuse or improper circulation of Inside Information or other Market Abuse by you may constitute a criminal offence and may render you liable to (1) a
financial penalty imposed by the FSA on you or (2) to be censured by the FSA. 

  

	15.3	If you become aware of any information that leads you to suspect that an officer or employee of the Group has carried out or may be about to carry out Market Abuse then you must
immediately notify the Group Human Resources Director or Company Secretary of Smith & Nephew plc. The provisions of this clause are without prejudice to any other legal rights or duties that you may have arising out of such circumstances
including any rights under the Public Interest Disclosure Act 1998. 

  

	15.4	You must notify the Company Secretary of Smith & Nephew plc in writing of all transactions conducted by you (or on your behalf) in our shares or derivatives or any other
financial instruments relating to our shares within 4 business days of the date on which that transaction or transactions occurred. The notification must be given in the form set out in Schedule A to this Agreement. 

	15.5	On execution of this Agreement, you must inform any person who is a Connected Person to you that they are a “connected person” and that they are accordingly required to
notify us if transactions are conducted by them or on their behalf in our shares or derivatives or any other financial instruments relating to our shares within 4 business days of the date on which that transaction or transactions occurred. You must
confirm to us in writing within 7 days of execution of this Agreement that you have complied with your obligations under this clause. 

  

	15.6	If a person becomes a Connected Person to you after execution of this Agreement, you must notify them immediately of that status and of their obligations to notify us of
transactions as set out in clause 15.5 above. 

  

	15.7	You must use your best endeavours to procure that any of your Connected Persons notifies the Company Secretary of Smith & Nephew plc in writing of all transactions
conducted by that Connected Person (or on their behalf) in our shares or derivatives or any other financial instruments relating to our shares within 4 business days of the date on which the transaction or transactions occurred. The notification
must be given in the form set out in Schedule B to this Agreement. 

  

	16.	CONFIDENTIAL INFORMATION 

  

	16.1	During the course of your employment, you will be exposed to information that is secret, confidential or commercially sensitive and which (if disclosed or used for purposes other
than those of the Group) could cause significant harm to the Group. In this Agreement, that information is referred to as Confidential Information and includes without limitation: 

  

	 	(a)	research and development carried out by the Group (whether or not that research is complete and including the outcome of any clinical or field trials) and potential areas of
research and development identified by the Group; 

  

	 	(b)	details of any applications for regulatory approval or clearance for any products or services developed by the Group; 

  

	 	(c)	the Group’s intellectual property (except where this is not protected by patent or equivalent protection); 

  

	 	(d)	the Group’s manufacturing techniques and methods and ideas for manufacturing techniques and methods; 

  

	 	(e)	the Group’s marketing and sales strategies and plans; 

  

	 	(f)	potential acquisitions and disposals by the Group; 

  

	 	(g)	the Group’s financial and sales performance; 

  

	 	(h)	information relating to the Group’s employees and contractors including without limitation their perceived strengths and weaknesses, remuneration and contact details.

  

	16.2	You must not use, disclose or permit to be used or disclosed (other than in the performance of your duties or as required by law) any Confidential Information. This restriction
applies both during the course of your employment and following its termination except in relation to Confidential Information which has come into the public domain other than by virtue of a breach of duty by you. 

  

	16.3	You acknowledge that in the ordinary course of your employment, you will have access to Inside Information. You agree that all Inside Information is confidential and must not be
used, disclosed or permitted to be used or disclosed except as may be necessary for the proper performance of your duties to us and in accordance with the requirements of the Market Abuse Directive or the law. 

  

	16.4	The provisions of this Agreement are without prejudice to any duties and obligations of confidentiality to which you may be subject at common law or equity.

  

	16.5	You must not make or issue any press statement or give any interview to a journalist or publish or submit for publication any article or opinion relating directly or indirectly to
the Group without our prior agreement. 

  

	16.6	You must not at any time make any untrue or misleading statement in relation to the Group. 

  

	17.	INTELLECTUAL PROPERTY 

  

	17.1	Due to the nature of your duties and your particular responsibilities, you recognise that you have a special obligation to further the interests of the Group.

	17.2	You must disclose to us at once any idea or invention created in the manner prescribed by sections 39(1) and 39(2) of the Patents Act 1977. Any such inventions will then be dealt
with in accordance with the provisions expressed in that Act. 

  

	17.3	You acknowledge that all trade marks, registered designs, design rights, copyright, database rights and other intellectual property rights (together, where registrable with the
right to apply for registration of those rights, aside from those described in clause 17.2) will vest in and be our exclusive property or any of the Group Companies which we nominate if they come into existence during the normal course of your
employment or by using materials, tools or knowledge made available through your employment. This applies regardless of whether those rights are in existence now or come into existence at any time in the future. If required to do so (whether during
or after the termination of your employment), you must sign any document and do anything necessary to vest ownership in these rights in the Group as sole beneficial owner. Where ownership does not automatically vest by Act of Parliament, you must
immediately assign all your interests to the Group. You irrevocably waive all your rights pursuant to sections 77 to 83 inclusive of the Copyright Designs and Patents Act 1988. 

 SECTION FOUR: DISCIPLINE AND GRIEVANCE 
  

	18.	You must comply with our disciplinary rules. Failure to do so is a serious breach of this Agreement. A copy of our disciplinary rules may be obtained from the Group Human Resources
Director. 

  

	19.	The disciplinary procedure is referred to in the staff handbook. That procedure does not form part of this Agreement nor does it give rise to any contractual rights as between you
and the Group. If you are dissatisfied with any disciplinary decision taken against you, you may appeal to the Chairman of the board of Smith & Nephew plc within 5 working days. 

  

	20.	If you have any grievance relating to your employment, you should raise it in the first instance with the Chief Executive and, if you so elect or are so requested, with the Group
Human Resources Director in accordance with our grievance procedure. 

  

	21.	We have the right to suspend you with full pay and benefits at any time to allow us to conduct a disciplinary investigation or if your dismissal is being contemplated. Suspension
may be for such period as is reasonably necessary in the circumstances and shall not normally exceed 7 days. 

  
 SECTION FIVE: SICKNESS AND ABSENCE FROM WORK 
  

	22.	INCAPACITY 

  

	22.1.	If you are unable to attend work due to sickness or accident, you must inform the Chief Executive Officer of Smith & Nephew plc on the first morning of absence, or as soon
as is reasonably possible. 

  

	22.2.	If your absence is for a period of 1 working day or more you will need to provide a self-certification form, obtainable from the Human Resources Department. This will cover you for
a maximum of 7 calendar days, after which a doctor’s statement is required. 

  

	22.3.	If you are absent from work owing to illness or injury you will be entitled to salary during the period of absence in accordance with the following scale. All such payments will be
subject to deduction of Statutory Sick Pay or National Insurance Sickness Benefit receivable. 

  

			
	 Length of Continuous Service

	  	 Payment entitlement in any 12 month period

	 0 - 3 years
	  	 6 months full pay
 6 months half pay

	  
	 After 3 years
	  	 12 months full pay

  

	22.4.	Your sick pay entitlement is based on your service at the beginning of the sickness period. 

  

	22.5.	The table set out in 22.3 also indicates the maximum sick pay entitlement payable in respect of one period of continuous absence as determined by our standard Company policy. This
policy statement should be read in conjunction with Clauses 9.5 and 9.6 (Income Protection) which in your case may provide a higher level of benefit 

  

	22.6.	Your entitlement to salary under the Company’s sick pay scheme includes any benefit from the Income Protection Plan where appropriate. 

  

	22.7.	At our request you will agree to undergo a medical examination performed by a doctor appointed and paid for by us. You authorise the Board and the Board of Smith & Nephew
plc to have access to any reports produced as a result of that examination provided that you are also shown copies of the same. 

  

 SECTION SIX: TERMINATION OF EMPLOYMENT 
  

	23	NOTICE 

  

	23.1	We have to give you twelve months notice in writing to terminate your employment, such notice not to expire before the second anniversary of the employment.

  

	23.2	If you want to resign, you must give us six months notice in writing, such notice not to expire before the second anniversary of the employment. 

  

	23.3	We may terminate your employment immediately and without any entitlement to notice or compensation if: 

  

	 	(a)	you are guilty of gross misconduct or gross negligence; 

  

	 	(b)	without reasonable cause, you neglect, omit or refuse to perform all or any of your duties or obligations under this Agreement or you fail to any substantial or material extent to
observe and perform the provisions of this Agreement to our reasonable satisfaction provided always that where such matters are capable of remedy, we shall not terminate pursuant to this clause unless and until we have given you 28 days’
written notice of the relevant matter requiring you to remedy the same and you have failed to do so; or 

  

	 	(c)	you misconduct yourself whether during or outside the course of your duties under this Agreement in such a way that in our reasonable opinion our business, operation, interests or
reputation of that of the Group are or are likely to be, prejudicially affected provided always that where such misconduct is capable of remedy so as to avoid such prejudicial effect, we shall not terminate pursuant to this clause unless and until
we have given you 28 days’ written notice of the misconduct requiring you to remedy the same and you have failed to do so; or 

  

	 	(d)	you commit any criminal offence (including in particular any offence involving dishonesty or violence) other than an offence which does not in our reasonable opinion affect your
position under this Agreement; or 

  

	 	(e)	you commit an offence under any statutory enactment or regulation or any provision of this Agreement relating to insider dealing or market abuse (whether that enactment was passed
in the United Kingdom or United States of America or elsewhere); or 

  

	 	(f)	you become bankrupt or make or attempt to make any composition with your creditors; or 

  

	 	(g)	you become prohibited by law from being a director of a company or you cease to be a director of a Group Company without our consent or concurrence; or 

  

	 	(h)	you are guilty of any deliberate act of discrimination, harassment or victimisation on grounds of race, sex, disability, sexual orientation, religion/religious belief or age.

  

	24	GARDEN LEAVE 

  

	24.1	During any period of notice, and provided that we continue to pay your salary and provide the benefits to which are entitled under this Agreement until your employment terminates,
then we are entitled at our absolute discretion during the remaining period of your notice period (or any part of such period) to place you on garden leave provided always that you shall not be placed on garden leave for a period (or periods in
aggregate) exceeding six months. This means that we may require you: 

  

	 	(a)	not to carry out all or part of your duties or to exercise your powers or responsibilities under this Agreement or require you to carry out alternative duties;

  

	 	(b)	to resign immediately from any offices you may hold with the Group; 

  

	 	(c)	not to attend your place of work or any other Group premises; 

  

	 	(d)	not to have contact (including socially) with any suppliers or customers of the Group or with employees (other than socially) except as authorised by us; 

 

	 	(e)	to return to us all documents, computer disks and other property (including summaries, extracts or copies) belonging to the Group or to its or their customers;

  

	 	(f)	to work from your home and/or to carry out exceptional duties or special projects outside the normal scope of your duties and responsibilities provided always that such special
projects are appropriate to your status, skills and experience; and/or 

  

	 	(g)	to take or not to take all or part of any outstanding holiday during your notice period. 

	25	CORPORATE GOVERNANCE AND PHASED PAYMENTS 

  

	25.1	Following a decision to terminate your employment (except in the circumstances defined under 23.3) the Remuneration Committee may use its discretion to determine not to
require you either to work out your notice period in full (as provided for in clause 23.1 above) nor to place you on garden leave (as provided for in clause 24 above). In such circumstances the Remuneration Committee may determine to pay a
sum equivalent to all of the salary and benefits (including bonus) you would have received if we had required you to work during your notice period. In deciding whether to exercise that discretion the Remuneration Committee will take into account
all relevant circumstances including the Group’s policy not to “reward for failure”, the appropriateness of your obligation to mitigate for loss, and other relevant “corporate governance” guidelines.

  

	26	OTHER TERMINATION PROVISIONS 

  

	26.1	Nothing in this Agreement shall prevent us from terminating your employment on grounds of ill-health if you are unable through health reasons (in circumstances of at least 26
week’s absence) to perform your duties even though at the time your employment terminates you have not exhausted your full sick pay entitlement or the consequence of the termination would be to end your entitlement to any further payments under
the Income Protection Plan. 

  

	26.2	On termination of your employment, your entitlement to accrued holiday pay will be calculated pro-rata. If you have untaken holiday due under the Working Time Regulations on the
date your employment terminates, you will be entitled to pay in lieu of that untaken holiday (save that if you are dismissed for gross misconduct or gross negligence then that pay in lieu will be calculated at the rate of £1 per day).

  

	26.3	If your employment terminates, you agree that you will immediately (at our expense) transfer all shares held by you as a result of our asking you to hold them on our behalf, either
in trust or as a nominee, to whatever persons we direct. 

  

	26.4	On termination of your employment (or earlier if requested), you will immediately return to us all Group property in your possession or control (without keeping any copies). This
obligation extends to any copies, drafts, notes, extracts or summaries (however stored or made) of all documents and software that relate to the Group’s business. If you have stored or copied any of the Group’s data or information onto a
computer, personal organiser or other electronic storage device which does not belong to the Group then you must immediately irretrievably delete that data or information and must allow us to have access to that device to verify that the data or
information has been deleted. Provided always that you shall be entitled to retain copies of Board Minutes (and documents referred to therein) relating to any period during which you are a director of the Company. 

  

	26.5	You will immediately on termination of your employment or at any other time on request of the Board, resign immediately without claim for compensation as a director of any Group
Company or from any trusteeship, office or appointment held by you on behalf of the Group provided that you shall only be required to resign as a director of Smith & Nephew Plc on or immediately before the termination of your employment.

  

	26.6	We acknowledge that if Smith & Nephew plc were to be de-listed following a Change of Control and you were not invited to become a director of the new parent company this
would constitute a substantial diminution in status entitling you to treat yourself as constructively dismissed. 

  

 SECTION SEVEN: PROTECTING THE COMPANY AFTER YOUR EMPLOYMENT HAS ENDED 
  

	27	CONFIDENTIALITY 

  

	27.1	The confidentiality provisions set out in clause 16 continue to apply to protect Confidential Information following the termination of your employment. 

  

	28	RESTRICTIVE COVENANTS 

  

	28.1	At any time in the period set out in Column A below, you must not carry out the activities set out in Column B. The Column B activities, however, are subject to the provisos and
limitations set out in Column C. 

  

					
	 A
 (Restricted
Period)

	  	 B (Restricted Activity)

	  	 C (Provisos and Limitations)

	6 months from the date your employment with us ends	  	Accepting employment with or engaging, assisting or being interested in any undertaking which carries out research, development or manufacturing of products or services in the fields of
orthopaedics, endoscopy and/or wound management and treatment.	  	This restriction only applies where: (a) you were materially concerned with research, development or manufacturing of that type during the last 12 months of your employment; and (b) that
undertaking competes with the Group.
			
	6 months from the date your employment with us ends	  	Accepting employment with or engaging, assisting or being interested in any undertaking which carries out marketing and/or selling of products or services in the fields of orthopaedics,
endoscopy and/or wound management and treatment.	  	This restriction only applies where: (a) you were materially concerned with marketing and selling of that type during the last 12 months of your employment; and (b) that undertaking competes
with the Group; and (c) that marketing or selling takes place in a Prohibited Territory.
			
	6 months from the date your employment with us ends	  	Soliciting orders from or being concerned with the supply of orders to any person who is a customer of the Group.	  	This restriction only applies where: (a) the orders would be supplied in a Prohibited Territory; (b) the orders relate to the supply of products or services in the fields of orthopaedics,
endoscopy and/or wound management; (c) the orders are in competition with the Group; (d) that person was someone with whom (during the last 12 months of your employment) you had personal contact or were materially concerned or about whom you
possessed confidential information; and (e) that person had been a customer in the last 12 months of your employment. The expression “customer” includes a prospective customer.
			
	6 months from the date your employment with us ends	  	Interfering or trying to interfere with the continuance of supplies to the Group or the terms on which those supplies are provided	  	This restriction only applies if the supplier is a person with whom (during the last 12 months of your employment) you had personal contact or were materially concerned or about whom you
possessed confidential information.
			
	6 months from the date your employment with us ends	  	Offering employment to an employee of the Group or persuading an employee to leave the Group.	  	This restriction only applies if: (a) the employee is engaged in an executive, managerial, sales, research or development role; and (b) during the last 12 months of your employment, you had
personal contact or were materially concerned with or possessed confidential information about the employee. The expression “employee” includes consultants, non-executive directors and contractors. It is immaterial whether or not the
employee leaves the Group in breach of contract.

  

	28.2	These covenants prevent you from doing the restricted activities yourself or in any other way. You must not do them through others acting on your behalf or on your instructions or
with your encouragement. You must not do them whether they are for your benefit or not. 

	28.3	The duration of these restrictive covenants shall be reduced by an amount equal to the time that you may be placed on garden leave by us. 

  

	28.4	The expression “last 12 months of your employment” excludes any time spent by you on garden leave. 

  

	28.5	The expression “Prohibited Territory” means: 

  

	 	(a)	In North and South America - Canada, Mexico, Puerto Rico and the United States 

  

	 	(b)	In Europe—Austria, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Eire, Estonia, Finland, France, Germany, Hungary, Italy, Latvia, Lithuania, Netherlands, Norway,
Portugal, Russian Federation, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom 

  

	 	(c)	In Asia—Brunei, China, Hong Kong, India, Indonesia, Japan, Malaysia, Myanmar, Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand

  

	 	(d)	In Australasia—Australia, New Zealand 

  

	 	(e)	In Middle East—United Arab Emirates 

  

	 	(f)	In Africa—South Africa 

  
 as well as any other country in which (at the date your employment terminates) the Group markets or sells products or services directly or via a
distributor or agent. 
  

	28.6	If the business of the Group expands beyond the fields of orthopaedics, endoscopy and wound management/treatment then the restrictive covenants will also apply to protect those new
fields of activity. 

  

	28.7	If you apply for or are offered a new employment, appointment or engagement, you must immediately bring the terms of this Agreement to the attention of the person to whom you are
applying or the person making that offer. 

 SECTION EIGHT: MISCELLANEOUS AND GENERAL PROVISIONS 
  

	29	DEFINITIONS 

  

	29.1	In this Agreement, the following words have the following meanings: 

  

			
	 Board
	  	Our Board of Directors from time to time and any person or committee authorised by the Board to act as its representative for the purposes of this Agreement
		
	 Connected Person
	  	(a) your spouse, civil partner, child or step-child under the age of 18; (b) a company or other body corporate with which you are associated; (c) a trustee of any trust of which you or any of
the persons named at (a) and (b) above are beneficiaries; (d) a person acting as your partner or the partner of any of the persons named at (a) to (c) above; (e) a Scottish firm in which you are a partner or any partner in that firm who falls within
categories (a) to (c) above or in which a partner in that firm is itself a Scottish firm in which you are a partner or one of its partners falls within categories (a) to (c) above; (f) a relative of yours who has shared the same household as you for
at least 12 months; or (g) a company or other body corporate in which you (or any person connected with you under (a) to (f) above) are either (i) a director or (ii) a senior executive who has the power to make management decisions affecting the
future development and business prospects of that company or body corporate.
		
	 FSA
	  	Financial Services Authority
		
	 Group
	  	All or any of the Group Companies
		
	 Group Company
	  	Smith & Nephew plc and its subsidiaries and any holding company and the other subsidiaries of that holding company (as those expressions are defined in the Companies Act 1985) together with
any associated company (which means any other company in which we or our holding company or any subsidiary of ours or our holding company beneficially holds not less than 20% of the equity share capital)
		
	 Inside Information
	  	As defined by s.118C of the Financial Services and Markets Act 2000 and Annex A to the Market Abuse Directive Instrument 2005 (but including without limitation information which would, if
generally available, be likely to have a significant effect on the price of our shares or derivatives or any other financial instruments relating to our shares).
		
	 Market Abuse
	  	The behaviour described in s.118 of the Financial Services and Markets Act 2000 and Annex A to the Market Abuse Directive Instrument 2005 (but including without limitation dissemination of
misleading or false information about our shares; distortion of the market in our shares; improper disclosure of Inside Information; manipulating devices and transactions in our shares; misleading behaviour in relation to our shares and misuse of
information contrary to the standards reasonably expected of a person in your position.)
		
	 Remuneration
 Committee
	  	The sub-committee of the board of Smith & Nephew plc comprising non-executive directors, responsible for setting (inter alia) the pay and benefits of the executive directors of Smith &
Nephew plc.

  

	29.2	Any reference to a statutory provision includes all re-enactments and modifications of that provision and any regulations made under it or them. 

  

	29.3	The headings in this Agreement are for convenience only. They do not form part of this Agreement and do not affect its interpretation. 

  

	29.4	Any reference in this Agreement to you, if appropriate, includes your personal representatives. 

  

	29.5	Any reference in this Agreement to we or us includes any Group Company if the context requires or if we so decide. 

  

	30	GENERAL PROVISIONS 

  

	30.1	Any provision in this Agreement which confers any rights or powers means those rights or powers as exercised by us from time to time. Those rights or powers may be exercised by the
Board or by any other person acting on our behalf and within the scope of their authority. 

  

	30.2	Any reference to any rule, regulation, policy, procedure or scheme means the rule, regulation, policy, procedure or scheme that is in force and as amended from time to time.

  

	30.3	 Any rule, regulation, policy, procedure or scheme referred to in this Agreement may be varied (in whole or part) or cancelled or terminated by us at any time. We
are not obliged to give any prior warning before making that variation, cancellation or termination nor are we under any obligation to compensate you for that variation, cancellation or termination, even if you are disadvantaged (financially or
otherwise) as a 

	 	 
result. We are not obliged to substitute a replacement rule, regulation, policy, procedure or scheme but, if we do provide a substitute, it may be on
whatever terms we consider appropriate provided always that you shall be treated no less favourably than other senior executives of comparable status to yourself under those terms. The duty of trust and confidence shall not extend to any exercise by
us of the rights and powers contained in this clause. 

  

	30.4	If any scheme provider (not limited to an insurance company) or other third party refuses for any reason to provide any benefit which is set out in this Agreement (or to provide any
benefit on terms that we consider to be reasonable) in relation to you or if applicable to your spouse, partner or children then we are not liable to make any payment; provide any replacement benefit or pay compensation in lieu of that benefit. We
may in our discretion challenge any refusal (and shall not unreasonably refuse your request for such a challenge) by any scheme provider or other third party to provide benefits but, if we do, it is on condition that: 

  

	 	(a)	You take all proper measures to appeal against the refusal in accordance with any applicable scheme and meet all reasonable costs associated with that appeal;

  

	 	(b)	You co-operate fully with us and disclose all relevant personal information; 

  

	 	(c)	If required, you attend a medical examination with one or more medical practitioners selected and instructed by us; and 

  

	 	(d)	You indemnify us fully against all reasonable costs, expenses and claims incurred by us in connection with challenging that refusal. 

  

	30.5	Any provision of this Agreement which says that you must not do something means that you must not do it yourself or in any other way. You must not do it through others acting on
your behalf or on your instructions or with your encouragement. 

  

	30.6	You agree to comply with all our policies and procedures including without limitation our email and internet policy and data protection policy. 

  

	30.7	Nothing in this Agreement confers any rights on your spouse, dependants, relatives or any third party except that, for the purposes of the Contracts (Rights of Third Parties) Act
1999, the Group can enforce the restrictive covenants, confidentiality, intellectual property clauses and any other clause of this Agreement that purports to confer rights on the Group in relation to you. 

  

	30.8	Any delay by the Group or you in exercising any of its rights under this Agreement will not constitute a waiver of those rights. 

  

	30.9	You appoint us to be your attorney (in your name and on your behalf) to execute any instrument or do any thing necessary for the purpose of giving to us or our nominee the full
benefit of the provisions of clauses 17, 26.3 and 26.5 of this Agreement. You acknowledge in favour of any third party that a certificate in writing, which is signed by any director or secretary of the Board, or of the board of Smith &
Nephew plc, stating that any instrument or act falls within the authority conferred shall be conclusive evidence that such is the case. 

  

	31	DEDUCTIONS 

  

	31.1	You authorise us at any time during your employment or following its termination (whether or not that termination is lawful) to deduct from your wages (as that expression is defined
in the Employment Rights Act 1996) any monies due from you to the Group, including without limitation the outstanding balance of any loan account; the cost of repairing any damage or loss to Group property caused by you; any overpayment of holiday
pay; and any loss suffered by the Group as a result of any breach of contract, statutory duty or tort committed by you. 

  

	32	DATA PROTECTION 

  

	32.1	You consent to us processing personal data about you for the purposes of the Data Protection Act 1998. 

  

	32.2	You agree to use all reasonable endeavours to keep us informed of any changes to your personal data and to comply with the Data Protection Act 1998. 

  

	33	COLLECTIVE AGREEMENTS 

  

	33.1	There are no collective agreements with trade unions that directly affect your terms and conditions of employment. 

	34	NOTICES 

  

	34.1	Any notice to be given under this agreement may be delivered by hand; sent by first-class post or email. In your case, a notice will be deemed to have been validly served if it is
sent to the last address that you have notified to us as being your address. In our case, any notice should be addressed to the Chief Executive of Smith & Nephew plc and should be sent to our registered office address or to their personal
email address. 

  

	34.2	Any notice served by post will be deemed to have been served 48 hours after it was posted or in the case of email, 1 hour after it was sent. 

  

	35	GOVERNING LAW AND JURISDICTION 

  

	35.1	This Agreement is governed by and interpreted in accordance with English law. 

  

	35.2	The parties submit to the non-exclusive jurisdiction of the High Court of England and Wales in connection with any claim, dispute or matter arising out of relating to this
Agreement. 

  
 IN WITNESS of
which the parties have executed this Agreement on the date set out above. 
  

			
	EXECUTED AS A DEED	  	SIGNED and delivered as a deed by
	Director/Secretary	  	Adrian Hennah
		
	Signature:	  	Signature:
		
	 	  	in the presence of
		
	Name:	  	Signature of Witness:
		
	 	  	Name:
		
	 	  	Address of Witness:

 SCHEDULE A 
  

NOTIFICATION OF TRANSACTIONS CARRIED OUT BY OR ON YOUR BEHALF 
  
 To: the Company Secretary, Smith & Nephew plc, 15 Adam Street, London WC2N 6LA, United Kingdom 
  

	1	My name is
                                        of
                                        
        (address) 

  

	2	The reason why I am notifying you of this transaction is because I am a director of Smith & Nephew plc (or its subsidiary and associated companies).

  

	3	The transaction relates to Smith & Nephew plc 

  

	4	The transaction related to shares/derivatives/other financial instruments relating to shares* 

  

	5	The nature of the transaction was                     (e.g. acquisition/disposal)

  

	6	The date and place of the transaction were
            20    at            (location) 

  

	7	The price of the transaction was             and the volume of the transaction was
            (e.g. number of shares) 

  
 Signed: 
  
 Dated: 
  
 * = delete as applicable 
  
 NB: this notification must be given to the Company Secretary of Smith & Nephew plc within no later than 4 business days
following the date of the transaction. 

 SCHEDULE B 
  

NOTIFICATION OF TRANSACTIONS CARRIED OUT BY OR ON BEHALF OF A CONNECTED PERSON 
  
 To: the Company Secretary, Smith & Nephew plc, 15 Adam Street, London WC2N 6LA, United Kingdom 
  

	1	My name is
                                        of
                                        
        (address) 

  

	2	The reason why I am notifying you of this transaction is because I am a connected person to
                    (name of director/manager at Smith & Nephew plc) 

  

	3	The transaction relates to Smith & Nephew plc 

  

	4	The transaction related to shares/derivatives/other financial instruments relating to shares* 

  

	5	The nature of the transaction was                     (e.g. acquisition/disposal)

  

	6	The date and place of the transaction were
            20    at            (location) 

  

	7	The price of the transaction was                    and the volume of the
transaction was                     (e.g. number of shares) 

  
 Signed: 
  
 Dated: 
  
 * = delete as applicableEmployment Agreement Fletcher Jay McCusker

 Exhibit 10.1 
 EMPLOYMENT AGREEMENT 
 THIS EMPLOYMENT AGREEMENT (“Agreement”), is made as of this 22nd day
of March, 2007, by and between THE PROVIDENCE SERVICE CORPORATION, a Delaware corporation, with its corporate headquarters located at 620 N. Craycroft, Tucson, AZ, its successors and assigns (hereinafter collectively referred to as
“Company”), and FLETCHER JAY MCCUSKER, an individual residing at 401 N. Mountain Side Place, Tucson, AZ 85745 (“Employee”). 
 BACKGROUND 
 WHEREAS, Employee is currently employed by the Company as its Chief Executive
Officer (“CEO”), and serves as Chairman of the Company’s Board of Directors (the “Board”); and 
 WHEREAS,
the Company desires to continue to employ Employee, and Employee desires to continue to be employed by the Company, all upon the terms and conditions set forth in this Agreement. 
 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 follows: 
 1. Employment. The Company hereby employs Employee and Employee hereby accepts employment by the
Company, for the period set forth in Section 3 below and upon the terms and conditions set forth in this Agreement, subject to earlier termination pursuant to Section 6 below. 
 2. Office and Duties. 
 (a) During
the term of this Agreement, Employee shall serve as CEO of the Company, and shall report directly to the Board and/or an executive committee established by the Board, and be subject to its and/or their supervision, control and direction. Employee
shall also serve on the Board as may be requested from time to time. 
 (b) In his capacity as CEO of the Company, Employee shall have such
authority, perform such duties, discharge such responsibilities and render such services as are customary to, and consistent with his position, subject to the authority and direction of the Board, and shall perform such additional duties and
responsibilities as may be from time to time assigned to him by the Board or committee established by the Board. 
 (c) The Employee shall
render his services diligently, faithfully and to the best of his ability, and shall devote substantially all of his working time, energy, skill and best efforts to the performance of his duties hereunder, in a manner that will further the business
and interests of the Company. 
  

 Page 1 of 15 

 (d) During the term of this Agreement, Employee shall not be engaged in any business activity which, in
the reasonable judgment of the Board, conflicts with Employee’s duties hereunder, whether or not such activity is pursued for pecuniary advantage. 
 3. Term. This Agreement shall be effective for a term of three (3) years (“Term”) commencing on March 22, 2007 (“Effective Date”), and if not previously terminated in accordance
with the terms of this Agreement, the Term shall end three (3) years later. The Term shall be automatically extended and renewed for a period of one (1) year from the end of the Term (“Renewal Date”) unless either the Company or
Employee shall give written notice of non-renewal to the other party prior at least six (6) months prior to the end of the Term, in which event this Agreement shall terminate at the end of the Term. Subject to the termination provisions
contained herein, if this Agreement is renewed on the Renewal Date for an additional one (1) year period, it will automatically be renewed on the anniversary of the Renewal Date and each subsequent year thereafter (the “Annual Renewal
Date”) for a period of one (1) year , unless either party gives written notice of non-renewal to the other party at least six (6) months prior to any Annual Renewal Date, in which case the Agreement will terminate on the Annual
Renewal Date immediately following such notice. 
 4. Compensation. 
 (a) Base Salary. In consideration of the services rendered by Employee to the Company during the term hereof, Employee shall receive an annual
base salary of Three Hundred Thousand and 00/100 Dollars ($300,000.00) (“Base Salary”), payable in equal periodic installments in accordance with the Company’s regular payroll practices in effect from time to time. Employee’s
Base Salary shall be reviewed at least annually by the Board and/or a committee of the Board which has been delegated responsibility for employee compensation matters (such committee to be referred to herein as the “Compensation
Committee”) in accordance with the compensation policies and guidelines of the Company, and may be modified as a result of such review at the sole discretion of the Board and/or the Compensation Committee. 
 (b) Bonus Plans/Incentive Compensation Programs. In addition to Base Salary, during the Term, Employee shall be eligible to participate in any
bonus plans or incentive compensation programs, if any, as may be in effect from time to time, at a level consistent with his position and with the Company’s then current policies and practices (“Bonus”). 
 (c) Benefits. During the Term, Employee also shall be entitled to participate in all fringe benefits, if any, as may be in effect from time to
time which 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”). 
 (d) Vacation. During the Term, 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 

  

 Page 2 of 15 

 
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 the Term, 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. 
 (f) Withholding. All payments made pursuant to this Agreement shall be subject to such withholding taxes as may be
required by any applicable law. 
 5. 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, his execution of this Agreement and his employment hereunder; (b) his execution of this Agreement and his employment
hereunder shall not constitute a breach of any contract, agreement or understanding, oral or written, to which he is a party, or by which he is bound; and (c) he is of full capacity, free and able to execute this Agreement and to enter into
this Agreement with the Company. 
 6. Termination. This Agreement and Employee’s employment hereunder shall continue until
terminated as provided herein. Upon termination of this Agreement and Employee’s employment hereunder, Employee shall immediately resign his position as a member of the Company’s Board if he is serving in such capacity. 
 (a) Termination by Company for Cause. The Company shall have the right to terminate this Agreement and his employment hereunder at any time for
“Cause”. For purposes of this Agreement, the term “Cause” shall mean the following: 
 (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 indicted, convicted of, or pleads
guilty or nolo contendere to, a felony; or 
 (ii) In carrying out his duties hereunder, the Employee engages in conduct that
constitutes gross neglect or willful misconduct and that results, in either case, in material economic harm to the Company or its Affiliates; or 
 (iii) Employee materially breaches any provision of this Agreement (including but not limited to the restrictive covenants contained in Paragraph 8 below) or breaches any fiduciary duty or duty of loyalty owed to the Company or its
Affiliates, and such breach continues uncured for a period 10 days after written notice from the Company to the Employee specifying the failure, refusal, or violation and the Company’s intention to terminate the Term for Cause; or 

(iv) Employee engages in conduct tending to bring the Company or its Affiliates into public disgrace; or 
  

 Page 3 of 15 

 (v) Employee repeatedly neglects or refuses to perform duties or responsibilities as directed by the
Company, the Board or any executive committee established by the Board, or violates any express direction of any lawful rule or regulation established by the Company or 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 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; or 
 (vi) Employee commits any acts or omissions resulting in or intended
to result in direct material personal gain to the 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. 
 “Cause” shall not
include a bona fide disagreement over a corporate policy, so long as Employee does not willfully violate on a continuing basis specific written directions from the Board or any executive committee of the Board, which directions are consistent with
the provisions of this Agreement. Action or inaction by Employee shall not be considered “willful” unless done or omitted by him intentionally and without his reasonable belief that his 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 by Company upon the Death or Disability of Employee. The Company shall have the right to terminate this Agreement and Employee’s employment hereunder at any time upon the death or 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 his 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
his 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 upon thirty (30) days written notice to Employee. The effective date of such termination shall be after the
completion of the thirty (30) day notice period. 
 (d) Termination By Employee For Good Reason. Employee shall have the right
to terminate this Agreement and his employment hereunder at any time during the Term of this Agreement for “Good Reason” upon sixty (60) days prior written notice to the Company’s Board. The effective date of such termination
shall be after the completion of the 

  

 Page 4 of 15 

 
sixty (60) day notice period. For purposes of this Agreement, “Good Reason” shall mean any of the following: 
 (i) the assignment to Employee by the Company of any duties inconsistent with Employee’s status with the Company or a substantial alteration in the
nature or status of Employee’s responsibilities from those in effect on the Effective Date hereof, or a reduction in Employee’s titles or offices as in effect on the Effective Date hereof, except in connection with the termination of his
employment for Cause or Disability or as a result of Employee’s death, or by Employee other than for Good Reason, or the Company’s establishment of a new office to which Employee may be asked to report, or the Company’s hiring of a
President or other officer which may result in the reassignment of some of Employee’s duties to someone in the Company below the level of Employee. 
 (ii) a reduction by the Company in Employee’s Base Salary as in effect on the Effective Date or as the same may be increased from time to time during the term of this Agreement; 
 (iii) the relocation of Employee to a Company office located more than ninety (90) miles from Tucson, Arizona; or 
 (iv) any material breach by the Company of a material term or provision contained in this Agreement, which breach is not cured within thirty
(30) days following the receipt by the Board of written notice of such breach. 
 (v) the Company gives Employee proper notice in
accordance with Section 3 above that the Agreement will not be extended or renewed for an additional one (1) year period from the end of the Term or from the end of any subsequent Annual Renewal Date. 
 (e) Termination by Employee for Other than Good Reason. If Employee shall desire to terminate his employment hereunder for other than Good
Reason, he shall first give the Company not less than ninety (90) days prior written notice of termination. Upon a termination of Employee’s employment with the Company under this Section 6(e), 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 6(e)) or an earlier date after the Company’s receipt of such notice as determined by the Company,
in its sole discretion, but not earlier than the date on which the Company learned of Employee’s decision to terminate his employment for other than Good Reason. 
 (f) Notice of Termination. Any termination, except for death, pursuant to this Section 6 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 the 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. 
  

 Page 5 of 15 

 Notwithstanding anything to the contrary set forth herein, the provisions of Sections 8, 9 and 10 shall
survive the end of the Term, the non-renewal of the Agreement, and/or the termination of Employee’s employment hereunder for any reason, and shall remain in full force and effect thereafter. 
 7. Payments Upon Termination and Change in Control. 
 (a) Termination for Cause. In the event Employee’s employment hereunder is terminated for Cause, all of Employee’s rights to his 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 his 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 the Agreement. 
 (b) Termination Due to Death or Disability. In the event Employee’s employment hereunder is terminated due to his death or Disability, all of Employee’s rights to his Base Salary, Benefits and Bonus,
if any, shall immediately terminate as of the 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 representative or
estate) shall be entitled to any earned and unpaid portion of his Base Salary and accrued Benefits up to the date of termination less all deductions or offsets for amounts owed by Employee to the Company, and any accrued Bonus prorated through the
date of termination. Subject to the provisions of the applicable Company stock option plan, should Employee’s death occur within one (1) year following his termination for Disability, but prior to his exercise of any options vested at the
date of termination, Employee’s estate shall be entitled to exercise Employee’s options for the remainder of the one (1) year period. The Company shall have no further obligations to Employee under the Agreement. 
 (c) Termination By Company Without Cause or By Employee For Good Reason. If the Company
terminates Employee’s employment other than for Cause or the occurrence of Employee’s death or Disability, or if Employee terminates his employment for Good Reason, Employee shall be entitled to receive severance in the gross amount of one
and one half (1 1/2) times his Base Salary in effect at the time of termination (so long as Employee is not
in breach of this Agreement) (“Severance Payment”), provided that Employee executes, and does not revoke, a General Release of all claims relating to his employment and termination from employment in a form provided by the Company. Subject
to Section 9 hereof, the Severance Payment shall be made to the Employee in a lump sum payment, minus appropriate tax and other withholdings, ten (10) days after the General Release is executed by Employee and returned and received by the
Company, provided Employee does not revoke the General Release. Employee understands that should he fail or refuse to execute the General Release provided by the Company, or revoke such General Release, he shall not be entitled to the Severance
Payment under this section. The Company shall have no further obligations to Employee under the Agreement. 
 (d) Termination By
Employee For Other Than Good Reason. In the event Employee terminates his employment for other than Good Reason, all of Employee’s 

  

 Page 6 of 15 

 
rights to his Base Salary, Benefits and Bonus, if any, shall immediately terminate as of the date of termination, except that Employee shall be entitled to
any earned and unpaid portion of his 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 the Agreement.

 (e) Payment Upon Change in Control. In the event of a “Change in Control” of the Company (as defined herein), Employee
shall receive a lump sum payment equal to $1.00 less than three (3) times Employee’s average annual W-2 compensation from the Company for the most recent five (5) taxable years ending before the date on which the Change in Control
occurs (or such portion of such period during which Employee performed personal services for the Company), but not in excess of the amount specified in Code Section 162(m)(1) (currently, $1,000,000) or any successor Code Section thereto;
provided, however, that if such lump sum payment, either alone or together with other payments or benefits, either cash or non-cash, that Employee has the right to receive from the Company, including, but not limited to, accelerated
vesting or payment of any deferred compensation, options, stock appreciation rights or any benefits payable to Employee under any plan for the benefit of employees, which would constitute an “excess parachute payment” (as defined in
Section 280G of the Code), then such lump sum payment or other benefit shall be reduced to the largest amount that will not result in receipt by Employee of a parachute payment (“Change in Control Payment”). The Change in Control
Payment will be paid to Employee upon the closing of the transaction causing the Change in Control. 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 have the definition as set
forth in the Providence Service Corporation 2006 Long Term Incentive Plan which defines “Change in Control” as 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 (i) the Company, (ii) any subsidiary of the
Company, (iii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or of any subsidiary of the Company, or (iv) 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 25% or more of the combined voting power of the Company’s then outstanding
securities; 
 (B) the stockholders of the Company approve a merger or consolidation of the Company with any other company, other than
(i) a merger or consolidation which would result in the 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, at least 65% of the combined voting power of the voting
securities of 

  

 Page 7 of 15 

 
the Company or such surviving entity outstanding immediately after such merger or consolidation or (ii) 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 25% of the combined voting
power of the securities of the Company or the surviving entity of such merger or consolidation; 
 (C) during any period of two consecutive
years (not including any period prior to the execution of the 2006 Plan), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has conducted or threatened a
proxy contest, or has entered into an agreement with the Company to effect a transaction described in clause (A), (B) or (D) of this definition) whose election by the Board or nomination for election by the Company’s stockholders
was approved by a vote of at least two-thirds (2/3) of the directors then still in office, who either were directors at the beginning of the period or whose election or nomination for election was previously so approved cease for any reason to
constitute at least a majority thereof; or 
 (D) the stockholders of the Company approve a plan of complete liquidation of the Company
or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets. 
 (ii) If this
Agreement provides for the payment of deferred compensation subject to Section 409A of the Code, any payment of such deferred compensation by reason of a Change in Control shall be made only if the Change in Control is one described in
subsection (a)(2)(A)(v) of Section 409A and the guidance thereunder and shall be paid consistent with the requirements of Section 409A. If any deferred compensation that would otherwise be payable by reason of a Change in Control
cannot be paid by reason of the immediately preceding sentence, it shall be paid as soon as practicable thereafter consistent with the requirements of Section 409A, as determined by the Company. 
 (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. 
 8. Restrictive Covenants. 
 (a)
Non-Competition. During the Term and any renewal periods, and for a period of eighteen (18) months after this Agreement is terminated 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 his own account or for the benefit of any natural person, corporation, partnership, trust, estate, joint
venture, sole proprietorship, association, cooperative or other entity (“Person”), establish, engage in, work for, or be connected with, except as an employee of the Company, any business in competition with the Business of the Company (as
defined in Section 8(i) below), if such business competes with the Business of the Company in any State, 

  

 Page 8 of 15 

 
county, or municipality where the Company or its Affiliates conduct business, are preparing to conduct business or have conducted business during the Term.

 (b) Non-Solicitation/Non-Piracy. During the Term and any renewal periods, and for a period of eighteen (18) months after this
Agreement is terminated for any reason, Employee will not, directly or indirectly, for his own account or for the benefit of any Person or entity: 
 (i) solicit, service, contact, or aid in the solicitation or servicing of 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 (“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 its Affiliates or (c) inducing Company Customers/Clients to do business with any Person or business entity in competition with the Business of
the Company (as hereafter defined). 
 (ii) solicit, aid in solicitation of, induce, contact for the purpose of, encourage or in any way
cause any employee of the Company or its Affiliates to leave the employ of the Company or its Affiliates, or interfere with such employee’s relationship with the Company or its Affiliates. 
 (c) Non-Disclosure. Other than in furtherance of the Business of the Company, in the ordinary course in his 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 entity, or use for the benefit of any Person or entity, any secret, confidential or
proprietary knowledge or information with respect to the conduct or details of the Business of the Company including, but not limited to, customer and client lists, customer and client accounts and information, prospective client, customer,
contractor and subcontractor lists and information, services, techniques, methods of operation, pricing, costs, sales, sales strategies and methods, marketing, marketing strategies and methods, products, product development, research, know-how,
policies, financial information, financial condition, business strategies and plans and other information of the Company or its Affiliates which is not generally available to the public and which has been developed or acquired by the Company or its
Affiliates with considerable effort and expense. Upon the expiration or termination of Employee’s employment under this Agreement, 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 otherwise came into his possession or under his control at any time prior to the expiration or termination of his employment under this Agreement, and which
in any way relate to the Business of the Company as conducted or as planned to be conducted by the Company or its Affiliates on the date of the expiration or termination. 
 (d) 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 

  

 Page 9 of 15 

 
to the Business of the Company which are conceived or developed by Employee alone or with others, at any time (during or after business hours) while Employee
is employed by the Company or its Affiliates. Employee acknowledges that all of those ideas and creations are inventions and works for hire, and will be the Company’s 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 in order to allow the Company to take full advantage of those ideas and creations. 
 (e) 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 for
Employee to testify truthfully in any judicial or administrative proceeding or to make statements or allegations in legal filings that are based on Employee’s reasonable belief and are not made in bad faith. 
 (f) Enforcement. Employee acknowledges that the covenants and agreements of this Section 8 (“Covenants”) herein are of a special
and unique character, which give 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 him 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 8 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 material breach of such Covenant was occurring, beginning on the date of a final court
order (without further right of appeal) holding that such a material breach occurred, or, if later, the last day of the original fixed term of such Covenant. 
 (g) 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 8 are
reasonable and necessary to protect the Company’s legitimate business interests. In addition, Employee acknowledges that in the event his employment with the Company terminates, he will still be able to earn a livelihood without violating this
Agreement, and that the Covenants contained in this Section 8 are material conditions to my employment and continued employment with the Company. 
  

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 (h) 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 is lawful and
appropriate. 
 (i) Business of the Company. The term “Business of the Company”, as used herein, shall mean the provision
by the Company or its Affiliates of social services, counseling, client monitoring and mentoring, substance abuse treatment and counseling, school support services, case management and foster care services to children, adults and families in
community based settings such as a client’s home, school or workplace, intake, assessment and referral, case management and network management services to governmental agencies and provider networks, educational tutoring, job readiness and
private parole or probation, and any other business in which the Company or its Affiliates were actually engaged or planning to be engaged during the Term. 
 (j) Costs, Expenses in the Event of Breach. In the event that Employee breaches or attempts to breach the Covenants contained in this Section 8, 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 contained in Section 8, 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 contained in Section 8, and a court of competent jurisdiction determines that Employee did not breach any of those 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. 
 9. 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 Agreement-related adverse tax consequences arising under Section 409A or other
provision of the Code. 
 (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 the 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. 
 (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 Severance Payment shall be made under Section 7(c) hereof
prior to the six-month 

  

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anniversary of Employee’s separation of service to the extent such six-month delay in payment is required to comply with Code Section 409A. To the
extent that this Section 9(c) applies to any Severance Payment under Section 7(c) hereof, the Company shall, as soon as practicable following Employee’s termination of employment, and after Employee executes and does not revoke the
General Release of all claims as referenced in Section 7(c), 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. 
 10.
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 Arizona (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 8 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 his 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 Tucson, Arizona (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 (the “Rules”) 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 

  

 Page 12 of 15 

 
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. 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. 
 (iii) 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 10(c) hereof. Each of 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 (A) shall be deemed in every respect effective service of process in any such suit, action or proceeding and (B) shall, to the fullest extent permitted by applicable law, be
taken and held to be valid personal service. 
 (iv) Nothing in this Section 10(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: 
     Fletcher Jay McCusker 
     401 N. Mountain Side Place 
     Tucson, AZ 85745 
  

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 (ii) If to the Company: 
      The Providence Service Corporation 
      620 N.
Craycroft 
      Tucson, AZ 85711 
      Attention: Board of Directors 
 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 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 8 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 his duties under this Agreement. 
 (e) Execution
in Counterparts. This Agreement may be executed in any number of counterparts, including by facsimile, 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 

  

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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 his 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. 
 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/ Steve Geringer

	Name:	 	Steve Geringer
	Title:	 	Chairman Compensation Committee
	
	FLETCHER JAY McCUSKER
	
	 /s/ Fletcher Jay McCusker

 [Signature Page to Employment Agreement of Fletcher Jay McCusker] 
  

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