Document:

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                                                                    EXHIBIT 10.1

                              AMENDED AND RESTATED
                              APS HEALTHCARE, INC.
                                STOCK OPTION PLAN
                                    ARTICLE I
                                     GENERAL

      1.1   PURPOSE.

      The Amended and Restated APS Healthcare, Inc. 1993 Stock Option Plan
(the "Plan") is established to create additional incentive for employees,
consultants and directors of American Psych Systems, Inc. (the ("Company") to
promote the financial success and progress of the Company.

      1.2   ADMINISTRATION.

      (a)   The Plan shall be administered by the Company's Board of Directors
(the "Board") and/or by a duly appointed committee of the Board having such
power as shall be specified by the Board. Any subsequent references to the Board
shall also mean the committee if it has been appointed.

      (b)   Subject to the limitations of the Plan, the Board shall have the
sole and complete authority (I) to select from the regular full-time employees
of the Company those who shall participate in the Plan ("Employee Participant"
or "Employee Participants"), (ii) to select such additional individuals who are
directors or consultants of the Company and who are determined in the discretion
of the Board to perform valuable services for the Company to participate in the
Plan ("Non-Employee Participants" or "Non-Employee Participants"), (iii) to make
awards in such forms and amounts as it shall determine, (iv) to impose such
limitations, restrictions and conditions upon such awards as it shall deem
appropriate and (v) to interpret the Plan and to adopt, amend and rescind
administrative guidelines and other rules and regulations relating to the
actions necessary or advisable for the implementation and administration of the
Plan. The Board's determinations on matters within its authority shall be
conclusive and binding upon the Company and all other persons. (Employee
Participants and Non-Employee Participants are hereinafter sometimes
collectively referred to as "Participants").

      (c)   The Board shall act on behalf of the Company as sponsor of the Plan.
Except as otherwise provided in section 2.4 hereof, all expenses associated with
the Plan shall be borne by the Company.

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      1.3   ELIGIBILITY.

      Participants shall be selected by the Board from (I) employees and (ii)
non-employee directors or consultants who have the capacity to contribute to the
success of the Company. In making these selections and in determining the form
and amount of awards, the Board may give consideration of the functions and
responsibilities of the individual, his or her past, present and potential
contributions to the Company's profitability and sound growth, the value of his
or her services to the Company and other factors deemed relevant by the Board.

      1.4   TYPES OF AWARDS UNDER THE PLAN.

      Awards under the Plan may be in the form of either of the following; (I)
Incentive Stock Options ("ISOs") or (ii) Nonstatutory Stock Options ("NSOs")
(hereinafter sometimes collectively referred to as "Options"). A participant
may, if otherwise eligible, be granted additional Options from time to time.

      1.5   SHARES SUBJECT TO THE PLAN.

      Shares of stock issued under the Plan may be in whole or in part
authorized and unissued or treasury shares of the Company's Class A Common
Stock, with par value $0.001 per share (the "Class A Stock"). The maximum number
of shares of Class A Stock, which may be issued for all purposes under the Plan
shall be 3,200,000 subject to adjustment in accordance with the provisions of
section 3.2 hereof. Any shares of Class A Stock subject to an Option which for
any reason is canceled or terminated without having been exercised shall again
be available for awards under the Plan. No fractional shares shall be issued,
and the Board shall determine the manner in which fractional share value shall
be treated.

                                   ARTICLE II

                              TERMS OF THE OPTIONS

      2.1   AWARD OF OPTIONS.

      Subject to the provisions of the Plan, the Board shall determine for each
Option (which need not be identical) the number of shares for which the Option
shall be granted, whether the Option is an ISO or a NSO, the option price of the
Option, the exercisability of the Option and all other terms and conditions of
the Option. In no event, however, shall any ISOs be awarded to Non-Employee
Participants. Options granted pursuant to the Plan shall be evidenced by written
agreements specifying the number of shares covered thereby, in such form as the
Board shall from time to time establish, which agreements may incorporate all or
any of the terms of the Plan

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by reference ("Stock Option Agreements").

      2.2   OPTION PRICE.

      The purchase price of Class A Stock purchasable under ISOs shall be not
less than the fair market value as determined by the Board of the shares of
Class A Stock of the Company on the date of the granting of the ISO, except
that, as to an employee who at the time the ISO is granted owns stock processing
more than 10% of the total combined voting power of all classes of stock of the
Company within the meaning of section 422(b)(6) of the Internal Revenue Code of
1986, as amended (the "Code") (a "Ten Percent Owner Employee"), the option price
shall not be less than 110% of the fair market value of the shares on the date
the ISO is granted. The option price for NSOs shall be determined by the Board
and may be less than fair market value.

      2.3   TERM OF OPTIONS.

      (a)   The Plan shall become effective on the date of its adoption by the
Board subject to the approval of the Plan by the holders of the majority of the
shares of stock of the Company entitled to vote at a meeting of the
stockholders, within 12 months of the effective date. No ISOs shall be awarded
pursuant to the Plan after the expiration of the ten year period beginning on
the date the Plan is adopted by the Board.

      (b)   The Board shall have the power to set the time or times within which
each Option shall be exercisable or the event or events upon the occurrence of
which all or a portion of each Option shall be exercisable and the term of each
Option; provided, however, that no ISO shall be exercisable after the expiration
of ten years from the date such ISO is granted, and provided further, that no
ISO granted to a Ten Percent Owner Employee shall be exercisable after the
expiration of five years from the date such ISO is granted. Notwithstanding the
foregoing, each Option granted hereunder that is designated by the Board as a
NSO shall expire not later than ten years after the date of grant. Unless
otherwise provided for by the Board in the grant of the Option, any Option
granted hereunder shall be exercisable in full immediately upon grant.

      2.4   EXERCISE OF OPTIONS.

      (a)   Options may be exercised only by written notice to the Company,
stating the number of shares of Class A Stock being purchased and accompanied by
payment of the option price for the number of such shares being purchased (I) in
cash, (ii) by tender to the Company of shares of the Company's Class A Stock
owned by the Participant and having a fair market value not less than the option
price, or (iii) by such other consideration as the Board may approve at the time
the Option is granted. As soon as practicable after receipt of such notice and
full

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payment for the shares of Class A Stock being purchased, the Company shall
deliver to the Participant a certificate or certificates representing the
acquired shares of Class A Stock. At the time an Option is exercised in whole or
in part, or at any time thereafter as requested by the Company, the Participant
shall pay, or make adequate provision for payment of, federal and state income
and employment tax withholding obligations of the Company, if any, which arise
upon exercise, in whole or in part, of the Option or upon disposition of the
shares acquired by exercise of the Option. The applicability of such withholding
taxes shall be determined by the Company in its sole discretion.

      (b)   Unless otherwise agreed in writing by the Board, Options may be
exercised only twice in any calendar year.

      2.5   LIMITATIONS ON ISOs.

      (a)   Under the terms of the Plan, the aggregate fair market value
(determined at the time an ISO is granted) of the shares of Class A Stock with
respect to which ISOs are exercisable for the first time by an Employee
Participant during any calendar year (under all such ISO plans of the Company)
shall not exceed $100,000.

      (b)   An Employee Participant shall have the following rights upon death,
disability or other termination of his or her employment:

            (i)   If the Employee Participant's employment is terminated by
death, his or her estate or the person who acquired the right to exercise such
ISO by bequest or inheritance from the Employee Participant shall be entitled,
for a period of one year following the date of his or her death, to exercise the
ISO with respect to all or any part of the shares of Class A Stock subject
thereto, to the extent the ISO had become exercisable at the time of death.

            (ii)  If the Employee Participant's employment terminates because of
disability within the meaning of section 22(e)(3) of the Code, the Employee
Participant or his or her legal representative shall have the right, for a
period of one year following the date of such termination, to exercise the ISO
with respect to all or any part of the shares of Class A Stock subject thereto,
to the extend the ISO had become exercisable at the time of such termination.

            (iii) If the Employee Participant's employment is terminated for any
reason other than death or disability, as provided above, the Employee
Participant holding an ISO under the Plan shall have the right, for a period of
three months following such termination, to exercise any ISO with respect to all
or any part of the shares of Class A Stock subject thereto, to the extent that
the ISO had become exercisable at the time of such termination.

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      2.6   TERMINATION OF RELATIONSHIP.

      In the event any Non-Employee Participant terminates his or her
relationship with the Company voluntarily or upon his or her death or
disability, the Non-Employee Participant or his or her estate or the person who
acquired the right to exercise such NSO by bequest or inheritance from the
Non-Employee Participant or the Non-Employee Participant's legal representative
shall be entitled at any time prior to an expiration date established for such
NSO by the Board at the time of the award, but in no event after its respective
expiration date, to exercise any NSO held by such Non-Employee Participant with
respect to all or any part of the shares of Class A Stock subject thereto, to
the extend that such NSO had become exercisable at the time of such termination.
If any Non-Employee Participant's relationship with the Company is terminated
involuntarily by the Company, all of the then outstanding NSOs granted to such
Non-Employee Participant shall terminate immediately.

                                   ARTICLE III

                            MISCELLANEOUS PROVISIONS

      3.1   NON-TRANSFERABILITY.

      No Option award under the Plan shall be transferable by any Participant
otherwise than by will or, if the Participant dies intestate, by the laws of
descent and distribution. All awards shall be exercisable or received during the
Participant's lifetime only by such Participant or his or her legal
representative. Any transfer contrary to this Section 3.1 will nullify the
Option involved.

      3.2   ADJUSTMENTS OF AND CHANGES IN STOCK.

      In the event that the shares of Class A Stock of the Company, as presently
constituted, shall be changed into or exchanged for a different number or kind
of shares of stock (as defined in section 424 of the Code) of the Company or of
another corporation (whether by reason of corporate merger, consolidation,
acquisition of property or stock separation, reorganization or liquidation) or
if the number of such shares of Class A Stock shall be increased through the
payment of a stock dividend, then there shall be substituted for or added to
each share of stock theretofore appropriated or thereafter subject or which may
become subject to an Option under this Plan, the number and kind of such shares
of stock into which each outstanding share of Class A Stock of the Company shall
be so changed, or for which each such share shall be exchanged, or to which each
such share shall be entitled, as the case may be. Outstanding Options shall also
be appropriately amended as to price and other terms as may be necessary to
reflect the foregoing events. Upon dissolution or liquidation of the Company, or
upon a reorganization, merger or consolidation in which the Company is not the
surviving corporation, or upon the sale

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of substantially all of the property of the Company to another corporation, the
Plan and the Options issued thereunder shall terminate, unless provisions are
made in connection with such transaction for the assumption of Options
theretofore granted, or for the substitution for such Options of new options of
the successor corporation or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kinds of shares and the per share exercise
prices.

      3.3   STOCK TRANSFER RESTRICTIONS.

      Shares of Class A Stock purchased under the Plan and held by or through
any person who is an officer, director or affiliate of the Company may not be
sold or otherwise disposed of except (I) pursuant to an effective registration
statement under the Securities Act of 1933, as amended, ("the Act"), or a
transaction which, in the opinion of counsel for the Company, is exempt from
registration under the Act and (ii) in compliance with state securities laws.
The Board may waive the foregoing restrictions, in whole or in part, in any
particular case or cases or may terminate such restrictions whenever the Board
determines that such restrictions afford no substantial benefit to the Company.

      3.4   AMENDMENT, MODIFICATION AND TERMINATION OF THE PLAN.

      The Board of Directors may terminate, amend or modify the Plan, at any
time; provided, however, that no such action of the Board of Directors, without
approval of the stockholders, may (I) increase the total number of shares of
Class A Stock for which Options may be granted under the Plan, except as
contemplated in Section 3.2 above, (ii) decrease the minimum ISO price or (iii)
increase the maximum ISO term or extend the period after which ISOs may not be
awarded under the Plan. No amendment, modification or termination of the Plan
shall in any manner affect any Option theretofore granted to a Participant under
the Plan without the consent of the Participant or the transferee of such
Option.

      3.5   NON-UNIFORM DETERMINATIONS.

      The Board's determinations under the Plan, including without limitation,
(I) the determination of the Participants to receive awards, (ii) the form,
amount and timing of such awards, (iii) the terms and provisions of such awards
and (iv) the agreements evidencing the same, need not be uniform and may be made
by it selectively among Participants who receive, or who are eligible to
receive, awards under the Plan, whether or not such Participants are similarly
situated.

      3.6   LEAVES OF ABSENCE; TRANSFERS.

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      The Board shall be entitled to make such rules, regulations and
determinations as it deems appropriate under the Plan in respect of any leave of
absence from the Company granted to a Participant. Without limiting the
generality of the foregoing, the Board shall be entitled to determine (i)
whether or not any such leave of absence shall be treated as if an Employee
Participant ceased to be an employee or a Non-Employee Participant terminated
his or her relationship with the Company and (ii) the impact, if any, of any
such leave of absence on awards under the Plan. In the event an employee
Participant transfers within the Company, such Participant transfers within the
Company, such Participant shall not be deemed to have ceased to be an employee
for purpose of the Plan.

      3.7   RIGHTS AS A STOCKHOLDER OR EMPLOYEE.

      No person shall have any rights as a stockholder with respect to any
shares of Class A Stock covered by an Option until such time as stock
certificates for the shares of Class A Stock for which the Option has been
exercised are issued. No adjustment shall be made for dividends or distributions
or other rights for which the record date is prior to the date such stock
certificate(s) are issued, except as provided in Section 3.2 above. Nothing in
this Plan or in any Stock Option Agreement shall confer upon any Participant any
right to continue in the employ of the Company or interfere in any way with any
right of the Company to terminate the Participant's employment at any time.

      3.8   TERMINATION OF THE PLAN.

      Termination of the Plan shall not affect the right of Participants under
Options previously granted to them, and all unexpired Options shall continue in
force and operation after termination of the Plan except as they may lapse or be
terminated by their own terms and conditions.<PAGE>

                                                                  EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT
                                       OF
                               KENNETH A. KESSLER

            THIS AGREEMENT, effective as of the 3rd day of April, 1995, is
made by and between American Psych Systems, Inc., a Delaware corporation
("APS"), and Kenneth A. Kessler, M.D. (the "Employee").

                                   WITNESSETH:

            WHEREAS, the Employee desires to be employed by APS in the
capacities set forth herein;

            WHEREAS, APS desires to employ the Employee in such capacities;
and

            WHEREAS, the parties hereto desire to set forth their agreement
concerning the aforementioned employment;

            NOW, THEREFORE, in consideration of the foregoing, for the mutual
promises and covenants hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, mutually agree and covenant as follows:

                         ARTICLE I. EMPLOYMENT AND TERM

            1.01 EMPLOYMENT. APS hereby employs Employee as President and Chief
Executive Officer and Employee hereby accepts such employment (the
"Employment").

            1.02 TERM. The term of Employment hereunder shall commence as of
April 3, 1995, and shall continue through March 31, 1999.

               ARTICLE II.  DUTIES AND AUTHORITY OF THE EMPLOYEE

            2.01 DUTIES AND AUTHORITY. During the term of this Agreement,
Employee shall devote substantially all of his time, services, skills and
abilities to his service and employment as specified in Section 1.01, excepting
periods of vacation, illness or disability and excepting any pursuits which do
not interfere with his duties hereunder or present a conflict of interest with
the interests of APS. APS agrees that Employee will be assigned only duties of
the type, nature and dignity normally assigned to the persons holding the
position of President and Chief Executive Officer with an organization of the
size, stature and nature of

<PAGE>

APS. Employee's duties shall, in accordance with this Section 2.01, include
making all decisions relating to the operations of APS, executing policies
adopted by the APS Board of Directors, supervising the financial operations of
APS, determining appropriate capital expenditures for APS, hiring and
terminating employees and consultants and establishing employee compensation.
Employee shall make decisions hereunder that are consistent with the policies
and directives of the Board of Directors. During the entire term of this
Agreement, Employee shall serve as a voting member of the APS Board of Directors
and shall serve on APS's Executive Committee, and on such Standing and Ad Hoc
Committees as may be provided in APS's Bylaws or by resolution of APS's Board of
Directors.

                            ARTICLE III. COMPENSATION

            3.01 BASE SALARY. The Employee shall be paid an annual base salary
("Base Salary") of no less than One Hundred Fifty Seven Thousand Five Hundred
Ninety Dollars ($157,590), payable in twenty-six equal biweekly installments.
Such Base Salary shall be subject to annual review effective no later than March
15 of each year during the term of this Agreement by the Executive Compensation
Committee. Base Salary may be increased, but not decreased below the Initial
Base Salary, as a result of such annual review.

            3.02 ANNUAL DISCRETIONARY BONUS. In addition to the foregoing, the
Executive Compensation Committee shall determine, in connection with its annual
review and based on the Employee's performance during the preceding year,
whether a bonus should be awarded and the amount of such bonus. Any bonus
awarded shall be consistent with APS policy on executive bonuses as recommended
to the Board by the Executive Compensation Committee.

            3.03 OTHER BENEFITS. In the event APS institutes any employee
benefit, incentive, stock option, stock ownership or other director or employee
plan related thereto, Employee shall participate in such plan in a manner
commensurate with his position with APS, but in any event, not less than any
other Officer or Director.

                             ARTICLE IV. TERMINATION

            4.01     TERMINATION BY APS.

            (a) APS may terminate this Agreement for Just Cause by giving
Employee thirty (30) days written advance notice. Termination for Just Cause
shall be for specified matters of genuine importance, materiality and
significance, and only as

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follows:

                     1. conviction of a felony;

                     2. commission of illegal conduct in office; or

                     3. gross disregard by Employee of his duties set forth
                        in Section 2.01 of this Agreement.

                     4. inability to perform properly official duties and
                        responsibilities by reason of physical or mental
                        disability for a period of six (6) consecutive months.

            APS shall have the right to make the termination provided for in
subparagraphs one (1) through (3) of this Section 4.01(a) immediately effective
upon the payment of Employee's compensation under this Agreement for the thirty
(30) day notice period.

            In the event that APS terminates this Agreement for reasons of Just
Cause specified in subparagraphs (1),(2) and (3) of this Section 4.01(a),
Employee shall be entitled to no further compensation or benefits hereunder
beyond the effective date of termination, except those provided for in Section
4.04. In the event that APS terminates this Agreement for reasons of Just Cause
specified in subparagraph (4) of this Section 4.01(a), Employee shall thereafter
receive payments, without any offset, under any disability insurance maintained
by APS following such termination of employment, and shall receive severance
compensation equal to three months of his then current Base Salary.

            (b) APS shall be entitled to terminate this Agreement for any reason
other than Just Cause by giving ninety (90) days advance written notice to
Employee. APS shall have the right to make the termination pursuant to the
preceding sentence effective at any time prior to the expiration of the 90 day
notice period, upon payment of Employee's compensation under this Agreement for
such ninety (90) day notice period. Such payments shall be in addition to the
Termination Payments (as defined in subparagraph (c)).

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            (c) If APS terminates this Agreement for any reason other than Just
Cause, or if this Agreement is terminated pursuant to Section 4.01(d) below the
payments provided for in Section 3.01 and 3.02 of this Agreement, the rights
accruing under Section 3.03 of this Agreement, and the insurance coverage
provided for in Section 5.01(b), (c) and (d) of this Agreement (collectively
"Termination Payments") shall continue through March 31, 1999. Notwithstanding
the foregoing, if APS terminates this Agreement for any reason other than Just
Cause, and if the effective date of such termination is on or after March 31,
1998, but before March 31, 1999, the Termination Payments shall continue to the
last day of the twelfth month following the last day of the month in which such
termination was effective.

            (d) If Employee reasonably so determines, termination of this
Agreement by APS shall include diminishing or encumbering Employee's duties and
authority so that he no longer has the duties and authority set forth in Section
2.01 of this Agreement or otherwise breaching any material term hereof; provided
that prior to any termination for the reason set forth in this Section 4.01(d),
Employee shall provide notice to APS of the grounds for such termination and the
Board of Directors shall have thirty (30) days to change the policies or actions
providing the basis for such termination.

            (e) Termination Payments payable under this Section 4.01 shall be
paid regardless of whether Employee accepts employment elsewhere during the
period of the Termination Payments, and Employee shall not be required to
furnish any services to APS after such termination.

            4.02     TERMINATION BY EMPLOYEE.  This Agreement is not
terminable by Employee except as provided in Section 4.01(d) above.

            4.03     AGREEMENT NOT TO COMPETE.

            (a) In the event Employee terminates this Agreement other than as
provided in Section 4.01(d), or is terminated for Just Cause pursuant to
subparagraphs (1), (2) or (3) of Section 4.01, Employee agrees that for a period
of eighteen (18) months from the date of such termination that he will not
accept employment with, act as a consultant to, become a director or shareholder
of, or otherwise provide services to, any organization not affiliated with APS
which is in competition with the business of APS anywhere in the United States
on the date of Employee's termination;

            (b) In the event Employee is terminated for Just Cause

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under Section 4.01(a)(4) and is then receiving disability insurance payments,
APS may elect, at the time Employee is no longer employed by Employer because of
such termination, to pay Employee an amount equal to twelve (12 months)
compensation; and, in such event, Employee shall be bound by the agreement not
to compete in Section 4.03(a) for twelve (12) months, from the date of such
termination;

            (c) If, following the expiration of this Agreement on March 31,
1999, Employee is terminated for reasons that would constitute Just Cause for
Termination under Section 4.01(a)(1) (2) or (3) if this Agreement were then in
effect or Employee terminates his employment, Employee shall be bound by the
agreement not to compete in Section 4.03 (a) for twelve months from the date of
such termination. This Section 4.03(c) shall not apply if at any time after
March 31, 1999, APS (i) reduces Employee's then current Base Salary or
terminates or reduces any of the benefits referenced in Section 3.03 of this
Agreement that are then accorded to him; (ii) diminishes or encumbers Employee's
then current duties and authorities or (iii) removes Employee's titles of
President or Chief Executive Officer.

            4.04  UNPAID COMPENSATION. In addition to any other payments
provided for in this Article IV, upon termination Employee shall be paid in
accordance with APS policy for accrued but unused leave and other earned but
unpaid benefits or compensation, including, without limitation, disability
payments, reimbursement for incurred expenses and any bonus or other benefit
awarded pursuant to Section 3.02 and 3.03 of this Agreement that has not yet
been fully paid to Employee.

            4.05  AUTOMATIC TERMINATION. If Employee should die during the term
of this Agreement, Employee's employment and APS's obligations hereunder shall
automatically terminate as of the end of the month in which his death occurs.

                              ARTICLE V. INSURANCE

            5.01  APS shall provide Employee with the following insurance
coverage at APS's sole expense:

                  (a) if commercially feasible, professional liability coverage
(or self-insurance) insuring Employee for all acts undertaken in good faith in
his capacities specified in this Agreement;

                  (b) a universal or other life insurance policy selected by
Employee (with a beneficiary or beneficiaries of his choice); to the extent
afforded to executive employees of APS;

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<PAGE>

                  (c) disability coverage accorded to executive employees of
APS; and

                  (d) group health and dental insurance available to executive
employees of APS covering Employee and his family.

                                ARTICLE VI. LEAVE

            6.01  VACATION. Employee shall be entitled to a vacation of twenty
(20) business days per year, during which time his salary shall be paid in full.
The Board of Directors may approve longer vacations with or without pay. Accrual
of leave shall be consistent with APS policy.

            6.02. DISABILITY. Employee shall continue to receive full
compensation during any period of illness or disability within the term of this
Agreement until such time as he is terminated for Just Cause under Section
4.01(a)(4).

                              ARTICLE VII. EXPENSES

            7.01  BUSINESS EXPENSES. Employee shall be reimbursed for his
ordinary, necessary and reasonable expenses which may be incurred in the course
of transacting the business of APS. In particular, APS's reimbursement will
cover expenses that Employee will be required to incur for travel in connection
with the business of APS and to entertain business-related persons both in his
home and at outside facilities.

            7.02 RECORDS; KEY MAN INSURANCE. Employee agrees to maintain
adequate records, in such detail as APS may reasonably request, of expenses to
be reimbursed by APS. Employee agrees to reasonably cooperate to assist APS, at
its sole cost, to secure key man life insurance on Employee's life which names
APS as the beneficiary of that insurance policy.

              ARTICLE VIII. PROTECTION OF CONFIDENTIAL INFORMATION

            8.01  CONFIDENTIAL INFORMATION. Employee acknowledges that:

                  (a)   As a result of his employment by APS, Employee has
obtained and will obtain secret and confidential information concerning the
business of APS and its affiliates, including, without limitation, the identity
of customers and sources of supply, their needs and requirements, the nature and
extent of contracts with them, and related cost, price and sales information.

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<PAGE>

                  (b)   APS and its affiliates will suffer substantial damage
which will be difficult to compute if, during the period of his employment with
APS or thereafter, Employee should divulge secret and confidential information
relating to the business of APS heretofore or hereafter acquired by him in the
course of his employment with APS. The provisions of this Agreement are
reasonable and necessary for the protection of the business of APS and its
affiliates.

            8.02  NON-DISCLOSURE. Employee agrees that he will not at any time,
either during the term of this Agreement or thereafter, divulge to any person,
firm or corporation any information obtained or learned by him during the course
of his employment with APS, with regard to the operational, financial, business
or other affairs of APS or its affiliates, their officers and directors,
including, without limitation, trade secrets, "know how," customer lists,
sources of supply, pricing policies, operational methods or technical processes,
except (i) in the course of performing his duties hereunder, (ii) with APS'
express written consent; (iii) to the extent that any such information is in the
public domain other than as a result of Employee's breach of any of his
obligations hereunder; or (iv) where required to be disclosed by court order,
subpoena or other government process. In the event that Employee shall be
required to make disclosure pursuant to the provisions of clause (iv) of the
preceding sentence, Employee promptly, but in no event more than 48 hours after
learning of such subpoena, court order, or other government process, shall
notify, by personal delivery or by cablegram, confirmed by mail, APS and, at APS
expense, Employee shall: (a) take all reasonably necessary steps requested by
APS to defend against the enforcement of such subpoena, court order or other
government process, and (b) permit APS to intervene and participate with counsel
of its choice in any proceeding relating to the enforcement thereof.

            8.03  DELIVERY OF DOCUMENTS. Upon termination of his employment with
APS, or at any time APS may so request, Employee will promptly deliver to APS
all memoranda, notes, records, reports, manuals, drawings, blueprints and other
documents (and all copies thereof) relating to the business of APS and its
affiliates and all property associated therewith, which he may then possess or
have under his control.

            8.04  BREACH AND ENFORCEMENT. If Employee commits a breach, or
threatens to commit a breach, of any of the provisions of Article VIII, the
Corporation shall have the right and remedy to have the provisions of this
Agreement specifically enforced by any court having equity jurisdiction, it
being acknowledged and

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agreed by Employee that the confidentiality commitments being made under this
Article 8 to APS are of a special, unique and extraordinary character and that
any such breach or threatened breach will cause irreparable injury to APS and
that money damages will not provide an adequate remedy to APS. Each of the
rights and remedies enumerated in this Section 8.04 shall be independent of the
other, and shall be severally enforceable, and such rights and remedies shall be
in addition to, and not in lieu of, any other rights and remedies available to
the Company under law or equity.

                               ARTICLE IX. NOTICES

            9.01  NOTICES, Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and delivered by hand to an
officer of APS other than Employee, or Employee, as the case may be, at the
address set forth below, or sent by certified or registered mail, return receipt
requested, postage prepaid, to an officer of APS other than Employee, or to
Employee, as the case may be, at the address set forth below, or to such other
person or at such other place as either party may designate in a notice.

            Notice shall be sent as follow:

            To APS:                 American Psych Systems, Inc.
                                    One Democracy Plaza, Suite 410
                                    6701 Democracy Boulevard
                                    Bethesda, Maryland  20817

            To Employee:            Kenneth A. Kessler, M.D.
                                    4833 Rockwood Parkway, N.W.
                                    Washington, D.C.  20016

                       ARTICLE X. MISCELLANEOUS PROVISIONS

            10.01 WAIVER OF BREACH. The waiver by either party of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by either party.

            10.02 ENTIRE UNDERSTANDING. This Agreement represents the full,
complete and entire understanding of the parties hereto with respect to the
subject matter contained herein and there are no contracts, representations,
understandings, agreement, undertakings, conditions precedent, conditions
subsequent, or other obligations of any nature or sort, express or implied,
written or oral, which are not expressly set forth in this Agreement.

                                     - 8 -
<PAGE>

            10.03 AMENDMENT. This Agreement may not be amended or modified
except in writing, which writing must be executed by both parties to this
Agreement.

            10.04 GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Maryland.

            10.05 SEVERABILITY. In the event that any term or condition of this
Agreement, or portion thereof, shall be deemed to be held null and void, the
remaining terms and conditions of this Agreement shall be enforced just as if
such illegal or prohibited term or condition had not been contained herein.

            10.06 ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof, including the arbitrability of
the dispute itself, shall be settled by one arbitrator in accordance with
arbitration conducted pursuant to the Commercial Arbitration Rules of the
American Arbitration Association in effect at the time the arbitration demand is
filed or such other rules as may be mutually agreed to by the parties. Each
party shall bear his or its own expenses in connection with an arbitration
proceeding hereunder. The decision of the Arbitrator shall be final and binding
on all parties hereto, and judgment may be entered upon the award rendered by
the Arbitrator in any court having jurisdiction thereof.

                                     - 9 -
<PAGE>

            10.07 INDEMNIFICATION. APS agrees to indemnify and hold harmless
employee for all acts and omissions of Employee in connection with his position
(and within his job description) as specified herein of APS. As provided for in
Article 5.01, APS, when feasible, will commercially insure itself against any
and all such acts and omissions by Employee which give rise to a legal claim,
controversy or suit against him, but in the absence of such commercial insurance
(or self insurance arrangements), APS agrees to defend, pay all costs related to
the defense of, and any money settlements or judgments to be attributable to his
acting in his capacity hereunder; provided, however, that he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of APS.

      IN WITNESS WHEREOF, APS has caused its duly authorized officer to execute
and acknowledge this Agreement and Employee has set his hand and seal, all on
the day and year first above written.

                              AMERICAN PSYCH SYSTEMS, INC.

                        By:   /s/ John Heffner
                              ---------------------------------
                              John C. Heffner, Vice President

                              EMPLOYEE

                              /s/ Kenneth Kessler
                              ---------------------------------
                              Kenneth A. Kessler

                                     - 10 -

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