Document:

Amendment No. #3 to the Amended and Restated Stock Option Plan

 Exhibit 10.9(cc) 
  
 AMENDMENT NO. 3 
 TO THE 
 PEDIATRIC SERVICES OF AMERICA, INC. STOCK OPTION PLAN 
 (As Amended and Restated Effective November 28, 2001) 
  
 THIS AMENDMENT NO. 3 to the PEDIATRIC SERVICES OF AMERICA, INC. STOCK OPTION PLAN (as amended and restated November 28, 2001), effective as of August 17,
2004; 
  
 W I T N E S
S E T H 
  
 WHEREAS, the Board of
Directors of Pediatric Services of America, Inc. (Delaware) (the “Board”) and the shareholders of Pediatric Services of America, Inc. (Delaware) (the “Company”) have approved an amendment and restatement of the Pediatric Services
of America, Inc. Stock Option Plan, effective as of November 28, 2001 (the “Employees Plan”); 
  
 WHEREAS, the Board has the authority in accordance with Section 10.1 of the Plan to amend the Employees Plan further, subject to the terms and conditions
specified in Employees Plan Section 10.2; and 
  
 WHEREAS, the
Board desires to amend the Employees Plan further to permit the administrator the Employees Plan (the “Committee” as defined in Section 2.9 of the Employees Plan), in its sole discretion, to extend the time for the exercise of options
granted under the Employees Plan beyond the period specified in the relevant original option grant under such terms and conditions as it may determine, but in no event beyond the maximum exercise period specified in Section 6.5 of the Employees
Plan; 
  
 NOW, THEREFORE, the Board hereby amends the Plan as
follows, effective as stated above: 
  
 1. Section 6.13 of the
Plan is amended and restated in its entirety to read as follows: 
  
 “6.13 Acceleration and Extension of Exercise Period. Notwithstanding anything in this Article 6 to the contrary, the Committee shall at all times have the power (i) to accelerate the vesting date of
Options previously granted under this Plan and (ii) to extend the time for the exercise of Options previously granted under this Plan beyond the period specified in the relevant original Option Agreement and this Plan under such terms and conditions
as it may determine, but in no event beyond the maximum exercise period specified in Section 6.5 of this Plan.” 
  
 2. Except as hereinabove and heretofore amended and modified, the Plan as amended and restated effective November 28, 2001 shall remain in full force and
effect. 
  
 Adopted by the Board of Directors of

 Pediatric Services of America, Inc. on August 17, 2004Separation Agreement by and between the Company and Joseph D. Sansone

 Exhibit 10.9 (dd) 
  
 SEPARATION AGREEMENT AND GENERAL RELEASE 
  
 This Separation Agreement and General Release (“Separation Agreement”) is entered into by and between JOSEPH D.
SANSONE (“Sansone”) an individual residing in the State of Georgia, and PEDIATRIC SERVICES OF AMERICA, INC., a Delaware corporation (“PSA”). 
  
 WHEREAS, Sansone has been an employee of PSA pursuant to an Amended and Restated Employment Agreement dated November 7, 2002
(the “Employment Agreement”); and 
  
 WHEREAS, Sansone
and PSA have decided to terminate the Employment Agreement and the employment relationship; and 
  
 WHEREAS, Sansone and PSA wish to memorialize in writing the terms upon which the employment relationship is being terminated; 
  
 THEREFORE, Sansone and PSA agree as follows: 
  
 1. Termination of Employment. 
  
 (a) Termination of Employment. Sansone’s employment with PSA
shall end effective August 9, 2004 (the “Separation Date”). 
  
 (b) Termination of Employment Agreement. Effective as of the Separation Date, Sansone and PSA agree that the Employment Agreement shall be of no further force and effect, and shall be superseded in all regards by this Separation
Agreement. From and after the Separation Date, neither Sansone nor PSA shall have any ongoing obligations toward the other pursuant to the Employment Agreement, except as may be expressly stated in this Separation Agreement. 
  
 (c) Resignation as Officer and Director. Sansone resigns his position
as an officer and director of PSA effective as of the Separation Date. In addition, Sansone resigns his position as an officer and director of each of the direct and indirect subsidiaries of PSA effective as of the Separation Date. Furthermore,
Sansone resigns, as of the Separation Date, from any and all PSA positions to which he was elected or appointed, including but not limited to any and all positions under PSA employee benefit plans, and positions in which Sansone was charged with
fiduciary responsibility or was an official representative of PSA. 
  
 (d) Resignation from Other Organizations. Sansone agrees to resign from his position as a director of the American Association for Home Care, and to take necessary steps to transfer his membership in that organization and other
similar organizations to an appropriate representative of PSA. 
  
 2. Transition. Both before and after the Separation Date, Sansone will assist PSA with (a) the transition of his existing duties to the person(s) designated by the Board of Directors of PSA; (b) execution of any documentation
necessary to transfer any licenses or similar documents relating to PSA’s business; (c) cooperation with PSA’s communication plan regarding Sansone’s separation from PSA and related public communications; and (d) any litigation or
arbitration proceeding that currently exists or may arise in the future relating to matters as to which Sansone had relevant knowledge during his employment with PSA. 

 3. Compensation and Benefits. 
  
 (a) Severance Payments. Sansone shall receive severance payments totaling $1,289,808.00, representing the sum of
$1,066,667 in severance pay, $210,000 for his final year bonus, and $13,141 in accrued vacation. These severance payments shall be made in three installments. The first payment shall be in the amount of $644,904.00, and shall be made within five (5)
business days following the Effective Date (as defined in section 5(b) below). The second payment shall be in the amount of $322,452.00 and shall be made on or before August 9, 2005. The third payment shall be in the amount of $322,452.00 and shall
be made on or before August 9, 2006. For purposes of this Separation Agreement, the period from the Separation Date until August 9, 2006 shall be referred to as the “Severance Period.” In the event of Sansone’s death during the
Severance Period, the remainder of the severance payments shall be made to Sansone’s estate. 
  
 (b) Health insurance. PSA shall reimburse Sansone for health insurance coverage for Sansone and his wife, to the extent reasonably commercially
available, for a period of thirty-two (32) months following the Separation Date (the “Health Insurance Period”). Such insurance coverage shall be provided, at the election of PSA, by means of: (i) an individual policy purchased through an
outside insurance carrier providing benefits reasonably comparable to those provided by PSA’s group health insurance plan; (ii) continuation of Sansone’s participation in PSA’s group health insurance plan pursuant to COBRA; or (iii)
some combination of COBRA coverage and an outside individual policy. PSA shall reimburse Sansone for the cost of such coverage less the premium amounts Sansone would have paid had he remained a participant in PSA’s group health insurance plan
as a regular employee. In the event that an outside individual policy is utilized and is in force at the end of the Health Insurance Period, Sansone shall be permitted to continue his health insurance coverage at his own expense to the extent
permitted by the terms of the insurance policy. In the event that Sansone obtains alternative employment in connection with which he is offered health insurance coverage through his new employer during the Health Insurance Period, PSA’s
obligations under this paragraph shall cease. In the event of Sansone’s death during the Health Insurance Period while receiving reimbursement payments under this subsection, PSA will make reasonable efforts to continue the health insurance
benefits provided in this section for Sansone’s spouse for the remainder of the Health Insurance Period. 
  
 (c) Stock Options. All unexercised stock options granted to Sansone prior to the Separation Date shall be deemed immediately fully vested and
exercisable as of the Effective Date, and shall remain exercisable thereafter for the remainder of their respective maximum terms, notwithstanding Sansone’s termination of employment with PSA. PSA shall take such steps as are necessary to
effectuate such acceleration of vesting and extension of the exercisability of such options beyond their otherwise applicable expiration date upon termination of employment. The stock options shall remain subject to their terms and conditions (and
the terms and conditions of the respective option plans under which they were issued), other than as explicitly provided herein. Sansone acknowledges that the implementation of the modifications to his outstanding unexercised Incentive Stock Options
contemplated in this subsection will have the effect of converting such options to Nonqualified Stock Options for purposes of the Internal Revenue Code of 1986, as amended. 
  

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 (d) Deferred Compensation. Upon the Separation Date, Sansone shall cease to participate in the
Pediatric Services of America, Inc. Non-Qualified Deferred Compensation Plan (the “DCP”). Accordingly, as provided under the DCP, no payments made to Sansone after the Separation Date, including without limitation any payments made
pursuant to this Separation Agreement, shall be eligible for deferral or otherwise considered part of Sansone’s Plan Year Compensation as defined in the DCP. Sansone acknowledges that, pursuant to the DCP, he has 30 days from the Separation
Date to elect whether to receive benefits under the DCP in a lump sum or in installments over five years, and that if he fails to make such an election, he will receive his DCP benefits in a lump sum. 
  
 (e) Cellular Phone. Sansone shall be permitted to retain the cellular
telephone provided to him by PSA during his employment. PSA shall make reasonable efforts to transfer the telephone number(s) associated with such equipment to Sansone’s personal accounts. Sansone shall be solely responsible for all usage fees
for the cellular telephone after the Separation Date. Sansone shall indemnify, defend and hold harmless PSA, its affiliates, directors, officers, employees and agents, and all their affiliates (collectively, the “Indemnified Parties”),
from and against any and all losses, including reasonable attorneys’ fees, directly or indirectly incurred by any Indemnified Party that arise out of Sansone’s use of such devices and telephone numbers after the Separation Date.

  
 (f) Electronic Mail. For a period of at least ninety
(90) days following the Separation Date, PSA shall make reasonable efforts to forward to Sansone’s personal e-mail account those e-mail messages directed to Sansone’s PSA e-mail address. PSA may retain electronic copies of all such
messages in its computer system. 
  
 (g) Automobile.
Sansone may purchase from PSA the 2003 Mercedes S430 automobile provided for his use as of the Separation Date, at a price equal to the value of such automobile shown on PSA’s accounting records as of the Separation Date, if Sansone so elects
by providing written notice to the Chief Financial Officer of PSA within ten (10) days after the Separation Date, along with a certified check in the amount of the purchase price. Sansone shall be responsible for all costs associated with such
transaction, including but not limited to taxes, license and transfer fees. If Sansone elects not to purchase the automobile in accordance with this paragraph, he shall return it to PSA within ten (10) days after the Separation Date. 
  
 (h) Other benefits. Except as otherwise expressly stated herein, all
employee benefits and other compensation provided by PSA to Sansone shall cease as of the Separation Date. 
  
 4. Release by Sansone. Except as to claims arising out of PSA’s promises and obligations under this Separation Agreement, Sansone, on behalf
of himself and his spouse, heirs, executors, administrators, assigns, insurers, attorneys and other persons or entities, acting or purporting to act on his behalf (collectively, the “Sansone Parties”), does hereby irrevocably and
unconditionally release, acquit and forever discharge Pediatric Services of America, Inc. (a Delaware corporation) and its subsidiaries (including but not limited to PSA Capital, Inc., a 
  

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 Delaware corporation; PSA Licensing, Inc., a Delaware corporation; PSA Properties, Inc., a Delaware corporation;
Pediatric Services of America, Inc., a Georgia corporation; and Pediatric Home Nursing Services, Inc. a New York corporation), and each of their affiliates, directors, officers, employees, partners, agents, representatives, predecessors, successors,
assigns, insurers, and attorneys (collectively, the “PSA Parties”), from any and all actions, causes of action, suits, claims, obligations, liabilities, debts, demands, contentions, damages, judgments, levies and executions of any kind,
whether in law or in equity, known or unknown, including but not limited to claims which the Sansone Parties have or have had against the PSA Parties by reason of, arising out of, related to, or resulting from Sansone’s employment with PSA or
the termination thereof. 
  
 The claims released herein
specifically include, but are not limited to, any claims arising in tort or contract, any claim based on wrongful discharge, any claim based on breach of contract, and any claim arising under federal, state, or local law prohibiting race, sex, age,
religion, national origin, handicap, disability or other forms of discrimination. This release specifically includes any claim which the Sansone Parties have or have had under Georgia state law regarding employment discrimination or wages; Title VII
of the Civil Rights Act of 1964, as amended; 42 U.S.C. § 1981; the Age Discrimination in Employment Act, as amended; the Americans with Disabilities Act; the Family and Medical Leave Act (including any reinstatement rights thereunder); and the
Employee Retirement Income Security Act, as amended. The claims released herein also specifically include any claims for attorney’s fees or expenses of litigation arising out of any dispute between the Sansone Parties and the PSA Parties
relating to any claim released herein. 
  
 5. Representations
by Sansone. 
  
 (a) Sansone represents and warrants to the
PSA Parties that he has read this Separation Agreement and fully understands the effect hereof, that he executes this Separation Agreement of his own free will and accord for the consideration set forth herein, and that he is not relying on any
representations whatsoever of PSA, other than those set forth herein, as an inducement to enter into this Separation Agreement. 
  
 (b) Sansone has had the opportunity to discuss this Separation Agreement with an attorney, and he has been encouraged by PSA to do so. Sansone covenants
and agrees that he has been given at least twenty-one (21) days to contemplate the terms of this Separation Agreement before executing it, and that if he chooses to execute it in fewer than 21 days, he does so of his own free will and volition.
Further, after execution of this Separation Agreement, Sansone has seven (7) days to revoke it by delivering written notice to the Chief Financial Officer of PSA of his decision to revoke this Separation Agreement. This Separation Agreement shall
not become effective or enforceable until the eighth day after the date on which Sansone executes this Separation Agreement (the “Effective Date”). 
  
 (c) Sansone further represents and warrants to the PSA Parties that no litigation or other proceeding has been filed or is pending by the Sansone Parties
against the PSA Parties; that no person or entity other than Sansone has or has had any interest in the matters released herein; that Sansone has the sole right, capacity, and exclusive authority to execute this Separation Agreement; and that
Sansone has not sold, assigned, transferred, conveyed or otherwise disposed of any of the claims, demands, obligations, or causes of action released herein. 
  

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 6. Attorney’s fees. In any subsequent litigation or other proceeding to enforce the terms of
this Separation Agreement, whether initiated by Sansone or PSA, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and costs, expert witness fees and costs, and court costs, from the other party. 
  
 7. Restrictive Covenants. 
  
 (a) Background. During his employment with PSA, Sansone has had
intimate knowledge of all aspects of PSA’s business, including its strategic plans and its financial information. In his role as Chief Executive Officer of PSA, Sansone has also developed ongoing business relationships with Medicaid programs in
the states in which PSA does business, as well as with the managed care companies with which PSA does business. Because of his vast knowledge and his relationships, PSA would suffer significant and irreparable harm if Sansone were to engage in the
conduct prohibited by this Section 7. Accordingly, Sansone agrees to the following restrictions. 
  
 (b) Noncompetition. During the Restricted Period, Sansone will not, directly or indirectly, on his own behalf or on behalf of another, acquire an
ownership interest in or act in the capacity of a director, officer, manager, supervisor, partner or consultant for any business which engages in one or more of the Restricted Lines of Business (as defined below) in the Restricted Territory (as
defined below). This paragraph shall not restrict Sansone from acquiring not more than two percent (2%) of the common stock of any publicly-traded corporation. This paragraph also shall not restrict Sansone from becoming employed by a company which
engages in the Restricted Lines of Business, as long as Sansone’s services for such employer are entirely separate from and unrelated to the Restricted Lines of Business and Sansone otherwise complies with the confidentiality and nonrecruitment
restrictions of this Section 7. 
  
 (c) Nonrecruitment of
Employees. During the Restricted Period, Sansone will not, directly or indirectly, on his own behalf or on behalf of another, solicit for employment or hire any employee of PSA or its subsidiaries or otherwise induce any employee of PSA or its
subsidiaries to terminate his/her employment. This paragraph shall not restrict Sansone from soliciting or hiring any member of his immediate family. 
  
 (d) Confidentiality. During Sansone’s employment with PSA, he has had access to and become familiar with information that the parties
acknowledge to be confidential, valuable and uniquely proprietary information. During the Restricted Period, Sansone shall neither use nor disclose for any purpose any confidential or proprietary information relating to the financial condition or
the manner of doing business or the property of PSA, its customers and business associates, other than to his attorney for the purpose of securing legal advice concerning this Separation Agreement. In the case of information which constitutes trade
secrets under applicable state law, Sansone agrees to maintain the secrecy of such information for so long as the law permits such information to be protected from disclosure. 
  

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 (e) Return of Property. Sansone hereby represents and warrants that, except as otherwise provided
in this Separation Agreement, no later than the Separation Date, he has or will have returned to PSA all documents or other property (including copies thereof) of any nature which relate to or contain information concerning PSA or the PSA Parties,
or its or their customers and business associates, as well as any other equipment or property belonging to PSA or the PSA Parties. 
  
 (f) Nondisparagement. During the Restricted Period, Sansone will not make any statements that are derogatory or disparaging towards PSA or the PSA
Parties or PSA’s management, products, or services, and PSA will not make any statements that are derogatory or disparaging toward Sansone or his professional reputation. 
  
 (g) Definitions. For purposes of this Section 7, the following terms shall have the following meanings: 

 
 (i) Restricted Period. The Restricted Period
shall refer to that period of time beginning on the Separation Date and ending on August 9, 2006. 
  
 (ii) Restricted Lines of Business. The Restricted Lines of Business shall include the following business lines that PSA (through
its subsidiaries) was either operating or actively considering operating as of the Separation Date: 
  
 (1) Pediatric Nursing Services, including private duty home nursing services for pediatric patients with illnesses and conditions such as
bronchopulmonary dysplasia, digestive and absorptive diseases, congenital heart defects and other cardiovascular disorders, cancer, cerebral palsy, cystic fibrosis, obstructive and restrictive pulmonary disease such as bronchitis or asthma,
endocrinology disorders, hemophilia, orthopedic conditions and post surgical needs, as well as intermittent home visits for patients with a lower level of acuity. In addition, these services include staffing contracts for educational institutions
and systems and pediatric skilled nursing facilities. 
  
 (2) Care centers similar to PSA’s Prescribed Pediatric Extended Care Centers, which provide, among other services, daily medical care and physical, occupational, and other forms of therapy for medically fragile, chronically ill and
developmentally delayed children. 
  
 (3)
Specialty Pharmacy and Infusion Therapy Services, which provide pharmaceutical products and services for patients in the home and physician offices. Pharmacy services include clinical drug management, patient counseling, compliance monitoring, side
effect management, educational information and reimbursement services for complex drug regimens. Specialty pharmacy provides self-injectable biotech medications for chronic diseases. Infusion therapy involves the intravenous administration of
nutrients, antibiotics and other medications. Specialty Pharmacy and Infusion Therapy Services address a wide variety of patient needs including hemophilia therapy, antibiotic and other anti-infective therapies, total parenteral nutrition therapy,
pain 
  

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 management therapy, growth hormone therapy, immunomodular therapy and chemotherapy, osteomyelitis,
bacterial endocarditis, cellulitis, septic arthritis wound infections, recurrent infections associated with the kidney and urinary tract, and AIDS. In addition, these services include therapies provided to terminally or chronically ill patients
suffering from acute or chronic pain, patients with impaired or altered digestive tracts due to gastrointestinal illness, patients suffering from various types of cancer, patients requiring treatment for congestive heart failure and patients with
chronic conditions such as hemophilia, cystic fibrosis, juvenile rheumatoid arthritis, multiple sclerosis and endocrinology disorders. This line of business also includes a mail order medication service that provides physician prescribed unit dose
medications to respiratory therapy patients. 
  
 (4) Respiratory Therapy and Home Medical Equipment Services, including (A) the rental, sale, delivery and setup in accordance with physician prescriptions of equipment such as ventilators, oxygen concentrators, liquid oxygen systems, high
pressure oxygen cylinders, apnea monitors and nebulizers, (B) period evaluation and maintenance or equipment, and (C) delivery and setup of disposable supplies necessary for the operation of the equipment to pediatric patients in the home. These
services are provided to patients with a variety of conditions including obstructive and restrictive pulmonary diseases, neurologically related respiratory problems, cystic fibrosis, congenital heart defects and cancer. This line of business also
provides rental, sale and service of home medical equipment and respiratory therapy services to adult patients with a focus on high-technology products including, but not limited to, ventilators, oxygen concentrators, liquid oxygen systems,
continuous positive airway pressure devices (“CPAP”), bi-level assist devices (“Bi-PAP”), and oximetry and apnea monitors. 
  
 (5) Pediatric Case Management Services. 
  
 (iii) Restricted Territory. The Restricted Territory is the area that is within a 25-mile radius of each location of PSA
(including its subsidiaries) as of the Separation Date, more specifically identified on Exhibit A hereto. 
  
 (h) Remedies. The parties acknowledge that the restrictions contained in this Section 7 are reasonable and appropriate for the protection of
PSA’s legitimate business interests, and that they will not unduly impair Sansone’s ability to find other employment. Sansone acknowledges and agrees that, in the event of a violation of one or more of Sansone’s covenants in this
Section 7 or in Section 2, in addition to and not in lieu of any other remedy to which PSA may be entitled, PSA shall be permitted to seek and obtain immediate injunctive relief, restraining further violations by Sansone, in a court of competent
jurisdiction, and without the necessity for posting of a bond or other security. In addition to and not in lieu of any other remedy to which PSA may be entitled, no further payments or benefits of any kind that would otherwise inure to Sansone
pursuant to Section 3 of this Separation Agreement shall accrue or be owed, and all future payments and benefits hereunder shall be forfeited, immediately upon Sansone’s violation of any of the covenants in Sections 2 or 7 of this Separation
Agreement. 
  

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 8. No Admission of Liability. This Separation Agreement shall not be construed as an admission of
liability by PSA or an admission that PSA has acted in any way wrongfully towards Sansone. The parties specifically deny and disclaim any such liability or wrongful conduct. 
  
 9. Confidentiality of Agreement. Sansone will treat the terms of this Separation Agreement as confidential and will
not disclose the terms of this Separation Agreement to anyone except his spouse, attorney, accountant or financial advisor, or except as may be required by law or agreed to in writing by PSA. Sansone shall notify his spouse, attorney, accountant
and/or financial advisor of the confidential nature of this Separation Agreement. 
  
 10. Taxation and Withholding. Sansone acknowledges that payments and benefits hereunder may be taxable and that PSA makes no representation or warranty regarding the income tax effects of any payment or benefit
provided hereunder. Sansone shall be solely responsible for his liability with respect to all payments and benefits provided under this Separation Agreement. PSA may withhold from any amounts payable under this Separation Agreement such federal,
state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. 
  
 11. Severability. In the event any portion or clause of this Separation Agreement is deemed invalid or unenforceable in a court of law, the
remainder of the Separation Agreement shall be severed from the invalid or unenforceable portion. 
  
 12. Entire Agreement. Any prior agreement (whether written or oral) between the parties with respect to the subject matter of this Separation
Agreement, including the Employment Agreement dated November 7, 2002, is null and void, as this Separation Agreement expresses the entire agreement of the parties with respect to its subject matter. This Separation Agreement may only be modified in
writing signed by both parties. 
  
 13. Assignment. This
Separation Agreement shall accrue to the benefit of PSA and its successors and assigns, and shall be freely assignable to any entity with which PSA may merge or otherwise combine, or to which PSA may transfer substantial assets. This Separation
Agreement is personal to Sansone and may not be assigned by him. 
  
 14. Governing Law. This Agreement shall be construed in accordance with, and governed by, the laws of the State of Georgia. 
  

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 WITNESS the execution of this Agreement effective on the Effective Date (defined in Section 5).

  

			
	PEDIATRIC SERVICES OF AMERICA, INC.
		
	By:	 	 /s/    EDWARD K. WISSING

	 Printed Name:
	 	 Edward K. Wissing

	 Title:
	 	 Chairman

		
	 	 	 /s/    JOSEPH D. SANSONE

 JOSEPH D. SANSONE

		
	 	 	 August 16, 2004

 Date of signature

  

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 EXHIBIT A 
  
 LIST OF PSA LOCATIONS AS OF SEPARATION DATE 
  

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