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<P id=PARA1 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman, Times, serif"><B>UNITED STATES </B></FONT></P>
<P id=PARA3 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman, Times, serif"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P>
<P id=PARA4 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>WASHINGTON, D.C. 20549 </B></FONT></P>
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<P id=PARA8 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman, Times, serif"><B>FORM 8-K </B></FONT></P>
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<P id=PARA9 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, Times, serif"><B>CURRENT REPORT </B></FONT></P>
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<P id=PARA11 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>PURSUANT TO SECTION 13 OR 15(d) OF THE </B></FONT></P>
<P id=PARA13 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>SECURITIES EXCHANGE ACT OF 1934 </B></FONT></P>
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<P id=PARA14 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Date of Report (Date of earliest event reported): </B><B>November 18, 2015</B><B> </B></FONT></P>
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<P id=PARA19 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 24pt; FONT-FAMILY: Times New Roman, Times, serif"><B>The Providence Service Corporation </B></FONT></P>
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<P id=PARA22 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Delaware</B></FONT></P></TD>
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<P id=PARA24 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>001-34221</B></FONT></P></TD>
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<P id=PARA26 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>86-0845127</B></FONT></P></TD></TR>
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<P id=PARA27 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>(State or other jurisdiction</B></FONT></P>
<P id=PARA28 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>of incorporation)</B></FONT></P></TD>
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<P id=PARA30 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>(Commission&nbsp;File Number)</B></FONT></P></TD>
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<P id=PARA32 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>(IRS Employer</B></FONT></P>
<P id=PARA33 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Identification No.)</B></FONT></P></TD></TR></TABLE>
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<P id=PARA36 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>64 East Broadway Blvd., Tucson, Arizona</B></FONT></P></TD>
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<P id=PARA38 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>85701</B></FONT></P></TD></TR>
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<P id=PARA39 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>(Address of principal executive offices)</B></FONT></P></TD>
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<P id=PARA41 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>(Zip Code)</B></FONT></P></TD></TR></TABLE>
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<P id=PARA43 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Registrant&#8217;s telephone number, including area code: (520)&nbsp;747-6600 </B></FONT></P>
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<P id=PARA45 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Not Applicable </B></FONT></P>
<P id=PARA47 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>(Former name or former address, if changed since last report) </B></FONT></P>
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<P id=PARA48 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: </FONT></P>
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<P id=PARA52 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </FONT></P></TD></TR></TABLE>
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<P id=PARA56 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </FONT></P></TD></TR></TABLE>
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<P id=PARA60 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </FONT></P></TD></TR></TABLE>
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<P id=PARA64 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </FONT></P></TD></TR></TABLE>
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<P id=PARA75 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.</B></FONT></P>
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<P id=PARA77 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Appointment of Chief Financial Officer</B></FONT></P>
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<P id=PARA79 style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">As previously reported on October 1, 2015, the Board of Directors of The Providence Service Corporation, or Providence, has appointed David Shackelton as Senior Vice President and Chief Financial Officer. </FONT></P>
<P id=PARA80 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA81 style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">On November 18, 2015, Providence and Mr. Shackelton entered into an employment agreement (the &#8220;Employment Agreement&#8221;), effective as of September 28, 2015 (the &#8220;Effective Date&#8221;), in connection with the appointment of Mr. Shackelton as Senior Vice President and Chief Financial Officer. The Employment Agreement provides for a term commencing as of the Effective Date and ending December 31, 2017. </FONT></P>
<P id=PARA82 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA83 style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Under the terms of the Employment Agreement, as of the Effective Date Mr. Shackelton&#8217;s annual base salary is $450,000. In addition to his annual base salary, during the term of the Employment Agreement, Mr. Shackelton is eligible to participate in 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&#8217;s then current policies and practices. For the calendar year 2015, Mr. Shackelton is eligible to participate in a bonus program under which he will be paid: (i) an amount equal to twenty-five percent (25%) of the base salary to which he was entitled starting on January 1, 2015 and ending on August 5, 2015 upon the achievement of the financial performance targets set by the Board for 2015; and (ii) an amount equal to seventy-five percent (75%) of his aggregate base salary payable for the period commencing August 6, 2015 and ending December 31, 2015 upon the achievement of the financial performance targets set by the Board for 2015, and up to an additional twenty-five percent (25%) of such base salary for performance in excess of such target.</FONT></P>
<P id=PARA84 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA85 style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company will maintain term life insurance in the amount of $900,000 on the life of Mr. Shackelton for a period of five years. Mr. Shackelton will have the absolute right to designate the beneficiaries under his policy. The Company will pay the premium for the shorter of (i) the period of five years commencing on the later of (a) the Effective Date or (b) the date the insurance goes into effect or (ii) the period Mr. Shackelton is employed by the Company. Premiums in respect thereof will thereafter be paid by Mr. Shackelton.</FONT></P>
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<P id=PARA87 style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Mr. Shackelton is eligible to receive a severance benefit in the event he is terminated by the Company without Cause (as such term is defined in the Employment Agreement). The severance benefit to which Mr. Shackelton will be entitled following such termination is equal to (i) any bonus, if earned, relating to a fiscal year which was completed before the effectiveness of his termination, (ii) any bonus, if earned, for the fiscal year through the date of effectiveness of his termination (pro-rated based on the number of days he is employed during the applicable fiscal year), and (iii) an amount, paid in periodic installments corresponding to the Company&#8217;s regular payroll periods, equal to the base salary he would be entitled to receive for the period which is twelve (12) months from the date of effectiveness of Mr. Shackelton&#8217;s termination (the &#8220;Post Employment Payment Period&#8221;). Payment of the severance benefit to Mr. Shackelton will be contingent upon his execution of a general release in favor of the Company and that on or prior to the payment date such general release is not revoked and Mr. Shackelton is not in material breach of the Employment Agreement.</FONT></P>
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<P id=PARA89 style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Certain payment provisions of the Employment Agreement with Mr. Shackelton are also triggered by a Change in Control (as such term is defined in the Employment Agreement) and an ensuing negative employment event. If a Change in Control of the Company occurs during the term of the Employment Agreement, and after such Change in Control but prior to the end of the term of the Employment Agreement the Company terminates Mr. Shackelton&#8217;s employment without Cause, in lieu of any other amounts payable under the Employment Agreement, Mr. Shackelton is entitled to receive the sum of (i) a lump sum payment in an amount equal to twelve months of his then-current base salary, and (ii) a pro-rata portion of any bonus earned prior to Mr. Shackelton&#8217;s termination.</FONT></P>
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<P id=PARA91 style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">If the sum of any lump sum payments and other benefits payable to Mr. Shackelton in connection with a Change in Control would constitute an &#8220;excess parachute payment&#8221; (as defined in Section 280G of the Internal Revenue Code of 1986, as amended), then such lump sum payment or other benefit due to Mr. Shackelton will be reduced to the largest amount that will not result in receipt by him of a parachute payment.</FONT></P>
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<P id=PARA93 style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Employment Agreement includes restrictive covenants providing for non-competition, non-solicitation, non-piracy, non-disclosure and non-disparagement by Mr. Shackelton. The term of the non-solicitation and non-piracy covenants is the period that includes the term of Mr. Shackelton&#8217;s employment and for two years thereafter. The term of the non-competition covenant is the period that includes the term of Mr. Shackelton&#8217;s employment, and (A) in the case of Mr. Shackelton&#8217;s resignation or termination by the Company for Cause, two years following the effective date of Mr. Shackelton&#8217;s termination of employment, or (B) in the case of termination by the Company without Cause, during the Post Employment Payment Period or, if the Company elects to continue to pay Mr. Shackelton his base salary for such period, up to two years following the effectiveness of termination of Mr. Shackelton&#8217;s employment.</FONT></P>
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<P id=PARA95 style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The preceding description of the Employment Agreement is qualified in its entirety by reference to the text of the Employment Agreement, which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.</FONT></P>
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<P id=PARA97 style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Item 9.01</B></FONT></P>
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<P id=PARA99 style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>(d) </B><B>Exhibits</B></FONT></P>
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<P id=PARA101 style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">10.1</FONT></P></TD>
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<P id=PARA102 style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Employment Agreement, dated as of September 28, 2015, by and between The Providence Service Corporation and David Shackelton</FONT></P></TD></TR></TABLE>
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<DIV id=PGNUM106  style="FONT-SIZE: 10pt; WIDTH: 100%; TEXT-ALIGN: center">3</DIV>
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<P id=PARA110 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>SIGNATURES</B></FONT></P>
<P id=PARA111 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA112 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 24.5pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. </FONT></P>
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<P id=PARA2.2 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">THE PROVIDENCE SERVICE CORPORATION</FONT></P></TD>
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<P id=PARA2.12 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date: November 19, 2015</FONT></P></TD>
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<P id=PARA2.13 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By: </FONT></P></TD>
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<P id=PARA2.14 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; /s/&nbsp;Michael-Bryant Hicks</FONT></P></TD>
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<P id=PARA2.17 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Name:&nbsp;</FONT></P></TD>
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<P id=PARA2.18 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael-Bryant Hicks</FONT></P></TD>
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<P id=PARA2.21 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Title:&nbsp;</FONT></P></TD>
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<P id=PARA2.22 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Senior Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer</FONT></P></TD>
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<P id=PARA2.23 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></P></TD></TR></TABLE>
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prsc20151119_8k.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
November 18, 2015
The Providence Service Corporation
(Exact name of registrant as specified in its charter)
Delaware
001-34221
86-0845127
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
64 East Broadway Blvd., Tucson, Arizona
85701
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (520) 747-6600
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Chief Financial Officer
As previously reported on October 1, 2015, the Board of Directors of The Providence Service Corporation, or Providence, has appointed David Shackelton as Senior Vice President and Chief Financial Officer.
On November 18, 2015, Providence and Mr. Shackelton entered into an employment agreement (the "Employment Agreement"), effective as of September 28, 2015 (the "Effective Date"), in connection with the appointment of Mr. Shackelton as Senior Vice President and Chief Financial Officer. The Employment Agreement provides for a term commencing as of the Effective Date and ending December 31, 2017.
Under the terms of the Employment Agreement, as of the Effective Date Mr. Shackelton's annual base salary is $450,000. In addition to his annual base salary, during the term of the Employment Agreement, Mr. Shackelton is eligible to participate in 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. For the calendar year 2015, Mr. Shackelton is eligible to participate in a bonus program under which he will be paid: (i) an amount equal to twenty-five percent (25%) of the base salary to which he was entitled starting on January 1, 2015 and ending on August 5, 2015 upon the achievement of the financial performance targets set by the Board for 2015; and (ii) an amount equal to seventy-five percent (75%) of his aggregate base salary payable for the period commencing August 6, 2015 and ending December 31, 2015 upon the achievement of the financial performance targets set by the Board for 2015, and up to an additional twenty-five percent (25%) of such base salary for performance in excess of such target.
The Company will maintain term life insurance in the amount of $900,000 on the life of Mr. Shackelton for a period of five years. Mr. Shackelton will have the absolute right to designate the beneficiaries under his policy. The Company will pay the premium for the shorter of (i) the period of five years commencing on the later of (a) the Effective Date or (b) the date the insurance goes into effect or (ii) the period Mr. Shackelton is employed by the Company. Premiums in respect thereof will thereafter be paid by Mr. Shackelton.
Mr. Shackelton is eligible to receive a severance benefit in the event he is terminated by the Company without Cause (as such term is defined in the Employment Agreement). The severance benefit to which Mr. Shackelton will be entitled following such termination is equal to (i) any bonus, if earned, relating to a fiscal year which was completed before the effectiveness of his termination, (ii) any bonus, if earned, for the fiscal year through the date of effectiveness of his termination (pro-rated based on the number of days he is employed during the applicable fiscal year), and (iii) an amount, paid in periodic installments corresponding to the Company's regular payroll periods, equal to the base salary he would be entitled to receive for the period which is twelve (12) months from the date of effectiveness of Mr. Shackelton's termination (the "Post Employment Payment Period"). Payment of the severance benefit to Mr. Shackelton will be contingent upon his execution of a general release in favor of the Company and that on or prior to the payment date such general release is not revoked and Mr. Shackelton is not in material breach of the Employment Agreement.
Certain payment provisions of the Employment Agreement with Mr. Shackelton are also triggered by a Change in Control (as such term is defined in the Employment Agreement) and an ensuing negative employment event. If a Change in Control of the Company occurs during the term of the Employment Agreement, and after such Change in Control but prior to the end of the term of the Employment Agreement the Company terminates Mr. Shackelton's employment without Cause, in lieu of any other amounts payable under the Employment Agreement, Mr. Shackelton is entitled to receive the sum of (i) a lump sum payment in an amount equal to twelve months of his then-current base salary, and (ii) a pro-rata portion of any bonus earned prior to Mr. Shackelton's termination.
If the sum of any lump sum payments and other benefits payable to Mr. Shackelton in connection with a Change in Control would constitute an "excess parachute payment" (as defined in Section 280G of the Internal Revenue Code of 1986, as amended), then such lump sum payment or other benefit due to Mr. Shackelton will be reduced to the largest amount that will not result in receipt by him of a parachute payment.
2
The Employment Agreement includes restrictive covenants providing for non-competition, non-solicitation, non-piracy, non-disclosure and non-disparagement by Mr. Shackelton. The term of the non-solicitation and non-piracy covenants is the period that includes the term of Mr. Shackelton's employment and for two years thereafter. The term of the non-competition covenant is the period that includes the term of Mr. Shackelton's employment, and (A) in the case of Mr. Shackelton's resignation or termination by the Company for Cause, two years following the effective date of Mr. Shackelton's termination of employment, or (B) in the case of termination by the Company without Cause, during the Post Employment Payment Period or, if the Company elects to continue to pay Mr. Shackelton his base salary for such period, up to two years following the effectiveness of termination of Mr. Shackelton's employment.
The preceding description of the Employment Agreement is qualified in its entirety by reference to the text of the Employment Agreement, which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.
Item 9.01
(d)
Exhibits
10.1
Employment Agreement, dated as of September 28, 2015, by and between The Providence Service Corporation and David Shackelton
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
THE PROVIDENCE SERVICE CORPORATION
Date: November 19, 2015
By:
/s/ Michael-Bryant Hicks
Name:
Michael-Bryant Hicks
Title:
Senior Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer
4