MAGELLAN HEALTH SERVICES INC
EXHIBIT 10(AW)
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<BR></FONT><FONT SIZE=2><B>Exhibit&nbsp;10(aw)    <BR>    </B></FONT></P>

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<A NAME="toc_jm1789_2"> </A></FONT> <FONT SIZE=2><B>Magellan Health Services<BR>  Key Employee Retention Program    <BR>    </B></FONT></P>

<P><FONT SIZE=2><B>Program Objective:  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retain the top percentage of people needed for successful completion of restructuring, resulting in emergence from bankruptcy. </FONT></P>


<P><FONT SIZE=2><B>Eligibility:  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An eligible employee (typically Director and Above) is defined as an employee meeting some or all of the following characteristics: </FONT></P>

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<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Possess
skills, abilities or competencies that are crucial for restructuring success and not found elsewhere in Magellan or difficult to find outside of Magellan
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Has
positive and influential business relationships with customers that are critical for us to sustain during the restructure process.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>Is
in a role that is required for the duration of organizational transition, and would involve substantial investment in time or dollars to refill. </FONT></DD></DL>
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<P><FONT SIZE=2><B>Retention Bonus Guidelines:  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Minimum bonus should be 10% of base. Maximum bonus should not exceed Incentive Plan funding level for each respective position. </FONT></P>

<P><FONT SIZE=2><B>Monetary Distribution:  </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retention bonuses will be paid out in two payments. One third of the total retention bonus will be paid 90&nbsp;days after filing. The remaining two thirds of
the total retention bonus will be paid 45&nbsp;days post emergence from bankruptcy. </FONT></P>

<P><FONT SIZE=2><B>Program Implementation:  </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A Retention Program Agreement will be put in place for each individual included in the Retention Bonus Program. This document will include a description of
services/project support needed, detailed forfeiture penalties an employee may face if he/she does not complete the services or performance standards, and a confidentiality statement. </FONT></P>

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<FONT SIZE=2><A HREF="#toc_jm1789_1">Exhibit 10(aw)</A></FONT><BR>
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<FONT SIZE=2><A HREF="#toc_jm1789_2">Magellan Health Services Key Employee Retention Program</A></FONT><BR>

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