NATIONAL MEDICAL HEALTH CARD SYSTEMS INC
MATERIAL CONTRACTS
<DOCUMENT>
<TYPE>EX-10.24
<SEQUENCE>10
<FILENAME>0010.txt
<DESCRIPTION>MATERIAL CONTRACTS
<TEXT>



                                 EXHIBIT 10.24


                   NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.

                              EMPLOYMENT AGREEMENT

     EMPLOYMENT  AGREEMENT,  dated as of March 27, 2000, by and between NATIONAL
MEDICAL  HEALTH CARD SYSTEMS,  INC., a New York  corporation  with an office and
place of business at 26 Harbor Park Drive, Port Washington,  New York 11050 (the
"Company"),  and DAVID GERSHEN, who resides at 2 Pal Court,  Plainview, NY 11830
(the "Employee").

                                   RECITALS:

          A. The  Company  is engaged in  providing  comprehensive  prescription
     benefit management services to the general commercial market.

          B. The Company wishes to assure itself of the services of the Employee
     for the period provided in this  Agreement,  and the Employee is willing to
     serve in the employ of the Company on a full-time  basis,  for said period,
     and upon the other terms and conditions hereinafter provided.

                                   AGREEMENT:

     1. TERM OF EMPLOYMENT.

     1.1 The  Company  hereby  employs the  Employee,  and the  Employee  hereby
accepts  employment  with the  Company,  all in  accordance  with the  terms and
conditions  hereof,  for an  initial  term of one  (1)  year  commencing  on the
Commencement  Date (as defined in Subsection 1.2 hereof) and ending  (subject to
the provisions of Section 5 hereof) on the date immediately  preceding the first
anniversary of the Commencement Date (the "Initial Term"). The employment of the
Employee  shall  continue  hereunder  after the Initial  Term to commence on the
first  anniversary  of the  Commencement  Date (such  period  being  hereinafter
referred to as the "Extended  Term"),  unless the Company or the Employee  shall
give  notice to the other of the  election  of the  Company or the  Employee  to
terminate  the  employment  of the Employee at the end of the Initial Term or at
any  time  during  the  Extended  Term as the case may be.  (The  period  of the
Company's  employment of the Employee  shall be  hereinafter  referred to as the
"Employment Period".)

     1.2 As used in this Agreement,  the term "Commencement Date" shall mean May
1, 2000.

     2. DUTIES.

     2.1 During the  Employment  Period,  the Employee  shall be employed by the
Company and shall serve as its Chief Financial Officer. Employee shall report on
a regular  basis  directly to the  Company's  President  and  Chairman and shall
perform  such  duties  consistent  with his  position  as of such  nature as are
usually associated with such office, and the Employee shall and have such powers
relating  to the  Company as shall from time to time be  assigned  to him by the
Board of Directors of the Company.

     2.2  During the  Employment  Period,  the  Employee  shall  devote his full
business time, best efforts,energies,  attention and ability to the business and
interests  of  the  Company.

     3. COMPENSATION.

     3.1 As full compensation for his services and undertakings pursuant to this
Agreement,  the Employee shall receive a salary at the rate of  $150,000.00  per
year,  subject to adjustment as hereafter  provided,  payable in twenty-six (26)
equal  installments  or other more frequent  installments in accordance with the
regular pay policies of the Company.  Employee's compensation shall be increased
by an amount to be determined by the parties each year of the Extended  Term. In
addition,  the  Employee  shall be entitled to receive a bonus of $25,000 at the
end of the Initial  Term,  provided  Employee is in the employ of the Company at
such time.  Employee  shall also be  entitled to  participate  in the bonus pool
allocated for senior executives.

     3.2 During the  Employment  Period,  the Employee shall also be entitled to
(a) three (3) weeks paid vacation  annually and (b) participate in group medical
insurance and other  benefits or programs of the Company  hereafter  established
and made  available by the Company to its  employees,  the cost of which will be
borne by the  Company.  The  Company  agrees  to  waive,  where  applicable  and
permissible  pursuant  to the terms of any such  plan,  any  enrollment  waiting
period in the Company's group medical insurance plans and retirement plans.

     3.3 The Company shall deduct from the Employee's salary, bonus or incentive
compensation  any federal,  state or city  withholding  taxes,  social  security
contributions  and any other  amounts  which may be  required  to be deducted or
withheld by the Company  pursuant to any federal,  state or city laws,  rules or
regulations.

     4. STOCK OPTIONS.

     Simultaneously  upon the execution of this Agreement,  the Employee will be
granted by the Company an option to purchase  35,000  shares of Common  Stock of
the  Company,  such  options to vest in  accordance  with the terms of the Stock
Option  Agreement  attached hereto and made part of this Agreement as Exhibit A.

     5. TERMINATION.

     5.1 If the Employee dies or becomes disabled during the Employment  Period,
his salary and all other rights under this Agreement  shall terminate at the end
of the month during which death or disability  occurs.  For the purposes of this
Agreement,  the Employee  shall be deemed to be "disabled" if he has been unable
to  perform  his  duties  for  six  consecutive  months  or nine  months  in any
twelve-month  period,  all as determined in good faith by the Board of Directors
of the Company.  Notwithstanding  the  definition  of disabled  contained in the
preceding  sentence,  in the event that the  Employee  is  receiving  disability
insurance  benefits  during any period prior to termination of this Agreement as
provided in this  Section  5.1,  the  Employee's  salary  shall be reduced by an
amount equal to such disability insurance benefits during such period.

     5.2 The Company,  in addition to any other remedies available to it, either
at law or in equity,  may terminate this Agreement without any further liability
or obligation to the Employee  from and after the date of such  termination,  by
delivering  to  Employee  written  notice  upon  the  occurrence  of  any of the
following  events:

     (a)  commission  by the  Employee  of a material  breach of this  Agreement
which, if curable, remains uncured for fifteen (15) days after Employee receives
written notice thereof, or

     (b) indictment of the Employee for a felony or other serious crime.

     5.3 In the event that the Company  terminates  this  Agreement for a reason
other than those set forth in Section  5.2 hereof or should  Employee  terminate
the Agreement for "Good Reason" as hereinafter  defined (but not in the event of
termination by Employee without Good Reason), the Company shall pay the Employee
an amount equal to the Employee's  then current annual salary,  exclusive of any
bonuses,  and shall continue group medical insurance and similar health benefits
(the  "Severance  Pay"),  for one year  after  termination  of  employment  (the
"Severance Period"). However, such Severance Pay shall immediately be reduced by
the amount of salary received by the Employee  during the Severance  Period upon
Employee's obtaining employment with another employer.  The Company shall assist
Employee in procuring new employment and Employee  agrees to give  consideration
to any and all prospective employers procured by the Company.

     5.4 The  Employee  shall have "Good  Reason" to  terminate  his  employment
hereunder if such termination shall be the result of: (a) a material  diminution
during  the  Employment  Period  in  the  Employee's  duties,  responsibilities,
reporting relationship or title as set forth in Section 2.1 hereof; (b) a breach
by the Company of the compensation and benefits  provisions set forth in Section
3 hereof; (c) a material breach by the Company of any of the other terms of this
Agreement;  (d) relocation of the Employee's office more than 35 miles from Port
Washington,  Long Island; or (e) if there is a "Change of Control" as defined in
Section 5.5 of this Agreement.

     5.5 The term "Change of Control"  shall mean:  (i) the  acquisition  by any
Person or Persons acting as a group (other than any existing  shareholder of the
Company)  following  the  Commencement  Date of more  than 50% of the  Company's
outstanding  voting  stock;  (ii) the merger of the Company with or into another
corporation  where the Company is not the  surviving  entity;  (iii) any reverse
merger in which the Company's  shareholders  immediately  prior to the merger do
not have the right to elect a majority of the Board of the surviving  entity; or
(iv) the sale of all or substantially all of the assets of the Company. The term
"Person"  shall  mean  any  individual,   company,  limited  liability  company,
partnership or other entity.  As used in this definition,  "control" of a Person
means the possession, directly or indirectly, of the unilateral power to cause a
change in the direction of the management  and policies of such Person,  whether
through the ownership of voting securities or otherwise.

     6.  COVENANT  NOT TO DISCLOSE.

     6.1 The  Employee  covenants  and  undertakes  that he will not at any time
during or after the termination of his employment hereunder reveal,  divulge, or
make known to any person,  firm,  corporation,  or other  business  organization
(other than the Company or its  affiliates,  if any), or use for his own account
any  customers'  lists,  trade  secrets,  or  any  secret  or  any  confidential
information ("Confidential  Information") of any kind used by the Company during
his employment by the Company, and made known (whether or not with the knowledge
and permission of the Company,  whether or not developed,  devised, or otherwise
created in whole or in part by the efforts of the Employee, and whether or not a
matter of public knowledge  unless as a result of authorized  disclosure) to the
Employee  by reason of his  employment  by the  Company.  The  Employee  further
covenants and agrees that he shall retain such knowledge and  information  which
he has acquired or shall acquire and develop  during his  employment  respecting
such Confidential  Information in trust for the sole benefit of the Company, its
successors and assigns and upon  termination of his employment with the Company,
return same to the Company.  Employee shall, if asked to by the Company,  sign a
statement acknowledging, among other things, that Employee has returned all such
Confidential Information.

     7. COVENANT NOT TO COMPETE; NON-INTERFERENCE.

     7.1 The Employee  covenants  and  undertakes  that,  during the  Employment
Period  hereunder  and  should  the  Company  terminate  Employee's   employment
hereunder  pursuant to Sections 5.2 (a) or (b), or should  Employee  voluntarily
terminate his employment  hereunder for other than Good Reason,  for a period of
one (1) year after the Severance  Period,  Employee will not,  without the prior
written consent of the Company, directly or indirectly, and whether as principal
or as agent, officer, director, employee,  consultant, or otherwise, alone or in
association  with  any  other  person,  firm,  corporation,  or  other  business
organization,  carry on, or be  engaged,  concerned,  or take part in, or render
services to, or own, share in the earnings of, or invest in the stock, bonds, or
other  securities  of  any  person,   firm,   corporation,   or  other  business
organization (other than the Company or its affiliates,  if any) engage anywhere
in a business  which is similar to or in  competition  with any of the  material
businesses carried on by the Company (a "Similar Business") in the New York City
metropolitan area, except in the course of his employment  hereunder;  provided,
however,  that the Employee may invest in stock,  bonds, or other  securities of
any Similar Business (but without  otherwise  participating in the activities of
such Similar Business) if (A) such stock,  bonds, or other securities are listed
on any national or regional  securities  exchange or have been registered  under
Section 12 (g) of the  Securities  Exchange Act of 1934;  and (B) his investment
does not  exceed,  in the  case of any  class  of the  capital  stock of any one
issuer, two (2%) percent of the issued and outstanding shares, or in the case of
bonds or other  securities,  two (2%) percent of the aggregate  principal amount
thereof issued and outstanding.

     7.2 The Employee covenants and undertakes that during the Employment Period
and for a period of three (3) years  after the  Severance  Period,  he will not,
whether  for his own  account  or for the  account  of any other  person,  firm,
corporation  or  other  business  organization,  interfere  with  the  Company's
relationship with, or endeavor to entice away from the Company any person, firm,
corporation or other business  organization  who or which at any time during the
Employee's  employment  with the Company  was an  employee,  consultant,  agent,
supplier, a customer of the Company or in the habit of dealing with the Company.

     8. COVENANT TO REPORT; PATENT, ETC.

     8.1 The Employee shall promptly communicate and disclose to the Company all
inventions, discoveries,  improvements and new writings, in any form, whatsoever
(hereinafter   "Inventions")  including,   without  limitation,   all  software,
programs,  routines,  techniques,  procedures,  training aides and instructional
manuals  conceived,  developed  or  made by him  during  his  employment  by the
Company, whether solely or jointly with others, and whether or not patentable or
copyrightable,  (A) which relate to any matters or business  carried on or being
developed by the Company,  or (B) which result from or are suggested by any work
done by him in the course of his  employment by the Company.  The Employee shall
also promptly communicate and disclose to the Company all other data obtained by
him  concerning  the  business  or affairs  of the  Company in the course of his
employment by the Company.

     8.2 All written  materials,  records and documents  made by the Employee or
coming into his possession  during the Employment Period concerning the business
or affairs of the Company shall be the sole  property of the Company,  and, upon
the  termination  of the  Employment  Period or upon the  request of the Company
during the Employment  Period, the Employee agrees to render to the Company such
reports of the  activities  undertaken  by the Employee or  conducted  under the
Employee's  direction,  pursuant  hereto  during  the  Employment  Period as the
Company may request.

     8.3 The Employee will assign to the Company all right in the Inventions and
will assist the Company or its designee during and subsequent to his employment,
at the Company's sole expense,  in filing patent and/or  copyright  applications
on, and obtaining for the Company's  benefit patents and/or  copyrights for such
Inventions  in any and all  countries,  and will  assign to the Company all such
patent and/or copyright  applications,  all patents and/or  copyrights which may
issue thereon,  said Inventions to be and remain the sole and exclusive property
of the Company or its designee whether or not patented and/or copyrighted.

     8.4 Any Invention  conceived,  developed or made by the Employee within one
(1) year of the  termination  of his  employment,  whether such  termination  of
employment  is voluntary or  involuntary,  shall be deemed to have arisen out of
and been  conceived,  developed or made by the Employee during his employment by
the Company, unless established to have been conceived,  developed or made after
the termination of such employment.

     9. REMEDIES.

     The Employee  acknowledges that the Company will have no adequate remedy at
law if the  Employee  violates  the terms of Section  6, 7 or 8 hereof.  In such
event,  the Company shall have the right, in addition to any other rights it may
have,  to obtain in any court of  competent  jurisdiction  injunctive  relief to
restrain any breach or threatened breach of or otherwise to specifically enforce
any of the covenants of such Sections.

     10. COMPLIANCE WITH OTHER AGREEMENTS.

     10.1  Employee and Company  represent and warrant to the other that each is
under  no  contract,  restriction  or  obligation  which  is  inconsistent  with
execution of this Agreement or the performance of his/its duties hereunder. Each
hereby agrees to indemnify the other for all losses,  damages,  costs,  fees and
expenses including  attorney's fees incurred by the other in connection with any
of the following:

     (a) any breach of the foregoing representations and warranties;

     (b) any lawsuit or other legal  proceeding  in which it is claimed that the
other has breached any trust, confidence or duty of loyalty, etc.;

     (c)  any  action  or  matter  relating  to the  above  representations  and
warranties.

     11. WAIVERS.

     A  waiver  by  the  Company  or  the  Employee  of a  breach  of any of the
provisions  of this  Agreement  shall not operate or be construed as a waiver of
any subsequent breach.

     12. BINDING EFFECT; BENEFITS.

     Subject to the provisions of Section 5 hereof this Agreement shall inure to
the  benefit  of,  and shall be  binding  upon,  the  parties  hereto  and their
respective successors, assigns, heirs, and legal representatives,  including any
corporation or other business  organization  with which the Company may merge or
consolidate or to which it may transfer substantially all of its assets. Insofar
as the  Employee  is  concerned,  this  Agreement,  being  personal,  cannot  be
assigned.

     13. NOTICES.

     All notices,  requests, demands and other communications which are required
or may be given under this Agreement  shall be in writing and shall be deemed to
have been duly given or made when delivered in person, by courier,  by facsimile
transmission  (with  proof of  delivery),  or four (4) days  after  dispatch  by
registered or certified mail,  postage paid,  return receipt  requested,  to the
party  to whom  the same is so given  or  made,  to the  address  of such  party
hereinabove  set forth and in the case of notices to the Employee,  a copy shall
be similarly sent to Broudy & Associates, P.C., 230 Park Avenue, Suite 2400, New
York, New York 10169, Attn: Louis L. Broudy, Esq.

     14. ENTIRE AGREEMENT; AMENDMENTS; SURVIVAL COVENANTS.

     This  Agreement  contains the entire  Agreement,  and  supersedes all prior
agreements and understandings,  oral or written, between the parties hereto with
respect to the subject matter hereof. This Agreement may not be waived, changed,
amended,  modified or  discharged  orally,  but only by an  agreement in writing
signed by the party against whom any waiver, change, amendment,  modification or
discharge is sought.  The  covenants of the Employee  contained in Sections 6, 7
and 8 (insofar as they relate to the  Employment  Period) of this  Agreement and
the  covenants of the Company  contained in Section  5.3, if  applicable,  shall
survive the termination of the Employment Period.

     15. HEADINGS.

     The headings  contained in this  Agreement are for reference  purposes only
and shall not affect the construction or interpretation of this Agreement.

     16. SEVERABILITY.

     The  invalidity of all or any part of any Section of this  Agreement  shall
not render  invalid the  remainder of this  Agreement  or the  remainder of such
Section.  If any provision of this Agreement is so broad as to be unenforceable,
such provisions shall be interpreted to be only so broad as is enforceable.

     17. COUNTERPARTS.

     This Agreement may be executed in any number of counterparts, each of which
shall,  when  executed,  be deemed to be an original,  but all of which together
shall constitute one and the same instrument.

     18. GOVERNING LAW.

     This  Agreement  shall be governed by and construed in accordance  with the
laws of the State of New York,  without giving effect to principles  relating to
conflict of laws.

     19. INDEMNIFICATION.

     The  Company  shall,  to the  fullest  extent  permitted  by law and by its
Certificate of  Incorporation  and By-laws,  indemnify the Employee and hold him
harmless  for any acts or decisions  made by him in good faith while  performing
his duties pursuant to this Agreement.


     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first written above.

                                                     NATIONAL MEDICAL HEALTH
                                                        CARD SYSTEMS, INC.


                                                     By:/s/Bert E. Brodsky
                                                           Bert E. Brodsky
                                                           Chairman

                                                     By:/s/David Gershen
                                                           David Gershen

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