Form of Stock Option Agreement For Senior Executive Officers

EXHIBIT 10.7


FORM OF STOCK OPTION AGREEMENT FOR SENIOR EXECUTIVE OFFICERS


STOCK OPTION AGREEMENT made as of the between NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC ., a Delaware corporation (the " Company" ), and (" Optionee" ).


WHEREAS , the Optionee is an employee of the Company or a subsidiary thereof;


WHEREAS , the Company desires to provide to the Optionee an additional incentive to promote the success of the Company;


NOW, THEREFORE , in consideration of the foregoing, the Company hereby grants to the Optionee (the " Grant" ) the right and option to purchase Common Shares of the Company under and pursuant to the terms and conditions of the 1999 Stock Option Plan (the " Plan" ) and upon and subject to the following terms and conditions:

1. GRANT OF OPTION . The Company hereby grants to the Optionee the right and option (the " Option" ) to purchase up to ( ) Common Shares of the Company (the " Option Shares" ) pursuant to Plan. The Option shall vest and become exercisable in accordance with the provisions of section 4 below. The Options granted pursuant to this agreement shall remain exercisable through the close of business on , 20 .


2. NATURE OF OPTION . Such Options to purchase the Option Shares are intended to meet the requirements of Section 422 of the Internal Revenue Code of 1986, as amended, relating to " incentive stock options" .

3. EXERCISE PRICE . The exercise price of each of the Option Shares shall be . The Company shall pay all original issue or transfer taxes on the exercise of the Option.


4. VESTING. Except as specifically provided otherwise herein or in the Plan, and subject to the Optionee remaining in the continuous employment with the Company or its subsidiaries through the applicable vesting dates provided below, the Option shall be come vested and exercisable as follows:


(a) All or any part of Common Shares may be purchased during the period commencing one year from the date hereof and terminating at 5:00 P.M. on 20 (the " Expiration Date" ).


(b) All or any part ...