8-K

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): June 7, 2002 (June 3, 2002)

COMPREHENSIVE CARE CORPORATION
(Exact Name of Registrant as Specified in Charter)

Delaware	1-9927	95-2594724
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

200 South Hoover Blvd., Suite 200
Tampa, Florida	33609
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (813) 288-4808

TABLE OF CONTENTS

	Item 5. Other Events.
	Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
SIGNATURES
Press Release - Howard A. Savin
Press Release - Thomas C. Clay
Employment Agreement - Thomas C. Clay
Press Release - Paul R. McCarthy
Employment Agreement - Paul R. McCarthy

Item 5. Other Events.

     Effective June 3, 2002, the Board of Directors elected Howard A Savin, Ph.D. to fill one existing vacancy for a Class II Director. Dr. Savin, 55 years of age, is currently Senior Vice President of Clinical Affairs at the Devereux Foundation, an organization engaged in providing high-quality human services to children, adults, and families with special needs which derive from behavioral, psychological, intellectual or neurological impairments. Dr. Savin has served the Devereux Foundation in this capacity since July 1995.

     Dr. Savin has been appointed to serve as Director and Chairman of the Company’s Compensation and Stock Option Committee and, also, as a member of the Company’s Audit Committee without receiving any cash compensation. In accordance to the Company’s 1995 Non-employee Director Stock Option Plan, Dr. Savin has been awarded initial and annual grants of options to purchase 10,000 and 10,833 shares, respectively, of the Company’s Common Stock. The initial grant of 10,000 options is an award for Dr. Savin’s service as Class II Director and is exercisable in 25% increments, beginning on the one-year anniversary of the date of grant, at a price of $1.50 per share. The annual grant of 10,833 shares is an award for Dr. Savin’s service as Chairman of one board committee and member of one additional board committee. These options become exercisable as of the date of the 2002 Annual Meeting at a price of $1.50 per share. A copy of the June 6, 2002 Press Release announcing Dr. Savin’s appointment is attached as an Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

     Effective June 3, 2002, the Company’s principal operating subsidiary, Comprehensive Behavioral Care, Inc. (“CompCare”) entered into an employment agreement with Thomas C. Clay, MSW. Pursuant to this agreement, Mr. Clay has been promoted to the position of President, Public Sector Systems, for CompCare. Mr. Clay is to receive an annual salary of $120,000 and he is eligible to earn an annual performance based incentive bonus of up to $20,000 for achievement of target company and individual objectives. Additionally, the Company shall provide Mr. Clay with the Company’s standard health insurance and other benefits as generally offered and made available to employees of the Company, and upon the same terms and conditions as provided to other executives of the Company. The foregoing is a description of Mr. Clay’s employment agreement, which is filed as an Exhibit 99.3 to this Form 8-K, and does not purport to contain all of the terms, provisions, and conditions included therein.

     Further, effective June 3, 2002, CompCare entered into an employment agreement with Paul R. McCarthy, Ph.D. Pursuant to this agreement, Dr. McCarthy has been employed by CompCare to serve as its Chief Operating Officer. Dr. McCarthy is to receive an annual salary of $120,000 and he is eligible to earn an annual performance based incentive bonus of up to $20,000 for achievement of target company and individual objectives. Additionally, the Company shall provide Dr. McCarthy with the Company’s standard health insurance and other benefits as generally offered and made available to employees of the Company, and upon the same terms and conditions as provided to other executives of the Company. The foregoing is a description of Dr. McCarthy’s employment agreement, which is filed as an Exhibit 99.5 to this Form 8-K, and does not purport to contain all of the terms, provisions, and conditions included therein.

2

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

(c) Exhibits.

Exhibit No.	Description
99.1	June 6, 2002 Press Release – Howard A. Savin, Ph.D.
99.2	June 4, 2002 Press Release – Thomas C. Clay.
99.3	Employment Agreement effective June 3, 2002 between the Company and Thomas C. Clay.
99.4	June 4, 2002 Press Release – Paul R. McCarthy, Ph.D.
99.5	Employment Agreement effective June 3, 2002 between the Company and Paul R. McCarthy, Ph.D.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

	COMPREHENSIVE CARE CORPORATION
	By: /s/ Robert J. Landis Robert J. Landis Chairman of the Board
Date: June 7, 2002

3 EX-99.1 3 g76752exv99w1.txt PRESS RELEASE - HOWARD A. SAVIN EXHIBIT 99.1 PRESS RELEASE COMPREHENSIVE CARE ANNOUNCES THE APPOINTMENT OF OUTSIDE BOARD MEMBER TAMPA, FLORIDA - JUNE 6, 2002 - Comprehensive Care Corporation (OTCBB: CHCR), today announced the appointment of Howard A. Savin, Ph.D. to join the Board of Directors. Dr. Savin is a psychologist with over 20 years of experience in the behavioral health industry, including managed behavioral healthcare, administration, and clinical practice. Dr. Savin is the current Senior Vice President of Clinical Affairs at the Devereux Foundation where he has served since July 1995. He has also served as Vice President of Medco Behavioral Care Corp., which later became Merit Behavioral Health and Magellan. "We are very excited and honored to have Dr. Savin join the company's Board of Directors," said Mary Jane Johnson, President and Chief Executive Officer. "He brings a wealth of knowledge and experience that will be valuable to the Company as we continue to grow." Comprehensive Care Corporation, headquartered in Tampa, Florida, administers and operates behavioral health, substance abuse, and employee assistance programs for governmental agencies and managed care companies throughout the United States. The company serves more than 1,100,000 members nationwide and has a network of approximately 5,600 behavioral health practitioners. "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: CERTAIN INFORMATION INCLUDED HEREIN AND IN OTHER COMPANY REPORTS, SEC FILINGS, STATEMENTS, AND PRESENTATIONS IS FORWARD LOOKING WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, INCLUDING, BUT NOT LIMITED TO, STATEMENTS CONCERNING THE COMPANY'S ANTICIPATED OPERATING RESULTS, FINANCIAL RESOURCES, INCREASES IN REVENUES, INCREASED PROFITABILITY, INTEREST EXPENSE, GROWTH AND EXPANSION, AND THE ABILITY TO OBTAIN NEW BEHAVIORAL HEALTHCARE CONTRACTS. SUCH FORWARD-LOOKING INFORMATION INVOLVES IMPORTANT RISKS AND UNCERTAINTIES THAT COULD SIGNIFICANTLY AFFECT ACTUAL RESULTS AND CAUSE THEM TO DIFFER MATERIALLY FROM EXPECTATIONS EXPRESSED HEREIN AND IN OTHER COMPANY REPORTS, SEC FILINGS, STATEMENTS, AND PRESENTATIONS. THESE RISKS AND UNCERTAINTIES INCLUDE LOCAL, REGIONAL, AND NATIONAL ECONOMIC AND POLITICAL CONDITIONS, THE EFFECT OF GOVERNMENTAL REGULATION, THE COMPETITIVE ENVIRONMENT IN WHICH THE COMPANY OPERATES, AND OTHER RISKS DETAILED FROM TIME TO TIME IN THE COMPANY'S SEC REPORTS. FOR MORE INFORMATION, PLEASE CONTACT: INVESTOR RELATIONS: Mary Jane Johnson, RN, MBA Robert Landis President and Chief Executive Officer Chief Financial Officer Comprehensive Care Corporation Comprehensive Care Corporation 200 South Hoover Blvd., Suite 200 200 South Hoover Blvd., Suite 200 Tampa, FL 33609 Tampa, FL 33609 (813) 288-4808 (813) 288-4808 EX-99.2 4 g76752exv99w2.txt PRESS RELEASE - THOMAS C. CLAY EXHIBIT 99.2 PRESS RELEASE COMPREHENSIVE BEHAVIORAL CARE ANNOUNCES SENIOR MANAGEMENT PROMOTION TAMPA, FLORIDA - JUNE 4, 2002 - Comprehensive Behavioral Care, Inc. ("CompCare"), a wholly-owned subsidiary of Comprehensive Care Corporation (OTCBB: CHCR), today announced the promotion of Thomas Clay, MSW to the position of President, Public Sector Systems. Mr. Clay has been employed by the company since January 2000. During this time, he has been a key executive responsible for all regional operations with 40% revenue growth and membership expansion of 400,000 lives. "We are very excited to have Tom in this new role," said Mary Jane Johnson, President and Chief Executive Officer. "He will bring more than 25 years of public sector experience to assist us in the development of these markets through creative programming for specialty populations." Comprehensive Care Corporation, headquartered in Tampa, Florida, administers and operates behavioral health, substance abuse, and employee assistance programs for governmental agencies and managed care companies throughout the United States. The company serves more than 1,100,000 members nationwide and has a network of approximately 5,600 behavioral health practitioners. "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: CERTAIN INFORMATION INCLUDED HEREIN AND IN OTHER COMPANY REPORTS, SEC FILINGS, STATEMENTS, AND PRESENTATIONS IS FORWARD LOOKING WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, INCLUDING, BUT NOT LIMITED TO, STATEMENTS CONCERNING THE COMPANY'S ANTICIPATED OPERATING RESULTS, FINANCIAL RESOURCES, INCREASES IN REVENUES, INCREASED PROFITABILITY, INTEREST EXPENSE, GROWTH AND EXPANSION, AND THE ABILITY TO OBTAIN NEW BEHAVIORAL HEALTHCARE CONTRACTS. SUCH FORWARD-LOOKING INFORMATION INVOLVES IMPORTANT RISKS AND UNCERTAINTIES THAT COULD SIGNIFICANTLY AFFECT ACTUAL RESULTS AND CAUSE THEM TO DIFFER MATERIALLY FROM EXPECTATIONS EXPRESSED HEREIN AND IN OTHER COMPANY REPORTS, SEC FILINGS, STATEMENTS, AND PRESENTATIONS. THESE RISKS AND UNCERTAINTIES INCLUDE LOCAL, REGIONAL, AND NATIONAL ECONOMIC AND POLITICAL CONDITIONS, THE EFFECT OF GOVERNMENTAL REGULATION, THE COMPETITIVE ENVIRONMENT IN WHICH THE COMPANY OPERATES, AND OTHER RISKS DETAILED FROM TIME TO TIME IN THE COMPANY'S SEC REPORTS. FOR MORE INFORMATION, PLEASE CONTACT: INVESTOR RELATIONS: Mary Jane Johnson, RN, MBA Robert Landis President and Chief Executive Officer Chief Financial Officer Comprehensive Care Corporation Comprehensive Care Corporation 200 South Hoover Blvd., Suite 200 200 South Hoover Blvd., Suite 200 Tampa, FL 33609 Tampa, FL 33609 (813) 288-4808 (813) 288-4808 EX-99.3 5 g76752exv99w3.txt EMPLOYMENT AGREEMENT - THOMAS C. CLAY EXHIBIT 99.3 EMPLOYMENT AGREEMENT AGREEMENT made this 3rd day of June 2002, effective as of June 3, 2002, by and between Thomas C. Clay (hereinafter referred to as the "Executive"), presently residing in Boulder, CO at the most recent address contained in Executive's personnel file, and Comprehensive Behavioral Care, Inc., a Nevada corporation with principal offices located at 200 South Hoover Boulevard; Building 219, Suite 200, Tampa, Florida 33609 (hereinafter referred to as the "Company"). W I T N E S S E T H : WHEREAS, the Company, and affiliate corporations, is currently engaged in the principal business of providing various managed behavioral health care services on a fee for service or through contract capitation agreements; and WHEREAS, the Executive is offered employment by the Company in the capacity as President, Public Sector Systems; and WHEREAS, the Company and Executive desire to provide for the future continued employment of Executive upon the terms and conditions provided for herein; NOW, THEREFORE, it is mutually agreed by and between the parties hereto as follows: ARTICLE I EMPLOYMENT Subject to and upon the terms and conditions of this Agreement, the Company hereby employs and agrees during the term hereof, and subject to the terms and conditions hereof to continue the employment of the Executive, and the Executive hereby accepts such employment in his capacity as President, Public Sector Systems of the Company. Executive shall report to the President and Chief Executive Officer. ARTICLE II DUTIES (A) Executive shall, during the term of his employment with the Company, and subject to the reasonable and good faith direction and control of the Executive Officers and ultimately the Company's Board of Directors, perform such duties and functions for the Company as he may be called upon to perform by the Chief Executive Officer of the Company during the term of this Agreement consistent with the position of President, Public Sector Systems. (B) The Executive agrees to devote his full time and utilize his continued best efforts to the performance of his duties for the Company and to render such services for any subsidiary and affiliate corporations of the Company as may be assigned to him. (C) The Executive shall perform, in conjunction with the Company's senior management, to the best of his ability the following services and duties for the Company and its subsidiary and affiliate corporations (by way of example, and not by way of limitation): (i) Those duties attendant to the position with the Company for which he was hired; (ii) Supervision of the Clinical Operations functions of the Company until an additional position is established for that function; (iii) Works with Executive management to establish priorities, strategies, and objectives; (iv) Development of Public Sector Products and Markets; 2 (v) Interfaces with and participates in marketing activities; (vi) Assist with the development of budgets, forecasts, financial models, credentialing and responses to Requests for Proposals. ARTICLE III STOCK OPTIONS (A) Executive shall be eligible for participation in periodic grants of Comprehensive Care Corporation ("CCC") stock options from time to time as determined by the CCC Board of Directors at its discretion. ARTICLE IV PRINCIPAL BUSINESS LOCATION OF EXECUTIVE Executive shall be based at the Company's corporate headquarters located in Tampa, Florida; even though he resides in Colorado. Executive shall undertake such travel as directed within or without the United States as is or may be reasonably necessary in the interests of the Company and its operating subsidiaries and the performance of his duties hereunder. 3 ARTICLE V COMPENSATION (A) Commencing the effective date of this Agreement and during the full term of this Agreement, Executive shall receive a base salary (the "Base Salary") at the rate of $120,000 per annum payable in equal bi-weekly increments or such other regular pay periods of the Company with the opportunity for periodic review and adjustment based on performance, market conditions, financial parameters of the Company, and other conditions as deemed appropriate and set forth by the Executive Officers of the Company. The Chief Executive Officer will have the sole discretion to approve any upward adjustment to Executive's compensation that brings the Executive's compensation up to $150,000 annually. Any upward adjustment to Executive's compensation that brings the Executive's compensation greater than $150,000 annually will be approved at the sole discretion of the Board of Directors. (B) Executive may receive such bonuses or additional compensation as may be determined from time to time by the Executive Officers and approved as appropriate by the Board of Directors in its sole discretion. (C) The Company shall deduct from Executive's compensation, whether Base Salary or any discretionary bonus, all federal, state and local taxes which it may now or may hereafter be required to deduct. (D) In addition to the Base Salary and for the fiscal year ending May 31, 2003, Executive shall be eligible to earn an annual performance based incentive bonus (the "Incentive Bonus") of up to $20,000 for achievement of target company financial and non-financial individual objectives. This target amount will be based 20% on individual performance against objectives and 80% on the 4 Company's financial performance against set financial criteria for the Plan year set forth in Annex A. Pay-out of this bonus will be as soon as reasonably possible after the closure of the books for the fiscal year. ARTICLE VI BENEFITS (A) During the term hereof, (i) the Company shall provide Executive with the Company's standard health insurance and retirement savings plans (i.e. 401k Plan) as generally offered and made available to employees of the Company, and upon the same terms and conditions as provided to other executives of the Company. The Company reserves the right to alter, modify, change any currently offered health insurance and retirement savings plan; Currently, Executive elects not to participate in the group health plans of the Company. Therefore, the Company reimburses Executive $220 per month toward health insurance premium costs. At such a time that Executive elects participation in the Company group health plans, premium contribution and cost sharing will be as provided to other executives of the Company; (ii) Executive shall also be eligible to participate life insurance and disability insurance as generally offered and made available to executives of the Company as now if effect or may hereafter be adopted; (iii) Executive shall be reimbursed by the Company, upon presentation of appropriate vouchers, for all reasonable business expenses incurred by the Executive on behalf of the Company, consistent with the Company's expense reimbursement policies. (B) Executive shall be entitled to three weeks of paid vacation during each 12-month period of employment, to be accrued in accordance with the Company's vacation policies and to be taken at such times as not to interfere with projects then in process and within the maximum carry 5 over limits as available to all employees of the Company. Additionally, the Executive shall be accorded such leave and holidays generally made available to other Executive Officers of the Company. (C) Executive shall be eligible to participate if adopted, in any Senior Executive Retirement Plan as implemented and approved by the Board of Directors. Participation shall be in an amount and shall be earned and vested in accordance with any plan the Company may ultimately adopt. It is currently anticipated with implementation beginning in Calendar Year 2002; final participation shall be based upon finalized and approved parameters as determined by the Board of Directors in their sole discretion. (D) Executive shall be eligible to participate in any Deferred Compensation Plan as implemented by the company in its discretion. Participation will be intended to give the ability to defer portions of the Executive's annual base salary and up to all of a Participant's earned annual incentive in accordance with finalized parameters of the approved Plan. 6 ARTICLE VII NON-DISCLOSURE The Executive shall not, at any time during or after the termination of his employment hereunder, except when acting on behalf of and with the authorization of the Company, make use of or disclose to any person, corporation, or other entity, for any purpose whatsoever, any trade secret or other confidential information concerning the Company's business, finances, marketing information, managed care business, plans and programs, contract proposals, psychiatric and dependence operations, names and arrangements with network providers, and information relating to any managed care, capitation, sales or marketing programs of the Company, or financial modeling and responses to Requests for Proposals (collectively referred to as the "Proprietary Information"). For the purposes of this Agreement, trade secrets and confidential information shall mean information disclosed to the Executive or known by him solely as a consequence of his employment by the Company, whether or not pursuant to this Agreement, and not generally known (other than as disclosed by any person in breach of any obligation of confidentiality to the Company) in the industry, concerning the business, finances, methods, operations, marketing information, and information relating to the sales and marketing of the Company. The foregoing is intended to be confirmatory of the statutory law and common law of the state of Florida relating to trade secrets and confidential information. ARTICLE VIII RESTRICTIVE COVENANT (A) In the event of the voluntary termination of employment with the Company by Executive, Executive agrees that he will not, for a period of twelve (12) months following such 7 termination, directly or indirectly contact or interfere with existing contracted business or business in process of active discussions. In addition, Executive agrees not to bid, either directly or indirectly, on any new business in a State where the Company has an office for a period of twelve months. (B) In furtherance of the foregoing, Executive shall not during the aforesaid period of non-competition, directly or indirectly, in competition with the Company, solicit any management person who was employed by the Company or solicit any provider, insurer or group through, from or with which the Company transacted any managed behavioral health care business. The foregoing shall not be deemed or construed to prevent Executive from soliciting any consultant or advisor to the Company for any project that Executive may participate in which is not in violation of this Article VIII. (C) If any court shall hold that the duration of non-competition or any other restriction contained in this paragraph is unenforceable, it is our intention that same shall not thereby be terminated but shall be deemed amended to delete there from such provision or portion adjudicated to be invalid or unenforceable or in the alternative such judicially substituted term may be substituted therefore. ARTICLE IX TERM AND TERMINATION (A) This Agreement shall commence on the date hereof and continue until terminated by the Executive or the Company. 8 (B) This Agreement shall terminate prior to the expiration of its term as follows: (i) upon the mutual agreement of the Company and Executive. (ii) upon the death or permanent disability of Executive, in which case Executive shall be entitled to all Base Salary through the date of termination. For the purposes of the foregoing, permanent disability shall be the inability of Executive to attend to his usual duties for a period of two (2) months in any 12 month period of the term or sixty (60) consecutive calendar days due to illness or injury. (iii) for cause by the Company, in which case Executive shall only be entitled to his Base Salary through the date of termination. For the purpose of the foregoing, cause shall be (a) a breach or default in the performance by Executive of any of his material obligations under this Agreement, or (b) the commission by Executive of any act resulting in or intending to result in his personal gain or enrichment at the expense of the Company, or (c) the commission by Executive of any felony or misdemeanor or act involving moral turpitude. (iv) by the Company without cause, in which case Executive shall be entitled to an amount equal to his then Base Salary for the term of three (3) months. (v) in the event a Change of Control in the Company shall have occurred and within six (6) months from such Change of Control Executive shall be terminated without cause, Executive is entitled to receive the amount equal six (6) months Base Salary upon termination. In addition, all options granted to Executive and which shall not have heretofore vested, shall immediately vest and become presently exercisable. (vi) at any time during the term, a Change of Control in the Company shall have occurred, Executive will have the option to accept six (6) months of special severance or to 9 continue employment in current position with the Company at Executive's current pay and benefit level. For the purpose of the foregoing, a Change of Control shall be a change in ownership of 30% or more of the voting power of all issued and outstanding share of capital stock of the Company of all classes and any convertible or exchangeable security on an as converted or as exchanged basis. ARTICLE X TERMINATION OF PRIOR AGREEMENTS This Agreement sets forth the entire agreement between the parties and supersedes all prior agreements between the parties, whether oral or written, which are merged herein. ARTICLE XI ARBITRATION Any dispute arising out of the interpretation, application and/or performance of this Agreement shall be settled through final and binding arbitration before a single arbitrator in Tampa, Florida in accordance with the commercial rules of the American Arbitration Association. The arbitrator shall be selected by the Association and shall be an attorney at law experienced in the field of corporate law. Any judgment upon any arbitration award may be entered in any court, federal or state, having competent jurisdiction of the parties. 10 ARTICLE XII SEVERABILITY If any provision of this Agreement shall be held invalid and unenforceable, the remainder of this Agreement shall remain in full force and effect. If any provision is held invalid or unenforceable with respect to particular circumstances, it shall remain in full force and effect in all other circumstances. ARTICLE XIII NOTICE All notices required to be given under the terms of this Agreement shall be in writing and shall be deemed to have been duly given only if delivered to the addressee in person or mailed by certified mail, return receipt requested, as follows: If to the Company: Comprehensive Care Corporation 200 South Hoover Boulevard; Building 219, Suite 200 Tampa, Florida 33609 Attention: Chief Executive Officer If to the Executive: Addressed to the most recent Residence Address contained in Executive's personnel file. or to any such other address as the party to receive the notice shall advise by due notice given in accordance with this paragraph. ARTICLE XIV BENEFIT This Agreement shall inure to, and shall be binding upon, the parties hereto, the successors and assigns of the Company, and the heirs and personal representatives of the Executive. 11 ARTICLE XV WAIVER The waiver by either party of any breach or violation of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of construction and validity. ARTICLE XVI GOVERNING LAW This Agreement has been negotiated and executed in the State of Florida, and Florida law shall govern its construction and validity. ARTICLE XVII ENTIRE AGREEMENT This Agreement contains the entire agreement between the parties hereto. No change, addition or amendment shall be made hereto, except by written agreement signed by the parties hereto. IN WITNESS WHEREOF, the parties hereto have executed this Agreement and affixed their hands and seals the day and year first above written. (Corporate Seal) COMPREHENSIVE CARE CORPORATION By: /s/ Mary Jane Johnson --------------------------------------------- Name: Mary Jane Johnson Title: President and Chief Executive Officer /s/ Thomas C. Clay ------------------------------------------------- THOMAS C. CLAY (Executive) 12 EX-99.4 6 g76752exv99w4.txt PRESS RELEASE - PAUL R. MCCARTHY EXHIBIT 99.4 PRESS RELEASE COMPREHENSIVE BEHAVIORAL CARE ANNOUNCES NEW SENIOR MANAGEMENT POSITION TAMPA, FLORIDA - JUNE 4, 2002 - Comprehensive Behavioral Care, Inc. ("CompCare"), a wholly-owned subsidiary of Comprehensive Care Corporation (OTCBB: CHCR), today announced the appointment of Paul R. McCarthy, Ph.D. to the newly created position of Chief Operating Officer. Dr. McCarthy has more than 18 years of experience in the behavioral healthcare industry, most recently as Director for CIGNA Behavioral Health's Southeastern Regional Operations. Dr. McCarthy previously worked for CompCare in the role of Senior Vice President of Quality Management and laid the foundation for CompCare's first NCQA accreditation in 1998. "We are very excited to announce this appointment which will position CompCare for expansion. We are committed to recruiting and retaining talented individuals who will contribute to continued growth," said Mary Jane Johnson, President and Chief Executive Officer. Comprehensive Care Corporation, headquartered in Tampa, Florida, administers and operates behavioral health, substance abuse, and employee assistance programs for governmental agencies and managed care companies throughout the United States. The company serves more than 1,100,000 members nationwide and has a network of approximately 5,600 behavioral health practitioners. "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: CERTAIN INFORMATION INCLUDED HEREIN AND IN OTHER COMPANY REPORTS, SEC FILINGS, STATEMENTS, AND PRESENTATIONS IS FORWARD LOOKING WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, INCLUDING, BUT NOT LIMITED TO, STATEMENTS CONCERNING THE COMPANY'S ANTICIPATED OPERATING RESULTS, FINANCIAL RESOURCES, INCREASES IN REVENUES, INCREASED PROFITABILITY, INTEREST EXPENSE, GROWTH AND EXPANSION, AND THE ABILITY TO OBTAIN NEW BEHAVIORAL HEALTHCARE CONTRACTS. SUCH FORWARD-LOOKING INFORMATION INVOLVES IMPORTANT RISKS AND UNCERTAINTIES THAT COULD SIGNIFICANTLY AFFECT ACTUAL RESULTS AND CAUSE THEM TO DIFFER MATERIALLY FROM EXPECTATIONS EXPRESSED HEREIN AND IN OTHER COMPANY REPORTS, SEC FILINGS, STATEMENTS, AND PRESENTATIONS. THESE RISKS AND UNCERTAINTIES INCLUDE LOCAL, REGIONAL, AND NATIONAL ECONOMIC AND POLITICAL CONDITIONS, THE EFFECT OF GOVERNMENTAL REGULATION, THE COMPETITIVE ENVIRONMENT IN WHICH THE COMPANY OPERATES, AND OTHER RISKS DETAILED FROM TIME TO TIME IN THE COMPANY'S SEC REPORTS. FOR MORE INFORMATION, PLEASE CONTACT: INVESTOR RELATIONS: Mary Jane Johnson, RN, MBA Robert Landis President and Chief Executive Officer Chief Financial Officer Comprehensive Care Corporation Comprehensive Care Corporation 200 South Hoover Blvd., Suite 200 200 South Hoover Blvd., Suite 200 Tampa, FL 33609 Tampa, FL 33609 (813) 288-4808 (813) 288-4808 EX-99.5 7 g76752exv99w5.txt EMPLOYMENT AGREEMENT - PAUL R. MCCARTHY EXHIBIT 99.5 EMPLOYMENT AGREEMENT AGREEMENT made this 3rd day of June, 2002, effective as of June 3, 2002, by and between Paul R. McCarthy (hereinafter referred to as the "Executive"), presently residing in Lutz, Florida, at the most recent address contained in Executive's personnel file, and Comprehensive Behavioral Care, Inc., a Nevada corporation with principal offices located at 200 South Hoover Boulevard; Building 219, Suite 200, Tampa, Florida 33609 (hereinafter referred to as the "Company"). WITNESSETH: WHEREAS, the Company, and affiliate corporations, is currently engaged in the principal business of providing various managed behavioral health care services on a fee for service or through contract capitation agreements; and WHEREAS, the Executive is offered employment by the Company in the capacity as Chief Operating Officer; and WHEREAS, the Company and Executive desire to provide for the future continued employment of Executive upon the terms and conditions provided for herein; NOW, THEREFORE, it is mutually agreed by and between the parties hereto as follows: ARTICLE I EMPLOYMENT Subject to and upon the terms and conditions of this Agreement, the Company hereby employs and agrees during the term hereof, and subject to the terms and conditions hereof to continue the employment of the Executive, and the Executive hereby accepts such employment in his capacity as Chief Operating Officer of the Company. Executive shall report to the President and Chief Executive Officer. ARTICLE II DUTIES (A) Executive shall, during the term of his employment with the Company, and subject to the reasonable and good faith direction and control of the Executive Officers and ultimately the Company's Board of Directors, perform such duties and functions for the Company as he may be called upon to perform by the Chief Executive Officer during the term of this Agreement consistent with the position of Chief Operating Officer. (B) The Executive agrees to devote his full time and utilize his continued best efforts to the performance of his duties for the Company and to render such services for any subsidiary and affiliate corporations of the Company as may be assigned to him. (C) The Executive shall perform, in conjunction with the Company's senior management, to the best of his ability the following services and duties for the Company and its subsidiary and affiliate corporations (by way of example, and not by way of limitation): (i) Those duties attendant to the position with the Company for which he was hired; (ii) Supervision of the Operations functions of the Company; (iii) Works with Executive management to establish priorities, strategies, and objectives; (iv) Interfaces with and participates in marketing activities; 2 (v) Assist with the development of budgets, forecasts, financial models, credentialing and responses to Requests for Proposals; (vi) Assists with the development of commercial sector products and markets. ARTICLE III STOCK OPTIONS (A) Executive shall be eligible for participation in periodic grants of Comprehensive Care Corporation ("CCC") stock options from time to time as determined by the CCC Board of Directors at its discretion. ARTICLE IV PRINCIPAL BUSINESS LOCATION OF EXECUTIVE Executive shall be based at the Company's corporate headquarters located in Tampa, Florida. Executive shall undertake such travel as directed within or without the United States as is or may be reasonably necessary in the interests of the Company and its operating subsidiaries and the performance of his duties hereunder. 3 ARTICLE V COMPENSATION (A) Commencing the effective date of this Agreement and during the full term of this Agreement, Executive shall receive a base salary (the "Base Salary") at the rate of $120,000 per annum payable in equal bi-weekly increments or such other regular pay periods of the Company with the opportunity for periodic review and adjustment based on performance, market conditions, financial parameters of the Company, and other conditions as deemed appropriate and set forth by the Executive Officers of the Company. The Chief Executive Officer will have the sole discretion to approve any upward adjustment to Executive's compensation that brings the Executive's compensation up to $150,000 annually. Any upward adjustment to Executive's compensation that brings the Executive's compensation greater than $150,000 annually will be approved at the sole discretion of the Board of Directors. (B) Executive may receive such bonuses or additional compensation as may be determined from time to time by the Executive Officers and approved as appropriate by the Board of Directors in its sole discretion. (C) The Company shall deduct from Executive's compensation, whether Base Salary or any discretionary bonus, all federal, state and local taxes which it may now or may hereafter be required to deduct. (D) In addition to the Base Salary and for the fiscal year ending May 31, 2003, Executive shall be eligible to earn an annual performance based incentive bonus (the "Incentive Bonus") of up to $20,000 for achievement of target company financial and non-financial individual objectives. This target amount will be based 20% on individual performance against objectives and 80% on the 4 Company's financial performance against set financial criteria for the Plan year set forth in Annex A. Pay-out of this bonus will be as soon as reasonably possible after the closure of the books for the fiscal year. ARTICLE VI BENEFITS (A) During the term hereof, (i) the Company shall provide Executive with the Company's standard health insurance and retirement savings plan (i.e. 401k Plan) as generally offered and made available to employees of the Company, and upon the same terms and conditions as provided to other executives of the Company. The Company reserves the right to alter, modify, change any currently offered health insurance and retirement savings plan; (ii) Executive shall also be eligible to participate in life insurance and disability insurance as generally offered and made available to executives of the Company as now in effect or may hereafter be adopted; (iii) Executive shall be reimbursed by the Company, upon presentation of appropriate vouchers, for all reasonable business expenses incurred by the Executive on behalf of the Company, consistent with the Company's expense reimbursement policies. (B) Executive shall be entitled to three weeks of paid vacation during each 12-month period of employment, to be accrued in accordance with the Company's vacation policies and to be taken at such times as not to interfere with projects then in process and within the maximum carry over limits as available to all employees of the Company. Additionally, the Executive shall be accorded such leave and holidays generally made available to other Executive Officers of the Company. 5 (C) Executive shall be eligible to participate if adopted, in any Senior Executive Retirement Plan as implemented and approved by the Board of Directors. Participation shall be in an amount and shall be earned and vested in accordance with any plan the Company may ultimately adopt. It is currently anticipated with implementation beginning in CY 2002; final participation shall be based upon finalized and approved parameters as determined by the Board of Directors in their sole discretion. (D) Executive shall be eligible to participate in any Deferred Compensation Plan as implemented by the company in its discretion. Participation will be intended to give the ability to defer portions of the Executive's annual base salary and up to all of a Participant's earned annual incentive in accordance with finalized parameters of the approved Plan. 6 ARTICLE VII NON-DISCLOSURE The Executive shall not, at any time during or after the termination of his employment hereunder, except when acting on behalf of and with the authorization of the Company, make use of or disclose to any person, corporation, or other entity, for any purpose whatsoever, any trade secret or other confidential information concerning the Company's business, finances, marketing information, managed care business, plans and programs, contract proposals, psychiatric and dependence operations, names and arrangements with network providers, and information relating to any managed care, capitation, sales or marketing programs of the Company, or financial modeling and responses to Requests for Proposals (collectively referred to as the "Proprietary Information"). For the purposes of this Agreement, trade secrets and confidential information shall mean information disclosed to the Executive or known by him solely as a consequence of his employment by the Company, whether or not pursuant to this Agreement, and not generally known (other than as disclosed by any person in breach of any obligation of confidentiality to the Company) in the industry, concerning the business, finances, methods, operations, marketing information, and information relating to the sales and marketing of the Company. The foregoing is intended to be confirmatory of the statutory law and common law of the state of Florida relating to trade secrets and confidential information. ARTICLE VIII RESTRICTIVE COVENANT (A) In the event of the voluntary termination of employment with the Company by Executive, Executive agrees that he will not, for a period of three (3) months following such 7 termination, directly or indirectly enter into or become associated with or engage in any other business (whether as a partner, officer, director, shareholder, employee, consultant, or otherwise), which business is primarily in competition with the Company or otherwise involved in the business of developing or marketing managed behavioral health care programs on a contract or capitated basis in any geographic area in which the Company currently, or during the term of this Agreement, actively has business. This does not preclude the Executive to act in the capacity of a Therapist or a provider of care in the scope of Executive's professional license. (B) In furtherance of the foregoing, Executive shall not during the aforesaid period of non-competition, directly or indirectly, in competition with the Company, solicit any management person who was employed by the Company or solicit any provider, insurer or group through, from or with which the Company transacted any managed behavioral health care business. The foregoing shall not be deemed or construed to prevent Executive from soliciting any consultant or advisor to the Company for any project that Executive may participate in which is not in violation of this Article VIII. (C) If any court shall hold that the duration of non-competition or any other restriction contained in this paragraph is unenforceable, it is our intention that same shall not thereby be terminated but shall be deemed amended to delete there from such provision or portion adjudicated to be invalid or unenforceable or in the alternative such judicially substituted term may be substituted therefore. 8 ARTICLE IX TERM AND TERMINATION (A) This Agreement shall commence on the date hereof and continue until terminated by the Executive or the Company. (B) This Agreement shall terminate prior to the expiration of its term as follows: (i) upon the mutual agreement of the Company and Executive. (ii) upon the death or permanent disability of Executive, in which case Executive shall be entitled to all Base Salary through the date of termination. For the purposes of the foregoing, permanent disability shall be the inability of Executive to attend to his usual duties for a period of two (2) months in any 12 month period of the term or sixty (60) consecutive calendar days due to illness or injury. (iii) for cause by the Company, in which case Executive shall only be entitled to his Base Salary through the date of termination. For the purpose of the foregoing, cause shall be (a) a breach or default in the performance by Executive of any of his material obligations under this Agreement, or (b) the commission by Executive of any act resulting in or intending to result in his personal gain or enrichment at the expense of the Company, or (c) the commission by Executive of any felony or misdemeanor or act involving moral turpitude. (iv) by the Company without cause, in which case Executive shall be entitled to an amount equal to his then Base Salary for the term of three (3) months. (v) in the event a Change of Control in the Company shall have occurred and within six (6) months from such Change of Control Executive shall be terminated without cause, Executive is entitled to receive the amount equal to six (6) months Base Salary upon 9 termination. In addition, all options granted to Executive and which shall not have heretofore vested, shall immediately vest and become presently exercisable. (vi) at any time during the term, a Change of Control in the Company shall have occurred, Executive will have the option to accept six (6) months of special severance or to continue employment in current position with the Company at Executive's current pay and benefit level. For the purpose of the foregoing, a Change of Control shall be a change in ownership of 30% or more of the voting power of all issued and outstanding shares of capital stock of the Company of all classes and any convertible or exchangeable security on an as converted or as exchanged basis. ARTICLE X TERMINATION OF PRIOR AGREEMENTS This Agreement sets forth the entire agreement between the parties and supersedes all prior agreements between the parties, whether oral or written, which are merged herein. ARTICLE XI ARBITRATION Any dispute arising out of the interpretation, application and/or performance of this Agreement shall be settled through final and binding arbitration before a single arbitrator in Tampa, Florida in accordance with the commercial rules of the American Arbitration Association. The arbitrator shall be selected by the Association and shall be an attorney at law experienced in the field of corporate law. Any judgment upon any arbitration award may be entered in any court, federal or state, having competent jurisdiction of the parties. 10 ARTICLE XII SEVERABILITY If any provision of this Agreement shall be held invalid and unenforceable, the remainder of this Agreement shall remain in full force and effect. If any provision is held invalid or unenforceable with respect to particular circumstances, it shall remain in full force and effect in all other circumstances. ARTICLE XIII NOTICE All notices required to be given under the terms of this Agreement shall be in writing and shall be deemed to have been duly given only if delivered to the addressee in person or mailed by certified mail, return receipt requested, as follows: If to the Company: Comprehensive Care Corporation 200 South Hoover Boulevard; Building 219, Suite 200 Tampa, Florida 33609 Attention: Chief Executive Officer If to the Executive: Addressed to the most recent Residence Address contained in Executive's personnel file. or to any such other address as the party to receive the notice shall advise by due notice given in accordance with this paragraph. ARTICLE XIV BENEFIT This Agreement shall inure to, and shall be binding upon, the parties hereto, the successors and assigns of the Company, and the heirs and personal representatives of the Executive. 11 ARTICLE XV WAIVER The waiver by either party of any breach or violation of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach of construction and validity. ARTICLE XVI GOVERNING LAW This Agreement has been negotiated and executed in the State of Florida, and Florida law shall govern its construction and validity. ARTICLE XVII ENTIRE AGREEMENT This Agreement contains the entire agreement between the parties hereto. No change, addition or amendment shall be made hereto, except by written agreement signed by the parties hereto. IN WITNESS WHEREOF, the parties hereto have executed this Agreement and affixed their hands and seals the day and year first above written. (Corporate Seal) COMPREHENSIVE CARE CORPORATION By: /s/ Mary Jane Johnson ------------------------------------------------ Name: Mary Jane Johnson Title: President and Chief Executive Officer /s/ Paul R. McCarthy --------------------------------------------------- PAUL R. MCCARTHY (Executive) 12 -----END PRIVACY-ENHANCED MESSAGE-----

EX-99.1

                                                                   EXHIBIT 99.1

                                 PRESS RELEASE
                          COMPREHENSIVE CARE ANNOUNCES
                    THE APPOINTMENT OF OUTSIDE BOARD MEMBER

TAMPA, FLORIDA - JUNE 6, 2002 - Comprehensive Care Corporation (OTCBB: CHCR),
today announced the appointment of Howard A. Savin, Ph.D. to join the Board of
Directors. Dr. Savin is a psychologist with over 20 years of experience in the
behavioral health industry, including managed behavioral healthcare,
administration, and clinical practice.

Dr. Savin is the current Senior Vice President of Clinical Affairs at the
Devereux Foundation where he has served since July 1995. He has also served as
Vice President of Medco Behavioral Care Corp., which later became Merit
Behavioral Health and Magellan.

"We are very excited and honored to have Dr. Savin join the company's Board of
Directors," said Mary Jane Johnson, President and Chief Executive Officer. "He
brings a wealth of knowledge and experience that will be valuable to the
Company as we continue to grow."

Comprehensive Care Corporation, headquartered in Tampa, Florida, administers
and operates behavioral health, substance abuse, and employee assistance
programs for governmental agencies and managed care companies throughout the
United States. The company serves more than 1,100,000 members nationwide and
has a network of approximately 5,600 behavioral health practitioners.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: CERTAIN INFORMATION INCLUDED HEREIN AND IN OTHER COMPANY REPORTS, SEC
FILINGS, STATEMENTS, AND PRESENTATIONS IS FORWARD LOOKING WITHIN THE MEANING OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, INCLUDING, BUT NOT
LIMITED TO, STATEMENTS CONCERNING THE COMPANY'S ANTICIPATED OPERATING RESULTS,
FINANCIAL RESOURCES, INCREASES IN REVENUES, INCREASED PROFITABILITY, INTEREST
EXPENSE, GROWTH AND EXPANSION, AND THE ABILITY TO OBTAIN NEW BEHAVIORAL
HEALTHCARE CONTRACTS. SUCH FORWARD-LOOKING INFORMATION INVOLVES IMPORTANT RISKS
AND UNCERTAINTIES THAT COULD SIGNIFICANTLY AFFECT ACTUAL RESULTS AND CAUSE THEM
TO DIFFER MATERIALLY FROM EXPECTATIONS EXPRESSED HEREIN AND IN OTHER COMPANY
REPORTS, SEC FILINGS, STATEMENTS, AND PRESENTATIONS. THESE RISKS AND
UNCERTAINTIES INCLUDE LOCAL, REGIONAL, AND NATIONAL ECONOMIC AND POLITICAL
CONDITIONS, THE EFFECT OF GOVERNMENTAL REGULATION, THE COMPETITIVE ENVIRONMENT
IN WHICH THE COMPANY OPERATES, AND OTHER RISKS DETAILED FROM TIME TO TIME IN
THE COMPANY'S SEC REPORTS.

FOR MORE INFORMATION, PLEASE CONTACT:          INVESTOR RELATIONS:
Mary Jane Johnson, RN, MBA                     Robert Landis
President and Chief Executive Officer          Chief Financial Officer
Comprehensive Care Corporation                 Comprehensive Care Corporation
200 South Hoover Blvd., Suite 200              200 South Hoover Blvd., Suite 200
Tampa, FL 33609                                Tampa, FL 33609
(813) 288-4808                                 (813) 288-4808

EX-99.2

                                                                   EXHIBIT 99.2

                                 PRESS RELEASE
                    COMPREHENSIVE BEHAVIORAL CARE ANNOUNCES
                          SENIOR MANAGEMENT PROMOTION

TAMPA, FLORIDA - JUNE 4, 2002 - Comprehensive Behavioral Care, Inc.
("CompCare"), a wholly-owned subsidiary of Comprehensive Care Corporation
(OTCBB: CHCR), today announced the promotion of Thomas Clay, MSW to the
position of President, Public Sector Systems. Mr. Clay has been employed by the
company since January 2000. During this time, he has been a key executive
responsible for all regional operations with 40% revenue growth and membership
expansion of 400,000 lives.

"We are very excited to have Tom in this new role," said Mary Jane Johnson,
President and Chief Executive Officer. "He will bring more than 25 years of
public sector experience to assist us in the development of these markets
through creative programming for specialty populations."

Comprehensive Care Corporation, headquartered in Tampa, Florida, administers
and operates behavioral health, substance abuse, and employee assistance
programs for governmental agencies and managed care companies throughout the
United States. The company serves more than 1,100,000 members nationwide and
has a network of approximately 5,600 behavioral health practitioners.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: CERTAIN INFORMATION INCLUDED HEREIN AND IN OTHER COMPANY REPORTS, SEC
FILINGS, STATEMENTS, AND PRESENTATIONS IS FORWARD LOOKING WITHIN THE MEANING OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, INCLUDING, BUT NOT
LIMITED TO, STATEMENTS CONCERNING THE COMPANY'S ANTICIPATED OPERATING RESULTS,
FINANCIAL RESOURCES, INCREASES IN REVENUES, INCREASED PROFITABILITY, INTEREST
EXPENSE, GROWTH AND EXPANSION, AND THE ABILITY TO OBTAIN NEW BEHAVIORAL
HEALTHCARE CONTRACTS. SUCH FORWARD-LOOKING INFORMATION INVOLVES IMPORTANT RISKS
AND UNCERTAINTIES THAT COULD SIGNIFICANTLY AFFECT ACTUAL RESULTS AND CAUSE THEM
TO DIFFER MATERIALLY FROM EXPECTATIONS EXPRESSED HEREIN AND IN OTHER COMPANY
REPORTS, SEC FILINGS, STATEMENTS, AND PRESENTATIONS. THESE RISKS AND
UNCERTAINTIES INCLUDE LOCAL, REGIONAL, AND NATIONAL ECONOMIC AND POLITICAL
CONDITIONS, THE EFFECT OF GOVERNMENTAL REGULATION, THE COMPETITIVE ENVIRONMENT
IN WHICH THE COMPANY OPERATES, AND OTHER RISKS DETAILED FROM TIME TO TIME IN
THE COMPANY'S SEC REPORTS.

FOR MORE INFORMATION, PLEASE CONTACT:         INVESTOR RELATIONS:
Mary Jane Johnson, RN, MBA                    Robert Landis
President and Chief Executive Officer         Chief Financial Officer
Comprehensive Care Corporation                Comprehensive Care Corporation
200 South Hoover Blvd., Suite 200             200 South Hoover Blvd., Suite 200
Tampa, FL 33609                               Tampa, FL 33609
(813) 288-4808                                (813) 288-4808

EX-99.3

                                                                   EXHIBIT 99.3

                              EMPLOYMENT AGREEMENT

         AGREEMENT made this 3rd day of June 2002, effective as of June 3,
2002, by and between Thomas C. Clay (hereinafter referred to as the
"Executive"), presently residing in Boulder, CO at the most recent address
contained in Executive's personnel file, and Comprehensive Behavioral Care,
Inc., a Nevada corporation with principal offices located at 200 South Hoover
Boulevard; Building 219, Suite 200, Tampa, Florida 33609 (hereinafter referred
to as the "Company").

                             W I T N E S S E T H :

         WHEREAS, the Company, and affiliate corporations, is currently engaged
in the principal business of providing various managed behavioral health care
services on a fee for service or through contract capitation agreements; and

         WHEREAS, the Executive is offered employment by the Company in the
capacity as President, Public Sector Systems; and

         WHEREAS, the Company and Executive desire to provide for the future
continued employment of Executive upon the terms and conditions provided for
herein;

         NOW, THEREFORE, it is mutually agreed by and between the parties
hereto as follows:

                                   ARTICLE I

                                   EMPLOYMENT

         Subject to and upon the terms and conditions of this Agreement, the
Company hereby employs and agrees during the term hereof, and subject to the
terms and conditions hereof to continue the employment of the Executive, and
the Executive hereby accepts such employment in his


capacity as President, Public Sector Systems of the Company. Executive shall
report to the President and Chief Executive Officer.

                                  ARTICLE II

                                    DUTIES

         (A)      Executive shall, during the term of his employment with the
Company, and subject to the reasonable and good faith direction and control of
the Executive Officers and ultimately the Company's Board of Directors, perform
such duties and functions for the Company as he may be called upon to perform
by the Chief Executive Officer of the Company during the term of this Agreement
consistent with the position of President, Public Sector Systems.

         (B)      The Executive agrees to devote his full time and utilize his
continued best efforts to the performance of his duties for the Company and to
render such services for any subsidiary and affiliate corporations of the
Company as may be assigned to him.

         (C)      The Executive shall perform, in conjunction with the
Company's senior management, to the best of his ability the following services
and duties for the Company and its subsidiary and affiliate corporations (by
way of example, and not by way of limitation):

                  (i)      Those duties attendant to the position with the
         Company for which he was hired;

                  (ii)     Supervision of the Clinical Operations functions of
         the Company until an additional position is established for that
         function;

                  (iii)    Works with Executive management to establish
         priorities, strategies, and objectives;

                  (iv)     Development of Public Sector Products and Markets;


                                       2


                  (v)      Interfaces with and participates in marketing
         activities;

                  (vi)     Assist with the development of budgets, forecasts,
         financial models, credentialing and responses to Requests for
         Proposals.

                                  ARTICLE III
                                 STOCK OPTIONS

         (A)      Executive shall be eligible for participation in periodic
grants of Comprehensive Care Corporation ("CCC") stock options from time to
time as determined by the CCC Board of Directors at its discretion.

                                   ARTICLE IV
                    PRINCIPAL BUSINESS LOCATION OF EXECUTIVE

         Executive shall be based at the Company's corporate headquarters
located in Tampa, Florida; even though he resides in Colorado. Executive shall
undertake such travel as directed within or without the United States as is or
may be reasonably necessary in the interests of the Company and its operating
subsidiaries and the performance of his duties hereunder.


                                       3


                                   ARTICLE V
                                  COMPENSATION

         (A)      Commencing the effective date of this Agreement and during
the full term of this Agreement, Executive shall receive a base salary (the
"Base Salary") at the rate of $120,000 per annum payable in equal bi-weekly
increments or such other regular pay periods of the Company with the
opportunity for periodic review and adjustment based on performance, market
conditions, financial parameters of the Company, and other conditions as deemed
appropriate and set forth by the Executive Officers of the Company. The Chief
Executive Officer will have the sole discretion to approve any upward
adjustment to Executive's compensation that brings the Executive's compensation
up to $150,000 annually. Any upward adjustment to Executive's compensation that
brings the Executive's compensation greater than $150,000 annually will be
approved at the sole discretion of the Board of Directors.

         (B)      Executive may receive such bonuses or additional compensation
as may be determined from time to time by the Executive Officers and approved
as appropriate by the Board of Directors in its sole discretion.

         (C)      The Company shall deduct from Executive's compensation,
whether Base Salary or any discretionary bonus, all federal, state and local
taxes which it may now or may hereafter be required to deduct.

         (D)      In addition to the Base Salary and for the fiscal year ending
May 31, 2003, Executive shall be eligible to earn an annual performance based
incentive bonus (the "Incentive Bonus") of up to $20,000 for achievement of
target company financial and non-financial individual objectives. This target
amount will be based 20% on individual performance against objectives and 80%
on the


                                       4


Company's financial performance against set financial criteria for the
Plan year set forth in Annex A. Pay-out of this bonus will be as soon as
reasonably possible after the closure of the books for the fiscal year.

                                   ARTICLE VI
                                    BENEFITS

         (A)      During the term hereof, (i) the Company shall provide
Executive with the Company's standard health insurance and retirement savings
plans (i.e. 401k Plan) as generally offered and made available to employees of
the Company, and upon the same terms and conditions as provided to other
executives of the Company. The Company reserves the right to alter, modify,
change any currently offered health insurance and retirement savings plan;
Currently, Executive elects not to participate in the group health plans of the
Company. Therefore, the Company reimburses Executive $220 per month toward
health insurance premium costs. At such a time that Executive elects
participation in the Company group health plans, premium contribution and cost
sharing will be as provided to other executives of the Company; (ii) Executive
shall also be eligible to participate life insurance and disability insurance
as generally offered and made available to executives of the Company as now if
effect or may hereafter be adopted; (iii) Executive shall be reimbursed by the
Company, upon presentation of appropriate vouchers, for all reasonable business
expenses incurred by the Executive on behalf of the Company, consistent with
the Company's expense reimbursement policies.

         (B)      Executive shall be entitled to three weeks of paid vacation
during each 12-month period of employment, to be accrued in accordance with the
Company's vacation policies and to be taken at such times as not to interfere
with projects then in process and within the maximum carry


                                       5


over limits as available to all employees of the Company. Additionally, the
Executive shall be accorded such leave and holidays generally made available to
other Executive Officers of the Company.

         (C)      Executive shall be eligible to participate if adopted, in any
Senior Executive Retirement Plan as implemented and approved by the Board of
Directors. Participation shall be in an amount and shall be earned and vested
in accordance with any plan the Company may ultimately adopt. It is currently
anticipated with implementation beginning in Calendar Year 2002; final
participation shall be based upon finalized and approved parameters as
determined by the Board of Directors in their sole discretion.

         (D)      Executive shall be eligible to participate in any Deferred
Compensation Plan as implemented by the company in its discretion.
Participation will be intended to give the ability to defer portions of the
Executive's annual base salary and up to all of a Participant's earned annual
incentive in accordance with finalized parameters of the approved Plan.


                                       6


                                  ARTICLE VII
                                NON-DISCLOSURE

         The Executive shall not, at any time during or after the termination
of his employment hereunder, except when acting on behalf of and with the
authorization of the Company, make use of or disclose to any person,
corporation, or other entity, for any purpose whatsoever, any trade secret or
other confidential information concerning the Company's business, finances,
marketing information, managed care business, plans and programs, contract
proposals, psychiatric and dependence operations, names and arrangements with
network providers, and information relating to any managed care, capitation,
sales or marketing programs of the Company, or financial modeling and responses
to Requests for Proposals (collectively referred to as the "Proprietary
Information"). For the purposes of this Agreement, trade secrets and
confidential information shall mean information disclosed to the Executive or
known by him solely as a consequence of his employment by the Company, whether
or not pursuant to this Agreement, and not generally known (other than as
disclosed by any person in breach of any obligation of confidentiality to the
Company) in the industry, concerning the business, finances, methods,
operations, marketing information, and information relating to the sales and
marketing of the Company. The foregoing is intended to be confirmatory of the
statutory law and common law of the state of Florida relating to trade secrets
and confidential information.

                                 ARTICLE VIII
                             RESTRICTIVE COVENANT

         (A)      In the event of the voluntary termination of employment with
the Company by Executive, Executive agrees that he will not, for a period of
twelve (12) months following such


                                       7


termination, directly or indirectly contact or interfere with existing
contracted business or business in process of active discussions. In addition,
Executive agrees not to bid, either directly or indirectly, on any new business
in a State where the Company has an office for a period of twelve months.

         (B)      In furtherance of the foregoing, Executive shall not during
the aforesaid period of non-competition, directly or indirectly, in competition
with the Company, solicit any management person who was employed by the Company
or solicit any provider, insurer or group through, from or with which the
Company transacted any managed behavioral health care business. The foregoing
shall not be deemed or construed to prevent Executive from soliciting any
consultant or advisor to the Company for any project that Executive may
participate in which is not in violation of this Article VIII.

         (C)      If any court shall hold that the duration of non-competition
or any other restriction contained in this paragraph is unenforceable, it is
our intention that same shall not thereby be terminated but shall be deemed
amended to delete there from such provision or portion adjudicated to be
invalid or unenforceable or in the alternative such judicially substituted term
may be substituted therefore.

                                   ARTICLE IX
                              TERM AND TERMINATION

         (A)      This Agreement shall commence on the date hereof and continue
until terminated by the Executive or the Company.


                                       8


         (B)      This Agreement shall terminate prior to the expiration of its
term as follows:

                  (i)      upon the mutual agreement of the Company and
         Executive.

                  (ii)     upon the death or permanent disability of Executive,
         in which case Executive shall be entitled to all Base Salary through
         the date of termination. For the purposes of the foregoing, permanent
         disability shall be the inability of Executive to attend to his usual
         duties for a period of two (2) months in any 12 month period of the
         term or sixty (60) consecutive calendar days due to illness or injury.

                  (iii)    for cause by the Company, in which case Executive
         shall only be entitled to his Base Salary through the date of
         termination. For the purpose of the foregoing, cause shall be (a) a
         breach or default in the performance by Executive of any of his
         material obligations under this Agreement, or (b) the commission by
         Executive of any act resulting in or intending to result in his
         personal gain or enrichment at the expense of the Company, or (c) the
         commission by Executive of any felony or misdemeanor or act involving
         moral turpitude.

                  (iv)     by the Company without cause, in which case
         Executive shall be entitled to an amount equal to his then Base Salary
         for the term of three (3) months.

                  (v)      in the event a Change of Control in the Company
         shall have occurred and within six (6) months from such Change of
         Control Executive shall be terminated without cause, Executive is
         entitled to receive the amount equal six (6) months Base Salary upon
         termination. In addition, all options granted to Executive and which
         shall not have heretofore vested, shall immediately vest and become
         presently exercisable.

                  (vi)     at any time during the term, a Change of Control in
         the Company shall have occurred, Executive will have the option to
         accept six (6) months of special severance or to


                                       9


         continue employment in current position with the Company at
         Executive's current pay and benefit level. For the purpose of the
         foregoing, a Change of Control shall be a change in ownership of 30%
         or more of the voting power of all issued and outstanding share of
         capital stock of the Company of all classes and any convertible or
         exchangeable security on an as converted or as exchanged basis.

                                   ARTICLE X
                        TERMINATION OF PRIOR AGREEMENTS

         This Agreement sets forth the entire agreement between the parties and
supersedes all prior agreements between the parties, whether oral or written,
which are merged herein.

                                   ARTICLE XI
                                  ARBITRATION

         Any dispute arising out of the interpretation, application and/or
performance of this Agreement shall be settled through final and binding
arbitration before a single arbitrator in Tampa, Florida in accordance with the
commercial rules of the American Arbitration Association. The arbitrator shall
be selected by the Association and shall be an attorney at law experienced in
the field of corporate law. Any judgment upon any arbitration award may be
entered in any court, federal or state, having competent jurisdiction of the
parties.


                                      10


                                  ARTICLE XII
                                  SEVERABILITY

         If any provision of this Agreement shall be held invalid and
unenforceable, the remainder of this Agreement shall remain in full force and
effect. If any provision is held invalid or unenforceable with respect to
particular circumstances, it shall remain in full force and effect in all other
circumstances.

                                  ARTICLE XIII
                                     NOTICE

         All notices required to be given under the terms of this Agreement
shall be in writing and shall be deemed to have been duly given only if
delivered to the addressee in person or mailed by certified mail, return
receipt requested, as follows:

  If to the Company:        Comprehensive Care Corporation
                            200 South Hoover Boulevard; Building 219, Suite 200
                            Tampa, Florida 33609
                            Attention: Chief Executive Officer

  If                        to the Executive: Addressed to the
                            most recent Residence Address
                            contained in Executive's personnel
                            file.

or to any such other address as the party to receive the notice shall advise by
due notice given in accordance with this paragraph.

                                  ARTICLE XIV
                                    BENEFIT

         This Agreement shall inure to, and shall be binding upon, the parties
hereto, the successors and assigns of the Company, and the heirs and personal
representatives of the Executive.


                                      11


                                   ARTICLE XV
                                     WAIVER

         The waiver by either party of any breach or violation of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of construction and validity.

                                  ARTICLE XVI
                                 GOVERNING LAW

         This Agreement has been negotiated and executed in the State of
Florida, and Florida law shall govern its construction and validity.

                                  ARTICLE XVII
                                ENTIRE AGREEMENT

         This Agreement contains the entire agreement between the parties
hereto. No change, addition or amendment shall be made hereto, except by
written agreement signed by the parties hereto.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
and affixed their hands and seals the day and year first above written.

(Corporate Seal)             COMPREHENSIVE CARE CORPORATION



                             By: /s/ Mary Jane Johnson
                                 ---------------------------------------------
                                 Name:   Mary Jane Johnson
                                 Title:  President and Chief Executive Officer



                             /s/ Thomas C. Clay
                             -------------------------------------------------
                                      THOMAS C. CLAY    (Executive)


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EX-99.4

                                                                    EXHIBIT 99.4

                                  PRESS RELEASE
                     COMPREHENSIVE BEHAVIORAL CARE ANNOUNCES
                         NEW SENIOR MANAGEMENT POSITION

TAMPA, FLORIDA - JUNE 4, 2002 - Comprehensive Behavioral Care, Inc.
("CompCare"), a wholly-owned subsidiary of Comprehensive Care Corporation
(OTCBB: CHCR), today announced the appointment of Paul R. McCarthy, Ph.D. to the
newly created position of Chief Operating Officer. Dr. McCarthy has more than 18
years of experience in the behavioral healthcare industry, most recently as
Director for CIGNA Behavioral Health's Southeastern Regional Operations. Dr.
McCarthy previously worked for CompCare in the role of Senior Vice President of
Quality Management and laid the foundation for CompCare's first NCQA
accreditation in 1998.

"We are very excited to announce this appointment which will position CompCare
for expansion. We are committed to recruiting and retaining talented individuals
who will contribute to continued growth," said Mary Jane Johnson, President and
Chief Executive Officer.

Comprehensive Care Corporation, headquartered in Tampa, Florida, administers and
operates behavioral health, substance abuse, and employee assistance programs
for governmental agencies and managed care companies throughout the United
States. The company serves more than 1,100,000 members nationwide and has a
network of approximately 5,600 behavioral health practitioners.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: CERTAIN INFORMATION INCLUDED HEREIN AND IN OTHER COMPANY REPORTS, SEC
FILINGS, STATEMENTS, AND PRESENTATIONS IS FORWARD LOOKING WITHIN THE MEANING OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, INCLUDING, BUT NOT LIMITED
TO, STATEMENTS CONCERNING THE COMPANY'S ANTICIPATED OPERATING RESULTS, FINANCIAL
RESOURCES, INCREASES IN REVENUES, INCREASED PROFITABILITY, INTEREST EXPENSE,
GROWTH AND EXPANSION, AND THE ABILITY TO OBTAIN NEW BEHAVIORAL HEALTHCARE
CONTRACTS. SUCH FORWARD-LOOKING INFORMATION INVOLVES IMPORTANT RISKS AND
UNCERTAINTIES THAT COULD SIGNIFICANTLY AFFECT ACTUAL RESULTS AND CAUSE THEM TO
DIFFER MATERIALLY FROM EXPECTATIONS EXPRESSED HEREIN AND IN OTHER COMPANY
REPORTS, SEC FILINGS, STATEMENTS, AND PRESENTATIONS. THESE RISKS AND
UNCERTAINTIES INCLUDE LOCAL, REGIONAL, AND NATIONAL ECONOMIC AND POLITICAL
CONDITIONS, THE EFFECT OF GOVERNMENTAL REGULATION, THE COMPETITIVE ENVIRONMENT
IN WHICH THE COMPANY OPERATES, AND OTHER RISKS DETAILED FROM TIME TO TIME IN THE
COMPANY'S SEC REPORTS.

                                        
FOR MORE INFORMATION, PLEASE CONTACT:      INVESTOR RELATIONS:
Mary Jane Johnson, RN, MBA                 Robert Landis
President and Chief Executive Officer      Chief Financial Officer
Comprehensive Care Corporation             Comprehensive Care Corporation
200 South Hoover Blvd., Suite 200          200 South Hoover Blvd., Suite 200
Tampa, FL 33609                            Tampa, FL 33609
(813) 288-4808                             (813) 288-4808

EX-99.5

                                                                    EXHIBIT 99.5

                              EMPLOYMENT AGREEMENT

         AGREEMENT made this 3rd day of June, 2002, effective as of June 3,
2002, by and between Paul R. McCarthy (hereinafter referred to as the
"Executive"), presently residing in Lutz, Florida, at the most recent address
contained in Executive's personnel file, and Comprehensive Behavioral Care,
Inc., a Nevada corporation with principal offices located at 200 South Hoover
Boulevard; Building 219, Suite 200, Tampa, Florida 33609 (hereinafter referred
to as the "Company").

                                   WITNESSETH:

         WHEREAS, the Company, and affiliate corporations, is currently engaged
in the principal business of providing various managed behavioral health care
services on a fee for service or through contract capitation agreements; and

         WHEREAS, the Executive is offered employment by the Company in the
capacity as Chief Operating Officer; and

         WHEREAS, the Company and Executive desire to provide for the future
continued employment of Executive upon the terms and conditions provided for
herein;

         NOW, THEREFORE, it is mutually agreed by and between the parties hereto
as follows:

                                    ARTICLE I

                                   EMPLOYMENT

         Subject to and upon the terms and conditions of this Agreement, the
Company hereby employs and agrees during the term hereof, and subject to the
terms and conditions hereof to



continue the employment of the Executive, and the Executive hereby accepts such
employment in his capacity as Chief Operating Officer of the Company. Executive
shall report to the President and Chief Executive Officer.

                                   ARTICLE II

                                     DUTIES

         (A)      Executive shall, during the term of his employment with the
Company, and subject to the reasonable and good faith direction and control of
the Executive Officers and ultimately the Company's Board of Directors, perform
such duties and functions for the Company as he may be called upon to perform by
the Chief Executive Officer during the term of this Agreement consistent with
the position of Chief Operating Officer.

         (B)      The Executive agrees to devote his full time and utilize his
continued best efforts to the performance of his duties for the Company and to
render such services for any subsidiary and affiliate corporations of the
Company as may be assigned to him.

         (C)      The Executive shall perform, in conjunction with the Company's
senior management, to the best of his ability the following services and duties
for the Company and its subsidiary and affiliate corporations (by way of
example, and not by way of limitation):

                  (i)      Those duties attendant to the position with the
         Company for which he was hired;

                  (ii)     Supervision of the Operations functions of the
         Company;

                  (iii)    Works with Executive management to establish
         priorities, strategies, and objectives;

                  (iv)     Interfaces with and participates in marketing
         activities;


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                  (v)      Assist with the development of budgets, forecasts,
         financial models, credentialing and responses to Requests for
         Proposals;

                  (vi)     Assists with the development of commercial sector
         products and markets.


                                   ARTICLE III

                                  STOCK OPTIONS

         (A)      Executive shall be eligible for participation in periodic
grants of Comprehensive Care Corporation ("CCC") stock options from time to time
as determined by the CCC Board of Directors at its discretion.

                                   ARTICLE IV

                    PRINCIPAL BUSINESS LOCATION OF EXECUTIVE

         Executive shall be based at the Company's corporate headquarters
located in Tampa, Florida. Executive shall undertake such travel as directed
within or without the United States as is or may be reasonably necessary in the
interests of the Company and its operating subsidiaries and the performance of
his duties hereunder.


                                       3


                                    ARTICLE V

                                  COMPENSATION

         (A)      Commencing the effective date of this Agreement and during the
full term of this Agreement, Executive shall receive a base salary (the "Base
Salary") at the rate of $120,000 per annum payable in equal bi-weekly increments
or such other regular pay periods of the Company with the opportunity for
periodic review and adjustment based on performance, market conditions,
financial parameters of the Company, and other conditions as deemed appropriate
and set forth by the Executive Officers of the Company. The Chief Executive
Officer will have the sole discretion to approve any upward adjustment to
Executive's compensation that brings the Executive's compensation up to $150,000
annually. Any upward adjustment to Executive's compensation that brings the
Executive's compensation greater than $150,000 annually will be approved at the
sole discretion of the Board of Directors.

         (B)      Executive may receive such bonuses or additional compensation
as may be determined from time to time by the Executive Officers and approved as
appropriate by the Board of Directors in its sole discretion.

         (C)      The Company shall deduct from Executive's compensation,
whether Base Salary or any discretionary bonus, all federal, state and local
taxes which it may now or may hereafter be required to deduct.

         (D)      In addition to the Base Salary and for the fiscal year ending
May 31, 2003, Executive shall be eligible to earn an annual performance based
incentive bonus (the "Incentive Bonus") of up to $20,000 for achievement of
target company financial and non-financial individual objectives. This target
amount will be based 20% on individual performance against objectives and 80% on
the


                                       4


Company's financial performance against set financial criteria for the Plan
year set forth in Annex A. Pay-out of this bonus will be as soon as reasonably
possible after the closure of the books for the fiscal year.

                                   ARTICLE VI

                                    BENEFITS

         (A)      During the term hereof, (i) the Company shall provide
Executive with the Company's standard health insurance and retirement savings
plan (i.e. 401k Plan) as generally offered and made available to employees of
the Company, and upon the same terms and conditions as provided to other
executives of the Company. The Company reserves the right to alter, modify,
change any currently offered health insurance and retirement savings plan; (ii)
Executive shall also be eligible to participate in life insurance and disability
insurance as generally offered and made available to executives of the Company
as now in effect or may hereafter be adopted; (iii) Executive shall be
reimbursed by the Company, upon presentation of appropriate vouchers, for all
reasonable business expenses incurred by the Executive on behalf of the Company,
consistent with the Company's expense reimbursement policies.

         (B)      Executive shall be entitled to three weeks of paid vacation
during each 12-month period of employment, to be accrued in accordance with the
Company's vacation policies and to be taken at such times as not to interfere
with projects then in process and within the maximum carry over limits as
available to all employees of the Company. Additionally, the Executive shall be
accorded such leave and holidays generally made available to other Executive
Officers of the Company.


                                       5


         (C)      Executive shall be eligible to participate if adopted, in any
Senior Executive Retirement Plan as implemented and approved by the Board of
Directors. Participation shall be in an amount and shall be earned and vested in
accordance with any plan the Company may ultimately adopt. It is currently
anticipated with implementation beginning in CY 2002; final participation shall
be based upon finalized and approved parameters as determined by the Board of
Directors in their sole discretion.

         (D)      Executive shall be eligible to participate in any Deferred
Compensation Plan as implemented by the company in its discretion. Participation
will be intended to give the ability to defer portions of the Executive's annual
base salary and up to all of a Participant's earned annual incentive in
accordance with finalized parameters of the approved Plan.


                                       6


                                   ARTICLE VII

                                 NON-DISCLOSURE

         The Executive shall not, at any time during or after the termination of
his employment hereunder, except when acting on behalf of and with the
authorization of the Company, make use of or disclose to any person,
corporation, or other entity, for any purpose whatsoever, any trade secret or
other confidential information concerning the Company's business, finances,
marketing information, managed care business, plans and programs, contract
proposals, psychiatric and dependence operations, names and arrangements with
network providers, and information relating to any managed care, capitation,
sales or marketing programs of the Company, or financial modeling and responses
to Requests for Proposals (collectively referred to as the "Proprietary
Information"). For the purposes of this Agreement, trade secrets and
confidential information shall mean information disclosed to the Executive or
known by him solely as a consequence of his employment by the Company, whether
or not pursuant to this Agreement, and not generally known (other than as
disclosed by any person in breach of any obligation of confidentiality to the
Company) in the industry, concerning the business, finances, methods,
operations, marketing information, and information relating to the sales and
marketing of the Company. The foregoing is intended to be confirmatory of the
statutory law and common law of the state of Florida relating to trade secrets
and confidential information.

                                  ARTICLE VIII

                              RESTRICTIVE COVENANT

         (A)      In the event of the voluntary termination of employment with
the Company by Executive, Executive agrees that he will not, for a period of
three (3) months following such


                                       7


termination, directly or indirectly enter into or become associated with or
engage in any other business (whether as a partner, officer, director,
shareholder, employee, consultant, or otherwise), which business is primarily in
competition with the Company or otherwise involved in the business of developing
or marketing managed behavioral health care programs on a contract or capitated
basis in any geographic area in which the Company currently, or during the term
of this Agreement, actively has business. This does not preclude the Executive
to act in the capacity of a Therapist or a provider of care in the scope of
Executive's professional license.

         (B)      In furtherance of the foregoing, Executive shall not during
the aforesaid period of non-competition, directly or indirectly, in competition
with the Company, solicit any management person who was employed by the Company
or solicit any provider, insurer or group through, from or with which the
Company transacted any managed behavioral health care business. The foregoing
shall not be deemed or construed to prevent Executive from soliciting any
consultant or advisor to the Company for any project that Executive may
participate in which is not in violation of this Article VIII.

         (C)      If any court shall hold that the duration of non-competition
or any other restriction contained in this paragraph is unenforceable, it is our
intention that same shall not thereby be terminated but shall be deemed amended
to delete there from such provision or portion adjudicated to be invalid or
unenforceable or in the alternative such judicially substituted term may be
substituted therefore.


                                       8


                                   ARTICLE IX

                              TERM AND TERMINATION

         (A)      This Agreement shall commence on the date hereof and continue
until terminated by the Executive or the Company.

         (B)      This Agreement shall terminate prior to the expiration of its
term as follows:

                  (i)      upon the mutual agreement of the Company and
         Executive.

                  (ii)     upon the death or permanent disability of Executive,
         in which case Executive shall be entitled to all Base Salary through
         the date of termination. For the purposes of the foregoing, permanent
         disability shall be the inability of Executive to attend to his usual
         duties for a period of two (2) months in any 12 month period of the
         term or sixty (60) consecutive calendar days due to illness or injury.

                  (iii)    for cause by the Company, in which case Executive
         shall only be entitled to his Base Salary through the date of
         termination. For the purpose of the foregoing, cause shall be (a) a
         breach or default in the performance by Executive of any of his
         material obligations under this Agreement, or (b) the commission by
         Executive of any act resulting in or intending to result in his
         personal gain or enrichment at the expense of the Company, or (c) the
         commission by Executive of any felony or misdemeanor or act involving
         moral turpitude.

                  (iv)     by the Company without cause, in which case Executive
         shall be entitled to an amount equal to his then Base Salary for the
         term of three (3) months.

                  (v)      in the event a Change of Control in the Company shall
         have occurred and within six (6) months from such Change of Control
         Executive shall be terminated without cause, Executive is entitled to
         receive the amount equal to six (6) months Base Salary upon


                                       9


         termination. In addition, all options granted to Executive and which
         shall not have heretofore vested, shall immediately vest and become
         presently exercisable.

                  (vi)     at any time during the term, a Change of Control in
         the Company shall have occurred, Executive will have the option to
         accept six (6) months of special severance or to continue employment in
         current position with the Company at Executive's current pay and
         benefit level. For the purpose of the foregoing, a Change of Control
         shall be a change in ownership of 30% or more of the voting power of
         all issued and outstanding shares of capital stock of the Company of
         all classes and any convertible or exchangeable security on an as
         converted or as exchanged basis.


                                    ARTICLE X

                         TERMINATION OF PRIOR AGREEMENTS

         This Agreement sets forth the entire agreement between the parties and
supersedes all prior agreements between the parties, whether oral or written,
which are merged herein.

                                   ARTICLE XI

                                   ARBITRATION

         Any dispute arising out of the interpretation, application and/or
performance of this Agreement shall be settled through final and binding
arbitration before a single arbitrator in Tampa, Florida in accordance with the
commercial rules of the American Arbitration Association. The arbitrator shall
be selected by the Association and shall be an attorney at law experienced in
the field of corporate law. Any judgment upon any arbitration award may be
entered in any court, federal or state, having competent jurisdiction of the
parties.


                                       10


                                   ARTICLE XII

                                  SEVERABILITY

         If any provision of this Agreement shall be held invalid and
unenforceable, the remainder of this Agreement shall remain in full force and
effect. If any provision is held invalid or unenforceable with respect to
particular circumstances, it shall remain in full force and effect in all other
circumstances.


                                  ARTICLE XIII

                                     NOTICE

         All notices required to be given under the terms of this Agreement
shall be in writing and shall be deemed to have been duly given only if
delivered to the addressee in person or mailed by certified mail, return receipt
requested, as follows:

         If to the Company:     Comprehensive Care Corporation
                                200 South Hoover Boulevard;
                                Building 219, Suite 200
                                Tampa, Florida 33609
                                Attention: Chief Executive Officer

         If to the Executive:   Addressed to the most recent Residence
                                Address contained in Executive's personnel
                                file.

or to any such other address as the party to receive the notice shall advise by
due notice given in accordance with this paragraph.

                                   ARTICLE XIV

                                     BENEFIT

         This Agreement shall inure to, and shall be binding upon, the parties
hereto, the successors and assigns of the Company, and the heirs and personal
representatives of the Executive.


                                       11


                                   ARTICLE XV

                                     WAIVER

         The waiver by either party of any breach or violation of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of construction and validity.


                                   ARTICLE XVI

                                  GOVERNING LAW

         This Agreement has been negotiated and executed in the State of
Florida, and Florida law shall govern its construction and validity.

                                  ARTICLE XVII

                                ENTIRE AGREEMENT

         This Agreement contains the entire agreement between the parties
hereto. No change, addition or amendment shall be made hereto, except by written
agreement signed by the parties hereto.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
affixed their hands and seals the day and year first above written.

(Corporate Seal)             COMPREHENSIVE CARE CORPORATION



                             By: /s/ Mary Jane Johnson
                                ------------------------------------------------
                               Name:  Mary Jane Johnson
                               Title: President and Chief Executive Officer

                             /s/ Paul R. McCarthy
                             ---------------------------------------------------
                                      PAUL R. MCCARTHY  (Executive)


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