EMPLOYMENT AGREEMENT

Exhibit 10.12

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made as of August 20, 2001 by and between John Gillespie (“Officer”), and National Mentor, Inc., a Delaware corporation (“Employer”).

WHEREAS, Employer and Officer desire to set forth the terms and conditions of Officer’s employment with Employer under this Agreement;

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements in this Agreement, the parties agree as follows:

STATEMENT OF AGREEMENT:

1.                                      Employment. Employer agrees to employ Officer, and Officer accepts such employment in accordance with the terms of this Agreement, for an initial term of 2 years commencing August 20, 2001, unless terminated earlier in accordance with the terms of this Agreement. After the initial term has expired, this Agreement will renew automatically on the anniversary date of each year for a one-year term . If either party desires not to renew the Agreement, they must provide the other party with written notice of their intent not to renew the Agreement at least sixty days prior to the next anniversary date. If Employer chooses not to renew this Agreement, Employer shall continue to pay Officer the compensation provided for in Section 4(a) of this Agreement for one year commencing on such anniversary date.

2.                                      Position and Duties of Officer. Officer will serve as Executive Vice President and Chief Financial Officer. Officer agrees to serve in such position or in such other positions of a similar status or level as Employer determines from time to time, and to perform the commensurate duties that Employer may assign from time to time to Officer until the expiration of the term or such time as Officer’s employment with Employer is terminated pursuant to this Agreement.

3.                                      Time Devoted and Location of Officer.

(a) Subject to Section 3(c), Officer will devote his/her full business time and energy to the business affairs and interests of Employer, and will use his/her best efforts and abilities to promote Employer’s interests. Officer agrees that he/she will diligently endeavor to perform services contemplated by this Agreement in a manner consistent with his/her position and in accordance with the policies established by the Employer and provided to Officer from time to time.

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(b) Officer’s primary business office and normal place of work will be located in Boston, Massachusetts.

(c) Officer may serve as an officer, director, agent or employee of any direct or indirect subsidiary or other affiliate of Employer, but may not serve as an officer, director, agent or employee of any other business enterprise without written approval of the Board; provided, that Officer may serve in any capacity with any civic, educational or charitable organization, or any governmental entity or trade association, without seeking or obtaining such written approval of the Board, if such activities and services do not interfere or conflict with the performance of Officer’s duties under this Agreement.

4.                                      Compensation.

(a) Base Salary. Employer will pay Officer a base salary in the amount of $230,000 per year, which amount will be paid in accordance with Employer’s normal payroll schedule less appropriate withholdings for federal and state taxes and other deductions authorized by Officer. Such salary will be subject to review and adjustment by Employer from time to time.

(b) Benefits. Officer will be eligible to participate in all benefit plans of Employer to the same extent as they are made available to other senior executives of Employer at Officer’s level. Officer will receive separate information detailing the terms of the benefit plans and the terms of such plans will control. Officer will also be eligible to participate in any annual incentive plan and stock option plan applicable to Officer by its terms.

5.                                      Expenses. During the term of this Agreement, Employer will reimburse Officer promptly for all reasonable travel, entertainment, parking, business meetings and similar expenditures in pursuance and furtherance of Employer’s business upon receipt of reasonably supporting documentation as required by Employer’s policies applicable to its officers and employees generally.

6.                                      Termination.

(a) Termination Due to Resignation and Termination with Cause. Except as otherwise set forth in this Agreement, Officer’s employment and Officer’s rights to receive compensation and benefits from Employer, will terminate upon the occurrence of any of the following events (i) the effective date of Officer’s resignation without good reason, or (ii) termination for cause at the discretion of Employer under the following circumstances: (a) Officer’s commission of an act of fraud or dishonesty involving his/her duties on behalf of Employer; (b) Officer’s willful failure or refusal to faithfully and diligently perform material duties assigned to Officer consistent with Section 2 above , or other breach of any material term under this Agreement; (c) Officer’s willful failure or refusal to abide by Employer’s material policies, rules, procedures or

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directives; or (d) Officer’s conviction of a felony or misdemeanor involving moral turpitude. If Officer is terminated pursuant to this Section 6(a), Employer’s only remaining financial obligation to Officer under this Agreement will be to pay any earned but unpaid base salary and accrued but unpaid vacation and reimbursable travel and entertainment expenses through the date of Officer’s termination.

For the events described in Sections 6(a)(ii)(b) and (c), Employer will give Officer written notice of such event and a reasonable opportunity to cure such situation, but in no event less than thirty days.

(b) Termination without Cause. Officer may terminate his/her employment without cause at any time giving thirty days written notice of resignation to Employer. Employer may terminate this Agreement without cause at any time by giving thirty days prior written notice to Officer. If Employer terminates this Agreement without cause, Employer may direct Officer to cease providing services immediately. Subject to the limitation set forth in Section 7(a) below, if Employer terminates this Agreement without cause, Employer shall continue to pay Officer the compensation provided for in Section 4(a) of this Agreement for a period of time equal to the greater of (i) the remaining term of this Agreement or (ii) two years. No other benefits or compensation will be paid to Officer if he/she is terminated pursuant to this Section 6(b), unless otherwise provided for in the terms of the applicable plan or benefit.

(c) Termination by Officer for Good Reason. Officer may terminate this Agreement, and his/her employment with Employer, for “good reason” upon the occurrence of any of the following:

(i)                                     a requirement by Employer that Officer relocate his/her primary business office more than 25 miles from its current location in order to fulfill Officer’s duties under this Agreement;

(ii)                                  the failure of Employer to comply with Section 4; or

(iii)                               any material breach of this Agreement by Employer; or

(iv)                              the assignment to Officer of duties materially inconsistent with Officer’s status as Executive Vice President and Chief Financial Officer of Employer.

Prior to terminating this Agreement pursuant to this Section, Officer shall give to Employer written notice of his/her “good reason” for terminating this Agreement and provide Employer with a reasonable period in which to contest or correct the “good reason”, but in no event less than thirty days. In the event of a termination for “good reason” pursuant to this Section, Officer will be entitled to receive all compensation and benefits provided for in this Agreement for a termination by Employer without cause.

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(d) Automatic Termination. This Agreement will terminate automatically upon the death or permanent disability of Officer. Officer will be deemed to be “Disabled” or to suffer from a “Disability” within the meaning of this Agreement if, because of a physical or mental impairment, Officer has been unable to perform the essential functions of his/her position for a period of 180 consecutive days, or if Officer can reasonably be expected to be unable to perform the essential functions of his/her position for such period. The term “essential duties” is defined as the ability to consistently perform his/her assigned duties, including travel requirements. Subject to continuing coverage under applicable benefits plans, and except as otherwise provided in this Agreement, if Officer is terminated pursuant to this Section 6(d), Employer’s only remaining financial obligation to Officer under this Agreement will be to pay any earned but unpaid base salary and accrued but unpaid vacation and reimbursable travel and entertainment expenses through the date of Officer’s termination.

(e) Effect of Termination. Except as otherwise provided for in this Agreement, upon termination of this Agreement, all rights and obligations under this Agreement will cease except for the rights and obligations under Sections 4 and 5 to the extent Officer has not been compensated or reimbursed for services performed prior to termination or has not been paid vacation and reimbursable travel and entertainment expenses accrued through the termination date (the amount of compensation to be prorated for the portion of the pay period prior to termination); the rights and obligations under Sections 7, 8, 9; and all procedural and remedial provisions of this Agreement. A termination of this Agreement will constitute a termination of Officer’s employment with Employer.

7.                                      Protection of Confidential Information /Non-Competition/Non-Solicitation.

Officer covenants and agrees as follows:

(a) During Employer’s employment of Officer and for a period of eighteen months following the termination of Officer’s employment for any reason, Officer will not use or disclose, directly or indirectly, for any reason whatsoever or in any way, other than at the direction of Employer (with the written consent of National Mentor Holdings, Inc.) during the course of Officer’s employment, or following the termination of Officer’s employment after receipt of the prior written consent of Employer, any confidential information or trade secrets of Employer or its controlled subsidiaries or affiliates, including but not limited to, the following: lists of past, current or potential customers of Employer and its controlled subsidiaries and affiliates; all systems, manuals, materials, processes and other intellectual property of any type used by Employer or its controlled subsidiaries and affiliates in connection with their respective business operations; financial statements, cost reports and other financial information; contract proposals and bidding information; rate and fee structures; policies and procedures developed as part of a confidential business plan; and management systems and procedures, including manuals and supplements (collectively the “Confidential Information”).

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The obligation not to use or disclose any Confidential Information will not apply to: (i) any Confidential Information known by Officer before commencing employment with Employer, (ii) Confidential Information which Officer obtains from a third party, provided Officer has no actual or constructive knowledge that the third party obtained the Confidential Information by wrongful or inappropriate means, (iii) following the termination of the employment of Officer with Employer, to any information that is or becomes public knowledge through no fault of Officer, and that may be utilized by the public without any direct or indirect obligation to Employer, but the termination of the obligation for non-use or nondisclosure by reason of such information becoming public will extend only from the date such information becomes public knowledge, or (iv) disclosure compelled by legal process. The above will be without prejudice to any rights or remedies of Employer under any state or federal law protecting trade secrets or other information.

(b) Officer covenants and agrees that during the term of his/her employment with Employer and for a period of twelve months immediately following the termination of said employment for any reason, he/she will not, directly or indirectly, seek, obtain or accept a “Competitive Position” in the “Restricted Territory” with a “Competitor” of Employer.

The following definitions shall apply to this Section:

“Competitor” means any business, individual, partnership, joint venture, association, firm, corporation or other entity engaged, wholly o