STOCK OPTION AGREEMENT

Exhibit 10.10

STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT is made on March 12, 2007 by and between National Medical Health Card Systems, Inc., a Delaware corporation (the “ Company ”) and Thomas W. Erickson (“ Optionee ”).

WHEREAS, Optionee serves as the chairman of the Board of Directors of the Company pursuant to an agreement, dated as of February 23, 2007, by and between the Company and Optionee (the “ Chairman Agreement ”); and

WHEREAS, in accordance with the terms of the Chairman Agreement, the Company now desires to grant to Optionee an option to purchase shares of the Company’s common stock (the “ Common Stock ”):

NOW, THEREFORE, the Company and Optionee hereby agree as follows:

1. Grant of Option . The Company hereby grants to Optionee an option (the “ Option ”) to purchase 100,000 shares of Common Stock (the “ Option Shares ”), under and pursuant to the terms of the Company’s 1999 Stock Option Plan, as amended (the “ Plan ”), upon and subject to the terms and provisions of this Agreement. The Option is not intended to meet the requirements of Section 422 of the Internal Revenue Code of 1986, as amended, relating to “incentive stock options.”

2. Exercise Price . The exercise price of each of the Option Shares shall be $14.02, which is the closing price per share of Common Stock on the date hereof.

3. Vesting; Term . (a) Except as specifically provided, the Option shall become vested and become exercisable upon the satisfaction of the following two conditions: (i) Optionee shall have been a director of the Company though at least February 23, 2008 (the “First Anniversary”) or Optionee shall have resigned at the request of the Board of Directors of the Company or have been otherwise involuntarily terminated (in either case other than a Termination for Cause (within the meaning of the Chairman Agreement)) on or prior to the First Anniversary and (ii) a Change in Control (as defined in Exhibit B to the Chairman Agreement) shall have occurred. The options would also immediately vest upon a Change in Control prior to the First Anniversary. If the condition set forth in clause (i) above is not satisfied due to termination of service, then, unless vesting is accelerated, the Option will thereupon terminate and be of no further force or effect. If Optionee’s service terminates due to the Optionee’s death or “disability” (within the meaning of Exhibit B to the Chairman Agreement) prior to the First Anniversary, and a Change in Control shall occur later during the term of this Agreement, then the Option will partially vest in connection with the Change in Control with respect to a proportionate number of the Option Shares (based upon the number of days during the initial one-year vesting period that have elapsed at the time of Optionee’s termination of service) and the balance of the Option shall terminate.

(b) Unless sooner exercised or terminated, the Option will expire on the tenth anniversary of the date hereof. The Option shall remain in effect following the satisfaction of the condition in clause (i) of the first sentence of paragraph (a) above, notwithstanding any subsequent termination of service.

4. Exercise of Options . The Option shall be exercised in accordance with the provisions of the Plan. As soon as practicable after the receipt of notice of exercise (in the form attached hereto as Exhibit A ) and payment of the Option Price as provided for in the Plan, the Company shall tender to Optionee certificates issued in Optionee’s name evidencing the number of Option Shares covered thereby.

5. Transferability . The Option shall not be transferable other than by will or the laws of descent and distribution and, during Optionee’s lifetime, shall not be exercisable by any person other than Optionee.

6. Incorporation by Reference . The terms and conditions of the Plan, which is attached hereto as Exhibit B , are hereby incorporated by reference and made a part hereof.

7. Notices . Any notice or other communication given hereunder shall be deemed sufficient if in writing and hand delivered or sent by registered or certified mail, return receipt requested, addressed to the Company, 26 Harbor Park Drive, Port Washington, New York 11050, Attention: Secretary and to Optionee at the address indicated below. Notices shall be deemed to have been given on the date of hand delivery or mailing, except notices of change of address, which shall be deemed to have been given when received.

8. Binding Effect . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors and assigns.

9. Entire Agreement . This Agreement, and the Plan, contains the entire understanding of the parties hereto with respect to the subject matter hereof and may be modified only by an instrument executed by the party sought to be charged.

[Signature page follows]

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

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Exhibit A

NATIONAL MEDICAL HEALTH CARD SYSTEMS, INC.

OPTION EXERCISE FORM

The undersigned hereby irrevocably elects to exercise the within Option dated                      to the extent of purchasing                      shares of common stock of National Medical Health Card Systems, Inc. The undersigned hereby makes a payment of $              in payment therefor.

Exhibit B

National Medical Health Card Systems, Inc.

1999 Stock Option Plan

As Amended on March 19, 2004

1. Purpose of the Plan . The National Medical Health Card Systems, Inc. 1999 Stock Option Plan (the “Plan”) is intended to advance the interests of National Medical Health Card Systems, Inc. (the “Company”) by inducing individuals and eligible entities (as hereinafter provided) of outstanding ability and potential to join and remain with, or provide consulting or advisory services to, the Company, by encouraging and enabling eligible employees, non- employee Directors, consultants and advisors to acquire proprietary interests in the Company, and by providing the participating employees, non-employee Directors, consultants and advisors with an additional incentive to promote the success of the Company. This is accomplished by providing for the granting of “Options,” which term as used herein includes both “Incentive Stock Options” and “Nonstatutory Stock Options,” as later defined, to employees, non-employee Directors, consultants and advisors.

2. Administration . The Plan shall be administered by the Board of Directors of the Company (the “Board of Directors”) or by a committee (the “Committee”) consisting of at least one (1) person chosen by the Board of Directors. Except as herein specifically provided, the interpretation and construction by the Board of Directors or the Committee of any provision of the Plan or of any Option granted under it shall be final and conclusive. The receipt of Options by Directors, or any members of the Committee, shall not preclude their vote on any matters in connection with the administration or interpretation of the Plan.

3. Shares Subject to the Plan . The stock subject to Options granted under the Plan shall be shares of the Company’s common stock, par value $.001 per share (the

“Common Stock”), whether authorized but unissued or held in the Company’s treasury, or shares purchased from stockholders expressly for use under the Plan. The maximum number of shares of Common Stock (a) which may be issued pursuant to Options or SARs granted under the Plan shall not exceed in the aggregate four million eight hundred fifty thousand (4,850,000) shares, and (b) with respect to which Options and SARs (as hereinafter defined) may be granted during any fiscal year of the Company to any employee shall not exceed six hundred thousand (600,000) shares, subject to adjustment in accordance with the provisions of Section 14 hereof. The Company shall at all times while the Plan is in force reserve such number of shares of Common Stock as will be sufficient to satisfy the requirements of all outstanding Options granted under the Plan. In the event any Option granted under the Plan shall expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part, the unpurchased shares subject thereto shall again be available for Options under the Plan.

4. Participation . The class of individual or entity that shall be eligible to receive Options under the Plan shall be (a) with respect to Incentive Stock Options described in Section 6 hereof, all employees (including officers) of either the Company or any subsidiary corporation of the Company, and (b) with respect to Nonstatutory Stock Options described in Section 7 hereof, all employees (including officers) and non-employee Directors of, or consultants and advisors to, either the Company or any subsidiary corporation of the Company; provided, however, that Nonstatutory Stock Options shall not be granted to any such consultants and advisors unless (i)  bona fide services have been or are to be rendered by such consultant or advisor and (ii) such services are not in connection with the offer or sale of securities in a capital raising transaction. For purposes of the Plan, for an entity to be an eligible entity, it must be

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included in the definition of “employee” for purposes of a Form S-8 Registration Statement filed under the Securities Act of 1933, as amended (the “Act”). The Board of Directors or the Committee, in its sole discretion, but subject to the provisions of the Plan, shall determine the employees and non-employee Directors of, and the consultants and advisors to, the Company and its subsidiary corporations to whom Options shall be granted, and the number of shares to be covered by each Option, taking into account the nature of the employment or services rendered by the individuals or entities being considered, their annual compensation, their present and potential contributions to the success of the Company, and such other factors as the Board of Directors or the Committee may deem relevant.

5. Stock Option Agreement . Each Option granted under the Plan shall be authorized by the Board of Directors or the Committee, and shall be evidenced by a Stock Option Agreement which shall be executed by the Company and by the individual or entity to whom such Option is granted. The Stock Option Agreement shall specify the number of shares of Common Stock as to which any Option is granted, the period during which the Option is exercisable, the option price per share thereof, and such other terms and provisions as the Board of Directors or the Committee may deem necessary or appropriate.

6. Incentive Stock Options . The Board of Directors or the Committee may grant Options under the Plan, which are intended to meet the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), and which are subject to the following terms and conditions and any other terms and conditions as may at any time be required by Section 422 of the Code (referred to herein as an “Incentive Stock Option”):

(a) No Incentive Stock Option shall be granted to individuals other than employees of the Company or of a subsidiary corporation of the Company.

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(b) Each Incentive Stock Option under the Plan must be granted prior to February 9, 2009, which is within ten (10) years from the date the Plan was adopted by the Board of Directors of the Company.

(c) The option price of the shares subject to any Incentive Stock Option shall not be less than the fair market value of the Common Stock at the time such Incentive Stock Option is granted; provided, however, if an Incentive Stock Option is granted to an individual who owns, at the time the Incentive Stock Option is granted, more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of a parent or subsidiary corporation of the Company (a “Principal Stockholder”), the option price of the shares subject to the Incentive Stock Option shall be at least one hundred ten percent (110%) of the fair market value of the Common Stock at the time the Incentive Stock Option is granted.

(d) No Incentive Stock Option granted under the Plan shall be exercisable after the expiration of ten (10) years from the date of its grant. However, if an Incentive Stock Option is granted to a Principal Stockholder, such Incentive Stock Option shall not be exercisable after the expiration of five (5) years from the date of its grant. Every Incentive Stock Option granted under the Plan shall be subject to earlier termination as expressly provided in Section 12 hereof.

(e) For purposes of determining stock ownership under this Section 6, the attribution rules of Section 424(d) of the Code shall apply.

(f) For purposes of the Plan, fair market value shall be determined by the Board of Directors or the Committee. If the Common Stock is listed on a national securities exchange or The Nasdaq Stock Market (“Nasdaq”) or traded on the NASD OTC Electronic Bulletin Board (the “Bulletin Board”) or the Over-the-Counter market, fair market value shall be

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the closing selling price or, if not available, the closing bid price or, if not available, the high bid price of the Common Stock quoted on such exchange or Nasdaq, or as reported by the Bulletin Board or, with respect to the Over-the-Counter market, the National Quotation Bureau, Incorporated or other reporting bureau, on the day immediately preceding the day on which the Option is granted (or, if granted after the close of trading, on the day on which the Option is granted), or, if there is no selling or bid price on that day, the closing selling price, closing bid price or high bid price on the most recent day which precedes that day and for which such prices are available. If there is no selling or bid price for the thirty (30) day period preceding the date of grant of an Option hereunder, fair market value shall be determined in good faith by the Board of Directors or the Committee.

7. Nonstatutory Stock Options . The Board of Directors or the Committee may grant Options under the Plan which are not intended to meet the requirements of Section 422 of the Code, as well as Options which are intended to meet the requirements of Section 422 of the Code but the terms of which provide that they will not be treated as Incentive Stock Options (referred to herein as a “Nonstatutory Stock Option”). Nonstatutory Stock Options shall be subject to the following terms and conditions:

(a) A Nonstatutory Stock Option may be granted to any individual or entity eligible to receive an Option under the Plan pursuant to Section 4(b) hereof.

(b) The option price of the shares subject to a Nonstatutory Stock Option shall be determined by the Board of Directors or the Committee, in its sole discretion, at the time of the grant of the Nonstatutory Stock Option.

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(c) A Nonstatutory Stock Option granted under the Plan may be of such duration as shall be determined by the Board of Directors or the Committee (subject to earlier termination as expressly provided in Section 12 hereof).

8. Reload Feature . The Board of Directors or the Committee may grant Options with a reload feature. A reload feature shall only apply when the option price is paid by delivery of Common Stock (as set forth in Sec