Exhibit 10.2
MAGELLAN HEALTH SERVICES, INC.
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2003 MANAGEMENT INCENTIVE PLAN
NOTICE OF STOCK OPTION GRANT
(REFERNCE NO. 20__ -_-_)
NAME OF OPTIONEE:
SHARES SUBJECT
TO OPTION: ____ shares of Ordinary Common Stock of Magellan Health
Services, Inc. ("Shares")
TYPE OF OPTION: __X__ Nonqualified _____ Incentive
EXERCISE PRICE
PER SHARE: $ ______
DATE OF GRANT: ______, 20__
DATE EXERCISABLE: This option shall be exercisable only to the extent it is
vested and, except as otherwise provided in this notice of
grant, to the extent vested, only when otherwise
exercisable in accordance with the terms of the 2003
Management Incentive Plan and the Option Agreement to
which this notice of grant relates.
The options granted hereby, to the extent vested on the
date of termination of the Optionee's Service with the
Company, shall be exercisable for a period of six months
after the termination of the Optionee's Service with the
Company (notwithstanding anything that may be to the
contrary in the Option Agreement to which this notice of
grant relates)..
VESTING: This option shall vest with respect to the Shares subject
hereto as to 25% of such Shares on each of the first,
second, third and fourth anniversaries of the Date of
Grant, provided that in each case the Optionee's Service
with the Company has not terminated prior to such date.
Notwithstanding the preceding paragraph, this Option shall
earlier vest immediately with respect to 100% of the
Shares subject hereto in the event, after the date hereof,
a Change in Control of the Company (as defined below)
shall have occurred and within the period of eighteen
months (or such other period as is provided by Optionee's
employment agreement, if any, in effect at the time of the
Change of Control) following occurrence of the Change in
Control, Optionee's Service with the Company shall be
terminated by the Company without Cause (as defined below)
or by the Optionee with Good Reason (as defined below),
provided that the Optionee's Service with the Company has
not previously terminated after the date hereof for any
other reason, and upon such accelerated vesting this
Option shall continue to be exercisable for a period of
six months after such termination of Optionee's Service,
consistent with the provisions regarding exercise set
forth above. For purposes of this Option, the terms
"Change in Control," "Cause" and "Good Reason" shall have
the same meanings
as provided in any employment agreement between the
Company and Optionee in effect at the time of the Change
in Control (including any terms of substantially
comparable significance in any such employment agreement
even if not of identical wording) or, if no such
employment agreement is in effect at such time or no such
meanings are provided in such employment agreement,, shall
have the meanings ascribed thereto below:
(1) A "Change in Control" of the Company shall mean
the first to occur after the date hereof of any
of the following events:
a. any "person," as such term is used
in Sections 3(a)(9) and 13(d) of the
Securities Exchange Act of 1934, as
amended (the "Exchange Act"),
becomes a "beneficial owner," as
such term is used in Rule 13d-3
promulgated under the Exchange Act,
of 30% or more of the Voting Stock
(as defined below) of the Company;
provided that this clause a shall
not be operative during the period
the Minimum Hold Condition (as
defined in the Company's certificate
of incorporation as in effect on the
date hereof) is satisfied; it being
understood, however, that a Change
in Control will occur at the time
the Minimum Hold Condition is no
longer satisfied (the "Requisite
Time") if (i) a person becomes the
beneficial owner of 30% or more of
the Voting Stock during the period
in which the Minimum Hold Condition
is satisfied and (ii) that person is
the beneficial owner of 30% or more
of the Voting Stock at the Requisite
Time);
b. both (i) the majority of the Board
of Directors of the Company consists
of individuals other than
"Continuing Directors," which shall
mean the members of the Board on the
date hereof, and (ii) the Minimum
Hold Condition is not satisfied at
such time; provided that any person
becoming a director subsequent to
the date hereof whose election or
nomination for election was
supported by two-thirds of the
directors who then comprised the
Continuing Directors, or who
otherwise became a director at a
time when the Minimum Hold Condition
was satisfied, shall be considered
to be a Continuing Director;
c. the Board of Directors of the
Company adopts and, if required by
law or the certificate of
incorporation of the Corporation,
the shareholders approve the
dissolution of the Company or a plan
of liquidation or comparable plan
providing for the disposition of all
or substantially all of the
Company's assets;
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d. all or substantially all of the
assets of the Company are disposed
of pursuant to a merger,
consolidation, share exchange,
reorganization or other transaction
unless the shareholders of the
Company immediately prior to such
merger, consolidation, share
exchange, reorganization or other
transaction beneficially own,
directly or indirectly, in
substantially the same proportion as
they previously owned the Voting
Stock or other ownership interests
of the Company, a majority of the
Voting Stock or other ownership
interests of the entity or entities,
if any, that succeed to the business
of the Company; or
e. the Company merges or combines with
another company and, immediately
after the merger or combination, the
shareholders of the Company
immediately prior to the merger or
combination own, directly or
indirectly, 50% or less of the
Voting Stock of the successor
company, provided that in making
such determination there shall being
excluded from the number of shares
of Voting Stock held by such
shareholders, but not from the
Voting Stock of the successor
company, any shares owned by
Affiliates of such other company who
were not also Affiliates of the
Company prior to such merger or
combination.
(2) "Cause" shall mean:
a. Optionee is convicted of (or pleads
guilty or nolo contendere to) a
felony or a crime involving moral
turpitude;
b. Optionee's commission of an act of
fraud or dishonesty involving his or
her duties on behalf of the Company;
c. Optionee's willful failure or
refusal to faithfully and diligently
perform duties lawfully assigned to
Optionee as an officer or employee
of the Company or other willful
breach of any material term of any
employment agreement at the time in
effect between the Company and
Optionee; or
d. Optionee's willful failure or
refusal to abide by the Company's
policies, rules, procedures or
directives, including any material
violation of the Company's Code of
Ethics.
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(3) "Good Reason" shall mean:
a. a reduction in Optionee's salary in
effect at the time of a Change in
Control, unless such reduction is
comparable in degree to the
reduction that takes place for all
other employees of the Company of
comparable rank (for which purpose
any person who is an executive
officer of the Company (as
determined for purposes of the
Exchange Act shall be considered of
comparable rank) or a reduction in
Optionee's bonus for the year in
which or any year after the year in
which the Change of Control occurs
from Optionee's maximum bonus
opportunity for the year in which
the Change in Control occurs (if
any) as established under any
employment agreement Optionee has
with the Company or any bonus plan
of the Company applicable to
Optionee (or, if no such maximum
bonus opportunity has yet been
established for Optionee under a
bonus plan applicable to Optionee
for the year in which the Change of
Control has occurred, the maximum
bonus opportunity so established for
Optionee for the immediately
preceding year (if any));
b. a material diminution in Optionee's
position, duties or responsibilities
as in effect at the time of a Change
in Control or the assignment to
Optionee of duties which are
materially inconsistent with such
position, duties and authority,
unless in either case such change is
made with the consent of the
Optionee; or
c. the relocation by more than 50 miles
of the offices of the Company which
constitute at the time of the Change
in Control Optionee's principal
location for the performance of his
or her services to the Company;
provided that, in each such case, such event or
condition continues uncured for a period of
more than 15 days after Optionee gives notice
thereof to the Company.
For purposes of the foregoing definitions, (A) "the
Company" shall include any entity that succeeds to all or
substantially all of the business of the Company, (B)
"Affiliate" of a person or other entity shall mean a
person or other entity that directly or indirectly
controls, is controlled by, or is under common control
with the person or other entity specified, and (C) "Voting
Stock" shall mean any capital stock of any class or
classes having general voting power under ordinary
circumstances, in the absence of contingencies, to elect
the directors of a corporation and reference to a
percentage of Voting Stock shall refer to such percentage
of the votes that all such Voting Stock is entitled to
cast.
OTHER TERMS (IF ANY):
EXPIRATION DATE: March 10, 2015
By signing your name below, you accept this award and acknowledge and agree that
this award is granted under and governed by the terms and conditions of Magellan
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Health Services, Inc. 2003 Management Incentive Plan and the related Stock
Option Agreement, reference number 2004-__, both of which are hereby made a part
of this document.
Optionee:
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Name:
MAGELLAN HEALTH SERVICES, INC.
By:
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Name:
Title:
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