Exhibit 10.7
MAGELLAN HEALTH SERVICES, INC.
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2003 MANAGEMENT INCENTIVE PLAN
NOTICE OF STOCK OPTION GRANT
REFERENCE No. 20__-___-_ (__________)
As of January 5, 2004
NAME OF OPTIONEE:
SHARES SUBJECT TO OPTION: _______ shares of the Ordinary Common Stock of
Magellan Health Services, Inc. ("Shares")
TYPE OF OPTION: ___X___ Nonqualified ________ Incentive
EXERCISE PRICE PER SHARE: $ _______
DATE OF GRANT: As of January 5, 2004
DATE EXERCISABLE: This option shall be exercisable (prior to its
expiration) in whole or in part only to the
extent it is vested. In addition, after
termination of Optionee's Service, this option
shall be exercisable (prior to its expiration)
during the time period and on the conditions
specified below (and only during such time
period and on such conditions, notwithstanding
the provisions of the Option Agreement
governing the exercise of an option after
termination of service).
Exercise after termination of Service:
In the event Optionee's Service terminates by
reason of his resignation, this option (to the
extent then vested shall be exercisable only
until the later of (i) 90 days following the
date Optionee's Service terminates by reason of
such resignation and (ii) the 45th day
following the first day on or after the date
Optionee's Service so terminates when the
Optionee is not subject to a prohibition
imposed by the Company on trading securities of
the Company and may sell the Shares acquired
upon exercise of the Option without violation
of Rule 10b-5 under the Securities Exchange Act
of 1934.
In the event Optionee's Service terminates by
reason of discharge by the Company for cause,
this option shall cease to be exercisable (even
if vested) automatically upon the effective
date Optionee's Service so terminates.
In the event Optionee's Service terminates by
reason of his death or disability, this option
shall vest as provided below and remain
exercisable for two years following such
termination of Service.
In the event Optionee terminates his Service
for good reason, unless such termination of
Service is in connection with a change in
control of the Company, this option shall vest
as provided below and remain exercisable for
two years following such termination of Service
(subject to the foregoing condition for
exercise before the seventh anniversary of the
Date of Grant regarding the Trading Price of
the Shares).
In the event Optionee's Service terminates by
reason of discharge by the Company without
cause or Optionee terminates his Service for
good reason (whether or not in connection with
a change in control of the Company), this
option shall vest as provided below and remain
exercisable for three years following such
termination of Service; provided, however,
that, upon the occurrence of a change in
control of the Company before a termination of
Optionee's Service, this option shall vest as
provided below and remain exercisable until its
normal expiration date.
For purposes of determining when the foregoing
provisions concerning exercise after
termination of Service apply (including what
events constitute a change in control of the
Company and when a termination of Service is in
connection with a change in control of the
Company), the provisions of Optionee's
Employment Agreement dated as of January 5,
2004 shall apply (even in the event such
agreement has previously expired in accordance
with its terms).
VESTING: This option shall vest with respect to
one-third (1/3) of the Shares subject hereto on
each of the first, second and third
anniversaries of the Date of Grant, provided
that Optionee's Service continues until the
date of vesting, except that, if Optionee's
Service with the Company terminates (i) by
reason of his death or disability, (ii) by
reason of discharge by the Company without
cause (whether or not in connection with a
change in control of the Company) or (iii) by
the Optionee for good reason (whether or not in
connection with a change in control of the
Company), this option shall immediately vest in
full upon such earlier termination in Service.
In addition, in the event of a change in
control of the Company, this option shall
immediately vest in full.
For purposes of determining when the foregoing
provisions concerning acceleration of vesting
apply (including what events constitute a
change in control of the Company and when a
termination of Service is in connection with a
change in control of the Company), the
provisions of Optionee's Employment Agreement
dated as of January 5, 2004 shall apply (even
in the event such agreement has previously
expired in accordance with its terms).
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EXPIRATION DATE: January 5, 2014
OTHER TERMS: The provisions of Section 12 of the Plan and
subsection 2(c) of the Stock Option Agreement
shall not apply to this option; the provisions
of Optionee's Employment Agreement with the
Company dated as of January 5, 2004 shall
instead apply to any circumstance in which such
provisions would otherwise apply.
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
Health Services, Inc. 2003 Management Incentive Plan and the related Stock
Option Agreement, reference number -20__-___, 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:
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Title:
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