EXHIBIT 10.3
MAGELLAN HEALTH SERVICES, INC.
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2003 MANAGEMENT INCENTIVE PLAN
NOTICE OF AMENDMENT OF STOCK OPTION GRANT
REFERENCE No. 2004-___-2 (___________)
As of January 5, 2004, Amended January 3, 2006
THIS NOTICE REFLECTS AMENDMENTS OF THE TERMS OF THE STOCK OPTION
GRANT BEARING THE SAME REFERENCE NUMBER DATED AS OF JANUARY 5, 2004, INCLUDING A
DEFERRAL OF THE TIME AT WHICH THE OPTION CAN FIRST BE EXERCISED TO JANUARY 5,
2007 AS TO THOSE SHARES SUBJECT TO THE OPTION THAT PREVIOUSLY WERE EARLIER
EXERCISABLE AND THE REDUCTION OF THE PERIOD DURING WHICH THE OPTION CAN BE
EXERCISED FOR ALL SHARES SUBJECT TO THE OPTION TO END ON DECEMBER 31, 2007 IN
ALL CIRCUMSTANCES, AND SUPERCEDES IN ITS ENTIRETY AND REPLACES THE PREVIOUS
NOTICE OF STOCK OPTION GRANT.
NAME OF OPTIONEE:
SHARES SUBJECT TO OPTION: ________ shares of the Ordinary Common Stock of
Magellan Health Services, Inc. ("Shares") as of
January 3, 2006. (Original grant was for ________
Shares but the Option has previously been
exercised for ________ Shares.)
TYPE OF OPTION: ___X___ Nonqualified ________ Incentive
EXERCISE PRICE PER SHARE: $ 10.43
DATE OF GRANT; DATE
OF AMENDMENT: As of January 5, 2004; amended as of January 3,
2006
EXPIRATION DATE: December 31, 2007.
DATE EXERCISABLE: This option shall be exercisable (prior to its
expiration) in whole or in part (i) only to the
extent it is vested, (ii) only after January 5,
2007 and (iii) only to the extent the Trading
Price on the date of exercise (on or after the
vesting date) exceeds the Target Price, all as
determined as provided below. 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 otherwise
governing the exercise of this option after
termination of Optionee's Service).
The Target Price shall be the amount equal to
$11.91 plus a cumulative return thereon of 10% per
annum, with daily compounding, from the Date of
Grant until the date for determining the Trading
Price applicable to the exercise of the option.
The Trading Price applicable to the date of
exercise of the option shall be determined as of
the day on which the Shares traded immediately
preceding the exercise date based on the Fair
Market Value of the Shares for each of the 20
consecutive trading days ending on (and including)
such trading date.
Exercise after termination of Service:
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>> In the event Optionee's Service terminates by
reason of his resignation, this option (to the
extent then vested and subject to the foregoing
condition for exercise regarding the Trading Price
of the Shares) shall be exercisable immediately,
and shall remain 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
(but not later than the earlier of the end of the
calendar year in which this option became
exercisable or the expiration of this option on
December 31, 2007).
>> 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 and notwithstanding the Trading Price at
the time) 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 shall be
exercisable immediately and shall remain
exercisable for two years following such
termination of Service, subject to the foregoing
condition for exercise regarding the Trading Price
of the Shares (but not later than the earlier of
the end of the calendar year in which this option
became exercisable or the expiration of this
option on December 31, 2007).
>> In the event Optionee's Service terminates by
reason of discharge without cause or 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 shall be
exercisable immediately and shall remain
exercisable until the earlier of the end of the
calendar year in which such termination occurs or
the expiration of the option on December 31, 2007,
subject to the foregoing condition for exercise
regarding the Trading Price of the Shares.
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>> In the event Optionee's Service terminates by
reason of discharge by the Company without cause
or Optionee terminates his Service for good reason
in connection with a change in control of the
Company, this option shall vest as provided below
and shall be exercisable immediately and shall
remain exercisable until the earlier of the end of
the calendar year in which such termination occurs
or the expiration of the option on December 31,
2007, subject to the foregoing condition for
exercise regarding the Trading Price of the
Shares; provided, however, that, upon the
occurrence of a change in control of the Company
before a termination of Optionee's Service, the
foregoing condition for exercise regarding the
Trading Price of the Shares shall no longer apply
(and shall be deemed satisfied) upon the
termination of Optionee's Service.
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: One-half (1/2) of the Shares subject to this option
(________ and then ________) (being 1/3 of the Shares
originally subject hereto upon grant on January 5, 2004)
shall vest on each of the 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.
Notwithstanding the vesting of this option as to part of the
Shares subject to this option at an earlier time as provided
by the immediately preceding sentence, this option shall not
be exercisable as to any Shares before the date provided
above.
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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).
ADDITIONAL TERMS: Option Shares issues upon exercise of this option may not be
sold or otherwise Transferred until the earlier of (i) the
third anniversary of the Date of Grant or (ii) termination
of Executive's service. For purposes of this provision, the
same terms of the Option Agreement as apply in respect of a
sale or other Transfer of options (including the definition
of "Transfer") shall apply to such Option Shares and for
purposes of implementing such restrictions, as a condition
of the issuance of such Option Shares, the Company may
require the Optionee to enter into an agreement comparable
to a Restricted Stock Agreement under the Plan with respect
to such Option Shares.
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 the amendment, as provided above, of the
option previously granted to you 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 2004-___, both of which are hereby made a part of
this document.
Optionee:
______________________________
Name:
MAGELLAN HEALTH SERVICES, INC.
By:____________________________________
Name: _________________________________
Title:_________________________________
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