EXHIBIT 10.4
MAGELLAN HEALTH SERVICES, INC.
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2003 MANAGEMENT INCENTIVE PLAN
NOTICE OF AMENDMENT OF STOCK OPTION GRANT
REFERENCE No. 2004-___-3 (____________)
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 PART OF THE SHARES SUBJECT TO THE OPTION THAT PREVIOUSLY WERE EARLIER
EXERCISABLE AND THE REDUCTION OF THE PERIOD DURING WHICH THE OPTION CAN BE
EXERCISED FOR SOME OF THE SHARES SUBJECT TO THE OPTION TO END ON DECEMBER 31,
2006 AND TO END ON DECEMBER 31, 2007 AS TO ALL OTHER SHARES SUBJECT TO THE
OPTION, IN EACH CASE IN ALL CIRCUMSTANCES, AND SUPERCEDES IN ITS ENTIRETY AND
REPLACES THE PREVIOUS NOTICE OF THE 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: $ 11.91
DATE OF GRANT; DATE
OF AMENDMENT: As of January 5, 2004; amended as of January 3,
2006.
EXPIRATION DATE: December 31, 2007, except that, in respect of the
________ Shares for which this option is
exercisable on January 5, 2006, this option shall
expire on December 31, 2006.
DATE EXERCISABLE: This option shall be exercisable (prior to its
expiration) in whole or in part (i) only to the
extent it is vested and (ii) as follows: ________
Shares after January 5, 2006 and until December
31, 2006 and ________ Shares after January 5, 2007
and until December 31, 2007. 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).
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) shall be exercisable
immediately (regardless of the restrictions on
exercisability set forth above) but 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 such termination occurs or
the expiration of the option (on December 31, 2006
or 2007, as the case may be).
>> 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 shall be
exercisable immediately (regardless of the
restrictions on exercisability set forth above)
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, 2006 or 2007, as the case may
be).
>> 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 shall be exercisable
immediately (regardless of the restrictions on
exercisability set forth above) 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, 2006
or 2007, as the case may be).
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 one-half of the Shares
subject hereto (1/3 of the Shares originally subject hereto
upon grant on January 5, 2004), i.e., ________ Shares, 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.
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).
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 award 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 2004-001, both of which are hereby made a part of
this document.
Optionee:
___________________________
Name:
MAGELLAN HEALTH SERVICES, INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
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