CENTENE CORPORATION Restricted Stock Unit Agreement Granted Under Amended and Restated 2003 Stock Incentive Plan
Exhibit 10.4
CENTENE
CORPORATION
Restricted
Stock Unit Agreement Granted Under
Amended and Restated 2003
Stock Incentive Plan
THIS
AGREEMENT is entered into by Centene Corporation, a Delaware corporation
(hereinafter the “Company”), and the undersigned employee of the Company
(hereinafter the “Participant”).
WHEREAS,
the Participant renders important services to the Company and acquires access to
Confidential Information (as defined below) of the Company in connection with
the Participant’s relationship with the Company; and
WHEREAS,
the Company desires to align the long-term interests of its valued employees
with those of the Company by providing the ownership interest granted herein and
to prevent former employees whose interest may become adverse to the Company
from maintaining an ownership interest in the Company;
NOW, THEREFORE, in consideration of
the foregoing and the mutual agreements herein contained, the parties hereto
hereby agree as follows:
1. Grant of
RSUs.
This
Agreement evidences the grant by the Company on __________, 20__ (the “Grant Date”)
to __________ (the
“Participant”) of __________ restricted
stock units (each an “RSU,” and collectively the “RSUs”) pursuant to the
Company’s Amended and Restated 2003 Stock Incentive Plan (the
“Plan”). Each RSU represents the right to receive one share of the
common stock, $.001 par value per share, of the Company (“Common Stock”) as
provided in this Agreement. The shares of Common Stock that are
issuable upon vesting of the RSUs are referred to in this Agreement as
“Shares.”
2. Vesting.
Subject
to Section 3 of this Agreement, the RSUs shall vest as to ___% of the original
number of RSUs on the __________ anniversary
of the Grant Date and as to an additional ___% of the original
number of RSUs at the end of each successive __________ period
following the first anniversary of the Grant Date until the __________ anniversary
of the Grant Date.
3. Reorganization
Event.
Upon the
occurrence of a “Change in Control,” all of the RSUs that (but for the
application of this clause) are not vested at the time of the occurrence of such
Change in Control event shall vest. A “Change in Control” shall be
deemed to have occurred if any of the events set forth in any one of the
following clauses shall occur: (i) any Person (as defined in section
3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and as such term is modified in sections 13(d) and 14(d) of the Exchange Act),
excluding a group of persons including the Participant, is or becomes the
“beneficial owner” (as defined in Rule 13(d)(3) under the Exchange Act),
directly or indirectly, of securities of the Company representing forty percent
or more of the combined voting power of the Company’s then-outstanding
securities; (ii) individuals who, as of the Grant Date, constitute the Board of
Directors of the Company (the “Incumbent Board”), cease for any reason to
constitute a majority thereof (provided, however, that an
individual becoming a director subsequent to the Grant Date whose election, or
nomination for election by the Company’s stockholders, was approved by at least
a majority of the directors then comprising the Incumbent Board shall be
included within the definition of Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual election contest (or such terms used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board of Directors of the Company); or (iii) the stockholders of
the Company consummate a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent of the
combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation.
4. Distribution of
Shares.
(a) Timing of
Distribution. The Company will distribute to the Participant
(or to the Participant’s estate in the event of the death of the Participant
occurring after a vesting date but before distribution of the corresponding
Shares), as soon as administratively practicable after each vesting date, the
Shares represented by RSUs that vested on such vesting date.
(b) No Fractional
Shares. No fractional Shares shall be issuable pursuant to any
RSU. In lieu of any fractional shares to which the Participant would
otherwise be entitled, the Company shall pay cash in an amount equal to such
fraction multiplied by the Fair Market Value (as defined in the Plan) of a share
of Common Stock.
(c) Termination of
Employment. In the event that the Participant’s employment
with the Company (and any parent or subsidiary thereof) is terminated for any
reason by the Company or by the Participant (including by reason of death or
disability, within the meaning of Section 22(e)(3) of the Internal Revenue
Code of 1986, as amended (the “Code”)), the RSUs shall cease vesting as of the
date of termination.
(d) Compliance
Restrictions. The Company shall not be obligated to issue to
the Participant the Shares upon the vesting of any RSU (or otherwise) unless (i)
the Participant has complied with covenants set forth in Section 10 of this
Agreement and (ii) the issuance and delivery of such Shares shall comply with
all relevant provisions of law and other legal requirements including any
applicable federal or state securities laws and the requirements of any stock
exchange or quotation system upon which Common Stock may then be listed or
quoted.
5. Restrictions on
Transfer.
The RSUs
may not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the
laws of descent and distribution, and, during the lifetime of the Participant,
the RSUs shall be exercisable only by the Participant.
6. No Rights as
Stockholder.
Except as
set forth in the Plan, neither the Participant nor any person claiming under or
through the Participant shall be, or shall have any rights or privileges of, a
stockholder of the Company in respect of any Share issuable pursuant to the RSUs
granted hereunder until such Share has been delivered to the
Participant.
7. Withholding Taxes; Section
83(b) Election.
(a) No Shares
will be delivered pursuant to the vesting of an RSU unless and until the
Participant pays to the Company, or makes provision satisfactory to the Company
for payment of, the amount (with respect to such
vesting, the “Withholding Amount”) of the Company’s minimum statutory
withholding obligations with respect to the income recognized by the Participant
upon such vesting, based on minimum statutory withholding rates for all tax
purposes, including payroll and social security taxes, that are applicable to
such income.
(b) The
Participant acknowledges that no election under Section 83(b) of the Code may be
filed with respect to the RSUs.
8. Automatic Sale Upon
Vesting.
(a) Upon any vesting of RSUs pursuant to Section 2 hereof,
the Company may sell, or arrange for the sale of, such number of the Shares
issuable pursuant to such vested RSU under Section 2 as is sufficient to
generate net proceeds to satisfy the Company’s minimum statutory withholding
obligations with respect to the income recognized by the Participant upon
vesting (based on minimum statutory withholding rates for all tax purposes,
including payroll and social security taxes, that are applicable to such
income), and the Company shall retain such net proceeds in satisfaction of such
tax withholding obligations.
(b) The Participant hereby appoints the Company’s Secretary
as his or her attorney-in-fact to sell the Shares in accordance with this
Section 8. The Participant agrees to execute and deliver such
documents, instruments and certificates as may reasonably be required in
connection with the sale of the Shares pursuant to this Section
8.
(c) It is
understood that the Participant and the Company may agree from time to time,
subject to compliance with applicable laws, to procedures to be implemented, in
lieu of the procedures set forth in paragraphs (a) and (b) of this Section 8, to
fund the Withholding Amount.
9. Provisions of the
Plan.
The RSUs
are subject to the provisions of the Plan, a copy of which is being furnished to
the Participant with this Agreement.
10. Participant’s
Covenants.
For and
in consideration of the delivery of this Agreement, the Participant agrees to
the provisions of this Section 10.
(a) Confidential
Information. As used in this Agreement, “Confidential
Information” shall mean the Company’s trade secrets and other non-public
proprietary information relating to the Company or the business of the Company,
including information relating to financial statements, customer lists and
identities, potential customers, customer contacts, employee skills and
compensation, employee data, suppliers, acquisition targets, servicing methods,
equipment, programs, strategies and information, analyses, marketing plans and
strategies, profit margins, financial, promotional, marketing, training or
operational information, and other information developed or used by the Company
that is not known generally to the public or the
industry. Confidential Information shall not include any information
that is in the public domain or becomes known in the public domain through no
wrongful act on the part of the Participant.
(b) Non-Disclosure. The
Participant agrees that the Confidential Information is a valuable, special and
unique asset of the Company’s business, that such Confidential Information is
important to the Company and the effective operation of the Company’s business,
and that during employment with the Company and at all times thereafter, the
Participant shall not, directly or indirectly, disclose to any competitor or
other person or entity (other than current employees of the Company) any
Confidential Information that the Participant obtains while performing services
for the Company, except as may be required in the Participant’s reasonable
judgment to fulfill his duties hereunder or to comply with any applicable legal
obligation.
(c) Non-Competition;
Non-Solicitation.
|
(i)
|
During
Participant’s employment with the Company and for the period of six (6)
months immediately after the termination of Participant’s employment with
the Company (including any parent, subsidiary, affiliate or division of
the Company) for any reason whatsoever, and whether voluntary or
involuntary, Participant shall not invest in (other than in a publicly
traded company with a maximum investment of no more than 1% of outstanding
shares), counsel, advise, consult, be employed or otherwise engaged by or
with any entity or enterprise (“Competitor”) that competes with (A) the
Company’s business of providing Medicaid managed care services,
Medicaid-related services, behavioral health, nurse triage or pharmacy
compliance specialty services or (B) any other business in which, after
the date of this Agreement, the Company (or any parent, subsidiary,
affiliate or division of the Company) becomes engaged (or has taken
substantial steps in which to become engaged) on or prior to the date of
termination of Participant’s employment. For purposes of paragraph 10,
Participant agrees that this agreement not to compete applies to any
Competitor that does business within the state of Missouri or and any
other state in which Centene does business, and that such geographical
limitation is reasonable.
|
|
(ii)
|
During
the Participant’s employment with the Company (or any parent, subsidiary,
affiliate or division of the Company) and for the period of twelve months
immediately after the termination of the Participant’s employment with the
Company (or any parent, subsidiary, affiliate or division of the Company)
for any cause whatsoever, and whether voluntary or involuntary
(“Restricted Period”), the Participant will not, either directly or
indirectly, either for himself or for any other person, firm, company or
corporation, call upon, solicit, divert, or take away, or attempt to
solicit, divert or take away any of the customers, prospective customers,
business, vendors or suppliers of the Company that the Participant had
dealings with, or responsibility for, or the Participant had access to,
confidential information of such customers’, vendors’ or suppliers’
confidential information.
|
|
(iii)
|
The
Participant shall not, at any time during the Restricted Period, without
the prior written consent of the Company, (i) directly or indirectly,
solicit, recruit or employ (whether as an employee, officer, director,
agent, consultant or independent contractor) any person who was or is at
any time during the previous six months an employee, representative,
officer or director of the Company (or any parent, subsidiary, affiliate
or division of the Company); or (ii) take any action to encourage or
induce any employee, representative, officer or director of the Company
(or any parent, subsidiary, affiliate or division of the Company) to cease
their relationship with the Company (or any parent, subsidiary, affiliate
or division of the Company) for any
reason
|
|
(iv)
|
This
Section 10(c) shall not apply if a "Change in Control" (as defined in
Section 3) occurs under Section 3(ii) thereof, or if such Change in
Control occurs under Section 3(i) or 3(iii) thereof without the prior
approval, recommendation or consent of the Board of Directors of the
Corporation.
|
(d) Enforcement. If
any of the provisions or subparts of this Section 10 shall be held to be invalid
or unenforceable by a court of competent jurisdiction, the remaining provisions
or subparts thereof shall nevertheless continue to be valid and enforceable
according to their terms. Further, if any restriction contained in
the provisions or subparts of this Section 10 is held to be overbroad or
unreasonable as written, the parties agree that the applicable provision should
be considered to be amended to reflect the maximum period, scope or geographical
area deemed reasonable and enforceable by the court and enforced as
amended.
(e) Remedy for
Breach.
(i) Because
the Participant’s services are unique and because the Participant has access to
the Company’s Confidential Information, the parties agree that any breach or
threatened breach of this Section 10 will cause irreparable harm to the Company
and that money damages alone would be an inadequate remedy. The
parties therefore agree that, in the event of any breach or threatened breach of
this Section 10, and in addition to all other rights and remedies available to
it, the Company may apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief, without a bond, in order to
enforce or prevent any violations of the provisions of this Section
10.
(ii) The
Participant shall immediately
repay to the Company a cash sum in the principal amount equal to all gross
proceeds (before-tax) realized by Participant upon the sale or other disposition
of the Shares occurring at any time during the period commencing on the date
that is three years before the date of termination of the Participant’s
employment with the Company and all Subsidiaries of the Company and ending on
the date of the Participant’s breach or threatened breach of this Section 10
(the “Refund Period”), together with interest accrued thereon, from the date of
such breach or threatened breach, at the prime rate (compounded calendar
monthly) as published from time to time in The Wall Street Journal, electronic
edition (“Interest”); and
(iii) The Participant shall repay to the Company a cash sum
equal to the fair market value of all of the Shares transferred by the
Participant as a gift or gifts at any time during the Refund Period, together
with Interest, and for which purpose, “fair market value” shall be the Fair
Market Value of one share of Common Stock on the date such gift
occurs.
(iv) The
Participant acknowledges and agrees that nothing contained herein shall be
construed to be an excessive remedy to prohibit the Company from pursuing any
other remedies available to it for such actual or threatened breach, including
the recovery of money damages, proximately caused by the Participant’s breach of
this Section 10.
(f) Survival. The
provisions of this Section 10 shall survive and continue in full force in
accordance with their terms notwithstanding any forfeiture, termination or
expiration of this Agreement in accordance with its terms or any termination of
the Participant’s employment for any reason (whether voluntary or
involuntary).
11. Miscellaneous.
(a) Severability. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
and each other provision of this Agreement shall be severable and enforceable to
the extent permitted by law.
(b) Waiver. Any
provision for the benefit of the Company contained in this Agreement may be
waived, either generally or in any particular instance, by the Board of
Directors of the Company.
(c) Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of the Company and the Participant and their respective heirs,
executors, administrators, legal representatives, successors and assigns,
subject to the restrictions on transfer set forth in Section 5 of this
Agreement.
(d) Notice. All
notices required or permitted hereunder shall be in writing and deemed
effectively given upon personal delivery or five days after delivery to a United
States Post Office, by registered or certified mail, postage prepaid, addressed
to the other party hereto at the address shown beneath his or its respective
signature to this Agreement, or at such other address or addresses as either
party shall designate to the other in accordance with this paragraph
(d).
(e) Entire
Agreement. This Agreement and the Plan constitute the entire
agreement between the parties, and supersede all prior agreements and
understandings, relating to the RSUs.
(f) Participant’s
Acknowledgments. The Participant acknowledges that he or
she: (i) has read this Agreement; (ii) has been represented in the
preparation, negotiation, and execution of this Agreement by legal counsel of
the Participant’s own choice or has voluntarily declined to seek such counsel;
(iii) understands the terms and consequences of this Agreement; (iv) is
fully aware of the legal and binding effect of this Agreement; and (v)
understands that the law firm of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP, is
acting as counsel to the Company in connection with the transactions
contemplated by the agreement, and is not acting as counsel for the
Participant.
(g) Unfunded
Rights. The right of the Participant to receive Common Stock
pursuant to this Agreement is an unfunded and unsecured obligation of the
Company. The Participant shall have no rights under this Agreement
other than those of an unsecured general creditor of the Company.
(h) Deferral. Neither
the Company nor the Participant may defer delivery of any Shares issuable under
unvested RSUs except to the extent that such deferral complies with the
provisions of Section 409A of the Code.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
set forth below.
CENTENE CORPORATION
By:
Chairman, President and
CEO
Name Date
