EXHIBIT 4.14
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MAGELLAN HEALTH SERVICES, INC.
RESTRICTED STOCK UNIT AGREEMENT
XXXXXXX XXXXXXX
JULY 17, 2006
SECTION 1. GRANT OF RESTRICTED STOCK UNITS.
(a) RESTRICTED STOCK UNITS. On the terms and conditions set forth in this
Agreement and each Notice of Restricted Stock Unit Award referencing this
Agreement, Magellan Health Services, Inc. (the "Company," as further defined
below) grants to the Grantee referred to on the signature page hereof the right
to receive on the Settlement Date (as hereinafter defined) the number of shares
of Ordinary Common Stock, $0.01 par value per share, of the Company ("Shares,"
as further defined below) equal to the number of "Stock Units" awarded to the
Grantee as set forth in the Notice of Restricted Stock Unit Award, subject to
adjustment thereto on account of any change that may be made in the Shares as
provided by Section 4 below (the "Unit Shares"). Each such Notice of Restricted
Stock Unit Award, together with this referenced Agreement, shall be a separate
"Restricted Stock Unit" governed by the terms of this Agreement and any such
separate Restricted Stock Unit may be referred to herein as the "Restricted
Stock Unit," and, as pertinent, any of multiple Notices of Restricted Stock Unit
Award referencing this Agreement may be referred to herein as the "Restricted
Stock Unit Award Notice."
(b) 2006 MANAGEMENT INCENTIVE PLAN AND DEFINED TERMS. Each Restricted Stock Unit
referred to in a Restricted Stock Unit Award Notice is granted on the same terms
and conditions as provided for the grant of Restricted Stock Units pursuant to
the Company's 2006 Management Incentive Plan, as amended and supplemented from
time to time (the "PLAN"), a copy of which is incorporated herein by this
reference, and shall be subject to such terms and conditions; it being
understood, however, that the Restricted Stock Unit granted pursuant to the
Restricted Stock Unit Award Notice dated as of July 17, 2006 referred to above
has been separately authorized by the Company and is not among the Restricted
Stock Units authorized by and granted under the Plan and that the shares of
stock that may be issued pursuant to such Restricted Stock Unit Award Notice are
not among the shares of Ordinary Common Stock of the Company, and shall not be
counted against, the maximum number of such shares, that may be issued pursuant
to the Plan. Certain capitalized terms used herein are defined in Section 6
below but terms used herein, if not defined herein, shall have the same meaning
for purposes hereof as provided by the Plan.
(c) SCOPE OF THIS AGREEMENT. This Agreement shall apply both to the Restricted
Stock Unit and to any Unit Shares acquired upon the settlement of the Restricted
Stock Units.
SECTION 2. VESTING AND SETTLEMENT OF RESTRICTED STOCK UNITS.
(a) VESTING. The Restricted Stock Unit shall vest in whole in part on the date
or dates provided by the Notice of Restricted Stock Unit Award, provided that
Grantee remains in the Service of the Company, a Subsidiary or a Parent company
at such date; it being understood that the Notice of Restricted Stock Unit Award
may provide that the Restricted Stock Unit shall vest upon termination of
Optionee's Service in such circumstances as are provided in the Notice of
Restricted Stock Unit Award.
(b) SETTLEMENT IN SHARES. Subject to following provisions of this Section 2, the
Company shall settle the Restricted Stock Unit, to the extent it has vested, on
the date on which the Restricted Stock Unit has vested (or, if such date is not
a Business Day, the next Business Day) by the delivery to Grantee of the number
of Unit Shares equal to the number of Restricted Stock Units so vested. The date
on which a Restricted Stock Unit is to be settled in herein referred to as the
"Settlement Date." Subject to subsection 2(b) below, in settlement of the
Restricted Stock Unit, the Company shall cause to be issued on the Settlement
Date or as soon as practicable thereafter an appropriate certificate or
certificates for the Unit Shares, registered in the name of the Grantee (or, at
the direction of the Grantee, in the names of such person and his or her spouse
as community property or as joint tenants with right of survivorship or as
tenants in the entirety); provided, however, that such Unit Shares shall be
subject to such restrictions on transfer or other restrictions as are provided
by the Restricted Stock Unit Award Notice and the certificates so issued may
bear a legend reflecting such restrictions and any restrictions applicable in
accordance with subsections 2(g) and 3(c) below.
(c) ALTERNATIVE SETTLEMENT IN CASH. In lieu of settlement of the Restricted
Stock Unit in Unit Shares, the Committee may in its sole discretion elect to
settle all or a portion of the Restricted Stock Unit by a cash payment equal to
the Fair Market Value as of the Settlement Date of the Unit Shares that would
otherwise have been issued under this Agreement. Such payment may be made by
good check of the Company issued in accordance with its normal payroll practices
or such other means as are acceptable to the Company.
(d) WITHHOLDING REQUIREMENTS. The Company may withhold any tax (or other
governmental obligation) the Company is required to withhold as a result of the
grant of the Restricted Stock Unit and/or the issuance of Unit Shares (or cash
in lieu of Unit Shares) in settlement of a Restricted Stock Unit and, as a
condition to the grant of the Restricted Stock Unit or issuance of the Unit
Shares in settlement thereof, the Grantee shall make arrangements satisfactory
to the Company to enable it to satisfy all such withholding requirements.
(e) INJURIOUS CONDUCT. Except as otherwise explicitly provided by the Restricted
Stock Unit Award Notice or other Award document or by an agreement executed by
the Company with the approval of the Committee, in the event the Grantee has
engaged in Injurious Conduct as defined in the Plan and as determined to have
occurred in accordance with such definition during Grantee's Service or during
the year following termination of Grantee's Service, then (i) no Unit Shares
shall be issued to Grantee in connection with the settlement of a Restricted
Stock Unit Award under the Plan after such determination (even if such Award is
fully vested) nor shall any other benefit of any Award thereafter accrue to the
Grantee under this Agreement or the Plan (including by reason of the lapse of
any restriction on transfer or other restriction then applicable to Unit Shares
that have been issued), and the Company shall not complete the settlement of any
other Award, and (ii) any such unsettled Restricted Stock Unit Award shall be
forfeited and shall terminate and any Unit Shares subject to any such
restrictions shall be forfeited (provided, however, that the foregoing shall not
excuse the Company from settling, completing delivery of or removing any legend
restricting the transfer of (A) any Restricted Stock Award or (B) Restricted
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Stock Unit Awards and any related Dividend Equivalent Rights (as defined in the
Plan) the settlement of which have been deferred at the election of the Grantee,
if such Restricted Stock Award or Restricted Stock Unit Awards were fully vested
before the date such Injurious Conduct occurred (as so determined)). In
addition, except as otherwise specifically provided by a Restricted Stock Unit
Award Notice or other Award document or by an agreement executed by the Company
with the approval of the Committee, in the event the Grantee has engaged in
Injurious Conduct during Grantee's Service or during the year following
termination of Grantee's Service, any benefits realized by Grantee as a result
of any Award under the Plan at any time after such Injurious Conduct occurred
(as so determined), whether upon vesting or exercise of an Option, lapse of
restrictions on Option Shares, vesting of Restricted Stock Awards or Stock Units
or related Dividend Equivalent Rights, or the lapse of any restrictions on
Shares issued as a result thereof, or as a result of any other settlement of an
Award, shall be forfeited by Grantee and Grantee shall pay over to the Company
in cash the amount of any benefits so received by Grantee or deliver to the
Company any Shares so received by Grantee and still owned by Grantee (provided,
however, that the foregoing shall not require the forfeiture of or excuse the
Company from settling, completing delivery of or removing any legend restricting
the transfer of (i) any Restricted Stock Award or (ii) Stock Units and any
related Dividend Equivalent Rights the settlement of which have been deferred at
the election of the Grantee, if such Restricted Stock Award or Stock Units were
fully vested before the date such Injurious Conduct occurred (as so
determined)). A forfeiture of benefits as provided hereby upon the Committee
determining that Grantee has engaged in Injurious Conduct during Grantee's
Service or during the year following termination of Grantee's Service shall not
relieve Grantee of any other liability he or she may have to the Company, any
Subsidiary or any Parent as a result of engaging in the Injurious Conduct.
(f) TRANSFER RESTRICTIONS ON UNIT SHARES. Subject to subsection 2(d) above and
subsections 2(f) and 3(c) below, unless otherwise provided by the Restricted
Stock Unit Award Notice or another agreement between Grantee and the Company,
upon the acquisition of Unit Shares pursuant to the settlement of a Restricted
Stock Unit Award, Grantee shall be free to dispose of the Unit Shares so
acquired in any manner and at any time.
(g) SECURITIES LAW RESTRICTIONS ON ISSUANCE OF UNIT SHARES. Unless a
registration statement under the Securities Act permitting the sale and delivery
of Unit Shares upon settlement of the Restricted Stock Unit Award is in effect
on the Settlement Date, the Company shall not be required to issue Unit Shares
upon such settlement, except as otherwise provided in this subsection. The
Company shall use its commercially reasonable efforts to register under the
Securities Act sufficient Unit Shares to permit delivery to Grantee of all Unit
Shares that may be acquired by Grantee upon the settlement of the Restricted
Stock Unit Award; provided, however, that the Company shall only be so required
to register the Unit Shares on Form S-8 under the Securities Act (or any
successor form). Notwithstanding the foregoing, the Company shall, if Grantee
has given the Company at least 90 days' notice requesting the Company to
register in accordance with the foregoing provisions of this subsection the Unit
Shares that may then be acquired by Grantee upon settlement of the Restricted
Stock Unit Award and the Company has failed to do so, issue Unit Shares to
Grantee upon settlement of the Restricted Stock Unit Award without registration
thereof under the Securities Act if (i) Grantee represents, effective on the
date of such issuance, in writing in a form acceptable to the Company (A) that
such Unit Shares are being acquired for investment and not with a present view
to distribution, (B) Grantee understands that the Unit Shares have not been
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registered under the Securities Act and cannot be sold or otherwise Transferred
unless a registration statement under the Securities Act is in effect with
respect thereto or the Company has received an opinion of counsel, satisfactory
to it, to the effect that such registration is not required, (C) that Grantee
has, alone or together with any qualified advisor, such knowledge and experience
in financial and business matters as is necessary to evaluate the risks of an
investment in the Unit Shares, is acquiring the Unit Shares based on an
independent evaluation of the long-term prospects of an investment in the Unit
Shares and has been furnished with such financial and other information
regarding the Company as the Grantee has requested for purposes of making such
evaluation, and (D) Grantee is able to bear the economic risk of an investment
in the Unit Shares subject to such restrictions on Transfer and (ii) if the
Company determines that under the circumstances issuing the Unit Shares pursuant
to such settlement of the Restricted Stock Unit Award is lawful; provided,
however, that the Company may require, as a condition of such issuance of Unit
Shares, that Grantee execute and deliver to it such other certificates,
agreements and other instruments as in the judgment of the Company, upon advice
of counsel, are necessary or appropriate to assure that the Unit Shares are
issued to Grantee in accordance with the Securities Act and any other applicable
securities law and may require that any certificates representing Unit Shares so
issued bear any restrictive legend appropriate for such purpose. In addition,
even if a registration statement under the Securities Act permitting the
delivery of Unit Shares upon settlement of the Restricted Stock Unit Award is in
effect at the Settlement Date, the Company may suspend the issuance of Unit
Shares pursuant to the settlement of all Restricted Stock Unit Awards issued
under the Plan for such period of time as in the judgment of the Company, upon
advice of counsel, is necessary in order for the Company to come into compliance
with all the reporting requirements applicable to the Company pursuant to
Section 13(a) of the Exchange Act or to otherwise avoid in connection with the
issuance of the Unit Shares under such registration statement a violation of
Sections 10, 11 or 12 of the Securities Act. If the Company suspends the
issuance of Unit Shares pursuant to the settlement of Restricted Stock Unit
Awards issued under the Plan, the Company shall give prompt written notice
thereof to the Grantee (but the failure of the Company to give such notice shall
not prevent the Company from suspending the issuance of Unit Shares as permitted
hereby) and, at such time as such period of suspension ends, shall give prompt
written notice thereof to Grantee. Notwithstanding that the Company in
accordance with this subsection may not be able to issue Unit Shares in
settlement of a Restricted Stock Unit, the Company shall not be required to
settle a Restricted Stock Unit in cash, but may do so if it elects in its
discretion to do so, as provided by subsection 2(c) above.
SECTION 3. TRANSFER OF RESTRICTED STOCK UNIT AWARD OR UNIT SHARES
(a) TRANSFERS GENERALLY PROHIBITED. Except as otherwise provided by the
Restricted Stock Unit Award Notice or otherwise permitted by the Plan or in the
case of a transfer permitted by subsection 3(b) below, the Restricted Stock Unit
Award may be settled only during the Grantee's lifetime and only by the issuance
of Unit Shares (or a cash payment in lieu thereof where permitted by the
Restricted Stock Unit Award Notice) to Grantee. Except as otherwise provided in
subsection 3(b) below, the Restricted Stock Unit Award and the rights and
privileges conferred by the Restricted Stock Unit Award shall not be sold or
otherwise Transferred.
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(b) CERTAIN TRANSFERS PERMITTED. Notwithstanding the foregoing provisions of
this Section 3, the Restricted Stock Unit Award may be Transferred (i) in the
event of the Grantee's death, by will or the laws of descent and distribution or
by a written beneficiary designation accepted by the Company, (ii) by operation
of law in connection with a merger, consolidation, recapitalization,
reclassification or exchange of Shares, reorganization or similar transaction
involving the Company and affecting the Shares generally or (iii) with the
approval of the Committee, to a member of Grantee's family, or a trust primarily
for the benefit of Grantee and/or one or more members of Grantee's family, or to
a corporation, partnership or other entity primarily for the benefit of Grantee
and/or one or more such family members and/or trusts or (iv) with the approval
of the Committee, in another estate or personal financial planning transaction;
provided, however, that in any such case the Restricted Stock Unit Award so
Transferred and, upon issuance of Unit Shares in settlement thereof, the Unit
Shares issued to the Transferee shall remain subject in the hands of the
Transferee to the restrictions on Transfer provided hereby and all other terms
hereof, including the terms of subsection 2(c) above.
(c) FIDUCIARY AND SECURITIES LAW RESTRICTIONS. As a employee, officer and/or
director of the Company, Grantee may be subject to restrictions on his or her
ability to sell or otherwise Transfer Unit Shares by reason of being a fiduciary
for the Company or by reason of federal or state securities laws and/or the
policies regarding transactions in securities of the Company from time to time
adopted by the Company and applicable to Grantee in connection therewith.
Nothing contained herein shall relieve Grantee of any restriction on sale or
other Transfer of Unit Shares provided thereby and any other restrictions of
sale or other Transfer of Unit Shares provided herein (including in an
Restricted Stock Unit Award Notice or in the Plan) shall be in addition to and
not in lieu of any other restrictions provided thereby.
SECTION 4. ADJUSTMENT OF SHARES.
(a) ADJUSTMENT GENERALLY. If while the Restricted Stock Unit remains in effect
there shall be any change in the outstanding Shares of the class which are to be
issued upon settlement of the Restricted Stock Unit, through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
reverse stock split, combination of shares, exchange of shares for other
securities or other like change in the outstanding Shares, or any spin-off,
split-off, dividend in kind or other extraordinary dividend or other
distribution in respect of such outstanding Shares or other extraordinary change
in the capital structure of the Company, an adjustment shall be made to the
terms of the Restricted Stock Unit so that the Restricted Stock Unit shall
thereafter be ultimately settled, otherwise on the same terms and conditions as
provided by the Restricted Stock Unit Award Notice, this Agreement and the Plan,
for such securities, cash and/or other property as would have been received in
respect of the Shares that would have been issued upon settlement of the
Restricted Stock Unit had the Restricted Stock Unit been settled in full
immediately prior to such change or distribution (whether or not the Restricted
Stock Unit was then fully vested) or, if and to the extent the Committee
determines that so adjusting the consideration to be received upon settlement of
the Restricted Stock Unit, in whole or in part, is not practicable, the
Committee shall equitably modify the consideration to be received in respect of
the settlement of the Restricted Stock Unit or other pertinent terms and
conditions of the Restricted Stock Unit as provided by subsection 4(b) below.
Such an adjustment shall be made successively each time any such change in the
outstanding Shares of the class which may be received upon settlement of the
Restricted Stock Unit or extraordinary distribution in respect of such
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outstanding Shares or extraordinary change in the capital structure of the
Company shall occur.
(b) MODIFICATION OF RESTRICTED STOCK UNIT. In the event any change in the
outstanding Shares of the class which may be received upon settlement of the
Restricted Stock Unit or extraordinary distribution in respect of such
outstanding Shares or extraordinary change in the capital structure of the
Company described in subsection 4(a) above occurs, or in the event of any change
in applicable laws or any change in circumstances which results in or would
result in any substantial dilution or enlargement of the rights granted to, or
available for, Grantee in respect of a Restricted Stock Unit or otherwise as a
participant in the Plan or which otherwise warrants equitable adjustment to the
terms and conditions of the Restricted Stock Unit because such event or
circumstances interferes with the intended operation of the Plan (including the
intended tax consequences of Awards) occurs, then the Committee may, and shall
where required by subsection 4(a) above, adjust the number and kind of Unit
Shares and/or other securities and/or cash or other property that may be issued
or delivered upon the settlement of the Restricted Stock Unit and/or adjust the
other terms and conditions of the Restricted Stock Unit as the Committee in its
discretion determines to be equitable in order to prevent dilution or
enlargement of the Grantee's rights in respect of the Restricted Stock Unit as
such existed before such event. Appropriate adjustments may likewise be made by
the Committee in other terms and conditions of the Restricted Stock Unit to
reflect equitably such changes in circumstances, including modifications of
performance targets and changes in the length of performance periods relating to
the vesting of the Restricted Stock Unit or any restrictions on Unit Shares.
(c) MODIFICATIONS TO COMPLY WITH SECTION 409A. To the extent applicable, this
Agreement (including any related Notice of Restricted Stock Award) shall be
interpreted in accordance with Section 409A of Code and Department of Treasury
regulations and other interpretive guidance issued thereunder, including without
limitation any such regulations or guidance that may be issued after the date on
which a Restricted Stock Unit was awarded. Without limiting the authority of the
Committee under subsection 4(b) above to make modifications to the Restricted
Stock Unit by reason of changes in law or circumstances that would result in any
substantial dilution or enlargement of the rights granted to, or available for,
Grantee in respect of a Restricted Stock Unit or otherwise as a participant in
the Plan or which otherwise warrants equitable adjustment to the terms and
conditions of the Restricted Stock Unit because such event interferes with the
operation of the Plan, and notwithstanding any provision of this Agreement to
the contrary, in the event that the Committee or an authorized officer of the
Company determines that any amounts will be immediately taxable to the
Participant under Section 409A of the Code and related Department of Treasury
guidance (or subject the Grantee to a penalty tax) in connection with the grant
or vesting of the Restricted Stock Unit or any other provision of the Restricted
Stock Unit Award Notice or this Agreement or the Plan, the Company may (a) adopt
such amendments to the Restricted Stock Unit, including amendments to this
Agreement (having prospective or retroactive effect), that the Committee or
authorized officer determines to be necessary or appropriate to preserve the
intended tax treatment of the Restricted Stock Unit and/or (b) take such other
actions as the Committee or authorized officer determines to be necessary or
appropriate to comply with the requirements of Section 409A of the Code and
related Department of Treasury guidance, including such Department of Treasury
guidance and other interpretive materials as may be issued after the date on
which such Restricted Stock Unit was awarded.
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SECTION 5. MISCELLANEOUS PROVISIONS.
(a) RIGHTS AS A SHAREHOLDER. Neither the Grantee nor the Grantee's personal
representative or permitted Transferee shall have any rights as a shareholder
with respect to any Unit Shares until the Grantee or his or her personal
representative or permitted Transferee becomes entitled to receive such Unit
Shares pursuant to this Agreement, the Plan and the applicable Restricted Stock
Unit Award Notice, and any such right shall also be subject to subsections 2(g)
and 3(c) above.
(b) TENURE. Nothing in the Restricted Stock Unit Award Notice, this Agreement or
in the Plan shall confer upon the Grantee any right to continue in the Company's
Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Company (or any Parent or Subsidiary
employing or retaining the Grantee) or of the Grantee, which rights are hereby
expressly reserved by each, to terminate his or her Service at any time and for
any reason, with or without cause.
(c) NOTIFICATION. Any notification required by the terms of this Agreement shall
be given in writing and shall be deemed effective upon personal delivery to the
President, Treasurer, General Counsel, Secretary or any Assistant Secretary of
the Company or five Business Days upon deposit with the United States Postal
Service, by registered or certified mail, with postage and fees prepaid
addressed to the Company. A notice shall be addressed to the Company at its
principal executive office, marked to the attention of the Corporate Secretary,
and to the Grantee at the address that he or she most recently provided to the
Company.
(d) ENTIRE AGREEMENT. This Agreement, any related Restricted Stock Unit Award
Notice and the Plan constitute the entire contract between the parties hereto
with regard to the subject matter hereof and supersede any other agreements,
representations or understandings (whether oral or written and whether express
or implied) which relate to the subject matter hereof.
(e) WAIVER. No waiver of any breach or condition of this Agreement shall be
deemed to be a waiver of any other or subsequent breach or condition whether of
like or different nature.
(f) SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Company and its successors and assigns and
upon the Grantee, the Grantee's personal representatives, heirs, legatees and
other permitted Transferees, assigns and the legal representatives, heirs and
legatees of the Grantee's estate, whether or not any such person shall have
become a party to this Agreement and have agreed in writing to be joined herein
and be bound by the terms hereof.
(g) CHOICE OF LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, as such laws are applied to
contracts entered into and performed in such State.
SECTION 6. DEFINITIONS.
(a) "CODE" shall mean the Internal Revenue Code of 1986, as amended and as the
same may be amended from time to time, and the regulations promulgated
thereunder.
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(b) "COMPANY" shall mean Magellan Health Services, Inc., a Delaware corporation,
and any successor thereto.
(c) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended
and as the same may be amended from time to time, and any successor statute, and
the rules and regulations promulgated thereunder.
(d) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended and as
the same may be amended from time to time, and any successor statute, and the
rules and regulations promulgated thereunder.
(e) "SHARE" shall mean a share of Ordinary Common Stock, $0.01 par value per
share, of the Company, as the same may generally be exchanged for or changed
into any other share of capital stock or other security of the Company or any
other company in connection with a transaction referred to in Section 4 above
(and in the event of any such successive exchange or change, any security
resulting from any such successive exchange or change).
(f) "TRANSFER" shall mean, with respect to any Restricted Stock Unit or any Unit
Share, any sale, assignment, transfer, alienation, conveyance, gift, bequest by
will or under intestacy laws, pledge, lien encumbrance or other disposition,
with or without consideration, of all or part of such Restricted Stock Unit or
any Unit Share, or of any beneficial interest therein, now or hereafter owned by
the Grantee, including by execution, attachments, levy or similar process
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In consideration of the foregoing and intending to be legally bound
hereby, the Company and the Grantee named below have executed this Agreement as
of the date first above written.
MAGELLAN HEALTH SERVICES, INC.
By:
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Name:
Title:
GRANTEE:
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Name:
Address for Notice:
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Social Security Number:
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MAGELLAN HEALTH SERVICES, INC.
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NOTICE OF RESTRICTED STOCK UNIT AWARD
NAME OF GRANTEE: Xxxxxxx Xxxxxxx
DATE OF GRANT: July 17, 2006
TYPE OF AWARD: Restricted Stock Units, each Restricted Stock Unit
representing the right to receive on the terms and
conditions of the Restricted Stock Unit Agreement between
Grantee and the Company referenced below and the terms and
conditions of this notice a share of Ordinary Common Stock,
par value $0.01 per share ("Share"), of Magellan Health
Services, Inc. (the "Company"), subject to adjustment
thereto as provided in such Restricted Stock Unit Agreement
(a "Unit Share"), or at the election of the Company a cash
payment in lieu thereof.
TOTAL NUMBER OF 4,753 Restricted Stock Units.
RESTRICTED STOCK
UNITS AWARDED:
VESTING : This Award shall vest in accordance with the vesting
schedule set forth below, provided that the Grantee's
Service with the Company, a Subsidiary or a Parent company
has not terminated prior to the vesting date.
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VESTING DATE VESTING PERCENTAGE
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1st anniversary of the
Date of Grant 33.4%
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2nd anniversary of the
Date of Grant 66.7%
(i.e., an additional 33.3%)
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3rd anniversary of the
Date of Grant 100%
(i.e., an additional 33.3%)
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Notwithstanding the preceding paragraph, this Restricted
Stock Unit shall earlier vest immediately with respect to
100% of the Unit 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
Grantee's employment agreement, if any, in effect at the
time of the Change of Control) following occurrence of the
Change in Control, Grantee's Service with the Company shall
be terminated by the Company without Cause (as defined
below) or by the Grantee with Good Reason (as defined
below), provided that the Grantee's Service with the
Company has not previously terminated after the date hereof
for any other reason, and upon such accelerated vesting
this Restricted Stock Unit shall continue to be exercisable
for the same period after such termination of Grantee's
Service as provided above. For purposes of this Restricted
Stock Unit, the terms "Change in Control," "Cause" and
"Good Reason" shall have the same meanings as provided in
any employment agreement between the Company and Grantee 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
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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;
b. 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;
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;
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. Grantee is convicted of (or pleads guilty or
nolo contendere to) a felony or a crime
involving moral turpitude;
b. Grantee's commission of an act of fraud or
dishonesty involving his or her duties on
behalf of the Company;
c. Grantee's willful failure or refusal to
faithfully and diligently perform duties
lawfully assigned to Grantee 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 Grantee; or
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d. Grantee'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.
(3) "Good Reason" shall mean:
a. a reduction in Grantee'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 Grantee's bonus for the year in
which or any year after the year in which the
Change of Control occurs from Grantee's
maximum bonus opportunity for the year in
which the Change in Control occurs (if any)
as established under any employment agreement
Grantee has with the Company or any bonus
plan of the Company applicable to Grantee
(or, if no such maximum bonus opportunity has
yet been established for Grantee under a
bonus plan applicable to Grantee for the year
in which the Change of Control has occurred,
the maximum bonus opportunity so established
for Grantee for the immediately preceding
year (if any));
b. a material diminution in Grantee's position,
duties or responsibilities as in effect at
the time of a Change in Control or the
assignment to Grantee 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
Grantee; 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 Grantee'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 Grantee 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.
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SETTLEMENT OF Unit Shares in settlement of this Award (or, at
AWARD: the Company's election, cash in lieu therof) shall be
delivered to Grantee on the Vesting Date (such date, the
"Settlement Date") as further provided in Grantee's
Restricted Stock Unit Agreement with the Company.
DIVIDEND NONE.
EQUIVALENT RIGHTS
TRANSFER Unit Shares issued in settlement of this Award shall not be
RESTRICTIONS subject to any additional transfer restrictions, other than
those provided by Grantee's Restricted Stock Unit
Agreement.
OTHER TERMS
By signing your name below, you acknowledge and agree that this Award is
governed by the terms and conditions of Restricted Stock Unit Agreement dated
July 17, 2006 between the Company and the undersigned which is hereby made a
part of this document. Capitalized terms used but not defined in this Notice of
Restricted Stock Unit Award shall have the meanings assigned to them in the
Agreement.
GRANTEE: MAGELLAN HEALTH SERVICES, INC.
By:
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Name:
------------------------------
Title:
------------------------------
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