Exhibit 10.3
MAGELLAN HEALTH SERVICES, INC.
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2003 MANAGEMENT INCENTIVE PLAN
RESTRICTED STOCK AWARD AGREEMENT
REFERENCE No. 200_-___ (___________)
As of _______ _, 20__
GRANTED TO: __________ ("GRANTEE")
SECTION 1. GRANT OF RESTRICTED STOCK.
(a) RESTRICTED STOCK AWARD. On the terms and conditions set forth in this
Agreement and, each Notice of Restricted Stock Award (an "AWARD NOTICE")
referencing this Agreement issued to Grantee by Magellan Health Services, Inc.
(the "COMPANY," as further defined below) in accordance with its 2003 Management
Incentive Plan, the Company hereby grants the Grantee the number of shares of
Ordinary Common Stock, par value $.01 per share (the "GRANTED SHARES"), of the
Company stated in the Award Notice or Award Notices. Each such Award Notice,
together with this referenced Agreement, shall be a separate restricted stock
award governed by the terms of this Agreement.
(b) APPLICATION OF 2003 MANAGEMENT INCENTIVE PLAN AND DEFINED TERMS. This award
is granted under and subject to the terms of the 2003 Management Incentive Plan,
as the same may be amended or supplemented from time to time in accordance with
its terms (the "PLAN"), which is incorporated herein by this reference. Certain
capitalized terms used herein are defined in Section 6 of this Agreement but
terms used herein, if not defined herein, shall have the same meaning for
purposes hereof as provided by the Plan.
(c) DURATION OF THIS AGREEMENT. Section 3 of this Agreement shall apply to the
Granted Shares until the date the Granted Shares have vested as provided in the
pertinent Award Notice. The other provisions of this Agreement shall lapse or
shall apply indefinitely in accordance with their terms.
SECTION 2. ISSUANCE OF SHARES
(a) STOCK CERTIFICATES. As soon as practicable after the execution and delivery
by the Grantee and the Company of this Agreement and an Award Notice, the
Company shall cause to be issued a certificate or certificates for the Granted
Shares representing the award provided by the Award Notice, registered in the
name of the Grantee (or in the names of such person and his or her spouse as
community property or as joint tenants with right of survivorship, as the
Grantee shall request).
(b) STOCKHOLDER RIGHTS. Subject to the limitations on transfer of Granted Shares
provided by Section 3, the Grantee (or any successor in interest) shall have all
the rights of a Stockholder (including, without limitation, voting, dividend and
liquidation rights) with respect to the Granted Shares, subject, however, to the
restrictions of this Agreement. Without limiting the generality of the foregoing
provisions of this paragraph, in the event of a stock dividend or stock split,
recapitalization, reorganization or other transaction whereby the Grantee as a
holder of Granted Shares receives additional Shares, such additional Shares
shall automatically be treated as additional Granted Shares and shall be subject
to all the same requirements as provided hereby and by the Award Notice as
applicable initially to the Granted Shares (including the vesting provisions and
restrictions of Section 3), unless otherwise approved by the Committee in
connection with such stock dividend, stock split, recapitalization or similar
transaction. In the event of any other recapitalization, reorganization or
similar extraordinary transaction, the rights of the Grantee in respect of the
Granted Shares shall be subject to equitable adjustment in accordance with
Section 4.
(c) WITHHOLDING REQUIREMENTS. As a condition to the grant of this award, the
Company may withhold any tax (or other governmental obligation) arising from the
grant of this award (jncluding, as pertinent, the filing of a Section 83(b)
election or the lapse of any right of repurchase) and the Grantee shall make
arrangements satisfactory to the Company to enable it to satisfy all such
withholding requirements.
SECTION 3. LIMITATIONS ON TRANSFER
(a) VESTING AND PROHIBITED TRANSFER PERIOD; REPURCHASE RIGHTS. Once issued in
accordance herewith, the Granted Shares may not be sold or otherwise Transferred
by the Grantee until the time the shares have vested in accordance with the
Award Notice pertaining to such shares, which may provide for the vesting of
shares in whole or in part on an accelerated basis in certain circumstances,
including a change in control of the Company. In addition, if so provided in the
Award Notice pertaining to the Granted Shares, the Granted Shares may be subject
to repurchase by the Company until the time the shares have vested in accordance
with the Award Notice, in which case the provisions of Exhibit A hereto may
apply to the Company's right to repurchase the Granted Shares (except as
otherwise provided in the Award Notice).
(b) CERTAIN TRANSFERS PERMITTED. Notwithstanding the foregoing provisions of
this Section 3, the Granted Shares may be Transferred (i) in the event of the
Grantee's death, by the laws of descent or distribution, (ii) by operation of
law in connection with a merger, consolidation, recapitalization,
reclassification or exchange of shares, reorganization or similar transaction
involving the Company affecting the Stock generally or (iii) with the approval
of the Committee, to a member of Grantee's family, or a trust primarily for the
benefit thereof, or to a corporation, partnership or other entity primarily for
the benefit of such a family member or trust or in another estate planning
transaction; provided, however, that the Granted Shares notwithstanding such
permitted Transfer shall (A) remain subject to repurchase as provided hereby to
the same extent as before the Transfer except as otherwise provided and (B)
Granted Shares transferred pursuant to clause (iii) hereof shall remain subject
in the hands of the transferee to the restrictions on Transfer provided hereby
until such restrictions lapse.
(c) FIDUCIARY AND SECURITIES LAW RESTRICTIONS. As a executive, officer and/or
director of the Company, Grantee may be subject to restrictions on his ability
to sell or otherwise transfer Granted 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 the securities of the Company from time to time
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adopted by the Company in connection therewith. Nothing contained herein shall
relieve Grantee of any restriction on sale or other transfer of Granted Shares
provided thereby and the restrictions provided herein shall be in addition to
and not in lieu of any such other restrictions.
(d) LAPSE OF TRANSFER RESTRICTIONS. Subject to paragraph (c) of this Section 3,
Grantee shall be free to disposes of Granted Shares in any manner and at any
time after expiration of the vesting period provided by paragraph (a) of this
Section 3.
SECTION 4. ADJUSTMENT OF SHARES.
In the event of changes in the outstanding Shares or in the capital
structure of the Company by reason of a combination of shares, reverse stock
split, recapitalization, reorganization, merger, consolidation, exchange of
shares or other relevant change in capitalization (including an extraordinary
dividend or distribution of cash or property or a spin-off or split-off)
occurring after a grant of restricted stock pursuant to this Agreement, the
terms of the grant (including the number and nature of the Granted Shares) shall
be adjusted as set forth in Section 13 of the Plan with the view to maintaining
equitably the Benefits provided by the award.
SECTION 5. MISCELLANEOUS PROVISIONS.
(a) NO RIGHTS RESPECTING CURRENT SERVICE. Nothing in this award or in the Plan
shall confer upon the Grantee any right to continue in Service for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Company (or any 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, or to any
right to employment or severance established by any separate agreement or plan.
(b) NOTIFICATION. Any notification required by the terms of this Agreement shall
be given in writing and shall be deemed effective upon personal delivery or upon
deposit with the United States Postal Service, by registered or certified mail,
with postage and fees prepaid. A notice shall be addressed to the Company at its
principal executive office and to the Grantee at the address that he or she most
recently provided to the Company.
(c) ENTIRE AGREEMENT. This Agreement and the Plan constitute the entire contract
between the parties hereto with regard to the subject matter hereof and
supersedes any other agreements, representations or understandings (whether oral
or written and whether express or implied) which relate to the subject matter
hereof; it being understood, however, that this Agreement is being entered into
by the Company in the performance of obligations under an Employment Agreement
between the Company and Grantee dated as of January 5, 2004, under which the
Company has certain separate obligations relating to the granting of this award.
(d) WAIVER. The failure of the Company in any instance to exercise any right
provided herein, in a Award Notice or in the Plan shall not constitute a waiver
of any other right that may subsequently arise under such provisions or in any
other agreement between the Company and the Grantee. 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.
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(e) ASSIGNMENT. The Company may assign any right it has or may acquire under
this Agreement, an Award Notice or the Plan with respect to its repurchase of or
other transactions in any Granted Shares to any person or entity selected by the
Board of Directors, including, without limitation, one or more Stockholders of
the Company.
(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 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 join 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) "AGREEMENT" shall mean this Restricted Stock Award Agreement.
(b) "AWARD NOTICE" shall have the meaning described in Section 1(a) of this
Agreement.
(c) "BENEFIT" shall have the meaning provided by the Plan.
(d) "BOARD OF DIRECTORS" shall mean the Board of Directors of the Company, as
constituted from time to time.
(e) "CODE" shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder from time to time in effect.
(f) "COMMON STOCK" shall mean the Ordinary Common Stock of the Company, par
value $.01 per share.
(g) "COMMITTEE" shall mean a committee of the Board of Directors, as described
in Section 2 of the Plan.
(h) "COMPANY" shall mean Magellan Health Services, Inc., a Delaware corporation,
and any successor thereto in accordance with the terms of the Plan and, in
respect of services provided or to be provided by the Grantee, reference to the
Company shall also include any Subsidiary.
(i) "DISABILITY" shall mean that the Grantee is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment as determined by the Committee in its sole discretion.
(j) "EMPLOYEE" shall mean any individual who is a common-law employee of the
Company or a Subsidiary.
(k) "FAIR MARKET VALUE" of a Share as of any day shall mean the closing price of
the Shares on such day (or on the last preceding trading date if the Shares were
not traded on such day) if the Shares are readily tradeable on a national
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securities exchange or the Nasdaq Stock Market (or other established market
system involving current interdealer quotations), and if the Shares are not
readily tradeable, Fair Market Value shall mean the amount determined in good
faith by the Committee as the fair market value of the Shares, which
determination shall be final and binding on all persons.
(l) "GRANTED SHARES" shall have the meaning described in Section 1(a) of this
Agreement
(m) "GRANTEE" shall mean the person named herein and/or in the Notice.
(n) "PURCHASE PRICE" shall mean the price, if any, to be paid by the Grantee for
Granted Shares as provided by the Award Notice for such Granted Shares, but the
Purchase Price may be adjusted for purposes of the Right of Repurchase as
provided by Exhibit A.
(o) "RESTRICTED SHARE" shall mean a Share that is not yet vested and subject to
Section 3.
(p) "RIGHT OF REPURCHASE" shall have the meaning provided by Exhibit A.
(q) "SERVICE" shall mean service as an Employee. For any purpose under this
Agreement, Service shall be deemed to continue while the Grantee is on a bona
fide leave of absence, if such leave was approved by the Company in writing or
if continued crediting of Service for such purpose is expressly required by the
terms of such leave or by applicable law (as determined by the Company).
(r) "SHARE" shall mean a share of Ordinary Common Stock 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 (and in the event of any such exchange or
change any security resulting from any such successive exchange or change) and
in respect of Granted Shares with such adjustment thereto as provided in respect
of adjustments in Benefits granted under the Plan in accordance with Section 13
of the Plan (if applicable).
(s) "SUBSIDIARY" shall mean any corporation (other than the Company) in an
unbroken chain of corporations or other companies beginning with the Company, if
each of the corporations or other companies other than the last corporation or
company in the unbroken chain owns stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain or owns other equity interests otherwise entitling
the owner thereof to select a majority of the governing body of such company. A
company that attains the status of a Subsidiary on a date after the execution of
this Agreement shall be considered a Subsidiary commencing as of such date.
(t) "TRANSFER" shall mean, with respect to any 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 Share, or of any beneficial interest therein, now or
hereafter owned by the Grantee.
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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:
Social Security Number:
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EXHIBIT A
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Rights of Repurchase
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If and to the extent an Award Notice provides that Granted Shares may
be repurchased by the Company until the Granted Shares become vested or upon the
occurrence of specified events or in specified circumstances (any shares as to
which such provision is made, "Repurchase Restricted Shares"), the following
provisions shall apply to the Company's right to repurchase the Granted Shares,
except as otherwise provided in the Award Notice ("Right of Repurchase").
1. RIGHT OF REPURCHASE. Unless and until the Repurchase Restricted
Shares have become vested in accordance with the terms of the Award Notice, the
Repurchase Restricted Shares shall be subject to a right (but not an obligation)
of repurchase by the Company upon termination of the Grantee's employment.
2. EXERCISE NOTICE. In the event the Company wishes to exercise its
Right of Repurchase, the Company shall provide the Grantee with five business
days prior written notice of its intent to exercise its right. If such Right of
Repurchase is to be exercised in connection with the termination of the
Grantee's employment, the Company shall provide such notice not later than 90
days after termination of the Grantee's employment. Such notice shall contain
the price per Share which shall be the repurchase price, described in paragraph
4 below, and all other terms and conditions of the offer (including, without
limitation, the proposed consummation date of the repurchase). The repurchase
price shall be paid in cash or by canceling of indebtedness owed by the Grantee
to the Company, as the Company, in its sole discretion, shall determine.
3. LAPSE OF REPURCHASE RIGHT. The Right of Repurchase shall lapse
with respect to the Repurchase Restricted Shares in accordance with the vesting
schedule described in the Award Notice.
4. REPURCHASE PRICE. If the Company exercises the Right of
Repurchase, it shall pay the Grantee (except as otherwise provided in the Award
Notice) an amount for each of the Repurchase Restricted Shares equal to the
lower of (i) Fair Market Value for each share or (ii) the Purchase Price,
subject to adjustment as provided in Section 5 of this Exhibit A. Payment shall
be made promptly by good check or as otherwise agreed by the parties.
5. ADDITIONAL SHARES OR SUBSTITUTED SECURITIES; ADJUSTMENT OF
REPURCHASE PRICE. In the event of a stock dividend or stock split,
recapitalization, reorganization or other transaction whereby the Grantee as a
holder of Repurchase Restricted Shares receives additional Shares, such
additional Shares shall automatically be subject to the Right of Repurchase to
the same extent as the Repurchase Restricted Shares in respect of which such
additional shares were issued, but the Purchase Price with respect to all the
Repurchase Restricted Shares shall be equitably adjusted to account for such
transaction as provided by the Committee. In the event of any other
recapitalization, reorganization or similar extraordinary transaction, the Right
of Repurchase shall be subject to equitable adjustment in accordance with
Section 4 of this Agreement, including, if any securities are received by a
Grantee in respect of Repurchase Restricted Shares, such securities being
subject to the Right of Repurchase on such equitably adjusted terms.
6. TERMINATION OF RIGHTS AS STOCKHOLDER. If the Company makes
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Repurchase Restricted Shares to be
repurchased in accordance with the Right of Repurchase, then after such time the
person from whom such Shares are to be purchased shall no longer have any rights
as a holder of such Shares (other than the right to receive payment of such
consideration in accordance with this Agreement). Such Shares shall be deemed to
have been purchased in accordance with the applicable provisions hereof, whether
or not the certificate(s) therefor have been delivered as required by this
Agreement.
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