CENTENE CORPORATION Nonstatutory Stock Option Agreement Granted Under Amended and Restated 2003 Stock Incentive Plan (Directors)
Exhibit
10.18
CENTENE
CORPORATION
Nonstatutory
Stock Option Agreement Granted Under
Amended and Restated 2003
Stock Incentive Plan
(Directors)
1. Grant of
Option
This
agreement evidences the grant by Centene Corporation, a Delaware corporation
(the “Company”), on __________________ (the “Grant
Date”) to__________________, a director of the Company (the
“Participant”), of an option to purchase, in whole or in part, on the terms
provided herein and in the Company’s Amended and Restated 2003 Stock Incentive
Plan (the “Plan”), a total of _______ shares (the “Shares”)
of common stock, $0.001 par value per share, of the Company (“Common Stock”) at
$______ per
Share. Unless earlier terminated, this option shall expire at 3:00
p.m., Central time, on
_____________ (the “Final Exercise Date”).
It is
intended that the option evidenced by this agreement shall not be an incentive
stock option as defined in Section 422 of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the
“Code”). Except as otherwise indicated by the context, the term
“Participant,” as used in this option, shall be deemed to include any person who
acquires the right to exercise this option validly under its terms.
2. Vesting
Schedule
This
option will become exercisable (“vest”) as to ___% of the original number of
Shares on the ____
anniversary of the Grant Date and as to an additional ___% of the original number of
Shares at the end of each successive _______ period following the
first anniversary of the Grant Date until the ____ anniversary of the Grant
Date.
The right
of exercise shall be cumulative so that to the extent the option is not
exercised in any period to the maximum extent permissible it shall continue to
be exercisable, in whole or in part, with respect to all Shares for which it is
vested until the earlier of the Final Exercise Date or the termination of this
option under Section 3 hereof or the Plan.
In the
event of a “Change in Control” of the Company or if the Optionee is not
re-elected as a member of the Board, all of the Shares that (but for the
application of this clause) are not vested at the time of the occurrence of such
events 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 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 which 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.
3. Exercise of
Option
(a) Form of
Exercise. Each election to exercise this option shall be in
writing, signed by the Participant, and received by the Company at its principal
office, accompanied by this agreement, and payment in full in the manner
provided in the Plan. Common Stock purchased upon the exercise of
this option shall be paid for as follows:
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(1)
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in
cash or by check, payable to the order of the
Company;
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(2)
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by
(i) delivery of an irrevocable and unconditional undertaking by a
creditworthy broker to deliver promptly to the Company sufficient funds to
pay the exercise price and any required tax withholding or (ii) delivery
by the Participant to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver promptly to
the Company cash or a check sufficient to pay the exercise price and any
required tax withholding;
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(3)
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when
the Common Stock is registered under the Securities and Exchange Act of
1934, as amended, by delivery of shares of Common Stock owned by the
Participant valued at their fair market value as determined by (or in a
manner approved by) the board of directors of the Company (the “Board”) in
good faith (“Fair Market Value”), provided (i) such
method of payment is then permitted under applicable law and (ii) such
Common Stock, if acquired directly from the Company was owned by the
Participant at least six months prior to such
delivery;
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(4)
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to
the extent permitted under applicable law and permitted by the Board, in
its sole discretion, provided that at least
an amount equal to the par value of the Common Stock being purchased shall
be paid in cash; or
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(5)
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by
any combination of the above permitted forms of
payment.
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The
Participant may purchase less than the number of shares covered hereby, provided
that no partial exercise of this option may be for any fractional share or for
fewer than ten whole shares.
(b) Continuous Relationship with
the Company Required. Except as otherwise provided in this
Section 3, this option may not be exercised unless the Participant, at the
time he or she exercises this option, is, and has been at all times since the
Grant Date, a director of, or consultant or advisor to, the Company or any other
entity the directors, consultants or advisors of which are eligible to receive
option grants under the Plan (an “Eligible Participant”).
(c) Termination of Relationship
with the Company. If the Participant ceases to be an Eligible
Participant for any reason, then, except as provided in paragraphs (d) and
(e) below, the right to exercise this option shall terminate 30 days after such
cessation (but in no event after the Final Exercise Date), provided that this option
shall be exercisable only to the extent that the Participant was entitled to
exercise this option on the date of such cessation. Notwithstanding
the foregoing, if the Participant, prior to the Final Exercise Date, violates
the non-competition or confidentiality provisions of any consulting, advisory,
nondisclosure, non-competition or other agreement between the Participant and
the Company, the right to exercise this option shall terminate immediately upon
such violation.
(d) Exercise Period Upon Death
or Disability. If the Participant dies or becomes disabled
(within the meaning of Section 22(e)(3) of the Code) prior to the Final
Exercise Date while he or she is an Eligible Participant and the Company has not
terminated such relationship for “cause” as specified in paragraph (e) below,
this option shall be exercisable, within the period of 90 days following the
date of death or disability of the Participant, by the Participant (or in the
case of death by an authorized transferee), provided that this option
shall be exercisable only to the extent that this option was exercisable by the
Participant on the date of his or her death or disability, and further provided that this
option shall not be exercisable after the Final Exercise Date.
(e) Discharge for
Cause. If the Participant, prior to the Final Exercise Date,
is discharged by the Company for “cause” (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of such
discharge. “Cause” shall include acts or omissions that the
Company determines in writing, after affording the Participant an
opportunity to be heard, are (i) criminal, dishonest or fraudulent or
constitute misconduct that reflect negatively on the reputation of
the Company (including any parent, subsidiary, affiliate or division of the
Company); (ii) acts or omissions that could expose the Company or any parent,
subsidiary, affiliate or division of the Company to claims of illegal harassment
or discrimination in employment;(iii) material breaches of this Agreement; or
(iv) continued and repeated failure to perform substantially the duties of
his/her employment. The Participant shall be considered to have been
discharged for “cause” if the Company determines, within 30 days after the
Participant’s resignation, that discharge for cause was warranted.
4. Withholding
No Shares
will be issued pursuant to the exercise of this option unless and until the
Participant pays to the Company, or makes provision satisfactory to the Company
for payment of, any federal, state or local withholding taxes required by law to
be withheld in respect of this option.
5. Nontransferability of
Option
This
option 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, this option shall be exercisable only by the
Participant.
6. Provisions of the
Plan
This
option is subject to the provisions of the Plan, a copy of which is furnished to
the Participant with this option.
In
Witness Whereof, the Company has caused this option to be executed under its
corporate seal by its duly authorized officer. This option shall take
effect as a sealed instrument.
Centene
Corporation
By:
PARTICIPANT’S
ACCEPTANCE
The
undersigned hereby accepts the foregoing option and agrees to the terms and
conditions thereof. The undersigned hereby acknowledges receipt of a
copy of the Company’s Amended and Restated 2003 Stock Incentive
Plan.
Participant:
Dated: _________________
