EXHIBIT 10.5
AMERIGROUP
CORPORATION
2009 EQUITY
INCENTIVE PLAN
STOCK APPRECIATION RIGHT AGREEMENT
This Stock Appreciation Right Agreement (the “SAR
Agreement”) is made and entered into as of
, 20
(the “Date of
Grant”), by and between AMERIGROUP Corporation, a Delaware
corporation (the “Company”), and
(the
“Grantee”). Capitalized terms not defined herein shall
have the meaning ascribed to them in the Company’s 2009
Equity Incentive Plan (the “Plan”).
1. Number of Shares .
The Company hereby grants to Grantee a stock appreciation right
(this “SAR”) covering
Shares (the “SAR
Shares”) at an Exercise Price per Share of $
, subject to all of the terms
and conditions of this SAR Agreement and the Plan.
2. SAR Term . The term
of the SAR (the “SAR Term”) shall commence on the Date
of Grant set forth above and, unless the SAR is previously
terminated pursuant to Section 5 below, shall terminate on the
[ ] anniversary thereof (the “Expiration Date”). As of
the Expiration Date, all rights of Grantee hereunder shall
terminate.
3. Conditions of
Exercise .
AT THE DISCRETION OF THE ADMINISTRATOR:
(a) Subject to Section 5
below, the SAR shall become vested on the Date of Grant as to
percent (
%) of the SAR Shares, as to
an additional percent (
%) of the SAR Shares on
, 20
and as to an additional
percent (
%) of the SAR Shares
thereafter, such that
the SAR shall become fully (100%) vested on
, 200
.
[OR]
(a) Subject to Section 5
below, the SAR shall become vested as to
of the SAR Shares on
the anniversary of the
Date of Grant, and as to an additional
of the SAR Shares
thereafter, such that
the SAR shall become fully (100%) vested on
.
(b) Prior to the Expiration
Date, this SAR may, subject to Section 5 below, be exercised
in whole or in part at any time, but only as to SAR Shares that
have vested. Without limiting Section 5, if Grantee’s
employment or service with the Company and all Subsidiaries and
Affiliates terminates, then from and after such Termination Date
(as defined in Section 5 below), this SAR may be exercised
only with respect to SAR Shares that have vested as of the
Termination Date and only as expressly permitted pursuant to
Section 5.
(c) This SAR may not be
exercised for a fraction of a share.
4. Method of Exercise of
SAR .
(a) The SAR may be exercised by
delivering to the Company an executed SAR exercise agreement in the
form attached hereto as Exhibit A , or in such other
form as may be approved by the Administrator from time to time (the
“Exercise Agreement”), which shall set forth,
inter alia , (i) Grantee’s election to
exercise the SAR and (ii) the number of vested SAR Shares with
respect to which it is being exercised. If someone other than
Grantee exercises the SAR, then such person must submit
documentation reasonably acceptable to the Company verifying that
such person has the legal right to exercise the SAR.
(b) The SAR may not be
exercised unless such exercise is in compliance with all applicable
federal and state securities law, as they are in effect on the date
of exercise.
(c) Upon exercise of the SAR,
the Company shall deliver to Grantee a number of Shares with a Fair
Market Value equal to the product of (i) the excess of the
Fair Market Value of a Share on the date of exercise over the
Exercise Price and (ii) the number of SAR Shares with respect
to which the SAR is being exercised.
5. Effect of Termination of
Employment or Service, Change in Control and Disabling Conduct
.
(a) Termination of
Employment or Service Generally .
(i) Upon the termination of
Grantee’s employment or service with the Company and all
Subsidiaries and Affiliates, the SAR shall immediately terminate as
to any SAR Shares that have not previously vested as of the date of
such termination (the “Termination Date”).
(ii) Any portion of the SAR
that has vested as of the Termination Date shall be exercisable in
whole or in part for a period of [ ] days following the Termination
Date (the “Post-Termination Exercise Period”) unless
Grantee has been terminated for Cause or engaged in Disabling
Conduct (defined below); provided , in no event may the SAR
be exercised after the Expiration Date.
(iii) In the event of
termination by reason of Grantee’s death or Disability, the
Post-Termination Exercise Period shall extend until the date that
is twelve months from the Termination Date; provided , in no
event may the SAR be exercised after the Expiration Date.
(iv) Upon the expiration of the
Post-Termination Exercise Period any unexercised portion of the SAR
shall terminate in full (whether or not then exercisable).
(b) Termination for Cause;
Disabling Conduct .
(i) The SAR shall terminate in
full (whether or not then exercisable) immediately upon the
termination of Grantee’s employment with the Company or any
Subsidiary or Affiliate for Cause.
(ii) The SAR also shall
terminate in full (whether or not then exercisable) immediately if
Grantee engages in Disabling Conduct.
[AT THE DISCRETION OF THE ADMINISTRATOR, EITHER]
(c) Change in Control .
For purposes of Section 5(a) above, any portion of the SAR that has
not previously vested shall be deemed fully vested if
Grantee’s employment or service with the Company or any
Subsidiary or Affiliate is terminated by the Company or any
Subsidiary or Affiliate or any successor entity for any reason
(other than for Cause or as a result of Disabling Conduct) within
two years following a Change in Control or if Grantee terminates
employment or service with the Company or any Subsidiary or
Affiliate within two years following the Change in Control and
after there is a material adverse change in the nature or status of
Grantee’s duties or responsibilities from those in effect
immediately prior to the Change in Control.
[OR]
(c) Change in Control .
Any portion of the SAR that has not previously vested shall become
fully vested upon a Change in Control.
(d) Definition of Disabling
Conduct . As used herein, “Disabling Conduct” shall
mean conduct involving a breach of the covenants made in
Section 6 below.
6. Covenant Not to
Compete .
(a) In consideration for the
grant of the SAR, and as a material condition to the grant, Grantee
hereby expressly agrees as follows:
(i) Grantee will act in the
best interests of the Company and its Subsidiaries and Affiliates
(each, an “AMERIGROUP Company” and collectively, the
“AMERIGROUP Companies”) throughout the period of
Grantee’s employment with any of the AMERIGROUP Companies;
and
(ii) at all times while
employed by any AMERIGROUP Company, and at all times during the
Covered Post-Employment Period (defined below), Grantee will not
(A) compete with any AMERIGROUP Company by serving a
Competitor (defined below) in any managerial capacity, or in any
capacity that influences business strategy, with respect to a
Covered Product or Service (defined below) that the Competitor is
offering in a Covered Area (defined below) or developing to offer
in a Covered Area, or (B) solicit for employment, interfere
with the employment relationship of or endeavor to entice away any
employee of any AMERIGROUP Company; provided ,
however , that in the event the Company terminates the
Grantee’s employment without Cause [or as described in
Section 5(c), or the Grantee voluntarily terminates his or her
employment under the circumstances described in Section 5(c)]
[NOTE: BRACKETED LANGUAGE TO BE USED IF DOUBLE-TRIGGER SECTION
5(C) IS USED] , the non-competition covenants in
Section 6(a)(ii)(A) shall terminate and be of no further force
or effect beginning at the close of business on the Grantee’s
last day of employment with the applicable AMERIGROUP Company;
and
(iii) at all times while
employed by any AMERIGROUP Company and at all times thereafter, the
Grantee will maintain in strict confidence, and will not reveal to
any person or entity (except as may be required in the ordinary
course of performing the Grantee’s duties as an employee of
the AMERIGROUP Company), any Confidential Information.
(b) As used herein,
(i) The “Covered
Post-Employment Period” means the twelve (12) month
period beginning on the first day on which Grantee is no longer
employed by any AMERIGROUP Company as a result of Grantee’s
resignation or termination for Cause and ending on the first
anniversary of such date.
(ii) “Competitor”
means any entity or person that provides or is planning to provide
a Covered Product or Service in competition with a Covered Product
or Service that an AMERIGROUP Company is actively developing,
marketing, providing or selling.
(iii) “Confidential
Information” means an AMERIGROUP Company’s proprietary
and/or non-public information concerning its business and affairs,
including, without limitation, trade secrets, strategies, business
plans, marketing and advertising plans, member and provider
information , employee and personnel information, contracts,
training manuals, financial projections, budgets and non-public
financial data (including, without limitation, statements with
premium revenue and/or provider compensation terms, reports of
actuaries, medical loss reports, balance sheets and income
statements).
(iv) A “Covered Product
or Service” shall mean a managed health care product or
service (A) offered or provided to any beneficiary of and/or
participant in any Medicare, Medicare-related, Medicaid,
Medicaid-related, or SSI program, any government-funded
children’s health insurance program or any federal and/or
state sponsored health care program that is substantial
