Exhibit 10.3
MAGELLAN HEALTH SERVICES,
INC.
2008
MANAGEMENT INCENTIVE PLAN
RESTRICTED STOCK UNIT
AGREEMENT
REFERENCE NUMBER:
2008- MARCH 5, 2008 ( Name )
As of
MARCH 5, 2008
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)
2008 Management Incentive Plan and Defined Terms. The
Restricted Stock Unit Award is granted under and subject to the
terms of the 2008 Management Incentive Plan, as amended and
supplemented from time to time (the “ Plan ”),
which is incorporated herein by this reference. Unless
otherwise defined herein, capitalized terms used herein shall have
the meanings ascribed to them in 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
or 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 Grantee’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 is 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 (but not more than five business days) 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, and as determined to have occurred
in accordance with, Section 12 of the Plan 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 Stock Unit Awards 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 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 as
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defined in, and as determined to have occurred
in accordance with, Section 12 of the Plan 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(g) 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 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
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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 co
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