SXC HEALTH SOLUTIONS CORP.
PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD
AGREEMENT
SXC Health Solutions Corp., a corporation
existing under the laws of the Yukon Territory of Canada (the
“Company”), hereby grants
(the “Employee”) as of
,
the (“Grant Date”), pursuant to Section 7.2 of the
SXC Health Solutions Corp. Long-Term Incentive Plan (the
“Plan”), a performance-based restricted stock unit
award (the “Award”), upon and subject to the
restrictions, terms and conditions set forth below. Capitalized
terms not defined herein shall have the meanings specified in the
Plan.
1. Award Subject to Acceptance of
Agreement . The Award shall be null and void unless the
Employee shall accept this Agreement by executing it in the space
provided below and returning it to the Company.
2. Restriction Period and Vesting;
Performance Target . (a) Subject to Sections 2(b),
(d) and (e), and provided that (i) the Employee remains
continuously employed by the Company or any Affiliate of the
Company until December 31, 2011 (the “Performance Period
End Date”) and (ii) the Committee has certified that the
Company has achieved the minimum Performance Measure level for the
three fiscal years ending December 31, 2011 (the
“Performance Period,” and the date on which such
certification is made is referred to as the “Vesting
Date”), then that number of restricted stock units shall vest
on the Vesting Date as set forth in Schedule I. For purposes
of this Agreement, the three-year period ending December 31,
2011 (or earlier pursuant to Section 2(b) or (d) hereof) in
which the restricted stock units subject to the Award may be
subject to forfeiture is referred to as the “Restriction
Period.”
(b) Subject to Section 2(e), if the
Employee’s employment by the Company terminates prior to the
Performance Period End Date by reason of termination without cause
or termination by the Company due to permanent disability or death,
the Award shall vest based on the actual Performance Measure
achievement level of the Company to the effective date of the
Employee’s termination of employment or the date of death, as
the case may be, as described in Schedule I. For purposes of
this Agreement, (i) “permanent disability” shall mean
the inability of the Employee to substantially perform his or her
duties for a continuous period of at least six months as determined
by the Committee, and (ii) “cause” shall have the
meaning ascribed thereto in any written employment agreement
between the Company or any Affiliate of the Company and the
Employee and, in the absence of any such agreement, shall mean the
willful and continued failure to substantially perform the duties
assigned by the Company (other than a failure resulting from the
Employee’s disability), the willful engaging in conduct which
is demonstrably injurious to the Company or any Affiliate of the
Company, monetarily or otherwise, including conduct that, in the
reasonable judgment of the Company, no longer conforms to the
standard of the Company’s executives or employees, any act of
dishonesty, commission of a felony, or a significant violation of
any statutory or common law duty of loyalty to the
Company.
(c) Subject to Section 2(e), if the
Employee’s employment by the Company terminates for any
reason other than termination without cause, permanent disability
or death, the portion of the Award, if any, which is not vested as
of the effective date of the Employee’s termination of
employment shall be forfeited and cancelled by the
Company.
(d) (1) In the event of a Change in
Control (as defined in Appendix A), that number of restricted
stock units equal to the number of restricted stock units that
would vest upon achievement by the Company of the target
Performance Measure level for the Performance Period (the
“Target RSU Number”), as described further in
Schedule I, shall immediately vest in full.
(2) In the event of a Change in Control
pursuant to paragraph (3) or (4) of Appendix A, the
Board of Directors (as constituted prior to such Change in Control)
may, in its discretion (subject to existing contractual
arrangements):
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(i)
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require that shares of stock of the
corporation resulting from such Change in Control, or a parent
corporation thereof, be substituted for some or all of the Shares
(as defined in Section 3) issuable pursuant to the Award, as
determined by the Board of Directors; and/or
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(ii)
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require the Award, in whole or in
part, to be surrendered to the Company by the Employee and to be
immediately cancelled by the Company, and provide for the Employee
to receive a cash payment in an amount not less than the amount
determined by multiplying the Target RSU Number (but after giving
effect to any adjustment pursuant to Section 12.4 of the Plan
in respect of any transaction that gives rise to such Change in
Control) by the highest per share price offered to holders of
shares of the Company’s common stock, no par value per share
(the “Common Stock”), in any transaction whereby the
Change in Control takes place.
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(3) The Company may, but is not required
to, cooperate with the Employee if the Employee is subject to
Section 16 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), to assure that any cash payment
or substitution in accordance with the foregoing to the Employee is
made in compliance with Section 16 and the rules and
regulations thereunder.
(e) The vesting terms in any written
employment agreement between the Company or any Affiliate of the
Company and the Employee shall prevail over the terms of this
Agreement.
3. Conversion of Restricted Stock Units
and Issuance of Shares . Upon the vesting of all or any portion
of the Award in accordance with Section 2 hereof, one share of
the Common Stock shall be issuable for each restricted stock unit
that vests on such date (the “Shares”), subject to the
terms and provisions of the Plan and this Agreement, and not later
than 30 days thereafter, the Company will transfer such Shares
to the Employee upon satisfaction of any required tax withholding
obligations. No fractional shares shall be issued under this
Agreement.
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4. No Rights as a Shareholder; Dividend
Equivalents . Prior to the issuance and transfer of Shares upon
vesting, the Employee will be credited with amounts equal to any
cash dividends that would be payable to the Employee if the
Employee had been transferred such Shares, which amounts shall
accrue during the Restriction Period and be paid in cash upon lapse
of the Restriction Period. This Section 4 will not apply with
respect to record dates for dividends occurring prior to the Grant
Date or after the Restriction Period has lapsed. During the
Restriction Period, the Employee (and any person succeeding to the
Employee’s rights pursuant to the Plan) will not be a
shareholder of record of the Shares underlying the Award and will
have no voting or other shareholder rights with respect to such
Shares.
5. Termination of Award . In the
event that the Employee shall forfeit all or a portion of the
restricted stock units subject to the Award, the Employee shall
promptly return this Agreement to the Company for cancellation.
Such cancellation shall be effective regardless of whether the
Employee returns this Agreement.
6. Additional Terms and Conditions of
Award .
6.1 Nontransferability of Award . During
the Restriction Period, the restricted stock units subject to the
Award and not then vested may not be transferred by the Employee
other than by will, the laws of descent and distribution or
pursuant to Section 12.5 of the Plan on a beneficiary
designation form approved by the Company. Except as permitted by
the foregoing, during the Restriction Period, the restricted stock
units subject to the Award and not then vested may not be sold,
transferred, assigned, pledged, hypothecated, encumbered or
otherwise disposed of (whether by operation of law or otherwise) or
be subject to execution, attachment or similar process. Any such
attempted sale, transfer, assignment, pledge, hypothecation or
encumbrance, or other disposition of such shares shall be null and
void.
6.2. Withholding Taxes . As a condition
precedent to the delivery to the Employee of any of the Shares
subject to the Award, the Employee shall, upon request by the
Company, pay to the Company (or shall cause a broker-dealer on
behalf of the Employee to pay to the Company) such amount of cash
as the Company may be required, under all applicable federal,
state, local or other laws or regulations, to withhold and pay over
as income or other withholding taxes (the “Required Tax
Payments”) with respect to the Award. If the Employee shall
fail to advance the Required Tax Payments after request by the
Company, the Company may, in its discretion, deduct any Required
Tax Payments from any amount then or thereafter payable by the
Company to the Employee. The Employee may elect to satisfy his or
her obligation to advance the amount of any Required Tax Payments
incurred in connection with the issuance and transfer of the Shares
by any of the following means: (1) a cash payment to the
Company, (2) delivery (either actual delivery or by
attestation procedures established by the Company) to the Company
of Common Stock having an aggregate Fair Market Value, determined
as of the date the obligation to withhold or pay taxes arises in
connection with an award (the “Tax Date”), equal to the
amount necessary to satisfy any such obligation, (3) with the
consent of the Committee (other than for “officers” (as
defined in Rule 16a-1(f) promulgated under the Securities Exchange
Act of 1934, as amended) or Directors, with respect to whom the
consent of the Committee shall not be required), authorizing the
Company to withhold whole shares of Common Stock which would
otherwise be delivered having an aggregate Fair Market Value,
determined as of the Tax Date, or withhold an amount of cash which
would otherwise be payable to a holder, equal to the amount
necessary to satisfy any such obligation, or (4) any
combination of (1) and (2). Shares of Common Stock to be delivered
or withheld may not have an aggregate Fair Market Value in excess
of the amount determined by applying the minimum statutory
withholding rate.
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6.3. Compliance with Applicable Law . The
Award is subject to the condition that if the listing, registration
or qualification of the Shares subject to the Award upon any
securities exchange or under any law, or the consent or approval of
any governmen
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