OPTION AWARD AGREEMENT UNDER THE EVOLENT HEALTH, INC. 2015 OMNIBUS INCENTIVE
COMPENSATION PLAN, dated as of , between EVOLENT HEALTH, INC., a Delaware
corporation (the “Company”), and .
This Option Award Agreement (the “Award Agreement”) sets forth the terms and
conditions of an award of options to purchase shares (this “Award”) of the
Company’s Class A Common Stock, $0.01 par value per share (each, a “Share”),
that are being granted to you on the date hereof (such date, the “Grant Date”),
at an exercise price of $10.27 per Share (the “Exercise Price”), that are
subject to the terms and conditions specified herein (each such option to
purchase one Share, an “Option”), and that are granted to you under the Evolent
Health, Inc. 2015 Omnibus Incentive Compensation Plan (the “Plan”). The Options
are not intended to qualify as “incentive stock options” (within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended).
THIS AWARD IS SUBJECT TO ALL TERMS AND CONDITIONS OF THE PLAN AND THIS AWARD
AGREEMENT, INCLUDING THE DISPUTE RESOLUTION PROVISIONS SET FORTH IN SECTION 10
OF THIS AWARD AGREEMENT. BY SIGNING YOUR NAME BELOW, YOU SHALL HAVE CONFIRMED
YOUR ACCEPTANCE OF THE TERMS AND CONDITIONS OF THIS AWARD AGREEMENT.
SECTION 1. The Plan. This Award is made pursuant to the Plan, all the terms of
which are hereby incorporated in this Award Agreement. In the event of any
conflict between the terms of the Plan and the terms of this Award Agreement,
the terms of the Plan shall govern.

SECTION 2. Definitions. Capitalized terms used in this Award Agreement that are
not defined in this Award Agreement have the meanings as used or defined in the
Plan. As used in this Award Agreement, the following terms have the meanings set
forth below:
        
“Business Day” means a day that is not a Saturday, a Sunday or a day on which
banking institutions are legally permitted to be closed in the City of New York.

“Good Reason” means the occurrence, without your written consent, of any of the
events or circumstances set forth in clauses (a) through (d) below:

(a) a material reduction in your annual base salary or target bonus opportunity
as the same may be increased from time to time;

(b) your assignment to duties inconsistent in any material respect with your
position, authority or responsibilities with the Company, or any other action or
omission by the Company which results in a material diminution of such position,
authority or responsibilities;

(c) a relocation of your principal work location by more than 50 miles from such
location as of immediately prior to the Change of Control; or

(d) any material breach of this Award Agreement by the Company.

Good Reason shall not exist unless you give the Company notice of the event
giving rise to Good Reason within 60 days of the date you have knowledge of such
event. Such notice shall specifically delineate such claimed breach and shall
inform the Company that it is required to cure such breach (if curable) within
90 days (the “Cure Period”) after such notice is given in accordance with
Section 12 of this Award Agreement. If such breach is not so cured (or is not
curable), you may resign for Good Reason within three months following the end
of the Cure Period. If such breach is cured within the Cure Period or if such
breach is not cured but you do not resign for Good Reason within three months
following the end of the Cure Period, Good Reason shall not exist hereunder.

“Performance Hurdle” has the meaning set forth on Exhibit A hereto.

“Option Tranche” has the meaning set forth on Exhibit A hereto.

“Service Completion Date” means each of the dates specified in the chart in
Section 3(a) of this Award Agreement on which the service requirement ends with
respect to the portion of Options specified in such chart.

“Vesting Date” means, with respect to each Option Tranche, the later of the
applicable Service Completion Date and the date on which the applicable
Performance Hurdle is satisfied with respect to such Option Tranche.

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SECTION 3. Vesting and Exercise.

(a) Vesting Schedule. On each Service Completion Date set forth below, the
service requirements with respect to the number of Options that corresponds to
such Service Completion Date as specified in the chart below shall lapse,
provided that the Options shall remain subject to the achievement of the
applicable Performance Hurdle if not previously satisfied. Accordingly, except
(i) if the Committee in its sole discretion determines to accelerate the vesting
of any Options or (ii) as set forth in Section 3 of this Award Agreement, the
vesting of the Options is contingent on (A) your employment by the Company or an
Affiliate on the applicable Service Completion Date and (B) achievement of the
applicable Performance Hurdle. For the avoidance of doubt, each Option Tranche
for which the applicable Performance Hurdle is met as of each Service Completion
Date shall vest and become exercisable as to 50% of the Options corresponding to
such Option Tranche on each such date, provided you are employed by the Company
or an Affiliate on the applicable Service Completion Date (or as otherwise set
forth in this Award Agreement).

Service Completion Date
Aggregate Percentage of Options Eligible to Vest
Aggregate Number of Options Eligible to Vest
Third anniversary of grant date
50%
 
Fourth anniversary of grant date
100%
 

(b) Exercise of Options. Options, to the extent that they are vested, may be
exercised, in whole or in part (but for the purchase of whole Shares only), by
delivery to the Company of (i) written or electronic notice, complying with the
applicable procedures established by the Committee or the Company, stating the
number of Options that are thereby exercised, and (ii) full payment, in
accordance with Section 6(b) of the Plan, of the aggregate Exercise Price for
the Shares with respect to which the Options are thereby exercised. The notice
shall be signed by you or any other person then entitled to exercise the
Options. Upon exercise and full payment of the aggregate Exercise Price for
Shares with respect to which the Options are thereby exercised, subject to
Section 7(a) of this Award Agreement, the Company shall issue to you or your
legal representative (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company, the delivery of
share certificates or as otherwise determined by the Company) one Share for each
Option you have exercised. Notwithstanding the foregoing, to the extent that
they are vested, you will also be permitted to exercise Options through a
“cashless exercise” by having the Company withhold from the number of Shares you
would otherwise be entitled to receive upon exercise of the Options a number of
Shares having a Fair Market Value (determined as of the date of exercise) equal
to the aggregate Exercise Price with respect to the Options being exercised, in
which case, subject to Section 7(1) of this Award Agreement, the Company shall
issue to you or your legal representative (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company, the delivery of share certification or as otherwise determined by the
Company) a net number of Shares net of such aggregate Exercise Price.
 
(c) Change of Control. Except as explicitly set forth in this Section 3(c), in
the event of a Change of Control prior to the final Vesting Date, all unvested
Options shall be treated in accordance with Section 8 of the Plan.
Notwithstanding the foregoing or the provisions of Section 8 of the Plan, if,
within 12 months following a Change of Control, your employment is terminated by
the Company without Cause or by you for Good Reason, any outstanding Options
that are unexercisable or otherwise unvested shall automatically be deemed
vested and exercisable, as of the date of such termination. For the avoidance of
doubt, the Performance Hurdle shall be deemed achieved for all outstanding
Options that are unexercisable or otherwise unvested as of the date of such
termination.

SECTION 4. Forfeiture of Options.

(a) Notwithstanding the foregoing, unless the Committee determines otherwise,
and except as otherwise provided in Section 3 of this Award Agreement, if the
Vesting Date with respect to any Options awarded to you pursuant to this Award
Agreement has not occurred prior to the earlier to occur of (i) the date on
which your employment with the Company or any of its Subsidiaries terminates for
any reason and (ii) the date on which you breach any restrictive covenant
contained in any arrangements with the Company (including this Award Agreement)
to which you are subject, such Options shall be immediately forfeited, and you
shall be entitled to no further payments or benefits

    

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with respect thereto. Furthermore, any Options awarded pursuant to this Award
Agreement and any Shares issued to you upon exercise of such Options shall be
subject to any recoupment or clawback policy the Company maintains, as in effect
from time to time.

(b) Notwithstanding the foregoing, unless the Committee determines otherwise,
vested and unexercised Options shall automatically expire on the earliest to
occur of (i) the date of the termination of your employment by the Company for
Cause, (ii) if your employment is terminated either by the Company without Cause
or by you for any reason, three months from the date of such termination, (iii)
if your employment is terminated as a result of death or disability (as
determined by the Company in its sole discretion), one year from the date of
such termination and (iv) the tenth anniversary of the Grant Date.

SECTION 5. No Rights as a Stockholder. You shall not have any rights or
privileges of a stockholder with respect to the Options subject to this Award
Agreement unless and until certificates representing such Shares are actually
issued to you or your legal representative or an entry is recorded in the books
of the Company (or, as applicable, its transfer agent or stock plan
administrator) upon exercise of vested Options.

SECTION 6. Non-Transferability of Options. Unless otherwise provided by the
Committee in its discretion, Options may not be sold, assigned, alienated,
transferred, pledged, attached or otherwise encumbered except as provided in
Section 9(a) of the Plan. Any purported sale, assignment, alienation, transfer,
pledge, attachment or other encumbrance of an Option in violation of the
provisions of this Section 6 and Section 9(a) of the Plan shall be void.

SECTION 7. Withholding, Consents and Legends.

(a) Withholding. The delivery of Shares pursuant to Section 3(b) of this Award
Agreement is conditioned on satisfaction of any applicable withholding taxes in
accordance with this Section 7(a) and Section 9(d) of the Plan. No later than
the date as of which an amount first becomes includible in your gross income for
Federal, state, local or foreign income tax purposes with respect to the
exercise of any Options, you shall pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any Federal, state, local
and foreign taxes that are required by applicable laws and regulations to be
withheld with respect to such amount. In the event that there is withholding tax
liability in connection with the exercise of an Option, you may satisfy, in
whole or in part, any withholding tax liability by having the Company withhold
from the number of Shares you would be entitled to receive upon exercise of the
Option a number of Shares having a Fair Market Value (which shall either have
the meaning set forth in the Plan or shall have such other meaning as determined
by the Company in accordance with applicable withholding requirements) equal to
such withholding tax liability.

(b) Consents. Your rights in respect of the Options are conditioned on the
receipt to the full satisfaction of the Committee of any required consents that
the Committee may determine to be necessary or advisable (including your consent
to the Company’s supplying to any third-party recordkeeper of the Plan such
personal information as the Committee deems advisable to administer the Plan).

(c) Legends. The Company may affix to certificates for Shares issued pursuant to
this Award Agreement any legend that the Committee determines to be necessary or
advisable (including to reflect any restrictions to which you may be subject
under any applicable securities laws). The Company may advise the transfer agent
to place a stop order against any legended Shares.

SECTION 8. Successors and Assigns of the Company. The terms and conditions of
this Award Agreement shall be binding upon and shall inure to the benefit of the
Company and its successors and assigns.

SECTION 9. Committee Discretion. The Committee shall have full and plenary
discretion with respect to any actions to be taken or determinations to be made
in connection with this Award Agreement, and its determinations shall be final,
binding and conclusive.

SECTION 10. Dispute Resolution.

(a) Jurisdiction and Venue. You and the Company irrevocably submit to the
exclusive jurisdiction of (i) the United States District Court for the Eastern
District of Virginia and (ii) the courts of the State of Virginia for the
purposes of any suit, action or other proceeding arising out of this Award
Agreement or the Plan. You and the Company agree to commence any such action,
suit or proceeding either in the United States District Court for the Eastern
District of Virginia or, if such suit, action or other proceeding may not be
brought in such court for jurisdictional reasons, in the

    

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courts of the State of Virginia. You and the Company further agree that service
of any process, summons, notice or document by U.S. registered mail to the other
party’s address set forth below shall be effective service of process for any
action, suit or proceeding in Virginia with respect to any matters to which you
have submitted to jurisdiction in this Section 10(a). You and the Company
irrevocably and unconditionally waive any objection to the laying of venue of
any action, suit or proceeding arising out of this Award Agreement or the Plan
in (A) the United States District Court for the Eastern District of Virginia or
(B) the courts of the State of Virginia, and hereby and thereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.

(b) Waiver of Jury Trial. You and the Company hereby waive, to the fullest
extent permitted by applicable law, any right either of you may have to a trial
by jury in respect to any litigation directly or indirectly arising out of,
under or in connection with this Award Agreement or the Plan.

(c) Confidentiality. You hereby agree to keep confidential the existence of, and
any information concerning, a dispute described in this Section 10, except that
you may disclose information concerning such dispute to the court that is
considering such dispute or to your legal counsel (provided that such counsel
agrees not to disclose any such information other than as necessary to the
prosecution or defense of the dispute).

SECTION 11. Restrictive Covenants.

In consideration of the grant of the Options under this Award Agreement and as a
condition to the receipt of the Options pursuant to this Award Agreement, you
agree that:

(a) Confidential Information.

(i) You acknowledge that the Company and its Affiliates continually develop
Confidential Information (as defined below), that you may develop Confidential
Information for the Company or its Affiliates and that the you may learn of
Confidential Information during the course of your employment. You will comply
with the policies and procedures of the Company and its Affiliates for
protecting Confidential Information and shall not disclose to any person or use,
other than as required by applicable law or for the proper performance of your
duties and responsibilities to the Company and its Affiliates, any Confidential
Information obtained by the you incident to your employment or other association
with the Company or any of its Affiliates. You understand that this restriction
shall continue to apply after your employment terminates, regardless of the
reason for such termination. The confidentiality obligation under this Section
11 shall not apply to information which is generally known or readily available
to the public at the time of disclosure or becomes generally known through no
wrongful act on the part of you or any other person having an obligation of
confidentiality to the Company or any of its Affiliates or is required to be
disclosed in order to enforce this Agreement.

(ii) All documents, records, tapes and other media of every kind and description
relating to the business, present or otherwise, of the Company or its Affiliates
and any copies, in whole or in part, thereof (the “Documents”), whether or not
prepared by the you, shall be the sole and exclusive property of the Company and
its Affiliates. You shall safeguard all Documents and shall surrender to the
Company at the time his or her employment terminates, or at such earlier time or
times as the Board or its designee may specify, all Documents then in your
possession or control.
    
(iii) “Confidential Information” means any and all information of the Company
and its Affiliates that is not generally known by those with whom the Company or
any of its Affiliates competes or does business, or with whom the Company or any
of its Affiliates plans to compete or do business and any and all information,
publicly known in whole or in part or not, which, if disclosed by the Company or
any of its Affiliates would assist in competition against them. Confidential
Information includes without limitation such information relating to (A) the
development, research, testing, manufacturing, marketing and financial
activities of the Company and its Affiliates, (B) the products and services of
the Company and its Affiliates, (C) the costs, sources of supply, financial
performance and strategic plans of the Company and its Affiliates, (D) the
identity and special needs of the customers of the Company and its Affiliates
and (E) the people and organizations with whom the Company and its Affiliates
have business relationships and the nature and substance of those relationships.
Confidential Information also includes any information that the Company or any
of its Affiliates has received, or may receive hereafter, belonging to customers
or others with any understanding, express or implied, that the information would
not be disclosed.

    

    

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(b) Non-Competition and Non-Solicitation.

(i) You agree and acknowledge that the business (the “Business”) of the Company
is any business activity engaged in, or actively contemplated by the Company (or
any Subsidiary) to be engaged in, by the Company (or any Subsidiary) and with
which you are or were involved on or prior to the your date of termination.

(ii) You agree that, except as the Company expressly agrees in writing, during
your employment with the Company and for the 12-month period following
termination of your employment for any reason, you shall not within the
Territory (defined below), directly or indirectly, as an owner, partner,
affiliate, stockholder, joint venturer, director, employee, consultant,
contractor, principal, trustee or licensor, or in any other similar capacity
whatsoever of or for any person or entity (other than for the Company):
        
(A) engage in, own, manage, operate, sell, finance, control, advise or
participate in the ownership, management, operation, sales, finance or control
of, be employed or employed by, or be connected in any manner with, any business
that competes with (1) the Business or (2) if you have provided services
directly to any health maintenance organization, health insurance company or
similar health insurance plan, owned or operated by a customer of the Company,
during the twelve-month period preceding the termination of your employment with
the Company, such customer (each, a “Competitor”). Notwithstanding this Section
11(b)(ii)(A), you may accept employment with a Competitor whose business is
diversified, provided that (I) such employment is with a portion of the
Competitor’s business that does not provide products or services that are the
same as, are similar to, or compete with the Company’s products or services
(“Competing Products or Services”) and (II) prior to your acceptance of such
employment with Competitor, the Company receives separate written assurances
satisfactory to the Company from such Competitor and from you that you will not
provide any Competing Products or Services;

(B) approach, solicit, divert, interfere with, or take away, the business or
patronage of any of the actual or prospective members, customers, or clients of
the Company, for a purpose that is competitive with the Business; or

(C) contact, recruit, solicit, hire, retain, or employ (whether as an employee,
consultant, agent, independent contractor, or otherwise) any person who is, or
who at any time during the 6-month period prior to your date of termination had
been, employed or engaged by the Company, or induce or take any action which is
intended to induce any such person to terminate his or her employment or
relationship, or otherwise cease his or her relationship, with the Company, or
interfere in any manner with the contractual or employment relationship between
the Company and any employee of or any other person engaged by the Company.

“Territory” shall mean the United States of America and any other country with
respect to which you have been involved on behalf of the Company.

(iii) Notwithstanding anything to the contrary in Section 11(b)(ii) of this
Award Agreement, you are permitted to own, individually, as a passive investor
(with no director designation rights, voting rights or veto rights or other
special governance or voting rights), up to a one percent (1%) interest in any
publicly traded entity that is a Competitor.

(iv) You shall disclose in writing all of your relationships as a director,
employee, consultant, contractor, principal, trustee, licensor, agent, or
otherwise, with a Competitor or other business entity, to the Company for the
12-month period after your date of termination. You shall not disparage the
Company or any of its officers, directors, or employees; provided, however, that
this Section 11(b)(iv) shall not prohibit or constrain truthful testimony by you
compelled by any valid legal process or valid legal dispute resolution process.
Notwithstanding anything herein to the contrary, nothing in this Section 11
shall prevent either party hereto from enforcing such party’s rights or remedies
hereunder or that such party may otherwise be entitled to enforce or assert
under any other agreement or applicable law, or shall limit such rights or
remedies in any way.

(v) During the 12-month period following your date of termination, you shall
notify in writing any prospective new employer or entity otherwise seeking to
engage you that the provisions of this Section 11 exist prior to accepting
employment or such other engagement.

(c) The terms of this Section 11 are reasonable and necessary in light of your
position with the Company and responsibility and knowledge of the operations of
the Company and its Subsidiaries and are not more restrictive than necessary to
protect the legitimate interests of the parties hereto. In addition, any breach
of the covenants contained

    

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in this Section 11 would cause irreparable harm to the Company, its Subsidiaries
and Affiliates and there would be no adequate remedy at law or in damages to
compensate the Company, its Subsidiaries and Affiliates for any such breach.
Notwithstanding the foregoing, this Award Agreement is not intended to, and
shall be interpreted in a manner that does not, limit or restrict you from
exercising any legally protected whistleblower rights (including pursuant to
Rule 21F under the Securities Exchange Act of 1934).

SECTION 12. Notice. All notices, requests, demands and other communications
required or permitted to be given under the terms of this Award Agreement shall
be in writing and shall be deemed to have been duly given when delivered by hand
or overnight courier or three Business Days after they have been mailed by U.S.
certified or registered mail, return receipt requested, postage prepaid,
addressed to the other party as set forth below:

If to the Company:
Evolent Health, Inc.
800 N. Glebe Road, Suite 500
Arlington, VA 22203
Attention: General Counsel

 
 
If to you:
To your address as most recently supplied to the Company and set forth in the
Company’s records

The parties may change the address to which notices under this Award Agreement
shall be sent by providing written notice to the other in the manner specified
above.
    
SECTION 13. Governing Law. This Award Agreement shall be deemed to be made in
the State of Delaware, and the validity, construction and effect of this Award
Agreement in all respects shall be determined in accordance with the laws of the
State of Delaware, without giving effect to the conflict of law principles
thereof.
    
SECTION 14. Headings and Construction. Headings are given to the Sections and
subsections of this Award Agreement solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material or relevant to
the construction or interpretation of this Award Agreement or any provision
thereof. Whenever the words “include”, “includes” or “including” are used in
this Award Agreement, they shall be deemed to be followed by the words “but not
limited to”. The term “or” is not exclusive.

SECTION 15. Amendment of this Award Agreement. The Committee may waive any
conditions or rights under, amend any terms of, or alter, suspend, discontinue,
cancel or terminate this Award Agreement prospectively or retroactively;
provided, however, that any such waiver, amendment, alteration, suspension,
discontinuance, cancelation or termination that would impair your rights under
this Award Agreement shall not to that extent be effective without your consent
(it being understood, notwithstanding the foregoing proviso, that this Award
Agreement and the Options shall be subject to the provisions of Section 7(c) of
the Plan).

SECTION 16. Counterparts. This Award Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. You and the Company hereby
acknowledge and agree that signatures delivered by facsimile or electronic means
(including by “pdf”) shall be deemed effective for all purposes.

SECTION 17.    

    

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EXHIBIT A

Performance Hurdle
The “Performance Hurdle” with respect to one-third of the Options subject to
this Award Agreement shall be achieved if, at any time prior to the tenth
anniversary of the Grant Date, the average closing Share price (as reported on
the Applicable Exchange) for each trading day during any 90- calendar day period
equals or exceeds the corresponding Share price set forth in the chart below.
For the avoidance of doubt, if, during any period of 90 consecutive calendar
days prior to March 1, 2026, (i) the average closing Share price is at least
$13.35, the Performance Hurdle will be deemed to have been achieved with respect
to one-third of the Options (“Option Tranche 1”), (ii) the average closing Share
price is at least $16.43, the Performance Hurdle will be deemed to have been
achieved with respect to an additional one-third of the Options (“Option Tranche
2”) and (iii) the average closing Share price is at least $19.51, the
Performance Hurdle will be deemed to have been achieved with respect to the
final one-third of the Options (“Option Tranche 3” and, together with Option
Tranche 1 and Option Tranche 2, the “Option Tranches”).
Option Tranche
Trailing 90-Day Average Closing Price
Number of Options
Option Tranche 1
$13.35
one-third
Option Tranche 2
$16.43
one-third
Option Tranche 3
$19.51
one-third

  

    

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