Exhibit 10.3

 
HEALTHWAYS, INC.

2007 STOCK INCENTIVE PLAN, AS AMENDED

RESTRICTED STOCK UNIT AWARD AGREEMENT

This RESTRICTED STOCK UNIT AWARD AGREEMENT (the "Agreement"), dated GRANT DATE,
is by and between Healthways, Inc., a Delaware corporation (the "Company"), and
PARTICIPANT NAME "Grantee"), under the Company's 2007 Stock Incentive Plan, as
amended (the "Plan").  Terms not otherwise defined herein shall have the
meanings given to them in the Plan.

Section 1. Restricted Stock Unit Award.  The Grantee is hereby granted NUMBER OF
SHARES restricted stock units (the "Restricted Stock Units").  Each Restricted
Stock Unit represents the right to receive one share of the Company's Common
Stock, $.001 par value (the "Stock"), subject to the terms and conditions of
this Agreement and the Plan.

Section 2. Vesting of the Award.  Except as otherwise provided in Section 3
below, the Restricted Stock Units will vest at such times (the "Vesting Date")
and in the percentages set forth below, as long as the Grantee is serving as an
employee of the Company on the Vesting Date.

Vesting Date
 
Award Percentage of Restricted Stock Units
One Year from Grant Date
Two Years from Grant Date
Three Years from Grant Date
Four Years from Grant Date
 
 
25%
25%
25%
25%

The Company shall issue one share of the Stock to the Grantee for each vested
Restricted Stock Unit (the “Distributed Shares”) at the time the Restricted
Stock Unit vests.  The Distributed Shares shall be represented by a certificate.

Section 3. Forfeiture on Termination of Employment.  If the Grantee ceases to be
employed by the Company for any reason, all Restricted Stock Units that have not
vested prior to the date of termination of Grantee's employment will be
forfeited and the Grantee shall have no further rights with respect to such
Restricted Stock Units; provided, however, that if the Grantee’s employment by
the Company terminates by reason of Retirement (as defined in the Plan), the
Restricted Stock Units granted hereunder shall not be forfeited and shall
continue vesting in accordance with Section 2, and provided further if the
Grantee’s employment by the Company terminates by reason of death or Disability
(as defined in the Plan), the Restricted Stock Units granted hereunder shall
immediately vest.

Section 4. Voting Rights and Dividends.  Prior to the Vesting Date, the Grantee
shall
 
 
 

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be credited with dividend equivalents with respect to the Restricted Stock
Units at the time of any payment of dividends to stockholders on shares of
Common Stock in accordance with the terms set forth in the Plan.  The Grantee
shall not have any voting rights with respect to the shares of Stock underlying
the Restricted Stock Units prior to the vesting of the Restricted Stock Units
and the issuance of the shares of Stock as set forth in Section 2.  A holder of
Distributed Shares shall have full dividend and voting rights as a holder of
Stock.

Section 5. Restrictions on Transfer.

5.1. General Restrictions.  The Restricted Stock Units shall not be transferable
by the Grantee (or his or her personal representative or estate) other than by
will or by the laws of descent and distribution.  The terms of this Agreement
shall be binding on the executors, administrators, heirs and successors of the
Grantee.

5.2. Change in Control.  All restrictions imposed on the Restricted Stock Units
shall expire automatically and the Restricted Stock United granted hereby shall
be deemed fully vested upon a Change in Control, as such term is defined in the
Plan, and the Company shall issue the shares of Stock underlying the Restricted
Stock Units.

Section 6. Restrictive Agreement.  As a condition to the receipt of any
Distributed Shares, the Grantee (or his or her legal representative or estate or
any third party transferee), if the Company so requests, will execute an
agreement in form satisfactory to the Company in which the Grantee or such other
recipient of the shares represents that he or she is purchasing the shares for
investment purposes, and not with a view to resale or distribution.

Section 7. Adjustment.  In the event of any merger, reorganization,
consolidation, recapitalization, extraordinary cash dividend, stock dividend,
stock split or other change in corporate structure affecting the Stock, the
number of Restricted Stock Units subject to this Agreement shall be equitably
and proportionately adjusted by the Committee in accordance with the Plan.

Section 8. Tax Withholding.  The Company shall withhold from any distribution of
Stock an amount of Stock equal to such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

Section 9. Governing Provisions.  This Agreement is made under and subject to
the provisions of the Plan, and all of the provisions of the Plan are also
provisions of this Agreement.  If there is a difference or conflict between the
provisions of this Agreement and the provisions of the Plan, the provisions of
the Plan will govern.  By signing this Agreement, the Grantee confirms that he
or she has received a copy of the Plan.

Section 10. Confidentiality, Non-Solicitation and Non-Compete.  It is in the
interest of all colleagues to protect and preserve the assets of the Company. In
this regard, in consideration for granting these Restricted Stock Units and as
conditions of Grantee’s ability to receive the Distributed Shares, Grantee
acknowledges and agrees that:

 
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(a) Confidentiality. In the course of Grantee's employment, Grantee will have
access to trade secrets and other confidential information of the Company and
its clients.  Accordingly, Grantee agrees that, without the prior written
consent of the Company, Grantee will not, other than in the normal conduct of
the Company's business affairs, divulge, furnish, publish or use for personal
benefit or for the direct or indirect benefit of any other person or business
entity, whether or not for monetary gain, any trade secrets or confidential or
proprietary information of the Company or its clients, including without
limitation, any information relating to any business methods, marketing and
business plans, financial data, systems, customers, suppliers, policies,
procedures, techniques or research developed for the benefit of the Company or
its clients.  Proprietary information includes, but is not limited to,
information developed by the Grantee for the Company while employed by the
Company.  The obligations of the Grantee under this paragraph will continue
after the Grantee has left the employment of the Company.  Grantee agrees that
upon leaving the employment of the Company, Grantee will return to the Company
all property and confidential information in the Grantee's possession and agrees
not to copy or otherwise record in any way such information.

(b) Non-Solicitation.  While employed by the Company and for a period of two
years thereafter, Grantee shall not, upon Grantee's own behalf or on behalf of
any other person or entity, directly or indirectly,

- hire or solicit to leave the employ of the Company any person employed by or
under contract as an independent contractor to the Company; or

- contact, solicit, entice away, or divert any healthcare and/or well-being
support services, coaching or management business from any person or entity who
is a client or with whom the Company was engaged in discussions as a potential
client within one year prior to the date of termination of Grantee.

(c) Non-Compete.  While employed by the Company and continuing during the period
while any amounts are being paid to Grantee and for a period of 18 months
thereafter, Grantee will not own or be employed by or assist anyone else in the
conduct of any business (i) which is in competition with any business conducted
by the Company or (ii) which Grantee knows the Company was actively evaluating
for possible entry, in either case in the United States or in any other
jurisdiction in which the Company is engaged in business or has been engaged in
business during Grantee’s employment by the Company, or in such jurisdictions
where Grantee knows the Company is actively pursuing business opportunities at
the time of Grantee’s termination of employment with the corporation; provided
that ownership of five percent (5%) or less of the voting stock or other
ownership interests of any business entity that is listed on a national
securities exchange shall not constitute a violation hereof.

In the event Grantee breaches any provisions of this Section 10, these
Restricted Stock Units shall immediately expire, and the Company shall be
entitled to seek other appropriate remedies it may have available to limit its
damages from such breach.

Section 11. Miscellaneous.

 
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11.1. Entire Agreement.  This Agreement and the Plan contain the entire
understanding and agreement between the Company and the Grantee concerning the
Restricted Stock Units granted hereby, and supersede any prior or
contemporaneous negotiations and understandings.  The Company and the Grantee
have made no promises, agreements, conditions, or understandings relating to the
Restricted Stock Units, either orally or in writing, that are not included in
this Agreement or the Plan.

11.2. Employment.  By establishing the Plan, granting awards under the Plan, and
entering into this Agreement, the Company does not give the Grantee any right to
continue to be employed by the Company or to be entitled to any remuneration or
benefits not set forth in this Agreement or the Plan.

11.3. Captions.  The captions and section numbers appearing in this Agreement
are inserted only as a matter of convenience.  They do not define, limit,
construe, or describe the scope or intent of the provisions of this Agreement.

11.4. Counterparts.  This Agreement may be executed in counterparts, each of
which when signed by the Company and the Grantee will be deemed an original and
all of which together will be deemed the same Agreement.

11.5. Notice.  Any notice or communication having to do with this Agreement must
be given by personal delivery or by certified mail, return receipt requested,
addressed, if to the Company, to the principal office of the Company and, if to
the Grantee, to the Grantee's address set forth below or any address of which
the Grantee subsequently notifies the Company.

To the Grantee:
PARTICIPANT NAME
(Grantee name and address)
Address on File at Healthways

11.6. Amendment.  Subject to the restrictions contained in the Plan, the
Committee may amend the terms of this Agreement, prospectively or retroactively,
but, subject to Section 7 above, no such amendment shall impair the rights of
the Grantee hereunder without the Grantee's consent.

11.7. Governing Law.  This Agreement shall be governed and construed exclusively
in accordance with the law of the State of Delaware applicable to agreements to
be performed in the State of Delaware to the extent it may apply.

11.8. Validity; Severability.  If, for any reason, any provision hereof shall be
determined to be invalid or unenforceable, the validity and effect of the other
provisions hereof shall not be affected thereby.  Whenever possible, each
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein.  If any court determines that any provision of Section 10 or any
 
 
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other provision hereof is unenforceable but has the power to reduce the scope or
duration of such provision, as the case may be, such provision, in its reduced
form, shall then be enforceable.

11.9. Successors in Interest.  This Agreement shall inure to the benefit of and
be binding upon any successor to the Company.  This Agreement shall inure to the
benefit of the Grantee’s legal representative and permitted assignees.  All
obligations imposed upon the Grantee and all rights granted to the Company under
this Agreement shall be binding upon the Grantee’s heirs, executors,
administrators, successors and assignees.

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IN WITNESS WHEREOF, the parties have caused the Restricted Stock Unit Agreement
to be duly executed as of the day and year first written above.

HEALTHWAYS, INC.

By:    /s/ Ben R. Leedle, Jr.

Name:           Ben R. Leedle, Jr.
Title:           Chief Executive Officer

GRANTEE: PARTICIPANT NAME

Online Grant Acceptance Satisfies
Signature Requirement

 

 
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