Exhibit 10.32

 

WELLCHOICE, INC.

2003 OMNIBUS INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

(FOR NON-EMPLOYEE BOARD MEMBER)

REFERENCE NUMBER: 00000000

 

SECTION 1. GRANT OF RESTRICTED STOCK UNIT AWARD.

 

(a) Restricted Stock Unit Award. On the terms and conditions set forth in this
Agreement and each Notice of Restricted Stock Unit Award referencing this
Agreement (the “Notice”), the Company hereby grants the Grantee the right to
receive on a date designated by the Grantee which is on or after the Settlement
Date the number of shares of common stock, par value $.01, of the Company
(“Common Stock”) equal to the number of units (the “Units”) awarded to the
Grantee, as set forth in the Notice. Each such Notice, together with this
referenced Agreement, shall be a separate Restricted Stock Unit Award governed
by the terms of this Agreement.

 

(b) Dividend Equivalents. If the Notice so provides, prior to the Settlement
Date, on the date (if any) that the Company pays any ordinary or special
dividends with respect to the Common Stock, the Company shall credit the Grantee
with a number of Units whose underlying shares have a Fair Market Value equal to
the dividend paid on each share of Common Stock, multiplied by the Total Number
of Units Subject to Award described in the Notice. Units issued in respect of
dividend equivalents shall be subject to the same rules and restrictions as
Units originally subject to the award.

 

(c) Plan and Defined Terms. This award is granted under and subject to the terms
of the Plan, which is incorporated herein by this reference. Unless otherwise
defined in Section 6 of this Agreement, capitalized terms shall have the
meanings ascribed to them in the Plan.

 

SECTION 2. ISSUANCE OF SHARES.

 

(a) Stock Certificates. Subject to the terms of the Notice and any deferral
election made by the Grantee, on or promptly following the Settlement Date, the
Company shall cause to be issued a certificate or certificates for the shares of
Common Stock representing this award, registered in the name of the Grantee (or
in the names of such person and his or her spouse as joint tenants with right of
survivorship).

 

(b) Stockholder Rights. Until such time as the Grantee receives the stock
certificate for the shares representing this award, the Grantee (or any
successor in interest) shall have no rights as a stockholder (including, without
limitation, no voting, dividend and liquidation rights) with respect to the
shares of Common Stock.

 

(c) Share Withhold Election. Upon or prior to receipt of shares of Common Stock,
the Grantee may make a written election to have shares of Common Stock withheld
by the Company from the shares otherwise to be received to cover Taxes incurred
by reason of the issuance of the shares under this Agreement and the Notice. The
number of shares so withheld shall have an

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aggregate Fair Market Value on the date of issuance sufficient to satisfy the
applicable Taxes. The acceptance of any such election by the Grantee shall be at
the sole discretion of the Committee. Such Taxes shall be calculated at minimum
statutory withholding rates.

 

SECTION 3. TRANSFER OR ASSIGNMENT OF RESTRICTED STOCK UNIT AWARD OR SHARES
ISSUED IN SETTLEMENT OF THIS AWARD.

 

(a) Generally. Except as otherwise provided in subsection (c) below, this award
and the rights and privileges conferred hereby shall not be sold, pledged or
otherwise transferred (whether by operation of law or otherwise) other than by
will or the laws of descent and distribution and shall not be subject to sale
under execution, attachment, levy or similar process.

 

(b) Transfer of Shares. Except as otherwise expressly permitted by the
Committee, the Grantee shall not Transfer (other than a Permitted Transfer as
described in subsection (c) below) any shares of Common Stock issued in
settlement of this award while the Grantee remains in Service with the Company,
except for a sale of only that number of shares necessary to generate sufficient
proceeds to pay taxes on income recognized by the Grantee upon the issuance of
shares issued in settlement of this award.

 

(c) Permitted Transfers. Subject to the approval of the Committee in its sole
discretion, the Grantee may transfer this award (other than those Units issued
under the Grantee’s initial Notice of Restricted Stock Unit Award and the shares
issued in settlement of such Units) in connection with his or her estate plan,
to the Grantee’s spouse, siblings, parents, children and grandchildren or trusts
for the benefit of such persons or partnerships, corporations, limited liability
companies or other entities owned solely by such persons, including trusts for
such persons. In connection with any such Permitted Transfer, the Transferee
shall execute and be bound by such terms and conditions as the Committee shall
require.

 

SECTION 4. ADJUSTMENT OF SHARES OF COMMON STOCK.

 

(a) Adjustment Generally. If there shall be any change in the Common Stock of
the Company, through merger, consolidation, reorganization, recapitalization,
stock dividend, stock split, reverse stock split, split up, spin-off,
combination of shares of Common Stock, exchange of shares of Common Stock,
dividend in kind or other like change in capital structure or distribution
(other than normal cash dividends) to stockholders of the Company, an adjustment
shall be made to this award so that upon the Settlement Date, the Grantee shall
receive on the Settlement Date such securities, cash and/or other property as
would have been received had the Grantee held a number of shares of Common Stock
equal to the number of Units held by the Grantee pursuant to this award
immediately prior to such change or distribution, and such an adjustment shall
be made successively each time any such change shall occur.

 

(b) Modification of Award. In the event of any change or distribution described
in subsection (a) above, in order to prevent dilution or enlargement of the
Grantee’s rights hereunder, the Committee may adjust, in an equitable manner,
the number and kind of shares of Common Stock that may be issued under this
award and other value determinations applicable to this award.

 

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SECTION 5. MISCELLANEOUS PROVISIONS.

 

(a) Tenure. Nothing in the Notice, Agreement or Plan shall confer upon the
Grantee any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Company (or
any Parent Corporation or Subsidiary Corporation retaining the Grantee) or of
the Grantee, which rights are hereby expressly reserved by each, to terminate
his or her Service at any time and for any reason, with or without cause.

 

(b) Notification. Any notification required by the terms of this Agreement shall
be given in writing and shall be deemed effective upon personal delivery or upon
deposit with the United States Postal Service, by registered or certified mail,
with postage and fees prepaid. Communications to the Company shall be addressed
to the Company at its principal executive office and to the Grantee at the
address that he or she most recently provided to the Company.

 

(c) Entire Agreement. This Agreement, the Notice and the Plan constitute the
entire contract between the parties hereto with regard to the subject matter
hereof. They supersede any other agreements, representations or understandings
(whether oral or written and whether express or implied) which relate to the
subject matter hereof.

 

(d) Amendment. This Agreement may be amended by the Company at any time upon
written notice to the Grantee, provided, however, that no such amendment shall
adversely affect the rights of the Grantee hereunder without the Grantee’s
consent.

 

(e) Waiver. The failure of the Company in any instance to exercise any rights
under this Agreement or any other agreement between the Company and the Grantee
shall not be deemed a waiver of such rights. No waiver of any breach or
condition of this Agreement shall be deemed to be a waiver of any other or
subsequent breach or condition whether of like or different nature.

 

(f) Grantee Undertaking. The Grantee agrees to take whatever additional action
and execute whatever additional documents the Company may deem necessary or
advisable in order to carry out or effect one or more of the obligations or
restrictions imposed on either the Grantee or the shares of Common Stock to be
issued in settlement of this award.

 

(g) Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Company and its successors and assigns and
upon the Grantee, the Grantee’s assigns and the legal representatives, heirs and
legatees of the Grantee’s estate, whether or not any such person shall have
become a party to this Agreement and have agreed in writing to be joined herein
and be bound by the terms hereof.

 

(h) Choice of Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, as such laws are applied to
contracts entered into and performed in such State.

 

SECTION 6. DEFINITIONS.

 

(a) “Agreement” shall mean this Restricted Stock Unit Award Agreement.

 

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(b) “Board of Directors” shall mean the Board of Directors of the Company, as
constituted from time to time.

 

(c) “Cause” shall mean with respect to the Grantee:

 

(i) any conviction or plea of guilty or nolo contendere to a felony,

 

(ii) any fraud, theft or other willful misconduct,

 

(iii) any willful breach of any material written policy of the Company which
results or reasonably could be expected to result in any material liability,
loss or damages to the Company, or

 

(iv) any willful breach of any confidential or proprietary information,
non-compete or non-solicitation covenant for the benefit of the Company or any
of its affiliates.

 

Upon the occurrence of any event described in clauses (ii) or (iii) above, the
Company shall provide the Grantee with written notice that Cause exists within a
reasonable period of time not to exceed one (1) calendar month after the event
giving rise to Cause exists. Upon receipt of such notice, the Grantee shall have
an opportunity to meet and discuss with the Board whether Cause exists.

 

(d) “Common Stock” shall have the meaning described in Section 1(a) of this
Agreement.

 

(e) “Company” shall mean WellChoice, Inc., a Delaware corporation, and any
successor thereto.

 

(f) “Director” shall mean a member of the Board of Directors who is not an
Employee.

 

(g) “Disability” shall mean the Grantee is unable to engage in any substantial
gainful activity by reason of any medically determined physical or mental
impairment as determined by the Committee in its sole discretion.

 

(h) “Employee” shall mean any individual who is an employee of the Company, a
Parent Corporation or a Subsidiary Corporation.

 

(i) “Grantee” shall mean the person named in the Notice.

 

(j) “Notice” shall have the meaning described in Section 1(a) of this Agreement.

 

(k) “Permitted Transfers” shall have the meaning described in Section 3(c) of
this Agreement.

 

(l) “Plan” shall mean WellChoice, Inc. 2003 Omnibus Incentive Plan, as amended
from time to time.

 

(m) “Retirement” shall mean the date the Grantee ceases to be a director after
not standing for election following the Grantee’s attainment of age 72.

 

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(n) “Service” shall mean service as a Director.

 

(o) “Settlement Date” shall have the meaning set forth in the Notice.

 

(p) “Transferee” shall mean any person to whom the Grantee has directly or
indirectly transferred any shares of Common Stock.

 

(q) “Unit” shall have the meaning described in Section 1(a) of this Agreement.

 

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GRANT NO.                     

 

WELLCHOICE, INC.

2003 OMNIBUS INCENTIVE PLAN

NOTICE OF RESTRICTED STOCK UNIT AWARD

(FOR INITIAL GRANT TO NON-EMPLOYEE BOARD MEMBER)

 

Name of Grantee:

  

                                          (“Grantee”)

Date of Grant:

  

______________

Type of Award:

   Units, to be settled in shares of common stock, par value $.01 per share
(“Common Stock”), of WellChoice, Inc. (the “Company”), and Dividend Equivalents,
to be “re-invested” in Units which shall also be settled in shares of Common
Stock.

Total Number of Units

Subject to Award:

   X Units, where each Unit represents one hypothetical share of Common Stock.

Vesting Date:

   The Grantee will be 100% vested in the Units and Dividend Equivalents that
are subject to this award on                      (the “Vesting Date”), provided
the Grantee’s Service as a Director has not terminated (other than due to the
Grantee’s Retirement) prior to that date; provided, however, that the Committee
may elect, in its sole discretion, to permit the Units to continue to vest after
Grantee’s Service terminates.

Settlement of Award:

   Unless the Grantee shall have delivered to the Company prior to the Date of
Grant a duly executed deferral election notice substantially in the form
attached hereto as Appendix A to defer settlement of this award to a later date
or dates (the “Deferral Date”), shares of Common Stock in settlement of this
award shall be delivered on the Vesting Date (such date, the “Settlement Date”).

Acceleration of Award:

  

This award shall be settled prior to the Settlement Date (or if applicable the
Deferral Date) and become fully vested as follows:

 

•        Change in Control: If following a Change in Control, the Grantee ceases
to be a director of the surviving company, this award shall be settled on the
date board service ends, unless the Grantee shall have made a separate Change in
Control deferral election in the manner described for deferrals above, in which
case this award shall be settled in accordance with such election;

 

•        Death/Disability: If the Grantee ceases to be a Director of the Company
due to death or Disability, but if such date should occur less than one year
after the Date of Grant, this award shall be settled on the anniversary of the
Date of Grant;

 

•        Committee Discretion: If the Committee, in its sole discretion, elects
to accelerate settlement of this award.

Dividend Equivalents:

   Prior to the settlement of this award, the Grantee shall be eligible to
receive for each Unit that is the subject to this award, additional Units the
number of which shall equal the Fair Market Value equal to the value of any
regular or special dividends paid on the shares of Common Stock.

Transfer Restrictions:

   The Units and the shares of Common Stock issued in settlement of this award
are subject to the transfer restrictions as described in the Restricted Stock
Unit Award Agreement, referenced below.

 

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By indicating your acceptance below, you accept this award and acknowledge that
this award is granted under and governed by the terms and conditions of
WellChoice, Inc. 2003 Omnibus Incentive Plan (“Plan”) and the Restricted Stock
Unit Award Agreement reference number DU000000 (“Agreement”), both of which are
hereby made a part of this document. Capitalized terms used but not defined in
this Notice of Restricted Stock Unit Award shall have the meanings ascribed to
them in the Plan and Agreement.

 

GRANTEE:   WELLCHOICE, INC.    

Name:

 

Michael A. Stocker, M.D.

   

Title:

 

President and Chief Executive Officer

 

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Appendix A

 

Deferral Election

 

TO:

 

Robert W. Lawrence, Senior Vice President, Human Resources and Services,

WellChoice, Inc.

 

I hereby request that WellChoice, Inc. (the “Company”) defer the delivery to me
of shares of Common Stock, par value $.01 per share, of the Company, in
settlement of an initial award of restricted stock units that may be made to me
in November 2003 (the “Award”) in accordance with my instructions described
below.

 

Deferral Date (check one)

 

Please commence delivery of shares of Common Stock in settlement of the Award
on:

 

_____

 

[DATE]

  (Note, this is the anticipated Settlement Date. Thus, there would be no
deferral if you elect a lump sum payment; if you elect installments, the first
installment would not be deferred.)

_____

 

[DATE]

  (or, if earlier, the date I cease to serve as member of the board of directors
of the Company).

_____

  The date I cease to serve as member of the board of directors of the Company.

 

Form of Payment (check one; if you elect annual installments, select the # of
installments)

 

Please settle my Award:

 

_____

 

All at once, in one lump sum delivery of shares of Common Stock on the Deferral
Date.

_____

 

In equal annual installments, commencing on the Deferral Date (or if no deferral
on the Settlement Date).

   

_____

   Number of Annual Installments (enter 2, 3, 4 or 5)

 

Form of Payment – Change in Control (check only if you agree)

 

    If settlement of my Award would otherwise be accelerated and paid in one
lump sum because of a Change in Control, please settle my Award (or the
remainder thereof):

_____

  In one lump sum.

_____

  In equal annual installments, commencing on the accelerated settlement date.  
 

_____

   Number of Annual Installments (enter 2, 3, 4 or 5)

 

Today’s Date:                                        

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Signature

    

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