Exhibit 10.2
HEALTHWAYS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
 
THIS STOCK OPTION AGREEMENT is made and entered into on GRANT DATE (the “Grant
Date”), by and between HEALTHWAYS, INC., a Delaware corporation (the
"Corporation") including its subsidiary corporations, and PARTICIPANT NAME (the
"Colleague").
 
WHEREAS, the Corporation desires to afford the Colleague an opportunity to
purchase shares of Common Stock, $.001 par value per share ("Common Stock") of
the Corporation, in accordance with the provisions of Healthways 2007 Stock
Incentive Plan, as amended (the "Plan").
 
NOW, THEREFORE, In consideration of the mutual covenants set forth in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
 
1.           Grant of Option.  Corporation hereby grants to Colleague the option
(the "Option"), exercisable in whole or in part to purchase NUMBER OF SHARES
shares of the Corporation's Common Stock, for a price of GRANT PRICE per share.
 
2.           Option Plan.  This Option is granted as a non-qualified stock
option under the Plan, and is not intended to qualify as an incentive stock
option, as that term is used in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").  This means that, at the time Colleague exercises
all or any portion of this Option, Colleague will have taxable income equal to
any positive difference between the market value of the Common Stock at the date
of the exercise and the option exercise price paid for the Common Stock under
this Option as shown in Section 1 of this Agreement.
 
The Colleague hereby acknowledges receipt of a copy of the Plan and agrees to be
bound by all the terms and provisions thereof, which are incorporated herein by
reference and made a part hereof.  The terms of this Agreement are governed by
the terms of the Plan, and in the case of any inconsistency between the terms of
this Agreement and the terms of the Plan, the terms of the Plan shall
govern.  Terms not otherwise defined herein shall have the meanings given them
in the Plan.
 
3.           Timing of Exercise.  Colleague may exercise this Option with
respect to the percentage of shares set forth below from and after the dates
specified below:
 
Percentage Vested
 
 
Date of Vesting
25%
50%
75%
100%
 
One Year from Grant Date
Two Years from Grant Date
Three Years from Grant Date
Four Years from Grant Date

This Option will expire ten (10) years from the Grant Date.
 
 
 

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4.           Manner of Exercise.  This Option shall be exercised by the
Colleague (or other party entitled to exercise the Option under Section 5 of
this Agreement) by providing notice to the stock plan administrator of your
intent to exercise the stock option, and providing to the stock plan
administrator all required information necessary to complete the exercise
transaction. Such notice shall not be effective unless accompanied by the full
purchase price for all shares so purchased within the timeframe required by the
plan administrator. The purchase price shall be payable in cash, personal check
(subject to collection), bank draft or such other method as the Committee may
determine from time to time.  The purchase price may also be paid by the tender
of, by either actual delivery or attestation, Common Stock acceptable to the
Committee and valued at its Fair Market Value on the date of exercise or through
a combination of Common Stock and cash.  The purchase price shall be calculated
as the number of shares to be purchased times the option exercise price per
share as shown in Section 1 of this Agreement.  The Corporation shall have the
right to require the Colleague to remit to the Corporation an amount sufficient
to satisfy any federal, state and local withholding tax requirements prior to
the delivery of any certificate for such shares, which may be paid as set forth
in Section 5.6 of the Plan.
 
5.           Nontransferability of Option.  This Option shall not be
transferable by the Colleague otherwise than by will or by the laws of descent
and distribution, and is exercisable during Colleague's lifetime only by the
Colleague.  The terms of this Option shall be binding on the executors,
administrators, heirs and successors of the Colleague.
 
6.           Termination of Employment.
 
(a)           Termination by Death.  If the Colleague's employment by the
Corporation terminates by reason of death, the shares subject to the Option
granted hereunder not previously exercisable and vested shall become fully
exercisable and vested upon the Colleague’s death, and this Option may
thereafter be exercised by the legal representative of the estate or by the
legatee of the Colleague under the will of the Colleague until the expiration of
the stated term of the Option.
 
(b)           Termination by Reason of Disability.  If the Colleague's
employment by the Corporation terminates by reason of Disability, the shares
subject to the Option granted hereunder not previously exercisable and vested
shall become fully exercisable and vested upon the date of such termination of
employment and this Option may thereafter be exercised by the Colleague until
the expiration of the stated term of the Option.
 
(c)           Retirement.  If the Colleague’s employment by the Corporation
terminates by reason of Retirement, as defined in the Plan, the shares subject
to the Option granted hereunder not previously exercisable and vested shall
continue vesting in accordance with Section 3 and, upon vesting, this Option may
be exercised until the expiration of the stated term of the Option.
 
(d)           Other Termination.  If the Colleague's employment by the
Corporation is involuntarily terminated for any reason other than death,
Disability, or Retirement, or if the Colleague voluntarily terminates
employment, this Option shall thereupon terminate, except that this Option may
be exercised by the Colleague, to the extent otherwise then exercisable, for a
period of three months from the date of such termination of employment or the
expiration of the
 
 
 

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Option's term, whichever period is the shorter if the involuntary termination is
without Cause.  If the Colleague’s employment by the Company is terminated for
Cause, this Option shall immediately terminate.
 
7.           Restrictions on Purchase and Sale of Shares.  The Corporation shall
be obligated to sell or issue shares pursuant to the exercise of this Option
only in the event that the shares are at that time effectively registered or
otherwise exempt from registration under the Securities Act of 1933, as amended
(“the 1933 Act”).  In the event that the shares are not registered under the
1933 Act, the Colleague hereby agrees that, as a further condition to the
exercise of this Option, the Colleague (or his successor under Section 5 of this
Agreement), if the Corporation so requests, will execute an agreement in form
satisfactory to the Corporation in which the Colleague represents that he or she
is purchasing the shares for investment purposes, and not with a view to resale
or distribution.  The Colleague further agrees that if the shares of Common
Stock to be issued upon the exercise of this Option are not subject to an
effective registration statement filed with the Securities and Exchange
Commission pursuant to the requirements of the 1933 Act, such shares shall bear
an appropriate restrictive legend.
 
8.           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 Common Stock,
the number of shares of Common Stock of the Corporation subject to this Option
and the price per share of such shares shall be equitably and proportionately
adjusted by the Committee in accordance with the Plan.
 
9.           Change in Control.  Upon a Change in Control, as defined in the
Plan, the shares subject to the Option granted hereunder not previously
exercisable and vested shall become fully exercisable and vested.
 
10.           No Rights Until Exercise.  The Colleague shall have no rights
hereunder as a stockholder with respect to any shares subject to this Option
until the date of the issuance of a stock certificate to him or her for such
shares upon due exercise of this Option.
 
11.           Confidentiality, Non-solicitation and Non-Compete.  It is the
interest of all Colleagues to protect and preserve the assets of the
Corporation. In this regard, in consideration for granting this Option and as
conditions of Colleagues' ability to exercise this Option, Colleague
acknowledges and agrees that:
 
(a)           Confidentiality. In the course of Colleague's employment,
Colleague will have access to trade secrets and other confidential information
of the Corporation and its clients.  Accordingly, Colleague agrees that, without
the prior written consent of the Corporation, Colleague will not, other than in
the normal conduct of the Corporation'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 Corporation 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 Corporation or its clients.  Proprietary information includes,
but is not limited to, information developed by the Colleague for the
Corporation while employed by
 
 
 

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the Corporation.  The obligations of the Colleague under this paragraph will
continue after the Colleague has left the employment of the
Corporation.  Colleague agrees that upon leaving the employment of the
Corporation, Colleague will return to the Corporation all property and
confidential information in the Colleague's possession and agrees not to copy or
otherwise record in any way such information.
 
(b) Non-Solicitation.  While employed by the Corporation and for a period of two
years thereafter, Colleague shall not, upon Colleague's own behalf or on behalf
of any other person or entity, directly or indirectly,
 
- hire or solicit to leave the employ of the Corporation any person employed by
or under contract as an independent contractor to the Corporation; 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 Corporation was engaged in discussions as a
potential client within one year prior to the date of termination of Colleague.
 
(c)           Non-Compete.  While employed by Corporation and continuing during
the period while any amounts are being paid to Colleague and for a period of 18
months thereafter, Colleague 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 Corporation or (ii) which Colleague knows the
Corporation was actively evaluating for possible entry, in either case in the
United States or in any other jurisdiction in which the Corporation is engaged
in business or has been engaged in business during Colleague’s employment by the
Corporation, or in such jurisdictions where Colleague knows the Corporation is
actively pursuing business opportunities at the time of Colleague’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 Colleague breaches any provisions of this Section 11, this Option
shall immediately expire and may not be exercised, and the Corporation shall be
entitled to seek other appropriate remedies it may have available to limit its
damages from such breach.
 
12.           Amendment.  Subject to the restrictions contained in the Plan, the
Committee may amend the terms of this Option, prospectively or retroactively,
but, subject to Section 8 above, no such amendment shall impair the rights of
the Colleague hereunder without the Colleague's consent.
 
13.           No Right to Continued Employment.  The grant of the Option shall
not be construed as giving Colleague the right to be retained in the employ of
the Corporation, and the Corporation may at any time dismiss Colleague from
employment, free from any liability or any claim under the Plan.
 
14.           Notices.  All notices required to be given under this Option shall
be deemed to be received if delivered or mailed as provided for herein, to the
parties at the following addresses, or to such other address as either party may
provide in writing from time to time.
 
 
 

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To the
Corporation:                                                              Healthways,
Inc.
701 Cool Springs Boulevard
Franklin, Tennessee 37067
 
To the
Colleague:                                                                
PARTICIPANT NAME
(Colleague name and address)                                           Address
on File
 at Healthways

15.           Severability.  If any provision of this Agreement is, or becomes,
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any person or the award of the Option, or would disqualify the Plan or the
Option under any laws deemed applicable by the Committee, such provision shall
be construed or deemed amended to conform to the applicable laws, or if it
cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan or the Option, such
provision shall be stricken as to such jurisdiction, person or Option, and the
remainder of the Plan and Option shall remain in full force and effect.
 
16.           Governing Law.  The validity, construction and effect of this
Agreement shall be determined in accordance with the laws of the State of
Delaware without giving effect to conflicts of laws principles.
 
17.           Resolution of Disputes.  Any dispute or disagreement which may
arise under, or as a result of, or in any way related to, the interpretation,
construction or application of this Agreement shall be determined by the
Committee.  Any determination made hereunder shall be final, binding and
conclusive on the Colleague and the Corporation for all purposes.
 
18.           Successors in Interest.  This Agreement shall inure to the benefit
of and be binding upon any successor to the Corporation.  This Agreement shall
inure to the benefit of the Colleague’s legal representative and permitted
assignees.  All obligations imposed upon the Colleague and all rights granted to
the Corporation under this Agreement shall be binding upon the Colleague's
heirs, executors, administrators, successors and assignees.
 

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

HEALTHWAYS, INC.:

/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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