Exhibit 10.64


 


Magellan Health Services, Inc.


 


Amendment to Agreements and Documents Governing
Restricted Stock Units


 


This
document shall be deemed a global amendment to Restricted Stock Unit (“RSU”)
Agreements, Notices of Restricted Stock Grant and other documents relating to
RSUs under the 2006 Plan and 2008 Plan, granted by Magellan
Health Services, Inc. (“Magellan”) on or before December 31,
2008 to the employee named below (hereinafter “Grantee”)
and which remain outstanding after December 31, 2008.  For purposes of Internal Revenue Code Section 409A
(hereinafter “409A”), each tranche of RSUs that vests at a separate stated
vesting date or is earned by performance over a separate measuring period is
deemed to be a separate payment, and any pro rata portion of a tranche that may
become vested or would not become vested upon a termination or other event in a
given calendar year will be deemed to be a separate payment.  The amendments herein are meant to confirm
that the RSUs granted to Grantee will qualify under the IRS Section 409A “short-term
deferral” rules to the maximum extent possible; RSUs not so qualifying
under such “short term” deferral rules are referred to herein as “409A
RSUs” .


 


A.                                    “Good Reason” Amendments


 


(1.)                              All agreements relating to such RSUs are
hereby amended as follows (to the extent such agreements do not already
incorporate these terms):


 


With
respect to the definition of “Good Reason,” the triggering event based on
reduction in salary or reduction in bonus opportunity shall be triggered only
for a material reduction, and references to “reduction” in such definition
(relating to salary or bonus) shall be changed to refer instead to “material
reduction.”  At the end of the provision
relating to this triggering event for Good Reason, the following provision
shall be added:


 


For purposes of this provision, an action or actions of the Company
will be deemed “material” if, individually or in the aggregate, the action or
actions result(s) or potentially result(s) in a reduction in
compensation in the current year or a future year having a present value to
Grantee of at least one and one half percent (1.5%) of Grantee’s then current
base salary, provided that actions may be material in a given case at levels
less than the specified level.


 


The
proviso at the end of the definition of “Good Reason,” dealing with the
required notice from Grantee to the Company, is modified to read as follows:


 


provided
that, in each such case, Grantee provides notice to the Company within 90 days
that such event or condition constituting Good Reason has arisen, and such
event or condition continues uncured for a period of more than 30 days after
Grantee gives notice thereof to the Company, and Grantee terminates Service
within 18 months after such event or condition has arisen.


 


(2.)                              Settlement of RSUs triggered by an event,
such as vesting, shall occur on the first business day that occurs on or after
the date of such event, unless a different 409A compliant settlement date is
specified for such RSU.


 


(3.)                              The foregoing notwithstanding, this Part A
will not apply to any RSU agreement that, due to an elective deferral or
controlling language in a separate employment agreement, would constitute a
409A RSU despite the application of this Part A.


 


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B.                                    Effects of RSUs Being 409A RSUs.


 


If
RSUs fail to qualify for exceptions from Section 409A and become 409A RSUs
as defined above, the following restrictions will apply:


 


(1)                                 The “six-month delay rule”


 


·                  The six-month delay rule will apply to
409A RSUs if these four conditions are met:


 


·                  The grantee has a separation from service
(within the meaning of Treasury Regulation § 1.409A-1(h))


·                  A distribution of shares is triggered by the
separation from service (but not due to death)


·                  The Grantee is a “key employee” (as defined
in Code Section 416(i) without regard to paragraph (5) thereof).  The Company will determine status of “key
employees” annually, under administrative procedures applicable to all 409A plans
and arrangements


·                  The Company’s stock is publicly traded on an
established securities market or otherwise.


 


·                  If it applies, the six-month delay rule will
delay a distribution in settlement of 409A RSUs triggered by separation from
service where the distribution otherwise would be within six months after the
separation


 


·                  Any delayed payment shall be made on the date
six months after separation from service


·                  During the six-month delay period,
accelerated distribution will be permitted in the event of the grantee’s death
and for no other reason (including no acceleration upon a Change in Control),
except for the limited exceptions permitted under the 409A regulations


·                  Any payment that is not triggered by a
separation from service, or triggered by a separation from service but which
would be made more than six months after separation (without applying this
six-month delay rule), shall be unaffected by the six-month delay rule.  Each payment in a series of installments
would be treated as a separate payment for this purpose.


 


·                  If the terms of a 409A RSUs agreement impose
this six-month delay rule in circumstances in which it is not required for
compliance with 409A, those terms shall not be given effect.


 


(2)                                 Change in Control Rule:


 


·                  If any distribution of 409A RSUs would be
triggered by a Change in Control, such distribution will be made only if, in
connection with the Change in Control, there occurs a change in the ownership
of the Company, a change in effective control of the Company, or a change in
the ownership of a substantial portion of the assets of the Company as defined
in Treasury Regulation § 1.409A-3(i)(5) (a “409A Change in Control”).


 


·                  In this case, distribution of the 409A RSUs
shall occur not later than five business days after (i) the occurrence of
a 409A Change in Control occurring at the time of or following the Change in
Control or (ii) upon occurrence of the Change in Control occurring within
90 days after the 409A Change in Control, but only if the occurrence 


 


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of
the Change in Control is non-discretionary and objectively determinable at the
time of the 409A Change in Control (in this case, the Grantee shall have no
influence on when during such 90-day period the settlement shall occur).


 


·                  Upon a Change in Control during the six-month
delay period, no accelerated distribution applies (even if the events involve a
409A Change in Control) to a distribution delayed by application of the
six-month delay rule.


 


(3)                                 Separation from Service


 


·                  Any distribution in settlement of 409A RSUs
that is triggered by a termination of employment will occur only at such time
as the participant has had a “separation from service” within the meaning of
Treasury Regulation § 1.409A-1(h), regardless of whether any other event
might be viewed as a termination of employment by the Company for any other
purpose.


 


·                  In particular, if a grantee switches to
part-time employment or becomes a consultant in connection with a termination
of employment, whether the event will be deemed a termination of employment for
purposes of 409A RSUs will be determined in accordance with Treasury Regulation
§ 1.409A-1(h).


 


(4)                                 Other Restrictions.


 


·                  The settlement of 409A RSUs may not be
accelerated by the Company except to the extent permitted under 409A.


 


·                  Any restriction imposed on RSUs under these
409A Compliance Rules or imposed on RSUs under the terms of other
documents solely to ensure compliance with 409A shall not be applied to RSUs
that are not 409A RSUs except to the extent necessary to preserve the status of
such RSUs as not 409A RSUs.  If any
mandatory term required for 409A RSUs or non-409A RSUs to avoid tax penalties
under Section 409A is not otherwise explicitly provided under this
document or other applicable documents, such term is hereby incorporated by
reference and fully applicable as though set forth at length herein.


 


C.                                    Other Revisions


 


Any
reference in an RSU agreement to the RSU continuing to be “exercisable” for a
period after termination of Grantee’s service shall be stricken as
inapplicable, because RSUs are not subject to “exercise.”


 


[Signatures Appear on Next Page]


 


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IN
WITNESS WHEREOF, the Amendment has been executed on behalf of Magellan and by
Grantee whose name appears below as of the date referred to above.


 


 


	
  Date:
  December 1, 2008

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Magellan
  Health Services, Inc.

  	
   

  	
  Employee
  / Grantee:

  
	
   

  	
   

  	
   

  
	
  By:

  	
  

  	
   

  	
  /s/ Daniel Gregoire

  
	
   

  	
  Rene
  Lerer, President and Chief

  	
   

  	
  Daniel N. Gregoire

  
	
   

  	
  Executive
  Officer

  	
   

  	
   

  



 


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