Exhibit 10.2

 

MAGELLAN HEALTH SERVICES, INC.

 

2011 MANAGEMENT INCENTIVE PLAN

 

NOTICE OF STOCK OPTION GRANT

 

(REFERENCE NO. 2011-MARCH 5, 2014)

 

	
Name   of Optionee:
    	
[Employee   Name]
    
	
 
    	
 
    
	
Shares   Subject to
   Option:
    	
           shares of Ordinary Common Stock of Magellan Health Services, Inc. (the “Shares”)
    
	
 
    	
 
    
	
Type   of Option:
    	
x  Nonqualified         o   Incentive
    
	
 
    	
 
    
	
Exercise   Price per
   Share:
    	
$60.39
    
	
 
    	
 
    
	
Date   of Grant:
    	
March 5,   2014
    
	
 
    	
 
    
	
Date   Exercisable and Other Conditions of Exercise:
    	
This   option shall be exercisable, in whole or in part, until its Expiration Date,   only to the extent it is vested and while the Optionee’s Service with the   Company, a Subsidiary or a Parent company continues.  In addition, this option, to the extent   vested on the date of termination of the Optionee’s Service, shall be   exercisable for the period after the termination of the Optionee’s Service   provided by Optionee’s Option Agreement, unless a different period is   specified in Optionee’s employment agreement with the Company, a Subsidiary   or a parent company, in which case this option shall be exercisable for such   different period after termination of Optionee’s Service (but in no event on   or after the Expiration Date).

 

In   addition, this option may be exercised, to the extent vested, only when   exercise is otherwise permitted in accordance with the terms of the 2011   Management Incentive Plan and the Option Agreement to which this notice of   grant relates (including the provisions thereof applicable in the event of   Injurious Conduct).
    
	
 
    	
 
    
	
Vesting:
    	
This   option shall vest with respect to the Shares subject hereto as to one-third   of such Shares on each of the first, second and third anniversaries of the   Date of Grant, provided that in each case the Optionee’s Service has not   terminated prior to such date.

 

Notwithstanding   the preceding paragraph, if the Optionee’s Service is terminated for   Retirement as defined under the Company’s Retirement Policy Applicable to   Employee Stock Options, this Option shall earlier vest 
    


 











 

	
 
    	
immediately   with respect to 100% of the Shares subject hereto.

 

Notwithstanding   the first paragraph of this section entitled “Vesting”, this Option shall   earlier vest immediately with respect to 100% of the Shares subject hereto in   the event, after the date hereof, a Change in Control of the Company (as   defined below) shall have occurred and within the period of eighteen months   (or such other period as is provided by Optionee’s employment agreement, if   any, in effect at the time of the Change of Control) following occurrence of   the Change in Control, Optionee’s Service with the Company shall be   terminated by the Company without Cause (as defined below) or by the Optionee   with Good Reason (as defined below), provided that the Optionee’s Service   with the Company has not previously terminated after the date hereof for any   other reason, and upon such accelerated vesting this Option shall continue to   be exercisable for the same period after such termination of Optionee’s   Service as provided above. For purposes of this Option, the terms “Change in   Control,” “Cause” and “Good Reason” shall have the same meanings as provided   in any employment agreement between the Company and Optionee in effect at the   time of the Change in Control (including any terms of substantially   comparable significance in any such employment agreement even if not of   identical wording) or, if no such employment agreement is in effect at such   time or no such meanings are provided in such employment agreement, shall   have the meanings ascribed thereto below:
    
	
 
    	
 
    
	
 
    	
(1)                                 A “Change in   Control” of the Company shall mean the first to occur after the date hereof   of any of the following events:
    
	
 
    	
 
    
	
 
    	
a.                                      any “person,”   as such term is used in Sections 3(a)(9) and 13(d) of the   Securities Exchange Act of 1934, as amended (the “Exchange Act”), becomes a “beneficial   owner,” as such term is used in Rule 13d-3 promulgated under the   Exchange Act, of 50% or more of the Voting Stock (as defined below) of the   Company;
    
	
 
    	
 
    
	
 
    	
b.                                      the majority   of the Board of Directors of the Company consists of individuals other than “Continuing   Directors,” which shall mean the members of the Board on the date hereof;
    
	
 
    	
 
    
	
 
    	
c.                                       the Board of   Directors of the Company adopts and, if required by law or the certificate of   incorporation of the Corporation, the shareholders approve the dissolution of   the Company or a plan of liquidation or comparable plan providing for the   disposition of all or substantially all of the Company’s assets;
    


 

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d.                                      all or   substantially all of the assets of the Company are disposed of pursuant to a   merger, consolidation, share exchange, reorganization or other transaction   unless the shareholders of the Company immediately prior to such merger,   consolidation, share exchange, reorganization or other transaction   beneficially own, directly or indirectly, in substantially the same   proportion as they previously owned the Voting Stock or other ownership   interests of the Company, a majority of the Voting Stock or other ownership   interests of the entity or entities, if any, that succeed to the business of   the Company; or
    
	
 
    	
 
    
	
 
    	
e.                                       the Company   merges or combines with another company and, immediately after the merger or   combination, the shareholders of the Company immediately prior to the merger   or combination own, directly or indirectly, 50% or less of the Voting Stock   of the successor company, provided that in making such determination there   shall being excluded from the number of shares of Voting Stock held by such   shareholders, but not from the Voting Stock of the successor company, any   shares owned by Affiliates of such other company who were not also Affiliates   of the Company prior to such merger or combination.
    
	
 
    	
 
    
	
 
    	
(2)                                 “Cause” shall   mean:
    
	
 
    	
 
    
	
 
    	
a.                                      Optionee is   convicted of (or pleads guilty or nolo contendere to) a felony or a crime   involving moral turpitude;
    
	
 
    	
 
    
	
 
    	
b.                                      Optionee’s   commission of an act of fraud or dishonesty involving his or her duties on   behalf of the Company;
    
	
 
    	
 
    
	
 
    	
c.                                       Optionee’s   willful failure or refusal to faithfully and diligently perform duties lawfully   assigned to Optionee as an officer or employee of the Company or other   willful breach of any material term of any employment agreement at the time   in effect between the Company and Optionee; or
    
	
 
    	
 
    
	
 
    	
d.                                      Optionee’s   willful failure or refusal to abide by the Company’s policies, rules,   procedures or directives, including any material violation of the Company’s   Code of Ethics.
    


 

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(3)                                 “Good Reason”   shall mean:
    
	
 
    	
 
    
	
 
    	
a.                                      a reduction   in Optionee’s salary in effect at the time of a Change in Control, unless   such reduction is comparable in degree to the reduction that takes place for   all other employees of the Company of comparable rank (for which purpose any   person who is an executive officer of the Company (as determined for purposes   of the Exchange Act shall be considered of comparable rank) or a reduction in   Optionee’s target bonus opportunity for the year in which or any year after   the year in which the Change of Control occurs from Optionee’s target bonus   opportunity for the year in which the Change in Control occurs (if any) as   established under any employment agreement Optionee has with the Company or   any bonus plan of the Company applicable to Optionee (or, if no such target   bonus opportunity has yet been established for Optionee under a bonus plan   applicable to Optionee for the year in which the Change of Control has   occurred, the target bonus opportunity so established for Optionee for the   immediately preceding year (if any)), 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 Optionee of at least one and one half percent   (1.5%) of Optionee’s then current base salary, provided that Optionee will   have a legal right to claim damages for a breach of contract for any action   by the Company or event having an effect described under those paragraphs   that does not meet this objective materiality test, and actions may be   material in a given case at levels less than the specified level.;
    
	
 
    	
 
    
	
 
    	
b.   a material diminution in Optionee’s   position, duties or responsibilities as in effect at the time of a Change in   Control or the assignment to Optionee of duties which are materially   inconsistent with such position, duties and authority, unless in either case   such change is made with the consent of the Optionee; or
    
	
 
    	
 
    
	
 
    	
c.   the relocation by more than 50 miles of   the offices of the Company which constitute at the time of the Change in   Control Optionee’s principal location for the performance of his or her   services to the Company;
    


 

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 provided that, in each such case, Optionee   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 Optionee gives notice thereof   to the Company, and Optionee terminates Service within 18 months after such   event or condition has arisen.

 
    
	
 
    	
For   purposes of the foregoing definitions, (A) “the Company” shall include   any entity that succeeds to all or substantially all of the business of the   Company, (B) “Affiliate” of a person or other entity shall mean a person   or other entity that directly or indirectly controls, is controlled by, or is   under common control with the person or other entity specified, and (C) “Voting   Stock” shall mean any capital stock of any class or classes having general   voting power under ordinary circumstances, in the absence of contingencies,   to elect the directors of a corporation and reference to a percentage of   Voting Stock shall refer to such percentage of the votes that all such Voting   Stock is entitled to cast.
    
	
 
    	
 
    
	
Other   Terms (if any):
    	
 
    
	
 
    	
 
    
	
Expiration   Date:
    	
March 5,   2024
    


 

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By signing your name below, you accept this award and acknowledge and agree that this award is granted under and governed by the terms and conditions of the Magellan Health Services, Inc. 2011 Management Incentive Plan and the related Stock Option Agreement, reference number 2011-March 5, 2014, both of which are hereby made a part of this document.

 

	
 
    	
MAGELLAN   HEALTH SERVICES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   Barry M. Smith
    
	
 
    	
Title:   Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
OPTIONEE:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    


 

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