Exhibit 10.2


 


MAGELLAN HEALTH SERVICES,
INC.


 


2008 MANAGEMENT INCENTIVE PLAN


 


NOTICE OF STOCK OPTION GRANT


 


(REFERENCE NO. 2008-MARCH 3, 2010)


 


	
  Name
  of Optionee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  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:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date
  of Grant:

  	
   

  	
  March 3, 2010

  
	
   

  	
   

  	
   

  
	
  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 2008 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, 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;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  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 

  



 


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  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.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (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 

  



 


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  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;

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  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.

  
							



 


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  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 3, 2020

  



 


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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. 2008 Management Incentive Plan and
the related Stock Option Agreement, reference number 2008-March3, 2010, both of
which are hereby made a part of this document.


 


	
   

  	
   

  	
  MAGELLAN
  HEALTH SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  René Lerer

  
	
   

  	
   

  	
  Title:
  President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OPTIONEE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  



 


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