EXHIBIT 10.17

 

FORM OF DIRECTOR RSU AGREEMENT

 

Congratulations, you have been awarded restricted stock units (“RSUs”) in recognition of your contributions to the success of HMS Holdings Corp. (the “Company”) and its Affiliates.  A restricted stock unit entitles you to receive a share of the Company’s common stock at a future date, assuming that you satisfy conditions of the Company’s Fourth Amended and Restated 2006 Stock Plan (the “Plan”) and the implementing agreement.  We would like you to have an opportunity to share in the continued success of the Company through these RSUs under the Plan.  The following represents a brief description of your grant.  Additional details regarding your award are provided in the attached Restricted Stock Unit Agreement (the “Grant Agreement”) and in the Plan.

 

Restricted Stock Unit Grant Summary:

 

	
 
    	
Date of Grant
    	
 
    	
October 1, 2011
    
	
 
    	
RSU Shares
    	
 
    	
2,554
    
	
 
    	
Vesting Schedule
    	
 
    	
One-quarter of the   RSU Shares on December 31 of the year in which the Grant is made and an   additional one-quarter on the last day of each of the first three quarters of   the following calendar year.  Each of those dates is a “Vesting   Date.”
    


 

·                  You have been granted RSUs for Shares of the Company’s common stock for the total number of Shares specified under “RSU Shares” in the chart above.

 

·                  The potential value of your RSUs increases if the price of the Company’s stock increases, but you also have to continue to provide services to the Company (except as the Grant Agreement provides) to actually receive such value.  Of course, the value of the stock may go up and down over time.

 

·                  You will not receive the Shares represented by the RSUs unless and until the RSUs vest.  Your RSUs vest as provided in the chart above under “Vesting,” assuming you remain an employee or member of the Board of Directors of the Company and subject to the terms in the Grant Agreement.

 

·                  Once you have received the Shares, you will own them and may decide whether to hold the stock, sell the stock or give the stock to someone as a gift.

 

You can access the Merrill Lynch portal updates and information: https://www.benefits.ml.com.  Please email IR@hms.com  with any questions.

 











 

HMS HOLDINGS CORP.

RESTRICTED STOCK UNIT GRANT AGREEMENT FOR EMPLOYEES AND DIRECTORS

 

HMS Holdings Corp. (the “Company”) has granted you restricted stock units (the “RSUs”) under the HMS Holdings Corp. Fourth Amended and Restated 2006 Stock Plan (as it may be amended from time to time) (the “Plan”).  Each RSU lets you receive a Share (an “RSU Share”) of the Company’s common stock, upon satisfaction of the conditions to receipt.

 

The individualized communication you received (the “Cover Letter”) provides the details for your RSUs.  It specifies the number of RSU Shares, the Date of Grant, and the schedule for vesting, with the related vesting dates (“Vesting Dates”).

 

The RSUs are subject in all respects to the applicable provisions of the Plan.  This Grant Agreement does not cover all of the rules that apply to the RSUs under the Plan; please refer to the Plan document.  Capitalized terms are defined either further below in this grant agreement (the “Grant Agreement”) or in the Plan.

 

The Plan document is available on the Merrill Lynch website.  The Prospectus for the Plan, the Company’s S-8, Annual Report on Form 10-K, and other filings the Company makes with the Securities and Exchange Commission are available for your review under the Investor Relations tab on the Company’s web site.  You may also obtain paper copies of these documents upon request to the Company’s Investor Relations department (IR@HMS.com).

 

Neither the Company nor anyone else is making any representations or promises regarding the duration of your service, vesting of the RSUs, the value of the Company’s stock or of these RSUs, or the Company’s prospects.  The Company is not providing any advice regarding tax consequences to you or regarding your decisions regarding the RSUs; you agree to rely only upon your own personal advisors.

 

NO ONE MAY SELL, TRANSFER, OR DISTRIBUTE THE RSUS OR THE SECURITIES THAT MAY BE RECEIVED UNDER THEM WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO HMS HOLDINGS CORP. OR OTHER INFORMATION AND REPRESENTATIONS SATISFACTORY TO IT THAT SUCH REGISTRATION IS NOT REQUIRED.

 











 

In addition to the Plan’s terms and restrictions, the following terms and restrictions apply:

 

	
Vesting Schedule
    	
 
    	
Your RSUs become   nonforfeitable (“Vested”) as provided in the   Cover Letter to this Grant Agreement, assuming that through each Vesting   Date, (i) if you received the RSUs in your capacity as an employee of the Company, you   remain an employee or (ii) if you received the RSUs in your capacity as   a member of the Company’s Board, you remain a member of the Company’s Board. Any fractional shares will be carried forward to the following   Vesting Date, unless the Committee selects a different treatment. For   purposes of this Grant Agreement, employment with the Company will include   employment with any Affiliate whose employees are then eligible to receive   Awards under the Plan. Unless the Committee determines otherwise, if an   entity employing you ceases to be an Affiliate, your employment with the   Company will be treated as ended even though you continue to be employed by   that entity.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Vesting will accelerate fully on your   disability or death, including with respect to the Performance RSU Shares (as   defined below). For this purpose, “disability”   means permanent and total disability as defined by   Section 22(e)(3) of the Code.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
If your employment or service ends as a   result of Retirement, you will be treated as continuing in service for   vesting purposes until the earlier to occur of (x) the second   anniversary of your Retirement and (y) the last of the applicable   Vesting Dates. “Retirement” for this purpose   means cessation of employment or service on or after attaining age 60 and   completing five years of service with the Company.
    
	
 
    	
 
    	
 
    
	
Change in Control
    	
 
    	
If a Change in Control occurs, your RSUs   will be treated as provided in Section 11   of the Plan if, within 24 months following the Change in Control, your   employment or service ends on (i) a termination without cause (as   determined by the Committee or the Board) or (ii) Retirement.
    
	
 
    	
 
    	
 
    
	
Termination for Cause
    	
 
    	
If the Company terminates your employment or   service for cause or if you violate any then applicable restrictive covenant   agreement (such as agreements pertaining to confidentiality, intellectual   property, nonsolicitation, and/or noncompetition), the RSUs will immediately   terminate without regard to whether they are then Vested in whole or in part.
    


 











 

	
Distribution Date
    	
 
    	
Subject to any   overriding provisions in the Plan, you will receive a distribution of the   Shares equivalent to your Vested RSU Shares as soon as practicable following   the date(s) on which you become Vested (with the actual date being the “Distribution Date”) and, in   any event, no later than 30   days following an applicable Vesting Date, unless the Committee determines   that you may make a timely deferral election to defer distribution to a later   date and you have made such an election (in which case the deferred date will   be the “Distribution Date”).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Vesting that accelerates after a Change in   Control will only accelerate the Distribution Date if and to the extent   permitted under Section 409A of the Code.
    
	
 
    	
 
    	
 
    
	
Restrictions and Forfeiture
    	
 
    	
You may not sell, assign, pledge, encumber,   or otherwise transfer any interest (“Transfer”) in the RSU Shares until the RSU   Shares are distributed to you. Any attempted Transfer that precedes the   Distribution Date is invalid.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Unless the Committee determines otherwise or   the Grant Agreement provides otherwise, if your employment or service with   the Company terminates for any reason before your RSUs are Vested, then you   will forfeit the unvested RSUs (and the Shares to which they relate) to the   extent that the RSUs do not otherwise vest as a result of the termination,   pursuant to the rules in the Vesting Schedule   section. The forfeited RSUs will then immediately revert to the Company. You   will receive no payment for the RSUs if you forfeit them.
    
	
 
    	
 
    	
 
    
	
Taxes and Withholding
    	
 
    	
The RSUs provide   tax deferral, meaning that the RSU Shares are not taxable until you actually   receive the RSU Shares on or around the Distribution Date. You will then owe   taxes at ordinary income tax rates as of the Distribution Date at the Shares’   value. As an employee of the Company, you may owe FICA and HI (Social   Security and Medicare) taxes before the   Distribution Date.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Issuing the Shares under the RSUs is   contingent on satisfaction of all obligations with respect to required tax or   other required withholdings (for example, in the U.S., Federal, state, and   local taxes). The Company may take any action permitted under   Section 14(c) of the Plan to satisfy such obligation, including   satisfying the tax obligations by (i) reducing the number of RSU Shares   to be issued to you by that number of RSU Shares (valued at their Fair Market   Value on the date of distribution) that would equal all taxes required to be   withheld (at their minimum withholding levels), (ii) accepting payment   of the withholdings from a broker in connection with a sale of the RSU Shares   or directly from you, or (iii) taking any other action under   Section 14(c) of the Plan. If a fractional share remains after   deduction for required withholding, the Company will pay you the value of the   fraction in cash.
    
	
 
    	
 
    	
 
    
	
Compliance with Law
    	
 
    	
The Company will not issue the RSU Shares if   doing so would violate any applicable Federal or state securities laws or   other laws or regulations. You may not sell or otherwise dispose of the RSU   Shares in violation of applicable law.
    
	
 
    	
 
    	
 
    
	
Additional Conditions to Receipt
    	
 
    	
The Company may postpone issuing and   delivering any RSU Shares for so long as the Company determines to be   advisable to satisfy the following:
    


 











 

	
 
    	
 
    	
its completing or amending any securities   registration or qualification of the RSU Shares or   its or your satisfying any exemption from registration under any Federal or   state law, rule, or regulation;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
its receiving proof it considers   satisfactory that a person seeking to receive the RSU Shares after your death   is entitled to do so;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
your complying with any requests for   representations under the Plan; and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
your complying with any Federal, state, or   local tax withholding obligations.
    
	
 
    	
 
    	
 
    
	
Additional Representations from You
    	
 
    	
If the vesting provisions of the RSUs are   satisfied and you are entitled to receive RSU Shares at a time when the   Company does not have a current registration statement (generally on   Form S-8) under the Securities Act of 1933 (the “Act”)   that covers issuances of shares to you, you must comply with the following   before the Company will issue the RSU Shares to you. You must —
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
represent to the Company, in a manner   satisfactory to the Company’s counsel, that you are acquiring the RSU Shares   for your own account and not with a view to reselling or distributing the RSU   Shares; and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
agree that you will not sell, transfer, or   otherwise dispose of the RSU Shares unless:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
a registration statement under the Act is   effective at the time of disposition with respect to the RSU Shares you   propose to sell, transfer, or otherwise dispose of; or
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
the Company has received an opinion of   counsel or other information and representations it considers satisfactory to   the effect that, because of Rule 144 under the Act or otherwise, no   registration under the Act is required.
    
	
 
    	
 
    	
 
    
	
No Effect on Employment or Other Relationship
    	
 
    	
Nothing in this Grant Agreement restricts   the Company’s rights or those of any of its Affiliates to terminate your   employment or other relationship at any time and for any or no reason. The   termination of employment or other relationship, whether by the Company or   any of its Affiliates or otherwise, and regardless of the reason for such   termination, has the consequences provided for under the Plan and any   applicable employment or severance agreement or plan.
    
	
 
    	
 
    	
 
    
	
Limited Status
    	
 
    	
You understand and agree that the Company   will not consider you a shareholder for any purpose with respect to the RSU   Shares, unless and until the RSU Shares have been issued to you on the   Distribution Date. You will not receive dividends with respect to the RSUs,   but the Company will credit additional whole or fractional RSUs to this Grant   equal to the result of dividing (i) the product of the total number of   RSUs credited to you under this Grant on the record date for such dividend   (and not yet distributed in Shares) and the per share amount of such dividend   by (ii) the Fair Market Value of one Share on the date such dividend is
    


 











 

	
 
    	
 
    	
paid by the Company to shareholders. The   additional RSUs will be or become Vested to the same extent as the RSUs that   resulted in the crediting of such additional Units and may be paid out in   cash or Shares under the timing rules provided in   Section 8(e) of the Plan.
    
	
 
    	
 
    	
 
    
	
Voting
    	
 
    	
You may not vote the RSUs. You may not vote   the RSU Shares unless and until the Shares are distributed to you.
    
	
 
    	
 
    	
 
    
	
No Effect on Running Business
    	
 
    	
You understand and agree that the existence   of the RSUs will not affect in any way the right or power of the Company or   its shareholders to make or authorize any adjustments, recapitalizations,   reorganizations, or other changes in the Company’s capital structure or its   business, or any merger or consolidation of the Company, or any issuance of   bonds, debentures, preferred or other stock, with preference ahead of or   convertible into, or otherwise affecting the Company’s common stock or the   rights thereof, or the dissolution or liquidation of the Company, or any sale   or transfer of all or any part of its assets or business, or any other   corporate act or proceeding, whether or not of a similar character to those   described above.
    
	
 
    	
 
    	
 
    
	
Section 409A
    	
 
    	
The RSUs are intended to comply with the   requirements of Section 409A and must be construed consistently with   that section. Notwithstanding anything in the Plan or this Grant Agreement to   the contrary, if the RSUs Vest in connection with your “separation from   service” within the meaning of Section 409A, as determined by the   Company), and if (x) you   are then a “specified employee” within the meaning of Section 409A at   the time of such separation from service (as determined by the Company, by   which determination you agree you are bound) and (y) the distribution of   RSU Shares under such RSUs will result in the imposition of additional tax   under Section 409A if distributed to you within the six month period   following your separation from service, then the distribution under such   accelerated RSUs will not be made until the earlier of (i) the date six   months and one day following the date of your separation from service or   (ii) the 10th day after your date of death.   Neither the Company nor you shall have the right to accelerate or defer the   delivery of any such RSU Shares or benefits except to the extent specifically   permitted or required by Section 409A. In no event may the Company or   you defer the delivery of the RSU Shares beyond the date specified in the Distribution Date section, unless such deferral complies   in all respects with Treasury Regulation   Section 1.409A-2(b) related to subsequent changes in the time or   form of payment of nonqualified deferred compensation arrangements, or any   successor regulation. In any event, the   Company makes no representations or warranty and shall have no liability to   you or any other person, if any provisions of or distributions under this   Grant Agreement are determined to constitute deferred compensation subject to   Section 409A but not to satisfy the conditions of that section.
    
	
 
    	
 
    	
 
    
	
Unsecured Creditor
    	
 
    	
The RSUs create a contractual obligation on   the part of the Company to make a distribution of the RSU Shares at the time   provided for in this Grant Agreement. Neither you nor any other party   claiming an interest in deferred compensation hereunder shall have any   interest whatsoever in any specific assets of the Company. Your right to   receive distributions hereunder is that of an unsecured general creditor of   Company.
    


 











 

	
Governing   Law
    	
 
    	
The laws of the State of New York will   govern all matters relating to the RSUs, without regard to the principles of   conflict of laws.
    
	
 
    	
 
    	
 
    
	
Notices
    	
 
    	
Any notice you   give to the Company must follow the procedures then in effect. If no other   procedures apply, you must send your notice in writing by hand or by mail to   the office of the Company’s Secretary (or to the Chair of the Committee if   you are then serving as the sole Secretary). If mailed, you should address it   to the Company’s Secretary (or the Chair of the Committee) at the Company’s   then corporate headquarters, unless the Company directs Plan participants to   send notices to another corporate department or to a third party   administrator or specifies another method of transmitting notice. The Company   and the Committee will address any notices to you using its standard   electronic communications methods or at your office or home address as   reflected on the Company’s personnel or other business records. You and the   Company may change the address for notice by like notice to the other, and   the Company can also change the address for notice by general announcements   to Plan participants.
    
	
 
    	
 
    	
 
    
	
Amendment
    	
 
    	
Subject to any required action by the   Committee or the shareholders of the Company, the Company may cancel the RSUs   and provide a new Award in its place, provided that the Award so replaced   will satisfy all of the requirements of the Plan as of the date such new   Award is made and no such action will adversely affect the RSUs to the extent   then Vested.
    
	
 
    	
 
    	
 
    
	
Plan Governs
    	
 
    	
Wherever a conflict may arise between the   terms of this Grant Agreement and the terms of the Plan, the terms of the   Plan will control. The Committee may adjust the number of RSU Shares and   other terms of the RSUs from time to time as the Plan provides.
    


 

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