Exhibit 10.2

 

MAGELLAN HEALTH SERVICES, INC.

 

2011 MANAGEMENT INCENTIVE PLAN

 

NOTICE OF STOCK OPTION GRANT

 

(REFERENCE NO. 2011-MARCH 5, 2012)

 

	
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:
    	
 
    	
$47.46
    
	
 
    	
 
    	
 
    
	
Date   of Grant:
    	
 
    	
March 5,   2012
    
	
 
    	
 
    	
 
    
	
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, 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 5,   2022
    


 

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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, 2012, both of which are hereby made a part of this document.

 

	
 
    	
MAGELLAN   HEALTH SERVICES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name:   René Lerer
    
	
 
    	
Title:   Chairman and Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
OPTIONEE:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    


 

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