EXHIBIT 10.1

 

2013 BOARD OF DIRECTOR NQSO AGREEMENT

 

Congratulations, you have been awarded a stock option grant in recognition of your contributions to the success of HMS Holdings Corp. (the “Company”) and its Affiliates.  A stock option grant gives you the right to purchase a specific number of shares of the Company’s common stock at a fixed price, 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 this stock option grant under the Plan.  The following represents a brief description of your grant.  Additional details regarding your award are provided in the attached Nonqualified Stock Option Agreement (the “Grant Agreement”) and in the Plan.

 

Stock Option Grant Summary:

 

	
Date of Grant
    	
 
    	
November 15, 2013
    
	
Option Shares
    	
 
    	
 
    
	
Exercise Price per Share
    	
 
    	
$
    
	
Exercisability
    	
 
    	
For Directors: One-quarter of the Option 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 an “Exercisability   Date.”
    
	
Term Expiration Date
    	
 
    	
                           ,                 
    


 

You have been granted a nonqualified stock option to purchase Shares of the Company’s common stock.  The total number of Shares under your grant is in the chart above under “Option Shares” and the price per share is under “Exercise Price per Share.”

 

The potential value of your stock option grant 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 can’t exercise the stock option (actually purchase the shares) until it becomes exercisable.  Your stock option becomes exercisable as provided in the chart above under Exercisability, assuming you remain an employee of or member of the Board of Directors of the Company and subject to the terms in the Grant Agreement.

 

Whether or not you decide to exercise your stock option and purchase the stock is your decision, and, you have until the stock option expires (which will be no later than the seventh anniversary of the Date of Grant, but can end earlier in various situations) to make that decision.

 

Once you have purchased 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.

NONQUALIFIED STOCK OPTION GRANT AGREEMENT FOR DIRECTORS

 

HMS Holdings Corp. (the “Company”) has granted you an option (the “Option”) under the HMS Holdings Corp. Fourth Amended and Restated 2006 Stock Plan (as it may be amended from time to time) (the “Plan”).  The Option lets you purchase a specified number (the “Option Shares”) of Shares of the Company’s common stock, at a specified price per Share (the “Exercise Price”).

 

The individualized communication you received (the “Cover Letter”) provides the details for your Option.  It specifies the number of Option Shares, the Exercise Price, the Date of Grant, the schedule for exercisability, and the latest date the Option will expire (the “Term Expiration Date”).

 

The Option is 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 Option 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, exercisability of the Option, the value of the Company’s stock or of this Option, or the Company’s prospects.  The Company is not providing any advice regarding tax consequences to you or regarding your decisions regarding the Option; you agree to rely only upon your own personal advisors.

 

NO ONE MAY SELL, TRANSFER, OR DISTRIBUTE THE OPTION OR THE SECURITIES THAT MAY BE PURCHASED UPON EXERCISING THE OPTION 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.

 

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

 

	
Option   Exercisability
    	
 
    	
While   your Option remains in effect under the Option Expiration section,   you may exercise any exercisable portions of the Option (and buy the Option   Shares) under the timing rules of this section, provided that you may   not exercise the Option for fewer than 100 full shares at any particular time   unless fewer than 100 remain unexercised.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The   Option will become exercisable on the schedule provided in the Cover Letter   to this Grant Agreement assuming that through each Exercisability Date,   (i) if you received the Option in your capacity as an employee of the   Company, you remain an employee or (ii) if you received the Option 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 Exercisability 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.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Exercisability will accelerate fully on your disability or death,   including with respect to the Performance Option Shares (as defined below).   For this purpose, “disability”   means permanent and total disability as defined by   Section 22(e)(3) of the Code. Exercisability will continue and   increase (until fully exercisable) over the two years following your date of   Retirement. “Retirement” for this   purpose means cessation of 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 Option 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 a   termination without cause (as determined by the Committee or the Board),   provided also that the Option will remain outstanding for 12 months following   such termination but not beyond the Term Expiration Date.
    
	
 
    	
 
    	
 
    
	
Option   Expiration
    	
 
    	
The   Option will expire no later than the close of business on the Term Expiration   Date. Unexercisable portions of the Option expire immediately when you cease   to be employed (unless you are concurrently remaining or becoming a member of   the Board, or, for a Board member, concurrently remaining or becoming an   employee of the Company). 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 Option will   immediately expire without regard to whether it is then exercisable.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Exercisable   portions of the Option remain exercisable until the first to occur of the   following (the “Final Exercise Date”), each   as defined further in the Plan or the Grant Agreement:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  Three months   (measured to the corresponding date in the month) after your employment (or   directorship) ends if you resign or if the Company terminates your employment   or service without cause (as determined under the Plan), except as provided   above under Change in Control
    


 

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·                  For death or   Disability, the first anniversary of the date employment or service ends
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  For   Retirement, the end of the second year following your date of Retirement
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  The Term   Expiration Date
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The   Committee can override the expiration provisions of this Grant Agreement.
    
	
 
    	
 
    	
 
    
	
Method   of Exercise and Payment for Shares
    	
 
    	
Subject   to this Grant Agreement and the Plan, you may exercise the Option only by   providing a written notice (or notice through another previously approved method,   which could include a web-based or voice- or e-mail system) to the Secretary   of the Company or to whomever the Committee designates, received on or before   the date the Option expires. Each such notice must satisfy whatever   then-current procedures apply to that Option and must contain such   representations (statements from you about your situation) as the Company   requires. You must, at the same time, pay the Exercise Price using one or   more of the following methods:
    


 

	
Cash/Check
    	
 
    	
cash   or check in the amount of the Exercise Price payable to the order of the   Company;
    
	
 
    	
 
    	
 
    
	
Cashless   Exercise
    	
 
    	
an   approved cashless exercise method, including directing the Company to send   the stock certificates (or other acceptable evidence of ownership) to be   issued under the Option to a licensed broker acceptable to the Company as   your agent in exchange for the broker’s tendering to the Company cash (or   acceptable cash equivalents) equal to the Exercise Price and, if you so   elect, any required tax withholdings;
    
	
 
    	
 
    	
 
    
	
Net   Exercise
    	
 
    	
by   delivery of a notice of “net exercise” to or as directed by the Company, as a   result of which you will receive (i) the number of shares underlying the   portion of the Option being exercised less (ii) such number of shares as is   equal to (A) the aggregate Exercise Price for the portion of the Option   being exercised divided by (B) the Fair Market Value on the date of   exercise;
    
	
 
    	
 
    	
 
    
	
Stock
    	
 
    	
if   permitted by the Committee, by delivery of Shares owned by you, valued at   their Fair Market Value, provided (i) applicable law then permits such   method of payment, (ii) you owned such Shares, if acquired directly from   the Company, for such minimum period of time, if any, as the Committee may   establish in its discretion, and (iii) the Shares are not subject to any   repurchase, forfeiture, unfulfilled vesting, or other similar restrictions;   or
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
any   combination of the above permitted forms for payment.
    


 

	
Withholding
    	
 
    	
Issuing   the Option Shares 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 Option Shares to be issued to you in connection with any exercise   of the Option by that number of Option Shares (valued at their Fair Market   Value on the date of exercise) that would equal all taxes required to be   withheld (at their minimum withholding levels), (ii) accepting
    


 

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payment   of the withholdings from a broker in connection with a Cashless Exercise of   the Option 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
    	
 
    	
You   may not exercise the Option if the Company’s issuing stock upon such exercise   would violate any applicable Federal or state securities laws or other laws   or regulations. You may not sell or otherwise dispose of the Option Shares in   violation of applicable law. As part of this prohibition, you may not use the   Cashless Exercise methods if the Company’s insider trading policy then   prohibits you from selling to the market.
    
	
 
    	
 
    	
 
    
	
Additional   Conditions to Exercise
    	
 
    	
The   Company may postpone issuing and delivering any Option 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   Option 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 exercise   the Option 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   you exercise the Option 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 Option Shares to you. You must —
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
represent   to the Company, in a manner satisfactory to the Company’s counsel, that you   are acquiring the Option Shares for your own account and not with a view to   reselling or distributing the Option Shares; and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
agree   that you will not sell, transfer, or otherwise dispose of the Option Shares   unless:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
a   registration statement under the Act is effective at the time of disposition   with respect to the Option 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.
    


 

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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.
    
	
 
    	
 
    	
 
    
	
Not a   Shareholder
    	
 
    	
You   understand and agree that the Company will not consider you a shareholder for   any purpose with respect to any of the Option Shares until you have exercised   the Option, paid for the shares, and received evidence of ownership.
    
	
 
    	
 
    	
 
    
	
No   Effect on Running Business
    	
 
    	
You   understand and agree that the existence of the Option 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.
    
	
 
    	
 
    	
 
    
	
Governing   Law
    	
 
    	
The   laws of the State of New York will govern all matters relating to the Option,   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   optionees 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 optionees.
    
	
 
    	
 
    	
 
    
	
Amendment
    	
 
    	
Subject   to any required action by the Committee or the shareholders of the Company,   the Company may cancel the Option 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 Option to the extent then exercisable.
    
	
 
    	
 
    	
 
    
	
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 Option Shares and the Exercise Price and other terms of the Option   from time to time as the Plan provides.
    


 

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