Exhibit 10.2

 

MAGELLAN HEALTH SERVICES, INC.

 

2011 MANAGEMENT INCENTIVE PLAN

 

NOTICE OF STOCK OPTION GRANT

 

(REFERENCE NO. 2011-MARCH 5, 2013)

 

	
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:
    	
 
    	
$53.00
    
	
 
    	
 
    	
 
    
	
Date   of Grant:
    	
 
    	
March 5,   2013
    
	
 
    	
 
    	
 
    
	
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, 2023
    
					


 

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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, 2013, 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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