Exhibit 10.2


 


MAGELLAN HEALTH SERVICES,
INC.


 


2008 MANAGEMENT INCENTIVE PLAN


 


NOTICE OF STOCK OPTION GRANT


 


(REFERENCE NO. 2008-MARCH 4, 2009)


 


	
  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 4, 2009

  
	
   

  	
   

  	
   

  
	
  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 4, 2019

  



 


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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-March 4, 2009,
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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