Document:

exv10w1

Exhibit 10.1

INCREMENTAL REVOLVING CREDIT FACILITY AMENDMENT dated as of June 9,
2011 (this “Amendment”), among CROWN CASTLE OPERATING COMPANY, a Delaware
corporation (the “Borrower”), the LOAN PARTIES signatory hereto, THE ROYAL
BANK OF SCOTLAND PLC (“RBS”), as Administrative Agent under the Credit
Agreement (as defined below) (in such capacity, the “Administrative
Agent”), and the ADDITIONAL REVOLVING LENDERS (as defined below), to the
CREDIT AGREEMENT dated as of January 9, 2007 (as amended, supplemented or
otherwise modified from time to time prior to the date hereof, the “Credit
Agreement”), among Crown Castle International Corp., a Delaware
corporation, the Borrower, the Subsidiary Guarantors from time to time
party thereto, the several banks and other financial institutions or
entities from time to time parties thereto (the “Lenders”) and the
Administrative Agent.

A. Pursuant to the Credit Agreement, the Lenders have extended credit to the Borrower, and
have agreed to extend credit to the Borrower, in each case pursuant to the terms and subject to the
conditions set forth therein. Capitalized terms used but not otherwise defined herein have the
respective meanings assigned to them in the Credit Agreement.

B. Pursuant to Section 2.24 of the Credit Agreement, the Borrower has requested that the
Persons set forth on Schedule I hereto (the “Additional Revolving Lenders”) increase the Total
Revolving Commitments by an amount equal to $50,000,000 (the “Revolving Commitment Increase”; the
commitment of each such Additional Revolving Lender to provide its applicable portion of the
Revolving Commitment Increase, each an “Incremental Revolving Loan Commitment”).

C. The Additional Revolving Lenders are willing to provide such Revolving Commitment Increase
to the Borrower on the terms and subject to the conditions set forth herein and in the Credit
Agreement.

D. This Amendment is an Increase Joinder under and as defined in Section 2.24 of the Credit
Agreement, and the parties hereto hereby agree that the Credit Agreement shall be amended as set
forth in this Amendment.

Accordingly, in consideration of the mutual agreements herein contained and other good and
valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and subject
to the conditions set forth herein, the parties hereto hereby agree as follows:

SECTION 1. Commitments; Pro Rata Allocation.

(a) Effective as of the Revolving Commitment Increase Effective Date (as defined in Section 2
below), (i) each Additional Revolving Lender hereby agrees to
provide an Incremental Revolving Loan Commitment in the amount set forth opposite such
Additional Revolving Lender’s name on Schedule I hereto and to make extensions of credit to the
Borrower from time to time during the Revolving Commitment Period in accordance with, and subject
to the limitations set forth in, the Credit Agreement and (ii) as a result of the Revolving
Commitment Increase, the Total Revolving Commitments shall be increased to $450,000,000.

 

 

 

(b) Effective as of the Revolving Commitment Increase Effective Date, unless the context shall
otherwise require, the Additional Revolving Lenders shall constitute “Revolving Lenders” and
“Lenders”, the Incremental Revolving Loan Commitments shall constitute “Revolving Commitments” and
“Commitments” and the loans made thereunder shall constitute “Revolving Loans” and “Loans”, in each
case for all purposes of the Credit Agreement and the other Loan Documents.

(c) On the Revolving Commitment Increase Effective Date, each Additional Revolving Lender
shall fund to the Administrative Agent for the account of the Borrower an amount equal to such
Additional Revolving Lender’s pro rata share of the aggregate principal amount of Revolving Loans
outstanding immediately prior to the Revolving Commitment Increase Effective Date, determined based
on the Total Revolving Commitments immediately after giving effect to the Revolving Commitment
Increase (such amount, the “Funded Incremental Loans”).

(d) The Borrower shall (i) make an optional prepayment in accordance with Section 2.8 of the
Credit Agreement (other than the minimum amount requirements set forth therein) on the Revolving
Commitment Increase Effective Date in an amount equal to the amount of the Funded Incremental Loans
(it being understood and agreed that the proceeds from the Funded Incremental Loans shall
constitute the principal amount required to be paid by the Borrower to the Administrative Agent in
connection with such optional prepayment) and (ii) pay to the Administrative Agent an amount equal
to the accrued but unpaid interest on such portion of such Revolving Loans so prepaid and any
amounts payable under Section 2.18 of the Credit Agreement in connection with such prepayment, and
the Administrative Agent shall apply the entire amount of the Funded Incremental Loans and the
amounts paid to the Administrative Agent pursuant to clause (ii) above to effect a prepayment of
the Revolving Loans of the Revolving Lenders (other than the Additional Revolving Lenders) in
accordance with Sections 2.8 and 2.15 of the Credit Agreement; provided that, for the
avoidance of doubt, the proceeds of the Funded Incremental Loans and the amounts set forth in
clause (ii) above shall be applied pro rata (other than any amounts payable under
Section 2.18 of the Credit Agreement, which shall be paid to the Revolving Lenders (other than the
Additional Revolving Lenders) entitled to such amounts in accordance with such Section 2.18) based
on the Total Revolving Commitments of each Revolving Lender (other than the Additional Revolving
Lenders) in effect immediately prior to giving effect to the Revolving Commitment Increase. The
Additional Revolving Lenders hereby agree to waive the requirement set forth in Section 2.15(c) of
the Credit Agreement solely with respect to the optional prepayment to be effected pursuant to this
Section 1(d).

 

 

 

(e) Each Funded Incremental Loan shall be a Revolving Loan for purposes of the Credit
Agreement and the other Loan Documents and shall be allocated among each existing borrowing
consisting of Revolving Loans made on the same date, of the same Type and with the same Interest
Period (each, a “Borrowing”) such that, after giving effect to such allocation and the optional
prepayment to be effected pursuant to Section 1(d) above, each Revolving Lender (including the
Additional Revolving Lenders) shall hold a pro rata share of the Revolving Loans in each Borrowing,
determined based on the Total Revolving Commitments immediately after giving effect to the
Revolving Commitment Increase.

(f) Upon giving effect to the Revolving Commitment Increase, Schedule 1 to the Credit
Agreement shall be replaced in its entirety with Schedule II hereto.

SECTION 2. Conditions. The consummation of the Revolving Commitment Increase shall
not become effective until the date on which each of the following conditions is satisfied or
waived by the Additional Revolving Lenders (such date, the “Revolving Commitment Increase Effective
Date”):

(a) The Administrative Agent shall have received a notice of borrowing with respect to the
Funded Incremental Loans to be made on the Revolving Commitment Increase Effective Date in the form
of the borrowing notice that would otherwise be required to be delivered under Section 2.2 of the
Credit Agreement; provided that the Funded Incremental Loans shall have Interest Periods as
determined pursuant to Section 1(e).

(b) All reasonable out-of-pocket expenses of the Administrative Agent for which invoices have
been presented (including the reasonable out-of-pocket expenses of legal counsel) that are required
to be reimbursed in connection with this Amendment under Section 10.5 of the Credit Agreement shall
have been paid or reimbursed, as the case may be.

(c) Each of the representations and warranties made or deemed to be made in this Amendment
shall be true and correct in all material respects.

(d) Each of the conditions set forth in Section 5.2 of the Credit Agreement shall be satisfied
as of the Revolving Commitment Increase Effective Date (after giving effect to any borrowings to be
made on the Revolving Commitment Increase Effective Date).

(e) After giving pro forma effect to the borrowings to be made on the
Revolving Commitment Increase Effective Date and to any change in Consolidated Adjusted EBITDA and
any increase in Indebtedness resulting from the consummation of any Investment concurrently with
such borrowings as of the date of the most recent financial statements delivered pursuant to
Section 6.1(a) or (b) of the Credit Agreement, the Borrower shall be in compliance with each of the
covenants set forth in Section 7.1 of the Credit Agreement.

 

 

 

(f) The Administrative Agent shall have received an executed legal opinion of (i) Cravath,
Swaine & Moore LLP, special counsel to the Loan Parties, (ii) Delaware counsel to the Loan Parties
and (iii) general counsel to the Loan Parties, dated as of the Revolving Commitment Increase
Effective Date and covering such matters as the Administrative Agent shall reasonably request.

(g) The Administrative Agent shall have received reasonably satisfactory evidence that the
Board of Directors (or such similar governing body) of the Borrower, Holdings and each other Loan
Party has approved the execution and delivery of this Amendment and the performance of the
transactions contemplated hereby.

SECTION 3. Representations and Warranties. To induce the other parties hereto to
enter into this Amendment, the Borrower hereby represents and warrants to each such party that:

(a) This Amendment has been duly authorized, executed and delivered by the Borrower and
constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally
and by general equitable principles (whether enforcement is sought by proceedings in equity or at
law).

(b) Each of the representations and warranties made by the Borrower in or pursuant to the Loan
Documents is true and correct in all material respects on and as of the date hereof and on and as
of the Revolving Commitment Increase Effective Date as if made on and as of the date hereof or the
Revolving Commitment Increase Effective Date, as the case may be, except to the extent such
representations and warranties relate to an earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such earlier date.

(c) No Event of Default or Default has occurred and is continuing as of the date hereof and as
of the Revolving Commitment Increase Effective Date after giving effect to the Revolving Commitment
increase and extensions of credit requested to be made on the Revolving Commitment Increase
Effective Date.

SECTION 4. Effectiveness; Amendments. This Amendment shall become effective as of the
date first written above when the Administrative Agent shall have received counterparts of this
Amendment that, when taken together, bear the signatures of the Borrower, the other Loan Parties,
the Administrative Agent and the Additional Revolving Lenders. This Amendment may not be amended
nor may any provision hereof be waived except pursuant to a writing signed by Holdings, the
Borrower, the Administrative Agent and each Additional Revolving Lender.

 

 

 

SECTION 5. Credit Agreement. Except as expressly set forth herein, this Amendment
shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the
rights and remedies of the Lenders, the Administrative Agent, the Borrower or any other Loan Party
under the Credit Agreement or any other Loan
Document, and shall not alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the Credit Agreement or any other
Loan Document, all of which are ratified and affirmed in all respects and shall continue in full
force and effect. Nothing herein shall be deemed to entitle the Borrower to any future consent to,
or waiver, amendment, modification or other change of, any of the terms, conditions, obligations,
covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or
different circumstances. After the date this Amendment becomes effective, any reference to the
Credit Agreement shall mean the Credit Agreement as modified hereby. This Amendment shall be a
“Loan Document” for purposes of the Credit Agreement and the other Loan Documents.

SECTION 6. Acknowledgment of Loan Parties. Each of the Loan Parties hereby
acknowledges its receipt of a copy of this Amendment and its review of the terms and conditions
hereof, and each of the Loan Parties hereby consents to the terms and conditions of this Amendment
and the transactions contemplated hereby, and hereby confirms its Guaranty (to the extent
applicable to such Loan Party) and its grant of Collateral under the Credit Agreement and the
Security Documents and agrees that such Guaranty and such grant of Collateral shall continue to be
in full force and effect and shall inure to the benefit of the Secured Parties (as defined in the
Security Agreement), including the Additional Revolving Lenders as such in respect of their
Incremental Revolving Loan Commitments and the other Obligations owed to them from time to time.

SECTION 7. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.

SECTION 8. Counterparts. This Amendment may be executed by one or more of the parties
to this Amendment on any number of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. Delivery of an executed
signature page of this Amendment by facsimile transmission or other electronic transmission shall
be effective as delivery of a manually executed counterpart hereof. A set of the copies of this
Amendment signed by all the parties shall be lodged with the Borrower and the Administrative Agent.

SECTION 9. Notices. All notices, requests and demands to or upon the respective
parties hereto shall be given in the manner, and become effective, as set forth in Section 10.2 of
the Credit Agreement, except that, with respect to each undersigned Additional Revolving Lender,
all such notices, requests and demands shall be delivered to the address set forth below such
Additional Revolving Lender’s name on its executed signature page hereto.

SECTION 10. Headings. The Section headings used herein are for convenience of
reference only, are not part of this Amendment and are not to affect the construction of, or to be
taken into consideration in interpreting, this Amendment.

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their
respective authorized officers as of the day and year first written above.

	 	 	 	 	 
	 	CROWN CASTLE OPERATING COMPANY, as Borrower

 	 
	 	by:  	/s/ Jay A. Brown
 	 
	 	 	Name:  	Jay A. Brown 	 
	 	 	Title:  	Senior Vice President, Chief Financial Officer &
Treasurer 	 
	 
	 	CROWN CASTLE INTERNATIONAL CORP., as a Loan Party

 	 
	 	by:  	/s/ Jay A. Brown
 	 
	 	 	Name:  	Jay A. Brown 	 
	 	 	Title:  	Senior Vice President, Chief Financial Officer &
Treasurer 	 
	 
	 	CROWN CASTLE OPERATING LLC, as a Loan Party

 	 
	 	by:  	/s/ Jay A. Brown
 	 
	 	 	Name:  	Jay A. Brown 	 
	 	 	Title:  	Senior Vice President, Chief Financial Officer &
Treasurer 	 
	 
	 	CCGS HOLDINGS CORP., as a Loan Party

 	 
	 	by:  	/s/ Jay A. Brown
 	 
	 	 	Name:  	Jay A. Brown 	 
	 	 	Title:  	Senior Vice President, Chief Financial Officer
& Treasurer 	 

 

 

 

	 	 	 	 	 
	 	GLOBAL SIGNAL OPERATING PARTNERSHIP, L.P., as a Loan Party

 	 
	 	by:  	/s/ Jay A. Brown
 	 
	 	 	Name:  	Jay A. Brown 	 
	 	 	Title:  	Senior Vice President, Chief Financial Officer &
Treasurer 	 

 

 

 

	 	 	 	 	 
	 	THE ROYAL BANK OF SCOTLAND PLC, as

Administrative Agent

 	 
	 	by:  	/s/ Matthew Pennachio
 	 
	 	 	Name:  	Matthew Pennachio 	 
	 	 	Title:  	Vice President 	 

 

 

 

	 	 	 	 	 
	 	SCOTIABANC INC., as an Additional

Revolving Lender

 	 
	 	by:  	/s/ J.F. Todd
 	 
	 	 	Name:  	J.F. Todd 	 
	 	 	Title:  	Managing Director 	 
	 
	 	Address for Notices:

711 Louisiana Street

Suite 1400

Houston, TX 77002

 	 

 

 

 

	 	 	 	 	 
	 	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as 

an
Additional Revolving Lender

 	 
	 	by:  	/s/ Jose Carlos
 	 
	 	 	Name:  	Jose Carlos 	 
	 	 	Title:  	Vice President 	 
	 
	 	Address for Notices:

1251 Avenue of the Americas

New York, NY 10020-1104exv10w26

Exhibit 10.26

	 	 	 

	 

	 	CorVel Corporation
	Notice of Grant of Stock Options

	 	ID: 33-0282651
	and Option Agreement

	 	2010 Main Street Suite 600
	 

	 	Irvine, California 92614

Diane J. Blaha

You have been granted an option to acquire CorVel Corporation (the “Corporation”) common
stock (the “Common Stock”) as follows:

	 	 	 	 	 

	Non-Qualified Stock Option Grant No.
	 	 	004117	 
	Date of Grant
	 	 	2/24/2009	 
	Stock Option Plan
	 	 	1988	 
	Option Price Per Share
	 	$	19.79	 
	Total Number of Shares Granted
	 	 	5,000.00	 
	Total Price of Shares Granted
	 	$	98,950.00	 
	Expiration Date
	 	 	2/24/2014	 

Provided you continue to be a Service Provider (as defined in the Stock Option Agreement
attached hereto as Exhibit A) throughout the specified period, the Option will become exercisable
in accordance with Schedule A.

Optionee (and Optionee’s spouse) hereby agree(s) that the option is granted pursuant to and in
accordance with the express terms and conditions of the Stock Option Agreement and the
Corporation’s Restated Omnibus Incentive Plan.

	 	 	 

	/s/ Daniel J. Starck

	 	February 25, 2009

	 

	 	 
	CorVel Corporation

	 	Date
	 
	 	 
	/s/ Diane J. Blaha

	 	April 3, 2009
	 

	 	 
	Diane J. Blaha

	 	Date
	 
	 	 
	 
	 

	 	 
	Spouse

	 	Date

 

 

CONFIDENTIAL TREATMENT REQUESTED

 Schedule A 

Performance Option

Grant:
5,000 shares

Definitions:

“EPS” shall mean fully diluted net income per share (as reported in the Company’s financial
statements filed with the Securities and Exchange Commission).

“Calendar 2009 Achieve Target” shall
mean the Company achieves EPS of at least $1.76 per share during calendar year 2009.

“Calendar 2009 Achieve Alternate Target” shall mean the Company achieves EPS of at least $1.69
per share during calendar year 2009.

“Calendar 2010 Achieve Target” shall mean the Company achieves
EPS of at least $1.95 per share during calendar year 2010.

“Calendar 2010 Achieve Alternate Target” shall mean the Company achieves EPS of at least $1.87
per share during calendar year 2010.

“Calendar 2011 Achieve Target” shall mean the Company achieves
EPS of at least $*.** per share during calendar year 2011.

“Calendar 2011 Achieve Alternate Target” shall mean the Company achieves EPS of at least $*.** per
share during calendar year 2011.

Unless otherwise defined herein, capitalized terms used herein
shall have the meanings assigned to them in the Stock Option Agreement.

 

			
	*	 	Confidential treatment requested pursuant to Rule 24b-2 under the Securities Exchange Act of
1934. In accordance with Rule 24b-2, these confidential portions have been omitted from this
exhibit and filed separately with the Securities and Exchange Commission.

 

 

CONFIDENTIAL
TREATMENT REQUESTED 

Vesting Schedule:

Upon the Company achieving the specified targets set forth in the table below, the Option shall
become exercisable during each stated calendar year for the number of Option Shares set forth
opposite such targets described in the table below.

Performance Vesting

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Performance	 	Number of Option Shares That Will Vest	 	 	 	 	 
	2009	 	2010	 	2011	 	2009	 	 	2010	 	 	2011	 	 	Total	 	 	 	 	 
	Achieve Target
	 	Achieve Target	 	Achieve Target	 	 	1,500	 	 	 	1,500	 	 	 	2,000	 	 	 	5,000	 	 	 	100	%
	Achieve Target
	 	Achieve Target	 	Achieve Alternate Target	 	 	1,500	 	 	 	1,500	 	 	 	1,000	 	 	 	4,000	 	 	 	80	%
	Achieve Target
	 	Achieve Target	 	Fail to Achieve Any Target	 	 	1,500	 	 	 	1,500	 	 	 	0	 	 	 	3,000	 	 	 	60	%
	Achieve Target
	 	Achieve Alternate Target	 	Achieve Target	 	 	1,500	 	 	 	750	 	 	 	2,000	 	 	 	4,250	 	 	 	85	%
	Achieve Target
	 	Achieve Alternate Target	 	Achieve Alternate Target	 	 	1,500	 	 	 	750	 	 	 	1,000	 	 	 	3,250	 	 	 	65	%
	Achieve Target
	 	Achieve Alternate Target	 	Fail to Achieve Any Target	 	 	1,500	 	 	 	750	 	 	 	0	 	 	 	2,250	 	 	 	45	%
	Achieve Target
	 	Fail to Achieve Any Target	 	Achieve Target	 	 	1,500	 	 	 	0	 	 	 	2,500	 	 	 	4,000	 	 	 	80	%
	Achieve Target
	 	Fail to Achieve Any Target	 	Achieve Alternate Target	 	 	1,500	 	 	 	0	 	 	 	1,250	 	 	 	2,750	 	 	 	55	%
	Achieve Target
	 	Fail to Achieve Any Target	 	Fail to Achieve Any Target	 	 	1,500	 	 	 	0	 	 	 	0	 	 	 	1,500	 	 	 	30	%
	Achieve Alternate Target
	 	Achieve Target	 	Achieve Target	 	 	750	 	 	 	1,500	 	 	 	2,000	 	 	 	4,250	 	 	 	85	%
	Achieve Alternate Target
	 	Achieve Target	 	Achieve Alternate Target	 	 	750	 	 	 	1,500	 	 	 	1,000	 	 	 	3,250	 	 	 	65	%
	Achieve Alternate Target
	 	Achieve Target	 	Fail to Achieve Any Target	 	 	750	 	 	 	1,500	 	 	 	0	 	 	 	2,250	 	 	 	45	%
	Achieve Alternate Target
	 	Achieve Alternate Target	 	Achieve Target	 	 	750	 	 	 	750	 	 	 	2,000	 	 	 	3,500	 	 	 	70	%
	Achieve Alternate Target
	 	Achieve Alternate Target	 	Achieve Alternate Target	 	 	750	 	 	 	750	 	 	 	1,000	 	 	 	2,500	 	 	 	50	%
	Achieve Alternate Target
	 	Achieve Alternate Target	 	Fail to Achieve Any Target	 	 	750	 	 	 	750	 	 	 	0	 	 	 	1,500	 	 	 	30	%
	Achieve Alternate Target
	 	Fail to Achieve Any Target	 	Achieve Target	 	 	750	 	 	 	0	 	 	 	2,500	 	 	 	3,250	 	 	 	65	%
	Achieve Alternate Target
	 	Fail to Achieve Any Target	 	Achieve Alternate Target	 	 	750	 	 	 	0	 	 	 	1,250	 	 	 	2,000	 	 	 	40	%
	Achieve Alternate Target
	 	Fail to Achieve Any Target	 	Fail to Achieve Any Target	 	 	750	 	 	 	0	 	 	 	0	 	 	 	750	 	 	 	15	%
	Fail to Achieve Any Target
	 	Achieve Target	 	Achieve Target	 	 	0	 	 	 	2,000	 	 	 	2,000	 	 	 	4,000	 	 	 	80	%
	Fail to Achieve Any Target
	 	Achieve Target	 	Achieve Alternate Target	 	 	0	 	 	 	2,000	 	 	 	1,000	 	 	 	3,000	 	 	 	60	%
	Fail to Achieve Any Target
	 	Achieve Target	 	Fail to Achieve Any Target	 	 	0	 	 	 	2,000	 	 	 	0	 	 	 	2,000	 	 	 	40	%
	Fail to Achieve Any Target
	 	Achieve Alternate Target	 	Achieve Target	 	 	0	 	 	 	1,000	 	 	 	2,000	 	 	 	3,000	 	 	 	60	%
	Fail to Achieve Any Target
	 	Achieve Alternate Target	 	Achieve Alternate Target	 	 	0	 	 	 	1,000	 	 	 	1,000	 	 	 	2,000	 	 	 	40	%
	Fail to Achieve Any Target
	 	Achieve Alternate Target	 	Fail to Achieve Any Target	 	 	0	 	 	 	1,000	 	 	 	0	 	 	 	1,000	 	 	 	20	%
	Fail to Achieve Any Target
	 	Fail to Achieve Any Target	 	Achieve Target	 	 	0	 	 	 	0	 	 	 	2,500	 	 	 	2,500	 	 	 	50	%
	Fail to Achieve Any Target
	 	Fail to Achieve Any Target	 	Achieve Alternate Target	 	 	0	 	 	 	0	 	 	 	1,250	 	 	 	1,250	 	 	 	25	%
	Fail to Achieve Any Target
	 	Fail to Achieve Any Target	 	Fail to Achieve Any Target	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	 	 	 	0	%

Notwithstanding
anything to the contrary in this Schedule A or the Stock Option Agreement to which
this Schedule A is attached, the Company shall have the right, in its sole discretion, with or
without the consent of the Optionee, to amend this Schedule A to adjust any or all of the targets,
dates and/or target EPS amounts as it deems equitable to recognize unusual or non-recurring events,
including, but not limited to the Company’s acquisition of another business entity or assets, a
corporate merger or other consolidation, or the sale or discontinuation of significant business
operations or business units of the Company; changes in tax laws or accounting procedures; and any
other extraordinary circumstances.

 

 

Exhibit A

Section 16 Insiders Discretionary Option Grant Program

CorVel Corporation

Stock Option Agreement

     A. The Board has adopted the Plan for the purpose of retaining the services of selected
Employees, non-employee members of the Board (or the board of directors of any Parent or
Subsidiary) and consultants and advisors who provide services to the Company (or any Parent or
Subsidiary).

     B. Optionee is to render valuable services to the Company (or a Parent or Subsidiary), and
this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the Company’s grant of an option to Optionee.

     C. All capitalized terms in this Agreement shall have the meaning assigned to them in the
attached Appendix.

          Now, therefore, it is hereby agreed as follows:

          1. Grant of Option. Subject to and upon the terms and conditions set forth in this Agreement,
Optionee is hereby granted, as of the Grant Date, an option to purchase the Option Shares. The
Option Shares shall be purchasable from time to time during the option term at the Exercise Price.

          2.
Option Term. This option shall expire at the close of business on the Expiration Date,
unless sooner terminated in accordance with this Agreement.

          3.  Limited Transferability.

               (a) During Optionee’s lifetime, this option shall be exercisable only by Optionee and shall
not be assignable or transferable other than by will, by the laws of descent and distribution
following the Optionee’s death, or to any “Family Member” (as such term is defined in the General
Instructions to Form S-8 (or any successor to such Instructions or such Form) under the Securities
Act), provided that Optionee may not receive any consideration for such transfer, the Family Member
may not make any subsequent transfers other than by will or by the laws of descent and distribution
and the Company receives written notice of such transfer. This assigned portion may only be
exercised by the person or persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as those in effect for
this option immediately prior to such assignment and shall be set forth in such documents issued to
the assignee as the Company may deem appropriate.

               (b) Should Optionee die while holding this option, then this option shall be transferred in
accordance with Optionee’s will or the laws of inheritance. However, Optionee may designate one or
more persons as the beneficiary or beneficiaries of this option, and this option shall, in
accordance with such designation, automatically be transferred to such

 

 

beneficiary or beneficiaries upon Optionee’s death while holding this option. Such beneficiary or
beneficiaries shall take the transferred option subject to all the terms and conditions of this
Agreement, including (without limitation) the limited time period during which this option may,
pursuant to Paragraph 5, be exercised following Optionee’s death.

          4.
Exercisability. This option shall become exercisable in one or more installments as
specified in the Grant Notice. As the option becomes exercisable for such installments, those
installments shall accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term.

          5.  Effect of Cessation of Service.

               (a) Should Optionee cease to be a Service Provider for any reason (other than death, Permanent
Disability or Misconduct) while this option is outstanding, then this option shall remain
exercisable until the earlier of (i) the expiration of the three month period commencing with the
date of such cessation of Service Provider status or (ii) the Expiration Date.

               (b) Should Optionee cease to be a Service Provider by reason of Permanent Disability or death
while this option is outstanding, then the option shall remain exercisable until the earlier of (i)
the expiration of the twelve month period commencing with the date of such cessation of Service
Provider status or (ii) the Expiration Date.

               (c) Should Optionee cease to be a Service Provider due to termination for Misconduct, then
this option shall terminate immediately.

               (d) During the limited period of post-service exercisability, this option may not be exercised
in the aggregate for more than the number of Option Shares for which the option is exercisable at
the time Optionee ceased to be a Service Provider. This option shall, immediately when Optionee
ceases to be a Service Provider for any reason, terminate with respect to any Option Shares for
which this option is not otherwise at that time exercisable. Upon the expiration of the limited
post-service exercise period or (if earlier) upon the Expiration Date, this option shall terminate
entirely.

          6. Effect of Corporate Transaction.

               (a) This option, to the extent outstanding at the time of a Corporate Transaction but not
otherwise fully exercisable, shall automatically accelerate so that this option shall, immediately
prior to the effective date of such Corporate Transaction, become exercisable for all of the Option
Shares at the time subject to this option. However, this option shall not become exercisable on
such an accelerated basis, if and to the extent: (i) this option is, in connection with the
Corporate Transaction, to be assumed by the successor corporation (or parent thereof) or to be
replaced with a comparable option to purchase shares of the capital stock of the successor
corporation (or parent thereof) or (ii) this option is to be replaced with a cash incentive program
of the successor corporation which preserves the spread existing at the time of the Corporate
Transaction on any Option Shares for which this option is not otherwise at that

2

 

time exercisable (the excess of the Fair Market Value of those Option Shares over the aggregate
Exercise Price payable for such shares) and provides for subsequent payout in accordance with the
same exercise schedule for those Option Shares set forth in the Grant Notice.

               (b) Upon the consummation of the Corporate Transaction, this option shall terminate, except to
the extent assumed by the successor corporation (or parent thereof) in connection with the
Corporate Transaction.

               (c) If this option is assumed in connection with a Corporate Transaction, then this option
shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the
number and class of securities which would have been issuable to Optionee as a result of the
consummation of such Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction, and appropriate adjustments shall also be made to the Exercise Price,
provided the aggregate Exercise Price shall remain the same.

               (d) This Agreement shall not in any way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or assets.

          7.  Adjustment in Option Shares . Should any change be made to
the
Common Stock by reason of any stock split, reverse stock split, stock dividend, recapitalization,
combination of shares, exchange of shares, reorganization, merger, consolidation, split-up,
spin-off, or other change affecting the outstanding Common Stock as a class without the Company’s
receipt of consideration, appropriate adjustments shall be made to (a) the total number and/or
class of securities subject to this option and (b) the Exercise Price in order to reflect such
change and thereby preclude a dilution or enlargement of benefits hereunder.

          8.
Stockholder Rights. The holder of this option shall not have any stockholder rights with
respect to the Option Shares until such person shall have exercised the option in accordance with
the provisions of Paragraph 9, paid the Exercise Price and become a holder of record of the
purchased shares.

          9.  Manner of Exercising Option.

               (a) In order to exercise this option with respect to all or any part of the Option Shares for
which this option is at the time exercisable, Optionee (or any other person or persons exercising
the option) must take the following actions:

               (i) Execute and deliver to the Company (A) a Notice of
Exercise, in substantially the form attached hereto as Exhibit I, that specifies the number of
Option Shares for which the option is being exercised and (B) any additional documents which the
Committee may, in its discretion, deem advisable.

3

 

               (ii) Pay the aggregate Exercise Price for the purchased shares in one or more of the
following forms:

               (A) cash or check payable to the Company’s order;

               (B) shares of Common
Stock held by Optionee for the requisite period necessary to avoid a charge to the
Company’s reported earnings and valued at Fair Market Value on the Exercise Date; or

               (C)
through a special sale and remittance procedure pursuant to which Optionee is to provide
irrevocable written instructions (1) to a brokerage firm to effect the immediate sale of
the purchased shares and remit to the Company, out of the sale proceeds available on the
settlement date, an amount sufficient to cover the aggregate Exercise Price payable for the
purchased shares plus all applicable Federal and state income and employment taxes required
to be withheld by the Company by reason of such purchase and (2) to the Company to deliver
the certificates for the purchased shares directly to such brokerage firm in order to
complete the sale transaction.

               (iii) Furnish to the Company appropriate documentation that the person or persons
exercising the option (if other than Optionee) have the right to exercise this option.

               (iv) Make appropriate arrangements with the Company (or Parent or Subsidiary employing
or retaining Optionee) for the satisfaction of all Federal, state and local income and
employment tax withholding requirements applicable to the option exercise.

               (b) If payment of the exercise price is made by means of the surrender of shares of Common
Stock which are subject to certain restrictions, the number of shares of Common Stock issued upon
the exercise of the option equal to the number of shares of restricted stock surrendered shall be
subject to the same restrictions as the restricted stock that was surrendered.

               (c) Except to the extent the sale and remittance procedure specified in Paragraph 9(a)(ii)(C)
is utilized in connection with the option exercise, payment of the option price for the purchased
shares must accompany the Notice of Exercise.

               (d) Assuming Optionee does not sell the purchased shares of Common Stock on the Exercise Date,
as soon as practical after the Exercise Date, the Company shall either (i) issue to or on behalf of
Optionee (or any other person or persons exercising this option) a certificate for the purchased
Option Shares, with the appropriate legends affixed thereto, or (ii) instruct the Company’s
transfer agent to make a book-entry reflecting the purchase on its stockholder ledger.

4

 

               (e) In no event may this option be exercised for any fractional shares.

          10.
Tax Withholding.
The Committee may, in its discretion and upon such terms and conditions as it may deem appropriate
(including the applicable safe-harbor provisions of Securities and Exchange Commission Rule 16b-3
or any successor rule or regulation) provide Optionee (if Optionee is an Employee) with the
election to surrender previously acquired shares of Common Stock or have shares withheld in
satisfaction of the tax withholding obligations. To the extent necessary to avoid adverse
accounting treatment, the number of shares that may be withheld for this purpose shall not exceed
the minimum number needed to satisfy the applicable income and employment tax withholding rules.
If Common Stock is used to satisfy the Company’s tax withholding obligations, the shares of Common
Stock shall have been held by Optionee for the requisite period necessary to avoid a charge to the
Company’s reported earnings and shall be valued at their Fair Market Value when the tax withholding
is required to be made.

          11. Compliance with Laws and Regulations.

               (a) The exercise of this option and the issuance of the Option Shares upon such exercise shall
be subject to compliance by the Company and Optionee with all applicable requirements of law
relating thereto and with all applicable regulations of any Stock Exchange (or the Nasdaq Stock
Market, if applicable) on which the Common Stock may be listed for trading at the time of such
exercise and issuance.

               (b) The inability of the Company to obtain approval from any regulatory body having authority
deemed by the Company to be necessary to the lawful issuance and sale of any Common Stock pursuant
to this option shall relieve the Company of any liability with respect to the non-issuance or sale
of the Common Stock as to which such approval shall not have been obtained. The Company, however,
shall use reasonable efforts to obtain all such approvals.

          12. Successors and Assigns. Except to the extent otherwise provided in this Agreement, the
provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and
its successors and assigns and Optionee, Optionee’s assigns, the legal representatives, heirs and
legatees of Optionee’s estate and any beneficiaries of this option designated by Optionee.

          13.
Notices. Any notice required to be given or delivered to the Company under the terms of
this Agreement shall be in writing and addressed to the Company at its principal corporate offices.
Any notice required to be given or delivered to Optionee shall be in writing and addressed to
Optionee at the address indicated below Optionee’s signature line on the Grant Notice. All notices
shall be deemed effective upon personal delivery or three days after deposit in the U.S. mail,
postage prepaid and properly addressed to the party to be notified.

          14. Construction. This Agreement and the option evidenced hereby are made and granted pursuant
to the Plan and are in all respects limited by and subject to the terms of the Plan. In the event
of a conflict between the terms and conditions of the Plan and the terms and conditions of this
Agreement, the terms and conditions of this Agreement shall prevail. All

5

 

decisions of the Committee with respect to any question or issue arising under the Plan or this
Agreement shall be conclusive and binding on all persons having an interest in this option.

     15.
Governing Law. The interpretation, performance and enforcement of this Agreement shall be
governed by the laws of the State of Delaware without resort to its conflict-of-laws rules.

     16.
No Employment/Service Contract. Nothing in this Agreement or in the Plan shall confer upon
Optionee any right to continue to be a Service Provider of the Company (or any Parent or
Subsidiary) for any period of specific duration or otherwise interfere with or restrict in any way
the rights of the Company (or such Parent or Subsidiary) or Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee’s Service Provider status at any time and for any
reason whatsoever, with or without cause.

6

 

EXHIBIT I

NOTICE OF EXERCISE OF STOCK OPTION

     I hereby notify CorVel Corporation (the “Company”) that I, _______________________, elect to
purchase __________ shares of Common Stock of the Corporation (the “Purchased Shares”) at an option
price of $ _________ per share (the “Option Price”) pursuant to the option (the “Option”) granted
to me on ___________.

          My option was granted as a non-qualified stock option. I will need to report taxable
income at the time I exercise this Option and pay the corresponding withholding tax (the
“Withholding Tax”) to the Corporation. The Withholding Tax is computed on the difference between
the Option Price and the Fair Market Value of the stock on the date I exercise the Option.

          Concurrently with the delivery of the Exercise Notice to the Chief Financial Officer of the
Corporation, I shall hereby pay to the Corporation the Option Price and Withholding Tax for the
Purchased Shares in accordance with the provisions of my agreement with the Corporation evidencing
the Option and shall deliver whatever additional documents may be required by such agreement as a
condition for exercise.

	 
	 	 	 

	 

	 	 
	Date

	 	Optionee’s Signature
	 
	 	 
	If applicable, print name in exact manner it
is to appear on the stock certificate:
	 	 
	 

	 	 
	 
	 	 
	Optionee’s Mailing Address:
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	Address to which certificate is to be sent, if
different from address above:
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	Brokerage Account Information
(Broker Name, Contact Info., Account #)
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

A-1

 

APPENDIX

          The following definitions shall be in effect under this Agreement:

     A. Agreement shall mean this Stock Option Agreement.

     B.
Board shall mean the Board of Directors of the Company.

     C. Common Stock shall mean shares of the Company’s common stock, $0.0001 par value.

     D. Code shall mean the Internal Revenue Code of 1986, as amended.

     E. Committee shall mean a committee designated by the Board to administer the Plan, which
initially shall be the compensation committee of the Board. The Committee shall be comprised of at
least two directors but not less than such number of directors as shall be required to permit
awards granted under the Plan to qualify under Rule 16b-3 under the Securities Act and Section
162(m) of the Code, and each member of the Committee shall be a “Non-Employee Director “ within the
meaning of Rule 16b-3 under the Securities Act and an “Outside Director” within the meaning of
Section 162(m) of the Code.

     F. Company shall mean CorVel Corporation, a Delaware corporation, or any corporate successor
which shall assume the Plan.

     G. Corporate Transaction shall mean any of the following transactions for which the approval
of the Company’s stockholders is obtained:

          (i) a merger or acquisition in which the Company is not
the surviving entity, except for a transaction the principal purpose of which is to change the
state of the Company’s incorporation,

          (ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Company to any entity other than a parent or subsidiary of
the Company, or

          (iii) any reverse merger in which the Company is the surviving entity but in which
fifty percent (50%) or more of the Company’s outstanding voting stock is transferred to holders
different from those who held such fifty percent (50%) or greater interest immediately prior to
such merger.

     H. Employee shall mean an individual for whom the Company or one or more of its Parent or
Subsidiaries reports his or her earnings on a Form W-2.

     I. Exercise Date shall mean the date on which the option shall have been exercised in
accordance with Paragraph 9.

A-2

 

     J. Exercise Price shall mean the exercise price per Option Share as specified in the Grant
Notice.

     K. Expiration Date shall mean the date on which the option expires as specified in the Grant
Notice.

     L. Fair
Market Value per share of Common Stock on any relevant date shall be determined in
accordance with the following provisions:

          (i) If the Common Stock is at the time listed on the
Nasdaq National Market or the Nasdaq Capital Market, then the Fair Market Value shall be the
closing selling price per share of Common Stock on the date in question, as such price is reported
by the National Association of Securities Dealers on the Nasdaq National Market or the Nasdaq
Capital Market and published in The Wall Street Journal.

          (ii) If the Common Stock is at the time listed on any Stock Exchange, then the Fair
Market Value shall be the closing selling price per share of Common Stock on the date in
question on the Stock Exchange determined by the Committee to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of transactions on
such exchange and published in The Wall Street Journal.

          (iii) If the Common Stock is not listed on the Nasdaq National Market, Nasdaq Capital
Market or a national securities exchange, the Fair Market Value shall be the average of the
closing bid and ask prices of the Common Stock on that day as reported by the Nasdaq
bulletin board or any comparable system on that day.

          (iv) If the Common Stock is not traded included in the Nasdaq bulletin board or any
comparable system, the Fair Market Value shall be the average of the closing bid and ask
prices on that day as furnished by any member of the National Association of Securities
Dealers, Inc. selected from time to time by the Company for that purpose.

          (v) If the date in question is not a trading day, then the Fair Market Value shall be
determined based on prices for the trading day prior to the date in question.

     M. Grant Date shall mean the date of grant of the option as specified in the Grant Notice.

     N. Grant Notice shall mean the Notice of Grant of Stock Option accompanying this Agreement,
pursuant to which Optionee has been informed of the basic terms of the option evidenced hereby.

     O. Misconduct shall mean any of the following:

               (i) Optionee’s intentional misconduct or continuing gross neglect of duties which
materially and adversely affects the business and operations of the Company or any Parent
or Subsidiary employing Optionee;

A-3

 

               (ii) Optionee’s unauthorized use or disclosure of (or attempt to use or disclose)
confidential information or trade secrets of the Company or any Parent or Subsidiary; or

               (iii) Optionee’s commission of an act involving embezzlement, theft, fraud,
falsification of records, destruction of property or commission of a crime or other offense
involving money or other property of the Company or any Parent or Subsidiary employing
Optionee.

                    The reasons for termination of Optionee as a Service Provider set forth in this subparagraph
are not intended to be an exclusive list of all acts or omissions which the Company (or any Parent
or Subsidiary) may deem to constitute misconduct or other grounds for terminating Optionee (or any
other individual).

     P. Non-Statutory Option shall mean an option not intended to satisfy the requirements of Code
Section 422.

     Q. Notice of Exercise shall mean the notice of exercise in the form attached hereto as Exhibit
I.

     R. Option Shares shall mean the number of shares of Common Stock subject to the option as
specified in the Grant Notice.

     S. Optionee shall mean the person to whom the option is granted as specified in the Grant
Notice.

     T. Parent shall mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, provided each such corporation in the unbroken chain (other
than the Company) owns, at the time of the determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the other corporations in
such chain.

     U. Permanent Disability shall have the meaning assigned to “permanent and total disability” as
set forth in Code Section 22(e)(3).

     V. Plan shall mean the CorVel Corporation Restated Omnibus Incentive Plan (Formerly The
Restated 1988 Executive Stock Option Plan).

     
W. Securities Act shall mean the Securities Act of 1933, as amended.

     X. Service Provider shall mean an individual who renders service on a periodic basis to the
Company, its Parent and/or any of its Subsidiaries as an Employee, a non-Employee member of the
board of directors or a consultant or independent advisor.

     Y. Stock Exchange shall mean the American Stock Exchange or the New York Stock Exchange, or
any other national stock exchange.

A-4

 

     Z. Subsidiary
shall mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, provided such corporation (other than the last corporation
in the unbroken chain) owns, at the time of determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the other corporations in
such chain. For purposes of all Non-Statutory Option grants under the Plan and all Corporate
Transaction provisions of the Plan, the term “Subsidiary” shall also include any partnership, joint
venture or other business entity of which the Company owns, directly or indirectly through another
entity, more than a fifty percent (50%) interest in voting power, capital or profits.

A-5

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