Document:

Exhibit 10.21

 

Director RSU Agreement

 

Congratulations, you have been awarded restricted stock units (“RSUs”) in recognition of your contributions to the success of HMS Holdings Corp. (the “Company”) and its Affiliates.  A restricted stock unit entitles you to receive a share of the Company’s common stock at a future date, 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 these RSUs under the Plan.  The following represents a brief description of your grant.  Additional details regarding your award are provided in the attached Restricted Stock Unit Agreement (the “Grant Agreement”) and in the Plan.

 

Restricted Stock Unit Grant Summary:

 

	
Date   of Grant
    	
 
    	
October 5,   2012
    
	
RSU   Shares
    	
 
    	
 
    
	
Vesting   Schedule
    	
 
    	
One-quarter of the RSU 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 a “Vesting Date.”
    

 

You have been granted RSUs for Shares of the Company’s common stock for the total number of Shares specified under “RSU Shares” in the chart above.

 

The potential value of your RSUs 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 will not receive the Shares represented by the RSUs unless and until the RSUs vest.  Your RSUs vest as provided in the chart above under “Vesting,” assuming you remain a member of the Board of Directors of the Company and subject to the terms in the Grant Agreement.

 

Once you have received 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.

Restricted Stock Unit Grant Agreement for Directors

 

HMS Holdings Corp. (the “Company”) has granted you restricted stock units (the “RSUs”) under the HMS Holdings Corp. Fourth Amended and Restated 2006 Stock Plan (as it may be amended from time to time) (the “Plan”).  Each RSU lets you receive a Share (an “RSU Share”) of the Company’s common stock, upon satisfaction of the conditions to receipt.

 

The individualized communication you received (the “Cover Letter”) provides the details for your RSUs.  It specifies the number of RSU Shares, the Date of Grant, and the schedule for vesting, with the related vesting dates (“Vesting Dates”).

 

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

 

No one may sell, transfer, or distribute the RSUs or the securities that may be received under them 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.

 

2

 

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

 

Vesting Schedule

 

Your RSUs become non-forfeitable (“Vested”) as provided in the Cover Letter to this Grant Agreement, assuming that through each Vesting Date, (i) if you received the RSUs in your capacity as an employee of the Company, you continue in service as an employee or (ii) if you received the RSUs in your capacity as a member of the Company’s Board, you continue in service as a member of the Company’s Board.  Any fractional shares will be carried forward to the following Vesting 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.

 

Vesting will accelerate fully on your disability or death, including with respect to the Performance RSU Shares (as defined below).  For this purpose, “disability” means permanent and total disability as defined by Section 22(e)(3) of the Code.

 

If your employment or service ends as a result of Retirement, you will be treated as continuing in service for vesting purposes until the earlier to occur of (x) the second anniversary of your Retirement and (y) the last of the applicable Vesting Dates.  “Retirement” for this purpose means cessation of employment or 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 RSUs 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 (i) a termination without cause (as determined by the Committee or the Board) or (ii) Retirement.

 

Termination for Cause

 

If the Company terminates your employment or service for cause or if you violate Cause any then applicable restrictive covenant agreement (such as agreements pertaining to confidentiality, intellectual property, nonsolicitation, and/or noncompetition), the RSUs will immediately terminate without regard to whether they are then Vested in whole or in part.

 

Distribution Date

 

Subject to any overriding provisions in the Plan, you will receive a distribution of the Shares equivalent to your Vested RSU Shares as soon as practicable following the date(s) on which you become Vested (with the actual date being the “Distribution Date”) and, in any event, no later than 30 days following an applicable Vesting Date, unless the Committee determines that you may make a timely deferral election to defer distribution to a later date and you have made such an election (in which case the deferred date will be the “Distribution Date”).

 

Vesting that accelerates after a Change in Control will only accelerate the Distribution Date if and to the extent permitted under Section 409A of the Code.

 

Restrictions and Forfeiture

 

You may not sell, assign, pledge, encumber, or otherwise transfer any interest (“Transfer”) in the RSU Shares until the RSU Shares are distributed to you. Any attempted Transfer that precedes the Distribution Date is invalid.

 

Unless the Committee determines otherwise or the Grant Agreement provides otherwise, if your employment or service with the Company terminates for any reason before your RSUs are Vested, then you will forfeit the unvested RSUs (and the Shares to which they relate) to the extent that the RSUs do not otherwise vest as a result of the termination, pursuant to the rules in the Vesting Schedule section.

 

3

 

The forfeited RSUs will then immediately revert to the Company.  You will receive no payment for the RSUs if you forfeit them.

 

Taxes and Withholding

 

The RSUs provide tax deferral, meaning that the RSU Shares are not taxable until you actually receive the RSU Shares on or around the Distribution Date.    You will then owe taxes at ordinary income tax rates as of the Distribution Date at the Shares’ value.  If you are an employee of the Company, you may owe FICA and HI (Social Security and Medicare) taxes before the Distribution Date.

 

Issuing the Shares under the RSUs 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 RSU Shares to be issued to you by that number of RSU Shares (valued at their Fair Market Value on the date of distribution) that would equal all taxes required to be withheld (at their minimum withholding levels), (ii) accepting payment of the withholdings from a broker in connection with a sale of the RSU Shares 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

 

The Company will not issue the RSU Shares if doing so would violate any applicable Federal or state securities laws or other laws or regulations.  You may not sell or otherwise dispose of the RSU Shares in violation of applicable law.

 

Additional Condition to Receipt

 

The Company may postpone issuing and delivering any RSU 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 RSU 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 receive the RSU Shares 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 the vesting provisions of the RSUs are satisfied and you are entitled to receive RSU Shares 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 RSU Shares to you.  You must —

 

·                  represent to the Company, in a manner satisfactory to the Company’s counsel, that you are acquiring the RSU Shares for your own account and not with a view to reselling or distributing the RSU Shares; and

 

·                  agree that you will not sell, transfer, or otherwise dispose of the RSU Shares unless:

 

·                  a registration statement under the Act is effective at the time of disposition with respect to the RSU Shares you propose to sell, transfer, or otherwise dispose of; or

 

4

 

·                  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.

 

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.

 

Limited Status

 

You understand and agree that the Company will not consider you a shareholder for any purpose with respect to the RSU Shares, unless and until the RSU Shares have been issued to you on the Distribution Date.  You will not receive dividends with respect to the RSUs, but the Company will credit additional whole or fractional RSUs to this Grant equal to the result of dividing (i) the product of the total number of RSUs credited to you under this Grant on the record date for such dividend (and not yet distributed in Shares) and the per share amount of such dividend by (ii) the Fair Market Value of one Share on the date such dividend is paid by the Company to shareholders.  The additional RSUs will be or become Vested to the same extent as the RSUs that resulted in the crediting of such additional Units and may be paid out in cash or Shares under the timing rules provided in Section 8(e) of the Plan.

 

Voting

 

You may not vote the RSUs.  You may not vote the RSU Shares unless and until the Shares are distributed to you.

 

No Effect on Running Business

 

You understand and agree that the existence of the RSUs 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.

 

Section 409A

 

The RSUs are intended to comply with the requirements of Section 409A and must be construed consistently with that section.  Notwithstanding anything in the Plan or this Grant Agreement to the contrary, if the RSUs Vest in connection with your “separation from service” within the meaning of Section 409A, as determined by the Company), and if (x) you are then a “specified employee” within the meaning of Section 409A at the time of such separation from service (as determined by the Company, by which determination you agree you are bound) and (y) the distribution of RSU Shares under such RSUs will result in the imposition of additional tax under Section 409A if distributed to you within the six month period following your separation from service, then the distribution under such accelerated RSUs will not be made until the earlier of (i) the date six months and one day following the date of your separation from service or (ii) the 10th day after your date of death.  Neither the Company nor you shall have the right to accelerate or defer the delivery of any such RSU Shares or benefits except to the extent specifically permitted or required by Section 409A.  In no event may the Company or you defer the delivery of the RSU Shares beyond the date specified in the Distribution Date section, unless such deferral complies in all respects with Treasury Regulation Section 1.409A-2(b) related to subsequent changes in the time or form of payment of nonqualified deferred compensation arrangements, or any successor regulation.

 

In any event, the Company makes no representations or warranty and shall have no liability to you or any other person, if any provisions of or distributions under this Grant Agreement are determined to constitute deferred compensation subject to Section 409A but not to satisfy the conditions of that section.

 

5

 

Unsecured Creditor

 

The RSUs create a contractual obligation on the part of the Company to make a distribution of the RSU Shares at the time provided for in this Grant Agreement.  Neither you nor any other party claiming an interest in deferred compensation hereunder shall have any interest whatsoever in any specific assets of the Company.  Your right to receive distributions hereunder is that of an unsecured general creditor of Company.

 

Governing Law

 

The laws of the State of New York will govern all matters relating to the RSUs, 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 Plan participants 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 Plan participants.

 

Amendment

 

Subject to any required action by the Committee or the shareholders of the Company, the Company may cancel the RSUs 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 RSUs to the extent then Vested.

 

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 RSU Shares and other terms of the RSUs from time to time as the Plan provides.

 

6Exhibit 10.22

 

EXECUTIVE NQSO AGREEMENT

 

<Participant Full Name>

 

Dear <Participant First Name>

 

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
    	
 
    	
October 5, 2012
    
	
Option Shares
    	
 
    	
<Number of Shares Granted>
    
	
Exercise Price per Share
    	
 
    	
$27.79
    
	
Exercisability
    	
 
    	
One-sixth of the Option Shares on December 31   of the year following the year of the Date of Grant and an additional   one-sixth on the two following anniversaries of that date, with the remainder   becoming exercisable as provided in Exhibit A to the Grant   Agreement. Each of those dates is an “Exercisability Date.”
    
	
Term Expiration Date
    	
 
    	
October 4, 2019
    

 

·                  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, October 4, 2019, 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://www29.benefits.ml.com/login/login.aspx.  Please email IR@hms.com  with any questions.

 

2

 

HMS HOLDINGS CORP.

NONQUALIFIED STOCK OPTION GRANT AGREEMENT FOR EXECUTIVES

 

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.

 

3

 

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, 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
    

 

4

 

	
 
    	
 
    	
·
    	
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
    
					

 

5

 

	
 
    	
 
    	
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.
    

 

6

 

	
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.
    
	
 
    	
 
    	
 
    
	
Restrictive Covenants Clawback
    	
 
    	
If the Board or the Committee determines,   in its sole discretion, that you violated or are violating any of the   Restrictive Covenants set forth below under the section titled “Restrictive   Covenants,” the Option will immediately terminate without regard to whether   it is then Vested in whole or in part.    In addition, the Board or the Committee may, in its sole discretion,   require from you payment or transfer   to the Company of the Gain from the Option, where the “Gain” consists of the   greatest of (i) the value of the Option Shares on the date, within the   Recovery Measurement Period, on which you exercised the Option with respect   to such Option Shares, (ii) the value of the Option Shares received upon   exercise during the Recovery Measurement Period, as determined on the date of   the request by the Committee to pay or transfer, (iii) the gross (before   tax) proceeds you received from any sale of the Option Shares during the   Recovery Measurement Period, and (iv) if transferred without sale during   the Recovery Measurement Period, the value of the Option Shares when so   transferred.  The Board or the   Committee may determine the recoupment method in its sole discretion for any   portion of the Option transferred (where permitted) before being   exercised.  The “Recovery Measurement Period”   means the 12 months before the date of the determination of violation.  The provisions in this section are   essential economic conditions to the Company’s grant of the Option to you. By   acknowledging receipt of the grant of the Option hereunder, you agree that   the Company may deduct from any amounts it owes you from time to time (such   as any severance or other payments owed following a termination of   employment, as well as any other amounts owed to you by the Company, as   permitted by applicable law) to the extent of any amounts you owe the Company   under this Restrictive Covenants Clawback   section.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
You acknowledge that you would not be   receiving the Option described herein but for your agreement to comply with   the Restrictive Covenants.  Likewise,   you 
    

 

7

 

	
 
    	
 
    	
acknowledge that you would be unjustly   enriched if you violate the Restrictive Covenants, while being able to retain   some or all of the Option Shares or the gain associated with them.  Furthermore, you acknowledge and agree that   the damages for your breach of the Restrictive Covenants are not subject to   calculation and that the remedies set forth in this Restrictive Covenants Clawback section,   therefore, will only reimburse the Company for a portion of the damage   done.  For this reason, the Company   shall be entitled to recover from you any and all damages Company has   suffered and, in addition, Company will be entitled to injunctive   relief.  The parties agree that the   forfeiture of the Option and payments described in this section are expressly   not Company’s exclusive or sole remedy.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
This remedy is in addition to any other   remedies that the Company may have available in law or equity with respect to   breaches of the Restrictive Covenants below.    It is also in addition to, and not in substitution for, any other   clawback policies that may be adopted from time to time, including any   required by Federal law, such as under Section 304 of the Sarbanes-Oxley   Act of 2002 or the Dodd-Frank Wall Street Reform and Consumer Protection Act.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Payment is due in cash or cash equivalents   within 10 days after the Board or the Committee provides notice to you that   it is enforcing this clawback.  Payment   will be calculated on a gross basis, without reduction for taxes or   commissions.  The Company may, but is   not required to, accept retransfer of shares in lieu of cash payments.
    
	
 
    	
 
    	
 
    
	
Restrictive   Covenants
    	
 
    	
In consideration of the terms of this   Option and your access to Proprietary Information (as defined below), you   agree to the Restrictive Covenants set forth below. 
    
	
 
    	
 
    	
 
    
	
 
    	
Confidential Information
    	
 
    	
You have or will be given access to and   provided with sensitive, confidential, proprietary and/or trade secret   information (collectively, “Proprietary   Information”) in the course of your employment. Examples of   Proprietary Information include inventions, new product or marketing plans,   business strategies and plans, merger and acquisition targets, financial and   pricing information, software of the Company in various stages of   development, including computer programs in source code and binary code form,   software designs, specifications, programming aids (including “library   subroutines” and productivity tools), programming languages, interfaces,   visual displays, technical documentation, user manuals, data files and   databases of the Company, analytical models, customer/client lists and   information, and supplier and vendor lists and information. You agree not to   disclose or use Proprietary Information, either during or after your   employment with the Company, except as necessary to perform your duties or as   the Company may consent in writing. 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Non-competition and Non-solicitation
    	
 
    	
You   agree that while the Company employs you and for a period of 12 months after   your employment ends for any reason, you will not directly or indirectly   (whether as an owner, partner, officer, employee, director, investor, lender,   consultant, independent contractor or otherwise) do any of the following:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
(i)                                     Compete.  In the geographical area   where the Company does business or, at the time your employment ends, plans   to do business, you will not engage or assist others in 
    
					

 

8

 

	
 
    	
 
    	
 
    	
engaging in any business or enterprise that competes with the   Company’s business, including any business or enterprise that develops,   designs, produces, manufactures, markets, licenses, sells, renders, or provides   any product or service that competes with any product or service actually or   planned to be developed, designed, produced, manufactured, marketed,   licensed, sold, rendered, or provided by the Company while you are or were   employed by the Company; provided that your passive ownership of not more   than 1% of the outstanding stock of a publicly-held company will not, by   itself, violate this provision.  For   purposes of this Grant Agreement, you agree that the Company does business   throughout and plans to do business throughout the United States;
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
(ii)                                  Solicit   Clients, Customers, or Accounts.  You will not, either alone or in   association with others, actually or attempt to solicit, divert, or take away   the business or patronage of any of the Company’s clients, customers, or   accounts, or prospective clients, customers, or accounts, that the Company   contacted, solicited, or served while you were employed by the Company or   about which you have Proprietary Information, provided that this provision   does not prevent you from soliciting clients, customers, or accounts (if you   are not using Proprietary Information to do so) for purposes that are not in   actual or potential competition with the Company;
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
(iii)                               Solicit   or Hire Company Employees and Independent Contractors.  You will not, either alone or in   association with others, actually or attempt to (x) solicit, recruit or   induce any Company employee or independent contractor to leave the Company’s   service or (y) solicit, recruit, hire, or engage as an employee or   independent contractor any individual whom the Company employed or engaged at   any time while you were employed by the Company, except for an individual   whose employment or other service relationship with the Company ended at   least six months before the date of your action; and/or
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
(iv)                              Disclose   or Utilize Product Development.  You will not, either alone or in   association with others, disclose to, or utilize for the benefit of, any   entity other than the Company, any systems or product development ideas,   concepts, or strategies that you or others in communication with you   explored, generated, initiated, or discussed for potential implementation   during your employment with the Company, even if the Company has not   implemented such ideas, concepts, or strategies by the time your employment   with the Company ends.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
For the purposes of subsection (ii) “Solicit   Clients, Customers, or Accounts”, the terms “customer,” “client,”   or “account” as applied to governmental agencies will mean the agency or   department for which any of the products or services of the Company are sold   or performed during the applicable period, any related program office, and   any agency, department, or office that succeeds to the functions of any   agency, department, or office to which the Company then provides or within   the preceding 12 months provided goods or services (to the extent that the   successor replaces part or all of the customer or client to which the Company   provided goods or services).
    

 

9

 

	
 
    	
General
    	
 
    	
To   the extent that you and the Company agree at any time to enter into separate   agreements containing restrictive covenants with different or inconsistent   terms than those contained herein, you and the Company acknowledge and agree   that such different or inconsistent terms shall not in any way affect or have   relevance to the Restrictive Covenants contained herein, and the terms of   these Restrictive Covenants do not supersede or amend any others currently or   in the future in place.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By   accepting this Option grant, you agree that the provisions of this   Restrictive Covenants section (and the related Restrictive Covenants Clawback   section) are reasonable and necessary to protect the legitimate interests of   the Company. 
    
	
 
    	
 
    	
 
    
	
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.
    
					

 

10

 

EXHIBIT A

 

The exercisability of 50% of the Shares covered by the Option (the “Performance Option Shares”) is subject to the following conditions:

 

Service Condition

 

You must remain employed by the Company until December 31, 2015.

 

Performance Conditions

 

1.  The Company’s adjusted earnings per share (“EPS”) for the fiscal year ending December 31, 2013 must be at least 10% higher than the Company’s adjusted EPS for its fiscal year ending December 31, 2012.

 

2.  Based on the percentage increase in adjusted EPS for the fiscal year ending December 31, 2014 compared to adjusted EPS for the fiscal year ending December 31, 2012 the percentage of Performance Option Shares that will be deemed to be exercisable, if you remain employed as provided above, will be determined in accordance with the following table:

 

	
Increase in Adjusted EPS
    	
 
    	
Deemed Vested Percentage
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
25%   or greater
    	
 
    	
100
    	
%
    

 

EPS will be determined in accordance with United States generally accepted accounting principles, excluding the effects of any transaction during the Performance Period in which the Company or a subsidiary acquires or combines with another company that was not then a subsidiary.  Adjusted EPS represents EPS adjusted for stock-based compensation expense and amortization of intangibles, and for the related taxes for these adjustments.

 

Whether the adjusted EPS requirement is achieved for a particular fiscal year will be treated as determined on the date that the Company files its Annual Report on Form 10-K for that year.

 

11

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