Document:

Exhibit

Exhibit 10.2.2

    
SUMMARY OF COMPENSATION FOR THE
COMPANY'S NON-EMPLOYEE DIRECTORS

On March 9, 2016, the Senior Executive Compensation Committee of the board of directors of Employers Mutual Casualty Company (the Company's parent company) in its capacity as administrator of the stock incentive plan, made a small modification to the vesting terms of the restricted stock that will be granted to the directors of the Company on May 19, 2016.  Following is an updated summary of the compensation to be paid to non-employee directors, effective as of May 19, 2016 (the date of the Company’s Annual Meeting of Stockholders).  

Compensation for non-employee directors includes an annual retainer of $50,000, board and committee meeting attendance fees of $2,000 per meeting, reimbursement of travel and business expenses and an award of 500 shares of the Company's common stock in the form of restricted stock.  The restricted stock will vest ratably over a period of three years and is subject to forfeiture upon retirement from the board if the director has not reached the age of 75 years.  Upon the attainment of 75 years of age, all unvested shares of restricted stock will vest if the director is still an active director.  In addition, the chair of the Board of Directors shall receive an annual fee of $20,000, the chair of the audit committee shall receive an annual fee of $17,000, the chairs of all other board committees shall receive an annual fee of $4,500 and the chairs of each board committee shall receive an additional $1,000 committee meeting fee for each meeting at which such director serves as chair.  Non-employee directors are also entitled to receive $1,000 ($1,500 for the chair of the audit committee) for each special audit committee meeting held primarily for the purpose of considering revisions to the Company's operating income guidance for the year, $2,000 and reimbursement of travel and business expense for each day that they attend an approved educational program or seminar, $2,000 for each webinar and similar computer-based educational program attended lasting more than two hours, and $250 for each webinar and similar computer-based educational program attended lasting two hours or less.  The non-employee directors are also eligible to participate in Employers Mutual Casualty Company’s Non-Employee Director Stock Purchase Plan.  Under this plan, directors are allowed to purchase the Company’s common stock in an amount up to 100 percent of their annual retainer at a price equal to 75 percent of the fair market value of the common stock on the purchase date.Exhibit 10.1

 

HEALTHWAYS, INC.

AMENDED AND RESTATED 2014 STOCK INCENTIVE PLAN

MARKET STOCK UNIT AWARD AGREEMENT

This MARKET STOCK UNIT AWARD AGREEMENT (the "Agreement"), dated GRANT DATE (the "Grant Date") is by and between Healthways, Inc., a Delaware corporation (the "Company"), and PARTICIPANT NAME (the "Grantee"), under the Company's Amended and Restated 2014 Stock Incentive Plan (the "Plan").  Terms not otherwise defined herein shall have the meanings given to them in the Grantee's employment agreement with the Company (as may be amended from time to time, the "Employment Agreement"), or in the absence of an Employment Agreement or if not defined in the Employment Agreement, then the meanings given to them in the Plan.

Section 1. Market Stock Unit Award; Performance Goals.  Subject to adjustment as set forth herein, the Grantee is hereby granted NUMBER OF UNITS restricted stock units (the "Target Award") under the Plan, with the specific number of restricted stock units earned to be determined in accordance with Exhibit A hereto (the "Market Stock Units").  Each Market Stock Unit represents the right to receive one share of the Company's Common Stock, $.001 par value (the "Stock"), subject to the terms and conditions of this Agreement and the Plan.  Except as otherwise provided in Section 3 or Section 5.2, before the Market Stock Units will be earned and settled, the Committee must certify the level of achievement of the Performance Goals described in Exhibit A hereto which the Committee shall do as soon as practicable after the third anniversary of the Grant Date (the "End Date of the Performance Period", and such period, the "Performance Period").  Any Market Stock Units that are not earned as a result of the level of achievement of the Performance Goals at the End Date of the Performance Period shall be immediately forfeited as of the End Date of the Performance Period.

Section 2. Vesting of the Award.  Except as otherwise provided in Section 3 and Section 5.2 below, 100% of the Market Stock Units determined by the Committee to be earned pursuant to Section 1 hereof will vest on the End Date of the Performance Period (the "Vesting Date"), as long as the Grantee is serving as an employee of the Company on such date.  The Company shall issue one share of the Stock to the Grantee in settlement of each earned and vested Market Stock Unit (in the aggregate, the "Distributed Shares") at the time the Market Stock Unit vests pursuant to this Agreement.  The Distributed Shares shall be represented by a certificate or by a book-entry.

Section 3. Forfeiture on Termination of Employment.

3.1. Termination by the Company for Cause.  If the Grantee's employment with the Company is involuntarily terminated for Cause prior to the End Date of the Performance Period, then all Market Stock Units will be forfeited and the Grantee shall have no further rights with respect to such Market Stock Units.

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3.2. Termination by the Company without Cause or by the Grantee for Good Reason. If Grantee's employment with the Company (a) is involuntarily terminated by the Company for any reason other than termination for Cause, or (b) is terminated by the Grantee for Good Reason, then, subject to Grantee's execution of any release of claims provided for in the Employment Agreement, if applicable, the Vesting Date shall be the effective date of Grantee's termination of employment, and the number of Market Stock Units that shall vest (the "Pro Rata Amount") shall be the product of (i) a fraction, the numerator of which is the number of whole months during the Performance Period that the Grantee was employed by the Company, and the denominator of which is the number of months in the originally stated Performance Period, multiplied by (ii) the number of Market Stock Units that would vest pursuant to Exhibit A if the Performance Goals that had been achieved as of the Vesting Date were in fact achieved on the End Date of the Performance Period, as further described on Exhibit A. The Pro Rata Amount of Market Stock Units shall be settled in Stock issued to the Grantee as soon as practicable following the Vesting Date. For purposes of this Section 3.2, the terms "Cause" and "Good Reason" shall have the meanings set forth in the Employment Agreement, or in the absence of an Employment Agreement, the term "Cause" shall have the meaning given to it in the Plan, and the term "Good Reason" shall mean (i) a material reduction in the Grantee's base salary (unless such reduction is part of an across the board reduction affecting all Company executives with a comparable title), or (ii) a requirement by the Company to relocate the Grantee to a location that is greater than 25 miles from the location of the office in which the Grantee performs his or her duties at the time of such relocation.

3.3. Termination by Death or Disability.  If the Grantee's employment with the Company terminates by reason of death or Disability (as defined in the Plan), then the Vesting Date shall be the date of Grantee's death or the effective date of Grantee's termination of employment on account of Disability, and the number of Market Stock Units that shall vest shall be the product of (i) a fraction, the numerator of which is the number of whole months during the Performance Period that the Grantee was employed by the Company, and the denominator of which is the number of months in the originally stated Performance Period, multiplied by (ii) the Target Award. The Market Stock Units shall be settled in Stock issued to the Grantee (or Grantee's estate or personal representative, as applicable) as soon as practicable following the Vesting Date.

3.4       Termination by Reason of Retirement.  If the Grantee's employment with the Company terminates by reason of Retirement (as defined in the Plan), the Market Stock Units granted hereunder shall not be forfeited but shall be settled in Stock to the Grantee in the manner as described in Section 2 (or otherwise) as if the Grantee had continued employment through the Vesting Date (or such other vesting event pursuant to Section 3.3 or Section 5.2) and based on actual performance of the Company as determined in accordance with Section 1 and Exhibit A hereto.

3.5. Other Termination.  Subject to Section 5.2, if the Grantee's employment with the Company terminates for any reason other than as described in Sections 3.1 through 3.4 above (or if Grantee fails to execute any release of claims pursuant to the Employment Agreement, if applicable), then all Market Stock Units that have not vested prior to the date of termination of Grantee's employment will be forfeited and the Grantee shall have no further rights with respect to such Market Stock Units.

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Section 4. Voting Rights and Dividends.  Prior to the Vesting Date, the Grantee shall be credited with cash dividend equivalents with respect to the Market Stock Units at the time of any payment of dividends to stockholders on shares of Common Stock in accordance with the terms set forth in the Plan, and such dividend equivalents shall be paid (in cash, without interest) to the Grantee when the Market Stock Units to which they relate are settled in accordance with this Agreement.  The Grantee shall not have any voting rights with respect to the Stock underlying the Market Stock Units prior to the vesting of the Market Stock Units and the issuance of the Stock as set forth in Section 2.  A holder of Distributed Shares shall have full dividend and voting rights as a holder of Stock.

Section 5. Restrictions on Transfer; Change in Control.

5.1. General Restrictions.  The Market Stock Units shall not be transferable by the Grantee (or his or her personal representative or estate) other than by will or by the laws of descent and distribution.  The terms of this Agreement shall be binding on the executors, administrators, heirs and successors of the Grantee.

5.2. Change in Control.

(a) If in connection with a Change in Control, the acquiring corporation (or other successor to the Company in the Change in Control) does not assume the Market Stock Units, then a number of Market Stock Units shall vest and be settled in Stock issued to the Grantee immediately prior to the Change in Control equal to the greater of (A) the Target Award, or (B) the number of Market Stock Units that would vest pursuant to Exhibit A if the Performance Goals that had been achieved as of the date of the Change in Control had in fact been achieved as of the End Date of the Performance Period.

(b) If in connection with a Change in Control, the acquiring corporation  (or other successor to the Company in the Change in Control) assumes the Market Stock Units, and if Grantee's employment with the Company (or its successor company) (i) is involuntarily terminated within 12 months following a Change in Control for any reason other than termination for Cause, or (ii) is terminated by the Grantee for Good Reason within 12 months following a Change in Control, then subject to Grantee's execution of any release of claims set forth in the Employment Agreement, if applicable, the Vesting Date shall be the date of the termination of employment described in this Section 5.2(b), and a number of Market Stock Units shall vest and be settled in Stock issued to the Grantee on the Vesting Date equal to the greater of (A) the Target Award, or (B) the number of Market Stock Units that would vest pursuant to Exhibit A if the Performance Goals that had been achieved as of the Vesting Date were in fact achieved as of the End Date of the Performance Period. For purposes of this Section 5.2(b), the terms "Cause" and "Good Reason" shall have the meanings set forth in Section 3.2.

Section 6. Restrictive Agreement.  As a condition to the receipt of any Distributed Shares, the Grantee (or his or her legal representative or estate or any third party transferee), if the Company so requests, will execute an agreement in form satisfactory to the Company in which the Grantee or such other recipient of the shares represents that he or she is purchasing the shares for investment purposes, and not with a view to resale or distribution.

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Section 7. Market Stock Units Award Subject to Recoupment Policy. The award of Market Stock Units is subject to the Healthways, Inc. Compensation Recoupment Policy (the "Policy").  The award of Market Stock Units, or any amount traceable to the award of Market Stock Units, shall be subject to the recoupment obligations described in the Policy.

Section 8. Adjustment.  In the event of any merger, reorganization, consolidation, recapitalization, extraordinary cash dividend, stock dividend, stock split or other change in corporate structure affecting the Stock, the number of Market Stock Units subject to this Agreement, as well as the performance criteria set forth on Exhibit A, shall be equitably and proportionately adjusted by the Committee in accordance with the Plan and the intent of this Agreement without duplication of Section 4.

Section 9. Tax Withholding.  The Company shall have the right to require the Grantee to remit to the Company an amount necessary to satisfy any federal, state and local withholding tax requirements attributable to the vesting and payment of the Market Stock Units prior to the delivery of the Distributed Shares, or may withhold from the Distributed Shares an amount of Stock having a Fair Market Value equal to such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

Section 10. Plan.  This Agreement is made under and subject to the provisions of the Plan, and all of the provisions of the Plan that do not conflict with this Agreement are also provisions of this Agreement.  If there is a difference or conflict between the provisions of this Agreement and the provisions of the Plan, the provisions of this Agreement will govern.  By signing this Agreement, the Grantee confirms that he or she has received a copy of the Plan.

Section 11. Confidentiality, Non-Solicitation and Non-Compete. In the event Grantee breaches any of the confidentiality, non-solicitation or non-compete covenants set forth in the Employment Agreement, if applicable, the Market Stock Units shall immediately thereupon expire and be forfeited, and the Company shall be entitled to seek other appropriate remedies it may have available in connection with such breach.

Section 12. Miscellaneous.

12.1. Entire Agreement.  This Agreement and the Plan contain the entire understanding and agreement between the Company and the Grantee concerning the Market Stock Units granted hereby, and supersede any prior or contemporaneous negotiations and understandings.  The Company and the Grantee have made no promises, agreements, conditions, or understandings relating to the Market Stock Units, either orally or in writing, that are not included in this Agreement or the Plan.

12.2. Employment.  By establishing the Plan, granting awards under the Plan, and entering into this Agreement, the Company does not give the Grantee any right to continue to be employed by the Company or to be entitled to any remuneration or benefits not set forth in this Agreement or the Plan.

12.3. Captions.  The captions and section numbers appearing in this Agreement are inserted only as a matter of convenience.  They do not define, limit, construe, or describe the scope or intent of the provisions of this Agreement.

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12.4. Counterparts.  This Agreement may be executed in counterparts, each of which when signed by the Company and the Grantee will be deemed an original and all of which together will be deemed the same Agreement.

12.5. Notice.  All notices required to be given under this Agreement shall be deemed to be received if delivered or mailed as provided for herein, to the parties at the following addresses, or to such other address as either party may provide in writing from time to time.

	
To the Company:

	
Healthways, Inc.

		
701 Cool Springs Blvd

	 	
Franklin, Tennessee 37067

	 	 

 

	
To the Grantee:

	
PARTICIPANT NAME

	
(Grantee name and address)

	
Address on File

	 	
at Healthways

	 	 

12.6. Amendment.  Subject to the restrictions contained in the Plan, the Committee may amend the terms of this Agreement, prospectively or retroactively, but, subject to Section 8 above, no such amendment shall impair the rights of the Grantee hereunder without the Grantee's consent.

12.7. Governing Law.  This Agreement shall be governed and construed exclusively in accordance with the law of the State of Delaware applicable to agreements to be performed in the State of Delaware to the extent it may apply.

12.8. Validity; Severability.  If, for any reason, any provision hereof shall be determined to be invalid or unenforceable, the validity and effect of the other provisions hereof shall not be affected thereby.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.  If any court determines that any provision of this Agreement is unenforceable but has the power to reduce the scope or duration of such provision, as the case may be, such provision, in its reduced form, shall then be enforceable.

12.9. Interpretation; Resolution of Disputes; Section 409A.

(a) It is expressly understood that the Committee is authorized to administer, construe and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Grantee.  Any dispute or disagreement which may arise under, or as a result of, or in any way related to, the interpretation, construction or application of this Agreement shall be determined by the Board.  Any determination made hereunder shall be final, binding and conclusive on the Grantee and the Company for all purposes.

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(b) Notwithstanding anything herein to the contrary, to the maximum extent permitted by applicable law, the settlement of the Market Stock Units (including any dividend equivalent rights) to be made to the Grantee pursuant to this Agreement is intended to qualify as a "short-term deferral" pursuant to Section 1.409A-1(b)(4) of the U.S. Treasury Regulations and this Agreement shall be interpreted consistently therewith.  However, under certain circumstances, settlement of the Market Stock Units or any dividend equivalent rights may not so qualify, and in that case, the Committee shall administer the grant and settlement of such Market Stock Units and any dividend equivalent rights in strict compliance with Section 409A of the Code.  Further, notwithstanding anything herein to the contrary, if at the time of a Participant's termination of employment with the Company, the Participant is a "specified employee" as defined in Section 409A of the Code, and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of service is necessary in order to prevent the imposition of any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to the Participant) to the minimum extent necessary to satisfy Section 409A of the Code until the date that is six months and one day following the Participant's termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code), if such payment or benefit is payable upon a termination of employment.  Each payment of Market Stock Units (and related dividend equivalent rights) constitutes a "separate payment" for purposes of Section 409A of the Code.

12.10. Successors in Interest.  This Agreement shall inure to the benefit of and be binding upon any successor to the Company.  This Agreement shall inure to the benefit of the Grantee's legal representative and permitted assignees.  All obligations imposed upon the Grantee and all rights granted to the Company under this Agreement shall be binding upon the Grantee's heirs, executors, administrators, successors and assignees.

[remainder of page intentionally left blank; signature page follows]

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IN WITNESS WHEREOF, the parties have caused the Market Stock Unit Award Agreement to be duly executed as of the day and year first written above.

 

	
 

	
 

	
HEALTHWAYS, INC.

	
 

	
By:   

	
/s/ Alfred Lumsdaine

	
 

	
Name:   

	
Alfred Lumsdaine

	
 

	
Title:   

	
Chief Financial Officer

 

	
 

	
GRANTEE:   

	
PARTICIPANT NAME

	
 

		
 

	
 

		
Online Grant Acceptance Satisfies

	
 

		Signature Requirement

 

 

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EXHIBIT A

Performance Period:  The three year period beginning on GRANT DATE.

Performance Goal:

Subject to the remaining provisions of this paragraph, the number of Market Stock Units earned shall be determined based on the compounded annual total shareholder return of the Company's Stock over the Performance Period. Compounded annual total shareholder return will be calculated using a beginning price equal to CLOSING STOCK PRICE ON THE GRANT DATE, and an ending price equal to the trading volume weighted average price of the Company's Stock over the period beginning ten (10) calendar days prior to the End Date of the Performance Period and ending on the End Date of the Performance Period, and accounting for immediate reinvestment (as of the ex-dividend date) of all cash dividends and other cash distributions (excluding cash distributions resulting from share repurchases or redemptions by the Company) over this period. In the event Grantee's employment terminates under the circumstances described in Section 3.2 or the Market Stock Units are settled pursuant to Section 5.2, the ending price shall be equal to the trading volume weighted average price of the Company's Stock over the period beginning ten (10) calendar days prior to the termination of Grantee's employment (or Change in Control, if applicable), and the compounded annual total shareholder return shall be determined as if such ending price were the price on the End Date of the Performance Period (which, for the avoidance doubt, would remain the third anniversary of the Grant Date).

The Target Award set forth in Section 1 of this Agreement shall be multiplied by the applicable percentage set forth in the table below (rounded to the nearest full share), with earned amounts above the 15% and below the 30% thresholds listed below determined by the Committee using straight-line interpolation:

	
Compounded Annual Total Shareholder Return as of the End Date of the Performance Period

	
Percentage of Target Award Earned

	
Less than 15%

	
0%

	
15%

	
100%

	
30% or more

	
140%

 

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