CENTENE CORPORATION Restricted Stock Unit Agreement Granted Under Amended and Restated 2003 Stock Incentive Plan
Exhibit
10.1
CENTENE
CORPORATION
Restricted
Stock Unit Agreement Granted Under
Amended
and Restated 2003 Stock Incentive Plan
THIS
AGREEMENT is entered into by Centene Corporation, a Delaware corporation
(hereinafter the “Company”), and the undersigned employee of the Company
(hereinafter the “Participant”).
WHEREAS,
the Participant renders important services to the Company and acquires access
to
Confidential Information (as defined below) of the Company in connection
with
the Participant’s relationship with the Company; and
WHEREAS,
the Company desires to align the long-term interests of its valued employees
with those of the Company by providing the ownership interest granted herein
and
to prevent former employees whose interest may become adverse to the Company
from maintaining an ownership interest in the Company;
NOW,
THEREFORE, in consideration of the foregoing and the mutual agreements herein
contained, the parties hereto hereby agree as follows:
1. Grant
of RSUs.
This
Agreement evidences the grant by the Company on __________, 20__ (the “Grant
Date”) to (the “Participant”) of __________ restricted stock units (each an
“RSU,” and collectively the “RSUs”) pursuant to the Company’s Amended and
Restated 2003 Stock Incentive Plan (the “Plan”). Each RSU represents
the right to receive one share of the common stock, $.001 par value per share,
of the Company (“Common Stock”) as provided in this Agreement. The
shares of Common Stock that are issuable upon vesting of the RSUs are referred
to in this Agreement as “Shares.”
2. Performance
Condition and Vesting.
(a) The
grant of RSUs provided for in Section 1 shall be conditioned on achievement
of
such performance goals as the Board of Directors (or its delegate pursuant
to
the Plan) may require in its sole discretion with respect to the Company’s full
fiscal year next following the Grant Date, or if the Grant Date occurs within
the first 90 days of a fiscal year, with respect to the full fiscal year
that
includes the Grant Date. The performance goals of the Participant may
be related to any combination of Company and individual objectives and need
not
be the same as those of other RSU recipients. The Participant’s
performance goals shall be established and communicated to the Participant
in
writing not later than 90 days after the beginning of the fiscal year to
which
they apply.
(b) If
the requirements of paragraph (a) are satisfied, then the RSUs shall vest
as to
_____% of the original number of RSUs on ______________ and as to an additional
____% of the original number of RSUs at the end of each successive 12-month
period following the _______ anniversary of the Grant Date until the _______
anniversary of the Grant Date.
3. Reorganization
Event.
Notwithstanding
the requirements of Section 2, upon the occurrence of a “Change in Control,” all
of the RSUs that (but for the application of this clause) are not vested
at the
time of the occurrence of such Change in Control event shall vest. A
“Change in Control” shall be deemed to have occurred if any of the events set
forth in any one of the following clauses shall occur: (i) any Person
(as defined in section 3(a)(9) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and as such term is modified in sections 13(d) and
14(d) of the Exchange Act), excluding a group of persons including the
Participant, is or becomes the “beneficial owner” (as defined in Rule 13(d)(3)
under the Exchange Act), directly or indirectly, of securities of the Company
representing forty percent or more of the combined voting power of the Company’s
then-outstanding securities; (ii) individuals who, as of the Grant Date,
constitute the Board of Directors of the Company (the “Incumbent Board”), cease
for any reason to constitute a majority thereof (provided, however, that
an
individual becoming a director subsequent to the Grant Date whose election,
or
nomination for election by the Company’s stockholders, was approved by at least
a majority of the directors then comprising the Incumbent Board shall be
included within the definition of Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as
a
result of either an actual election contest (or such terms used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a person
other
than the Board of Directors of the Company); or (iii) the stockholders of
the
Company consummate a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent of
the
combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation.
4. Distribution
of Shares.
(a) Timing
of Distribution. The Company will distribute to the Participant
(or to the Participant’s estate in the event of the death of the Participant
occurring after a vesting date but before distribution of the corresponding
Shares), as soon as administratively practicable after each vesting date,
the
Shares represented by RSUs that vested on such vesting date.
(b) No
Fractional Shares. No fractional Shares shall be issuable
pursuant to any RSU. In lieu of any fractional shares to which the
Participant would otherwise be entitled, the Company shall pay cash in an
amount
equal to such fraction multiplied by the Fair Market Value (as defined in
the
Plan) of a share of Common Stock.
(c) Termination
of Employment. In the event that the Participant’s employment
with the Company (and any parent or subsidiary thereof) is terminated for
any
reason by the Company or by the Participant (including by reason of death
or
disability, within the meaning of Section 22(e)(3) of the Internal Revenue
Code
of 1986, as amended (the “Code”)), the RSUs shall cease vesting as of the date
of termination.
(d) Compliance
Restrictions. The Company shall not be obligated to issue to the
Participant the Shares upon the vesting of any RSU (or otherwise) unless
(i) the
Participant has complied with covenants set forth in Section 10 of this
Agreement and (ii) the issuance and delivery of such Shares shall comply
with
all relevant provisions of law and other legal requirements including any
applicable federal or state securities laws and the requirements of any stock
exchange or quotation system upon which Common Stock may then be listed or
quoted.
5. Restrictions
on Transfer.
The
RSUs may
not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or
the
laws of descent and distribution, and, during the lifetime of the Participant,
the RSUs shall be exercisable only by the Participant.
6. No
Rights as Stockholder.
Except
as
set forth in the Plan, neither the Participant nor any person claiming under
or
through the Participant shall be, or shall have any rights or privileges
of, a
stockholder of the Company in respect of any Share issuable pursuant to the
RSUs
granted hereunder until such Share has been delivered to the
Participant.
7. Withholding
Taxes; Section 83(b) Election.
(a) No
Shares will be delivered pursuant to the vesting of an RSU unless and until
the
Participant pays to the Company, or makes provision satisfactory to the Company
for payment of, the amount (with respect to such vesting, the “Withholding
Amount”) of the Company’s minimum statutory withholding obligations with respect
to the income recognized by the Participant upon such vesting, based on minimum
statutory withholding rates for all tax purposes, including payroll and social
security taxes, that are applicable to such income.
(b) The
Participant acknowledges that no election under Section 83(b) of the Code
may be
filed with respect to the RSUs.
8. Automatic
Sale Upon Vesting.
(a) Upon
any vesting of RSUs pursuant to Section 2 hereof, the Company may sell, or
arrange for the sale of, such number of the Shares issuable pursuant to such
vested RSU under Section 2 as is sufficient to generate net proceeds to satisfy
the Company’s minimum statutory withholding obligations with respect to the
income recognized by the Participant upon vesting (based on minimum statutory
withholding rates for all tax purposes, including payroll and social security
taxes, that are applicable to such income), and the Company shall retain
such
net proceeds in satisfaction of such tax withholding obligations.
(b) The
Participant hereby appoints the Company’s Secretary as his or her
attorney-in-fact to sell the Shares in accordance with this Section
8. The Participant agrees to execute and deliver such documents,
instruments and certificates as may reasonably be required in connection
with
the sale of the Shares pursuant to this Section 8.
(c) It
is understood that the Participant and the Company may agree from time to
time,
subject to compliance with applicable laws, to procedures to be implemented,
in
lieu of the procedures set forth in paragraphs (a) and (b) of this Section
8, to
fund the Withholding Amount.
9. Provisions
of the Plan.
The
RSUs
are subject to the provisions of the Plan, a copy of which is being furnished
to
the Participant with this Agreement.
10. Participant’s
Covenants.
For
and
in consideration of the delivery of this Agreement, the Participant agrees
to
the provisions of this Section 10.
(a) Confidential
Information. As used in this Agreement, “Confidential
Information” shall mean the Company’s trade secrets and other non-public
proprietary information relating to the Company or the business of the Company,
including information relating to financial statements, customer lists and
identities, potential customers, customer contacts, employee skills and
compensation, employee data, suppliers, acquisition targets, servicing methods,
equipment, programs, strategies and information, analyses, marketing plans
and
strategies, profit margins, financial, promotional, marketing, training or
operational information, and other information developed or used by the Company
that is not known generally to the public or the
industry. Confidential Information shall not include any information
that is in the public domain or becomes known in the public domain through
no
wrongful act on the part of the Participant.
(b) Non-Disclosure. The
Participant agrees that the Confidential Information is a valuable, special
and
unique asset of the Company’s business, that such Confidential Information is
important to the Company and the effective operation of the Company’s business,
and that during employment with the Company and at all times thereafter,
the
Participant shall not, directly or indirectly, disclose to any competitor
or
other person or entity (other than current employees of the Company) any
Confidential Information that the Participant obtains while performing services
for the Company, except as may be required in the Participant’s reasonable
judgment to fulfill his duties hereunder or to comply with any applicable
legal
obligation.
(c) Non-Competition;
Non-Solicitation.
(i) During
the Participant’s employment with the Company and for the period of six months
immediately after the termination of the Participant’s employment with the
Company for any cause whatsoever, the Participant shall not invest in (other
than in a publicly traded company with a maximum investment of no more than
1%
of outstanding shares), counsel, advise, consult or be otherwise engaged
or
employed by any entity or enterprise (a “Competitor”) that competes with (A) the
Company’s business of providing Medicaid managed care services, Medicaid-related
services, and behavior health, nurse triage and pharmacy compliance specialty
services or (B) any other business in which, after the Grant Date, the Company
becomes engaged (or has taken substantial steps in which to become engaged)
on
or prior to the date of termination of the Participant’s employment, regarding
which business the Participant has acquired confidential information, and
regarding which business constitutes (or is expected to constitute if only then
recently commenced) more than 5% of the annual gross revenues of the Company
or,
as conducted by such Competitor, more than 35% of the Competitor’s annual gross
revenues.
(ii) During
the Participant’s employment with the Company and for the period of twelve
months immediately after the termination of the Participant’s employment with
the Company for any cause whatsoever (the “Restricted Period”), the Participant
will not, either directly or indirectly, either for himself or for any other
person, firm, company or corporation, call upon, solicit, divert, or take
away,
or attempt to solicit, divert or take away any of the customers, prospective
customers, business, vendors or suppliers of the Company that the Participant
had dealings with, or responsibility for, or the Participant had access to,
confidential information of such customers, vendors or suppliers.
(iii) The
Participant shall not, at any time during the Restricted Period, without
the
prior written consent of the Company, (A) directly or indirectly, solicit,
recruit or employ (whether as an employee, officer, director, agent, consultant
or independent contractor) any person who was or is at any time during the
previous six months an employee, representative, officer or director of the
Company; or (B) take any action to encourage or induce any employee,
representative, officer or director of the Company to cease their relationship
with the Company for any reason.
(d) Enforcement. If
any of the provisions or subparts of this Section 10 shall be held to be
invalid
or unenforceable by a court of competent jurisdiction, the remaining provisions
or subparts thereof shall nevertheless continue to be valid and enforceable
according to their terms. Further, if any restriction contained in
the provisions or subparts of this Section 10 is held to be overbroad or
unreasonable as written, the parties agree that the applicable provision
should
be considered to be amended to reflect the maximum period, scope or geographical
area deemed reasonable and enforceable by the court and enforced as
amended.
(e) Remedy
for Breach.
(i) Because
the Participant’s services are unique and because the Participant has access to
the Company’s Confidential Information, the parties agree that any breach or
threatened breach of this Section 10 will cause irreparable harm to the Company
and that money damages alone would be an inadequate remedy. The
parties therefore agree that, in the event of any breach or threatened breach
of
this Section 10, and in addition to all other rights and remedies available
to
it, the Company may apply to any court of competent jurisdiction for specific
performance and/or injunctive or other relief, without a bond, in order to
enforce or prevent any violations of the provisions of this Section
10.
(ii) The
Participant acknowledges and agrees that nothing contained herein shall be
construed to be an excessive remedy to prohibit the Company from pursuing
any
other remedies available to it for such actual or threatened breach, including
the recovery of money damages, proximately caused by the Participant’s breach of
this Section 10.
(f) Survival. The
provisions of this Section 10 shall survive and continue in full force in
accordance with their terms notwithstanding any forfeiture, termination or
expiration of this Agreement in accordance with its terms or any termination
of
the Participant’s employment for any reason (whether voluntary or
involuntary).
11. Miscellaneous.
(a) Severability. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
and each other provision of this Agreement shall be severable and enforceable
to
the extent permitted by law.
(b) Waiver. Any
provision for the benefit of the Company contained in this Agreement may
be
waived, either generally or in any particular instance, by the Board of
Directors of the Company.
(c) Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of the Company and the Participant and their respective heirs,
executors, administrators, legal representatives, successors and assigns,
subject to the restrictions on transfer set forth in Section 5 of this
Agreement.
(d) Notice. All
notices required or permitted hereunder shall be in writing and deemed
effectively given upon personal delivery or five days after delivery to a
United
States Post Office, by registered or certified mail, postage prepaid, addressed
to the other party hereto at the address shown beneath his or its respective
signature to this Agreement, or at such other address or addresses as either
party shall designate to the other in accordance with this paragraph
(d).
(e) Entire
Agreement. This Agreement and the Plan constitute the entire
agreement between the parties, and supersede all prior agreements and
understandings, relating to the RSUs.
(f) Participant’s
Acknowledgments. The Participant acknowledges that he or
she: (i) has read this Agreement; (ii) has been represented in the
preparation, negotiation, and execution of this Agreement by legal counsel
of
the Participant’s own choice or has voluntarily declined to seek such counsel;
(iii) understands the terms and consequences of this Agreement; (iv) is fully
aware of the legal and binding effect of this Agreement; and (v) understands
that the law firms of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP and Xxxxx
Xxxx
LLP have acted as counsel to the Company in connection with transactions
of the
type contemplated by this Agreement, and neither such firm is acting as counsel
for the Participant.
(g) Unfunded
Rights. The right of the Participant to receive Common Stock
pursuant to this Agreement is an unfunded and unsecured obligation of the
Company. The Participant shall have no rights under this Agreement
other than those of an unsecured general creditor of the Company.
(h) Deferral. Neither
the Company nor the Participant may defer delivery of any Shares issuable
under
unvested RSUs except to the extent that such deferral complies with the
provisions of Section 409A of the Code.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
set forth below.
CENTENE CORPORATION | |||
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By:
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Xxxxxxx X. Xxxxxxxx | |||
Chairman, President and Chief Executive Officer | |||
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Name | Date | ||||
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