SEPARATION AND CONSULTING AGREEMENT

 

THIS SEPARATION AND CONSULTING AGREEMENT (the “Agreement") is entered into on
November 16, 2009, by and between COVENTRY HEALTH CARE, INC., a Delaware
corporation (the “Company”), with its principal office in Bethesda, MD and SHAWN
M. GUERTIN, (“Executive”).

 

 

WHEREAS, Executive is the Chief Financial Officer of the Company and entered
into an employment agreement with the Company on December 19, 2007 (the “Prior
Agreement”); and

 

 

WHEREAS, Executive has given notice of his intention to resign from his
employment on December 31, 2009, (the “Termination Date”); and

 

 

WHEREAS, Executive and the Board of Directors (the “Board”) of the Company have
determined that it is in the best interest of the Company for Executive to serve
as a Consultant to the Company after the Termination Date; and

 

 

WHEREAS, the Company and Executive desire to enter into this Agreement to set
forth the Executive’s duties and responsibilities, his compensation and other
benefits to which Executive will be entitled pursuant to this Agreement, the
Prior Agreement, and certain Restrictive Covenants Agreements previously entered
into by Executive.

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as follows:

 

 

1.

Agreement. All terms and conditions of the Prior Agreement that would continue
in the event of a Termination without Cause shall continue in full force and
effect.

 

 

2.

Termination Date. Effective November 16, 2009, Executive shall resign all
officer and director positions with the Company and its subsidiaries, although
he will remain an employee of the Company until December 31, 2009.

 

 

3.

Compensation and Benefits. Beginning on January 1, 2010, the Company shall
provide Executive with the compensation and benefits applicable to a Termination
without Cause, as set forth in the Prior Agreement

 

 

4.

Restrictive Covenants. The Restrictive Covenants Agreements (the “RCAs”) signed
by Executive on a) September 26, 2008 and, b) June 22, 2009, in exchange for
equity awards, shall continue in full force and effect.

 

 

5.

Consulting Agreement. Executive agrees to, (i) provide financial and business
consulting services to the Company, (ii) consult with the officers and
executives of the Company, (iii) provide periodic review and advice to the
Company related to various financial matters and initiatives and, (iv) provide
assistance to the Company and its attorneys in defending various lawsuits filed
against the Company.

                          

 

(a).

Term. The term during which Executive will be providing the consulting services
described in Paragraph 5 above will be January 1, 2010 to December 31, 2011.

 

 

(b).

Payment. Payment for these consulting services will be $50,000 per calendar
quarter, payable upon the last day of each quarter. Executive shall be solely
responsible for the payment of all federal, state and local taxes arising from
such payments.

 

 

(c).

Travel and Expenses. Where travel is authorized by the Company, all reasonable
and necessary out-of-pocket travel and related expenses will be reimbursed by
the Company, upon the submission of appropriate receipts and invoices.

 

 

(d).

Benefits. For calendar year 2011, Company shall pay for medical, dental and
vision benefit coverage for Executive and his family.

 

 

(e).

Time Commitment. Executive agrees to devote, on average, three (3) days per
quarter, with additional time as required to assist in the defense of the
various lawsuits.

 

 

(f).

Non-Solicitation. Executive agrees that he will not employ, solicit for
employment directly or indirectly, or advise or recommend to any other persons
that they employ or solicit for employment, any employee of the Employer, during
the term of the Consulting Agreement.

 

 

 

 

6.

Assignment. All the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Executive under
this Agreement are of a personal nature and shall not be assigned or delegated,
in whole or in part, by Executive.

 

 

7.

Severability. If any provision of the Agreement or application thereof to anyone
or under any circumstances is adjudicated to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect any other
provision or application of this Agreement which can be given effect without the
invalid or unenforceable provision or application and shall not invalidate or
render unenforceable such provision or application in any other jurisdiction. If
any provision is held void, invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances.

 

 

8.

Remedies Cumulative; No Waiver. No remedy conferred upon a party by this
Agreement is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to any other remedy
given under this Agreement or now or hereafter existing at law or in equity. No
delay or omission by a party in exercising any right, remedy or power under this
Agreement or existing at law or in equity shall be construed as a waiver
thereof, and any such right, remedy or power may be exercised by such party from
time to time and as often as may be deemed expedient or necessary by such party
in its sole discretion.

 

 

9.

Death Benefits. In the event of Executive’s death prior to December 31, 2011,
the provisions of this Agreement shall continue in full force and effect and all
payments and benefits due under Section 5 of the Agreement, shall be paid to
Executive’s beneficiary(ies), when otherwise due in accordance with this
Agreement without regard to Executive’s death and no pro-ration shall apply by
reason of Executive’s death. Executive shall be entitled to select and change a
beneficiary(ies) by giving the Company written notice thereof.

 

 

10.

Enforcement. In the event Executive violates any of the restrictive covenants as
outlined in the Prior Agreement, the Restrictive Covenant Agreements or the
Consulting Agreement, Executive shall forfeit all rights to any future payments
and other benefits as defined herein. Executive consents to the enforcement of
these covenants by means of a temporary or permanent injunction and other
appropriate equitable relief, in addition to any other legal or contractual
remedies available to the Employer.

 

 

11.

Governing Law. This Agreement shall be governed by and interpreted under the
laws of the State of Maryland without giving effect to any conflict of laws
provisions.

 

 

 

IN WITNESS WHEREOF, the parties, intending to be legally bound, have executed
this Agreement as of the date first above written.

 

 

_______________________________

Shawn M. Guertin

14421 Sugarland Lane

Poolesville, MD 20837

 

COVENTRY HEALTH CARE

 

By_____________________________

Allen F. Wise

Chief Executive Officer