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Back to Form 8-K [form8-k.htm]
 
Exhibit 10.2

 

 
WELLCARE HEALTH PLANS, INC.
 
RESTRICTED STOCK AGREEMENT
 
FOR
 
THOMAS F. O’NEIL III
 
 
This RESTRICTED STOCK AGREEMENT (the “Agreement”) is made and entered into
effective as of April 1, 2008, by and between WellCare Health Plans, Inc., a
Delaware corporation (the “Company”), and Thomas F. O’Neil III (the “Grantee”).
 
RECITALS
 
In consideration of services to be rendered by the Grantee and to provide an
incentive to the Grantee to remain with the Company and its Subsidiaries, it is
in the best interests of the Company to make a grant of Restricted Stock to
Grantee in accordance with the terms of this Agreement.
 
NOW, THEREFORE, for and in consideration of the mutual premises, covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
 
1.           Award of Restricted Stock.  The Company hereby grants, as of April
1, 2008, the Grantee’s first day of employment (the “Date of Grant”), to the
Grantee, 50,000 restricted shares of Common Stock (collectively, the “Restricted
Stock”), which Restricted Stock is and shall be subject to the terms, provisions
and restrictions set forth in this Agreement.  The purchase price per share of
Restricted Stock is $.01 per share (the par value of a share of Common Stock),
which shall be deemed paid by your services to the Company.  The Restricted
Stock is being granted as an “employee inducement award” within the meaning of
Section 303A(8) of the New York Stock Exchange Listed Company Manual.   As a
condition to entering into this Agreement, and as a condition to the issuance of
the Restricted Stock, the Grantee agrees to be bound by all of the terms and
conditions herein.
 
2.           Vesting of Restricted Stock.
 
(a)            Except as otherwise provided in Section 3 hereof, the Restricted
Stock shall become vested in equal annual installments on each of April, 2009,
2010, 2011 and 2012 (each such date being a “Vesting Date”), provided that the
Grantee’s employment or service with the Company and its Subsidiaries continues
through and on the applicable Vesting Date.
 
(b)            Except as otherwise provided in Section 3 hereof, there shall be
no proportionate or partial vesting of Restricted Stock in or during the months,
days or periods prior to each Vesting Date, and all vesting of Restricted Stock
shall occur only on the applicable Vesting Date.
 
3.           Termination of Employment
 
(a)             Upon the termination or cessation of Grantee’s employment with
the Company and its Subsidiaries (the “Date of Termination”), for any reason
whatsoever, any portion of the
 

 
 

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Restricted Stock which is not yet then vested, and which does not then become
vested pursuant to this Section 3, shall automatically and without notice
terminate, be forfeited and become null and void.
 
(b)             Notwithstanding Section 3(a), if the Grantee ceases to be a
director, officer or employee of, or to perform other services for, the Company
and any Subsidiary, and the Grantee’s employment was terminated (i) by the
Company without Cause or (ii) by the Grantee for Good Reason, within twelve
months after there is a Change in Control of the Company, then, in each case,
the unvested Restricted Stock shall become immediately vested as of the Date of
Termination.
 
(c)             Notwithstanding any other term or provision of this Agreement,
in the event that the Grantee’s employment with the Company and its Subsidiaries
is terminated on account of the Grantee’s death or Disability any unvested
portion of the Restricted Stock shall become immediately vested as of the Date
of the Termination.
 
(d)            Notwithstanding any other term or provision of this Agreement,
the Committee shall be authorized, in its sole discretion, based upon its review
and evaluation of the performance of the Grantee and of the Company and its
Subsidiaries, to accelerate the vesting of all or any portion of the Restricted
Stock under this Agreement, at such times and upon such terms and conditions as
the Committee shall deem advisable.
 
4.           Delivery of Restricted Stock.  The Company shall make a book entry
in its stock ledger for the Restricted Stock registered in the Grantee’s
name.  Upon vesting, certificates for the Restricted Stock will be issued in the
name of the Grantee and shall be delivered to the Grantee’s address on record
with the Company or to such other address as the Grantee may instruct the
Company.  The Company shall retain the right to determine if any stock
certificates issued under the Plan or under this Agreement shall bear a
restrictive legend.
 
5.           Rights with Respect to Restricted Stock.
 
 
(a)            Except as otherwise provided in this Agreement, the Grantee shall
have, with respect to all of the shares of Restricted Stock, whether vested or
unvested, all of the rights of a holder of shares of Common Stock, including
without limitation (i) the right to vote such Restricted Stock, (ii) the right
to receive dividends, if any, as may be declared on the Restricted Stock from
time to time, and (iii) the rights available to all holders of shares of Common
Stock upon any merger, consolidation, reorganization, liquidation or
dissolution, stock split-up, stock dividend or recapitalization undertaken by
the Company.
 
(b)            In the event that the Committee shall determine that any stock
dividend, stock split, share combination, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination, exchange of shares, warrants or rights offering to purchase Common
Stock at a price substantially below fair market value, or other similar
corporate event affects the Common Stock such that an adjustment is required in
the number of shares of Restricted Stock in order to preserve, or to prevent the
enlargement of, the benefits or potential benefits intended to be made available
under this Award, then the Committee shall, in its sole discretion, and in such
manner as the Committee may deem equitable, adjust any or all of
 

 
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the number and kind of shares of Restricted Stock and/or, if deemed appropriate,
make provision for a cash payment to the Grantee, provided, however, that,
unless the Committee determines otherwise, the number of shares of Restricted
Stock subject to this Award shall always be a whole number.
 
(c)            Notwithstanding any term or provision of this Agreement to the
contrary, the existence of this Agreement, or of any outstanding Restricted
Stock awarded hereunder, shall not affect in any manner the right, power or
authority of the Company to make, authorize or consummate: (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company’s capital structure or its business; (ii) any merger, consolidation,
reorganization or similar transaction by or of the Company; (iii) any offer,
issue or sale by the Company of any capital stock of the Company, including any
equity or debt securities, or preferred or preference stock that would rank
prior to or on parity with the Restricted Stock and/or that would include, have
or possess other rights, benefits and/or preferences superior to those that the
Restricted Stock includes, has or possesses, or any warrants, options or rights
with respect to any of the foregoing; (iv) the dissolution or liquidation of the
Company; (v) any sale, transfer or assignment of all or any part of the stock,
assets or business of the Company; or (vi) any other corporate transaction, act
or proceeding (whether of a similar character or otherwise).
 
 
6.           Transferability.  Unless otherwise determined by the Committee, the
shares of Restricted Stock granted hereby are not transferable until and unless
they become vested in accordance with this Agreement.  The terms of this
Agreement shall be binding upon the executors, administrators, heirs, successors
and assigns of the Grantee.  Any attempt to effect a Transfer of any shares of
Restricted Stock prior to the date on which the shares of Restricted Stock
become vested shall be void ab initio.  For purposes of this Agreement,
“Transfer” shall mean any sale, transfer, encumbrance, gift, donation,
assignment, pledge, hypothecation, or other disposition, whether similar or
dissimilar to those previously enumerated, whether voluntary or involuntary, and
including, but not limited to, any disposition by operation of law, by court
order, by judicial process, or by foreclosure, levy or attachment.
 
7.           Tax Withholding Obligations.
 
(a)            The Company shall withhold a number of shares of Common Stock
(rounded up) otherwise deliverable to the Grantee having a Fair Market Value
sufficient to satisfy the statutory minimum of all or part of the Grantee’s
estimated total federal, state and local tax obligations associated with the
award or vesting of the Restricted Stock; provided, however, the Grantee may
elect, by providing the Company with at least two weeks prior notice, to satisfy
such tax withholding obligations by depositing with the Company an amount of
cash equal to the amount determined by the Company to be required with respect
to any withholding taxes, FICA contributions or the like under federal, state or
local statute, ordinance rule or regulation in connection with the award or
vesting of the Restricted Stock.  Alternatively, the Company may, in its sole
discretion and to the extent permitted by law, deduct from any payment of any
kind otherwise due to the Grantee any federal, state or local taxes of any kind
required by law to be withheld with respect to the Restricted Stock.
 
(b)            Tax consequences on the Grantee (including without limitation
federal, state, local and foreign income tax consequences) with respect to the
Restricted Stock (including
 

 
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without limitation the grant, vesting and/or forfeiture thereof) are the sole
responsibility of the Grantee.  The Grantee shall consult with his or her own
personal accountant(s) and/or tax advisor(s) regarding these matters, the making
of a Section 83(b) election and the Grantee’s filing, withholding and payment
(or tax liability) obligations.
 
8.           Amendment, Modification and Assignment; Non-Transferability.  This
Agreement may only be modified or amended in a writing signed by the parties
hereto.  No promises, assurances, commitments, agreements, undertakings or
representations, whether oral, written, electronic or otherwise, and whether
express or implied, with respect to the subject matter hereof, have been made by
either party which are not set forth expressly in this Agreement.  Unless
otherwise consented to in writing by the Company, in its sole discretion, this
Agreement (and Grantee’s rights hereunder) may not be assigned, and the
obligations of Grantee hereunder may not be delegated, in whole or in part.  The
rights and obligations created hereunder shall be binding on the Grantee and his
heirs and legal representatives and on the successors and assigns of the
Company.
 
9.           Complete Agreement.  This Agreement (together with the Employment
Agreement and those agreements and documents expressly referred to herein, for
the purposes referred to herein) embody the complete and entire agreement and
understanding between the parties with respect to the subject matter hereof, and
supersede any and all prior promises, assurances, commitments, agreements,
undertakings or representations, whether oral, written, electronic or otherwise,
and whether express or implied, which may relate to the subject matter hereof in
any way.
 
10.           Definitions.

i.           “Board” means the Board of Directors of the Company.

ii.           “Cause” shall have such meaning as otherwise set forth in the
Employment Agreement dated April 1, 2008 between the Grantee, the Company and
Comprehensive Health Management, Inc., a Florida corporation (the “Employment
Agreement”).

iii.           “Change in Control” shall have such meaning as otherwise set
forth in the Employment Agreement.

iv.           “Committee” means the Compensation Committee of the Board.

v.           “Common Stock” means the Common Stock, par value $.01 per share, of
the Company, and any other shares into which such stock may be changed by reason
of a recapitalization, reorganization, merger, consolidation or any other change
in the corporate structure or capital stock of the Company.

vi.           “Disability” shall have such meaning as otherwise set forth in the
Employment Agreement.

vii.           “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

 
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viii.          “Fair Market Value” of a share of Common Stock means, as of the
date in question, the officially-quoted closing selling price of the stock (or
if no selling price is quoted, the bid price) on the principal securities
exchange on which the Common Stock is then listed for trading (the New York
Stock Exchange) or interdealer quotation system  (the “Market”) for the
applicable trading day or, if the Common Stock is not then listed or quoted in
the Market, the Fair Market Value shall be the fair value of the Common Stock
determined in good faith by the Board.

ix.           “Good Reason” shall have such meaning as otherwise set forth in
the Employment Agreement.

xii.           “Subsidiary” means a corporation or other entity of which
outstanding shares or ownership interests representing 50% or more of the
combined voting power of such corporation or other entity entitled to elect the
management thereof, or such lesser percentage as may be approved by the
Committee, are owned directly or indirectly by the Company.
 
11.           Requirements of Law.
 
(a)           The Company shall in no event be obligated to register any
securities covered hereby pursuant to the Securities Act of 1933, as amended
(the “1933 Act”).
 
(b)           Grantee Representations.  The Grantee hereby represents and
warrants to the Company that:  (i) the Grantee understands and accepts that the
grant of Restricted Stock by the Company to the Grantee is intended to be exempt
from registration under the 1933 Act by virtue of Section 4(2) of the 1933 Act;
(ii) the Grantee understands and accepts that the grant of Restricted Stock by
the Company to the Grantee is intended to be exempt from registration under the
securities laws of the state or states in which the grant of such Restricted
Stock is deemed to be made, by virtue of transactional exemptions set forth
therein; (iii) the shares of Restricted Stock of the Company acquired by the
Grantee hereunder are being acquired solely for his own account, for investment
purposes only and not with a view to, or for sale in connection with, any
distribution (as such term is used in Section 2(11) of the 1933 Act) of such
shares of Restricted Stock nor with the present intention of distributing or
selling any of such shares of Restricted Stock; (iv) the Grantee has made a
detailed inquiry concerning the Company and its business and services, officers
and personnel, including the ongoing governmental investigations and the
investigation by special committee of the Board (“Special Committee”); (v) the
Company has made available to the Grantee, or such Grantee has had access to,
any and all information, financial or otherwise, concerning the Company and its
businesses and services, officers and personnel (including information regarding
the ongoing investigations of the Company by certain federal and state agencies
and other regulatory bodies, as well as related private party proceedings, the
Special Committee investigation and the Company’s ongoing response thereto);
(vi) the Grantee has such knowledge and experience in financial and business
matters in order to evaluate the merits and risks of investment in the shares of
Restricted Stock of the Company and to make an informed investment decision with
respect thereto; (vii) the Grantee is an “accredited investor” as defined in
Regulation D promulgated under the 1933 Act; and (viii) the Grantee can bear a
complete loss of the value of the shares of Restricted Stock and is able to bear
the economic risks of holding the Restricted Stock for an indefinite
period.  The Grantee also understands that his shares of Restricted Stock have
not been registered under the 1933 Act or
 

 
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any applicable state securities laws and regulations and that such shares of
Restricted Stock cannot be transferred or sold unless subsequently registered
under the 1933 Act, unless an exemption from such registration is available, and
any applicable state securities laws and regulations.  The Grantee further
acknowledges that if an exemption from registration is available, it may be
conditioned on various requirements including, but not limited to, the time and
manner of sale, the holding period for the shares of Restricted Stock, and on
information and other requirements relating to the Company which are outside of
the Grantee’s control.
 
12.           Miscellaneous.
 
(a)            No Right to Continued Employment or Service.  This Agreement and
the grant of Restricted Stock hereunder shall not confer, or be construed to
confer, upon the Grantee any right to employment or service, or continued
employment or service, with the Company or any Subsidiary.
 
(b)            No Limit on Other Compensation Arrangements.  Nothing contained
in this Agreement shall preclude the Company or any Subsidiary from adopting or
continuing in effect other or additional compensation plans, agreements or
arrangements, and any such plans, agreements and arrangements may be either
generally applicable or applicable only in specific cases or to specific
persons.
 
(c)            Severability.  If any term or provision of this Agreement is or
becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction
or under any applicable law, rule or regulation, then such provision shall be
construed or deemed amended to conform to applicable law (or if such provision
cannot be so construed or deemed amended without materially altering the purpose
or intent of this Agreement and the grant of Restricted Stock hereunder, such
provision shall be stricken as to such jurisdiction and the remainder of this
Agreement and the award hereunder shall remain in full force and effect).
 
(d)            No Trust or Fund Created.  Neither this Agreement nor the grant
of Restricted Stock hereunder shall create or be construed to create a trust or
separate fund of any kind or a fiduciary relationship between the Company or any
Subsidiary and the Grantee or any other person.  To the extent that the Grantee
or any other person acquires a right to receive payments from the Company or any
Subsidiary pursuant to this Agreement, such right shall be no greater than the
right of any unsecured general creditor of the Company.
 
(e)            Electronic Delivery and Signatures.  Grantee hereby consents and
agrees to electronic delivery of any proxy materials, annual reports and other
related documents.  If the Company establishes procedures for an electronic
signature system for delivery and acceptance of documents, Grantee hereby
consents to such procedures and agrees that his or her electronic signature is
the same as, and shall have the same force and effect as, his or her manual
signature.  Grantee consents and agrees that any such procedures and delivery
may be effected by a third party engaged by the Company to provide
administrative services related to the Restricted Stock.
 
(f)            Law Governing.  This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Delaware
(without reference to the conflict of laws rules or principles thereof).
 

 
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(g)            Interpretation.  The Grantee accepts the Restricted Stock subject
to all of the terms, provisions and restrictions of this Agreement.  The
undersigned Grantee hereby accepts as binding, conclusive and final all
decisions or interpretations of the Committee upon any questions arising under
this Agreement.
 
(h)            Headings.  Section, paragraph and other headings and captions are
provided solely as a convenience to facilitate reference.  Such headings and
captions shall not be deemed in any way material or relevant to the
construction, meaning or interpretation of this Agreement or any term or
provision hereof.
 
(i)            Notices.                      Any notice under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
personally or when deposited in the United States mail, registered, postage
prepaid, and addressed, in the case of the Company, to the Company’s Secretary
at 8735 Henderson Road, Ren Two, Tampa, Florida 33634, or if the Company should
move its principal office, to such principal office, and, in the case of the
Grantee, to the Grantee’s last permanent address as shown on the Company’s
records, subject to the right of either party to designate some other address at
any time hereafter in a notice satisfying the requirements of this Section.
 
(j)            Non-Waiver of Breach.  The waiver by any party hereto of the
other party’s prompt and complete performance, or breach or violation, of any
term or provision of this Agreement shall be effected solely in a writing signed
by such party, and shall not operate nor be construed as a waiver of any
subsequent breach or violation, and the waiver by any party hereto to exercise
any right or remedy which he or it may possess shall not operate nor be
construed as the waiver of such right or remedy by such party, or as a bar to
the exercise of such right or remedy by such party, upon the occurrence of any
subsequent breach or violation.
 
(k)            Counterparts.  This Agreement may be executed in two or more
separate counterparts, each of which shall be an original, and all of which
together shall constitute one and the same agreement.
 
 
* * * * * * * *
 
 
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
executed this Agreement as of the date first written above.
 

     
WELLCARE HEALTH PLANS, INC.
 
      By:  /s/  Heath Schiesser      
Name:  Heath Schiesser
     
Title:  President & CEO

 

 
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Grantee hereby accepts this Agreement subject to all of the terms and provisions
thereof.  Grantee has reviewed this Agreement in its entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Agreement,
and fully understands all provisions of this Agreement.
 
 

     
GRANTEE:
 
      By: /s/  Thomas F. O’Neil III      
Thomas F. O’Neil III
     
 

 

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