Exhibit 10.14

 

Coventry Health Care, Inc. (“Coventry”)

 

Summary of Named Executive Officer Compensation

 

Base Salary

 

The following table sets forth the current base salaries provided to Coventry’s
Chief Executive Officer, Chief Financial Officer, and three most highly
compensated executive officers (“Named Executive Officers”):

 

 

Executive Officer

Current Salary

Dale B. Wolf, Chief Executive Officer

$925,000

Shawn M. Guertin, Executive Vice President, Chief Financial Officer, and
Treasurer

$525,000

Thomas P. McDonough, President

$885,000

Harvey C. DeMovick, Jr., Executive Vice President, Customer Service Operations,
and Chief Information Officer

$600,000

Francis S. Soistman, Jr., Executive Vice President, Government & Individual
Plans

$575,000

 

 

Executive Management Incentive Plan

 

2006 Criteria and Incentives

 

Coventry’s Chief Executive Officer, Chief Financial Officer, and three most
highly compensated officers are also eligible to receive a non-equity incentive
award each year under Coventry’s Executive Management Incentive Plan (the 2006
Executive Management Incentive Plan (the “2006 EMIP”) which was previously filed
as Exhibit 10.25 to Coventry’s Current Report on Form 8-K filed on January 12,
2006. For fiscal year 2006, incentives under the 2006 EMIP were based on the
attainment of budgeted EPS (earnings per share) and year-over-year EPS growth.
The incentives paid to Coventry’s Chief Executive Officer and other named
executive officers for performance in fiscal year 2006 are set forth below:

 

 

Executive Officer

Incentive for 2006

Dale B. Wolf, Chief Executive Officer

$     1,625,000

Shawn M. Guertin, Executive Vice President, Chief Financial Officer, and
Treasurer

 

$        450,000

Thomas P. McDonough, President

$2,400,000 (1)

Harvey C. DeMovick, Jr., Executive Vice President, Customer Service Operations,
and Chief Information Officer

$        575,000

Francis S. Soistman, Jr., Executive Vice President, Government & Individual
Plans

$        650,000

 

(1) Includes $1,700,000 special incentive for First Health integration and
$700,000 EMIP.

 

--------------------------------------------------------------------------------

2007 Criteria

 

Pursuant to Coventry’s 2007 Executive Management Incentive Plan (the “2007
EMIP”), which was previously filed as Exhibit 10.1 to Coventry’s Current Report
on Form 8-K, filed on November 7, 2006, the Compensation Committee of Coventry’s
Board of Directors approved the incentive criteria for fiscal year 2007 under
the 2007 EMIP. For fiscal year 2007, incentives under the 2007 EMIP will be
predicated on budgeted earnings per share targets and year-over-year EPS growth.

 

2003 Deferred Compensation Plan and 2004 Mid-Term Executive Retention Program

 

In addition to their base salaries and incentives, Coventry’s Chief Executive
Officer, Chief Financial Officer, and three most highly compensated executive
officers were also eligible to receive an annual cash and stock equivalent
allocation to an account under the 2003 Deferred Compensation Plan, effective
July 1, 2003, a copy of which is filed as Exhibit 10.18.3 to Coventry’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2003, filed on
August 12, 2003, and the 2004 Mid-Term Executive Retention Program, effective
July 1, 2004, a copy of which is filed as Exhibit 10.26 to Coventry’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2004, filed on March
16, 2005. The EPS goals for the 2004 and 2005 program years were met, and the
three plan years all vested July 1, 2006. The accounts were paid in cash, equal
to the June 30, 2006 stock value and investment value of the cash account as of
that date. The following payouts were made on July 7, 2006:

 

Executive Officer

Payments in 2006

Dale B. Wolf, Chief Executive Officer

$ 6,730,375

Shawn M. Guertin, Executive Vice President, Chief Financial Officer, and
Treasurer

$    949,499

Thomas P. McDonough, President

$ 6,376,064

Harvey C. DeMovick, Jr., Executive Vice President, Customer Service Operations,
and Chief Information Officer

$ 2,405,521

Francis S. Soistman, Jr., Executive Vice President, Government & Individual
Plans

$ 1,738,439

 

 

2006 Mid-Term Executive Retention Program

 

In addition to their base salaries and incentives, Coventry’s Chief Executive
Officer, Chief Financial Officer, and three most highly compensated executive
officers are also eligible to receive an annual cash and stock equivalent
allocation to an account under the 2006 Mid-Term Executive Retention Program,
effective July 1, 2006, a copy of which is filed as Exhibit 10.1 to Coventry’s
Current Report on Form 8-K filed on May 24, 2006. The amount of the allocation
is a percentage of base salary and incentive earned for the prior year and
ranges from 0% to 55%, based on performance. Each account will fully vest on
July 1, 2009 and will be paid out in cash, subject to the attainment of pre-

 

--------------------------------------------------------------------------------

established performance criteria for each performance period. In the event the
performance criteria are not met in any period, the award for that period is
forfeited. For the twelve month period ended December 31, 2006, the performance
criteria were based on the attainment of budgeted EPS. The performance criteria
for the twelve months ended December 31, 2006 was met, and the participants were
credited the following amounts in accounts under the 2006 Mid-Term Executive
Retention Program:

 

 

Executive Officer

2006 Allocation

2006 Stock Equivalent Allocation

Dale B. Wolf, Chief Executive Officer

$ 1,147,500

$ 401,610

Shawn M. Guertin, Executive Vice President, Chief Financial Officer, and
Treasurer

$    323,750

$ 113,302

Thomas P. McDonough, President

$    621,250

$ 217,448

Harvey C. DeMovick, Jr., Executive Vice President, Customer Service Operations,
and Chief Information Officer

-0-

-0-

Francis S. Soistman, Jr., Executive Vice President, Government & Individual
Plans

$    393,750

$ 137,804

 

Other Benefit Plans and Arrangements

 

In addition to their base salaries and incentives, Coventry’s Chief Executive
Officer, Chief Financial Officer, and three most highly compensated executive
officers are also eligible to:

 

 

•

Participate in Coventry’s long-term incentive plan under its 2004 Incentive
Plan, a copy of which is filed as Exhibit 10.17 to Coventry’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2004, filed on March 16, 2005,
which can be in the form of stock options, stock appreciation rights, restricted
stock, performance awards, other stock-based awards or cash; and

 

 

•

Participate in Coventry’s 401(k) Restoration and Deferred Compensation Plan, as
amended, a copy of which is filed as Exhibit 10.31 to Coventry’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2004, filed on March 16,
2005, Exhibit 10 to Coventry’s Quarterly Report on Form 10-Q for the quarter
ended June 30, 2005, filed on August 9, 2005, and Exhibit 10.29.3 to Coventry’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2006, filed
herewith.