Exhibit 10.12 dated December 31, 2008










Exhibit 10.12







 


Coventry Health Care, Inc. (“Coventry”)


 


Summary of Non-Employee Directors’ Compensation


 


The following table summarizes the components and amounts of the compensation to be paid to eligible non-employee directors for their services in 2009.   


 





	
            Compensation Components
 	
            Board or Committee
 	
             
  	
            Compensation
  	
             
  
	
            Annual Compensation for Attendance at Regular Board Meetings1 (paid/vested/deferred quarterly in arrears in accordance with the Plan and includes compensation for five regularly scheduled Board meetings)
 	
            Board
 	
            $
 	
            225,000
 	
             
 
	
            Annual Committee Chair Retainer 
 (Paid annually in arrears)                                       
 	
            Chair of Board
 	
            $
 	
            125,000
 	
            *
 
	
             
 	
            Lead Director
 	
             
 	
            10,000
 	
             
 
	
             
 	
            Chair of Audit Committee
 	
             
 	
            15,000
 	
             
 
	
             
 	
            Chair of Comp Committee
 	
             
 	
            10,000
 	
             
 
	
             
 	
            Chair of N/CG Committee
 	
             
 	
            5,000
 	
             
 
	
            Attendance at In-Person Special Meeting                    
 	
            Board
 	
            $
 	
            3,000
 	
             
 
	
             
 	
            Audit Committee
 	
             
 	
            3,000
 	
             
 
	
             
 	
            Comp Committee
 	
             
 	
            3,000
 	
             
 
	
             
 	
            N/CG Committee
 	
             
 	
            1,500
 	
             
 
	
            Participation in a Special Telephonic Meeting                                               
 	
            Board
 	
            $
 	
            1,000
 	
             
 
	
             
 	
            Audit Committee
 	
             
 	
            1,000
 	
             
 
	
             
 	
            Comp Committee
 	
             
 	
            1,000
 	
             
 
	
             
 	
            N/CG Committee
 	
             
 	
            500
 	
             
 
	
            Reimbursement of Reasonable Travel Expenses                                     
 	
            All Directors
 	
             
 	
            Actual Costs
 	
             
 
	
            New Director Stock Option Grant                 
 	
            New Director
 	
             
 	
            10,000 options to acquire shares which vest in equal amounts over four years
 	
             
 
	
            Health and Basic Life Insurance Coverage                 
 	
            All Non-employee Directors
 	
             
 	
                                                                                                                              
 	
             
 
	
             
 	
            (voluntary participation)
 	
             
 	
                                                                                                                              
 	
             
 





 


*   Annual retainer established for the Chairman of the Board. Allen F. Wise, our Chairman of the Board, became our Chief Executive Officer effective January 30, 2009. In light of this, his compensation for 2009 for his services as both a director and executive is currently under discussion and his compensation for board services will be appropriate for that of an employee director. 


1 Any non-employee directors who become eligible to participate in the Plan after January 1 will receive a pro rata portion of the Annual Compensation.  











Exhibit 10.12







 






Subject to the terms of the Plan, non-employee directors may elect the form and the timing of their compensation on an individual basis as summarized in the table below. All elections of the form of payment must be made in multiples of 25%.  The table below summarizes the forms of compensation each individual non-employee director may select as well as certain material terms related to those forms of compensation. 


 


 





	
            Payment

“Form” 2
 	
            Maximum Allocation
 	
            Payment

“Current”
 	
            Payment

“Deferred”
 	
            Vesting
 
	
            Cash
 	
            50%3
 	
            Paid at the end of each quarter
 	
            Credited at the end of each quarter4
 	
            None
 
	
            Restricted Stock/
 Stock Units
 	
            100%
 	
            Granted at beginning of year
 	
            Stock Units deferred until termination of service or unforeseeable emergency

 
 	
            Quarterly over the year of service
 
	
            Stock Options
 	
            100%
 	
            Granted at beginning of year
 	
            Exercisable when vested and subject to a 10 year term
 	
            Quarterly over the year of service
 





 


_________________________


2   Value of stock options, restricted stock awards and stock units determined in accordance with SFAS 123R.


3 limit may be waived with the approval of the Chairman of the Compensation Committee.


4 cash will be credited quarterly with interest based on the Company’s borrowing rate set at the beginning of each year (the 2008 rate is approximately 5.71%).