Nolan Employment Agreement




Exhibit 10.8 




EMPLOYMENT AGREEMENT 



        This
Employment Agreement is entered into as of the 1st day of December, 2003, by
and between Timothy Nolan (“Executive”) and Coventry Health Care, Inc.
(“Employer”), a Delaware corporation with its principal place of business at
6705 Rockledge Drive, Bethesda, Maryland 20817. 




W I T N E S S E T H: 



        WHEREAS,
Executive desires to enter into an employment relationship with Employer and Employer
desires to employ Executive; and 



        WHEREAS,
Executive and Employer desire to set forth in a written agreement the terms and conditions
of such employment. 



        NOW,
THEREFORE, in consideration of the premises hereof and of the mutual promises and
agreements contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows: 



         1.       
          Employment. On the Date of Employment (as defined in
          Section 3 below), Executive shall be engaged by Employer as a Senior Vice
          President. Executive hereby agrees to such employment on and after the Date of
          Employment under the terms and conditions hereinafter set forth. 



         2.       
          Duties. As Senior Vice President, Executive shall report to
          the Chief Operating Officer, of Employer. Executive’s powers and duties
          shall be those normally associated with such position or as may be delegated or
          assigned to Executive by Employer’s Chief Executive Officer and President
          or Chief Operating Officer or by the Board of Directors of Employer. During the
          term of this Agreement, Executive shall also serve without additional
          compensation in such other offices of the Employer or its subsidiaries or
          affiliates to which he may be elected or appointed by the Board of Directors of
          Employer or its subsidiaries or affiliates, respectively. 



         3.       
          Date of Employment. Executive’s employment shall
          commence on December 1, 2003 (the “Date of Employment”). 



         4.       
          Initial Term. Subject to the terms and conditions set forth
          herein, Executive shall be employed hereunder for an initial term of one year
          beginning on the Date of Employment. If at the end of the initial term a new
          employment contract is not executed, the term of this Agreement shall continue
          on a year-to-year basis in the absence of notice of either party. 



         5.       
          Base Compensation. For all duties rendered by Executive,
          Employer shall pay Executive a base salary (“Base Salary”) of Three
          Hundred Twenty-five Thousand Dollars ($325,000), annually, to be reviewed on an
          annual basis based upon the performance of Executive. The Base Salary shall be
          paid to Executive in accordance with Employer’s normal payroll policies. 



    
6.       
Additional Compensation. During the period of this
Agreement and as a result of employment under this Agreement, Executive shall
receive or be eligible for the following additional compensation: 



        Employer
Stock Options:Executive will be granted a Restricted Stock Award of 25,000
shares of Common Stock of the Company. The terms and conditions of the grant will be under
and in accordance with an agreement between Executive and the Company and subject to the
terms and conditions of the Restricted Stock Award Agreement and in accordance with the
provisions of the Company’s 1998 Stock Incentive Plan. The grant will vest at a rate
of one-fourth of the shares per year over a four-year vesting period beginning on the date
of grant, or in the event of a Change of Control (as defined in the 1998 Stock Incentive
Plan), the grant will become fully vested subject to the terms and conditions of the
Restricted Stock Award and in accordance with the provisions of the 1998 Stock Incentive
Plan. 



        Bonus
Compensation:Executive shall be eligible for an annual bonus (“Bonus”)
with a target bonus equal to 70% of base compensation and an incentive payment which may
range from 0% to 200% of target. Measurement criteria will be determined in accordance
with the terms and conditions of Employer’s Management Incentive Compensation Plan. 



        Deferred
Compensation: Executive shall be eligible to participate in the company
2003 Deferred Compensation Plan. The terms and conditions of the Plan are defined in the
Coventry Health Care, Inc., 2003 Deferred Compensation Plan document. 



        Other
Benefits:Executive will be eligible for participation in any employee
benefit programs available to officers of Employer from time to time as provided in
Section 15 below. 




     7.
       Expenses.
 Executive shall be reimbursed for ordinary and
 necessary business expenses incurred by Executive on behalf of Employer and its
 subsidiaries or affiliates upon presentation of vouchers in accordance with the
 usual and customary procedure of Employer in relation to such expense items,
 except that Employer may elect, at its option, to pay such expense items
 directly rather than reimburse Executive therefor. 




    8.       
  Extent of Service. Executive shall devote substantially all
  of his working time, attention and energies to the business of the Employer and
  shall not, during the term of this Agreement, take, directly or indirectly, an
  active role in any other business activity without the prior written consent of
  the Employer; but except as provided in Section 13(b), this Section shall not
  prevent Executive from serving as a director of other entities not affiliated
  with Employer, from making real estate or other investments of a passive nature
  or from participating in the activities of a nonprofit charitable organization
  where such participation does not require a substantial amount of time and does
  not adversely affect Executive’s ability to perform his duties under this
  Agreement. 


    9.       
Termination of Employment. Employer may terminate this
Agreement with or without cause at any time during the term of this Agreement.
If the employment of Executive with Employer is terminated by Employer for any
reason other than Good Cause (as defined in Section 24 below) the following
provisions will apply: 




	(a) 	  	
 Employer shall during the Severance Period (as defined in Section 24 below),
 continue to pay Executive an amount equal to: 


 



        
     
              
              
  (i)       
Executive’s Base Salary at the time of termination of employment. 



	  	Such
amount will be paid during the Severance Period in installments similar to those being
received by Executive at the date of termination of employment, and will commence as soon
as practicable following the date of termination of employment. 






	(b) 	  	
During the Severance Period Executive and his spouse and family will continue to
be covered by all Welfare Plans (as defined in Section 24 below), maintained by
Employer in which he or his spouse or family were participating immediately
prior to the date of his termination as if he continued to be an employee of
Employer; provided that, if participation in any one or more of such Welfare
Plans is not possible under the terms thereof, Employer will provide
substantially identical benefits to the extent possible. If, however, Executive
obtains employment with another employer during the Severance Period, such
coverage shall be provided until the earlier of: (i) the end of the Severance
Period or (ii) the date on which the Executive and his spouse and family can be
covered under the plans of a new employer without being excluded from full
coverage because of any actual pre-existing condition. Executive’s
eligibility for and the Employer match to the 401(k) Plan, Supplemental
Executive Retirement Plan and/or any other retirement savings program in which
the Employee participates shall end at the date of termination of employment. 






	(c) 	  	
 Executive shall not be entitled to payments during the Severance Period
 attributable to compensation for vacation periods he would have earned had his
 employment continued during the Severance Period or to unused vacation periods
 accrued as of the date of termination of employment. 


 



	(d) 	  	
During the Severance Period Executive shall not be entitled to reimbursement for
fringe benefits such as, dues and expenses related to club memberships, and
expenses for professional services. 






        Compensation
under Section 9(a) and (b) hereof is contingent upon Executive’s compliance with
Section 13 hereof. 


    10.       
Termination by Executive. Executive may terminate his
employment hereunder at any time upon sixty (60) days prior written notice. Upon
such termination by Executive, the Employer shall pay the Executive only his
Base Salary due through the date on which his employment is terminated at the
rate in effect at the time of notice of termination. The Employer shall then
have no further obligation to Executive under this Agreement, except for the
payout of benefits accrued under any Employee Benefit Plans or other employee
benefits. 


    11.       
Setoff. 




 	(a) 	  	
  With respect to Section 9, payments or benefits payable to or with respect to
  Executive or his spouse pursuant to this Agreement shall be reduced by the
  amount of any claim of Employer against Executive or his spouse or any debt or
  obligation of Executive or his spouse owing to Employer. 


  



               	(b) 	  	
 With respect to Section 9, payments or benefits payable to or with respect to
 Executive pursuant to this Agreement shall be reduced by any amount Executive
 may earn or receive from employment with another employer or other professional
 services, except as expressly provided in Section 9(b). Employee shall notify
 Employer immediately in writing of the date upon which such services or other
 work commenced and shall provide Employer with such documentation as Employer
 shall require to determine the amount of any such setoff. Employee’s
 failure to provide such written notice and documentation as required herein
 shall immediately release Employer from its obligations under this Agreement and
 Employer shall have the right to recover all amounts payable hereunder. 


 



      12.       
  Death. If Executive dies during the Severance Period: 



  	(a) 	  	
   All amounts payable hereunder to Executive shall, during the remainder of the
   Severance Period, be paid to his surviving spouse. On the death of the survivor
   of Executive and his spouse, no further benefits will be paid under the
   Agreement. 


   



               	(b) 	  	
  The spouse and family of Executive shall, during the remainder of the Severance
  Period, be covered under all Welfare Plans made available by Employer to
  Executive or his spouse immediately prior to the date of his death to the extent
  possible. 


  



        Any
benefits payable under this Section 12 are in addition to any other benefit due to
Executive or his spouse or beneficiaries from Employer, including, but not limited to,
payments under any Incentive Plans. 


    13.       
Restrictive Covenants. 




               	(a) 	  	
   Confidential Information. Executive agrees not to disclose, either during
   the time he is employed by the Employer or following termination of his
   employment hereunder, to any person (other than a person to whom disclosure is
   necessary in connection with the performance of his duties as an employee of
   Employer or to any person specifically authorized by the Board of Directors of
   Employer) any material confidential information concerning the Employer or any
   of its Affiliates, including, but not limited to, strategic plans, customer
   lists, contract terms, financial costs, pricing terms, sales data or business
   opportunities whether for existing, new or developing businesses. 


   



	(b) 	  	
 Non-Competition. During the term of employment provided hereunder and for
 a period of twelve months following termination of employment, Executive will
 not directly or indirectly own, manage, operate, control or participate in the
 ownership, management, operation or control of, or be connected as an officer,
 employee, partner, director or otherwise with, or any have financial interest
 in, or aid or assist anyone else in the conduct of, any business which is in
 competition with any business conducted by the Employer or any Affiliate of
 Employer in any state in which the Employer or any Affiliate of Employer is
 conducting business on the date of termination or expiration of this Agreement,
 provided that ownership of 5% or less of the voting stock of any public
 corporation shall not constitute a violation hereof. In the event Executive
 enters into any of the foregoing arrangements in competition with Employer or
 any Affiliate of Employer, Executive shall forfeit all rights to payments and
 other benefits under Section 9, above. Such forfeiture shall be Employer’s
 sole remedy against Executive for violation of this Section 13(b). 


 



               	(c) 	  	
    Non-Solicitation. During the term of employment provided for hereunder
    and for a period of twelve months following termination of employment, Executive
    will not (i) directly or indirectly solicit business which could reasonably be
    expected to conflict with the interest of Employer or any Affiliate of Employer
    from any entity, organization or person which has contracted with the Employer
    or any Affiliate of Employer, which has been doing business with the Employer or
    any Affiliate of Employer, from which the Employer or any Affiliate of Employer
    was soliciting business at the time of the termination of employment or from
    which Executive knew or had reason to know that Employer or any Affiliate of
    Employer was going to solicit business at the time of termination of employment,
    or (ii) employ, solicit for employment, or advise or recommend to any other
    persons that they employ or solicit for employment, any employee of the Employer
    or any Affiliate of Employer. 


    



               	(d) 	  	
   Consultation. Executive shall, at the Employer’s written request,
   for a period of twelve months following termination of employment cooperate with
   the Employer in concluding any matters in which Executive was involved during
   the term of his employment and will make himself available for consultation with
   the Employer on other matters otherwise of interest to the Employer. The
   Employer agrees that such requests shall be reasonable in number and will
   consider Executive’s time required for other employment and/or employment
   search. In the event of voluntary termination by Executive, Employer agrees to
   pay Executive a reasonable fee for any such consultation services requested by
   Employer; provided, however, Executive agrees to cooperate with Employer, at no
   cost to Employer, in concluding any matters in which Executive was involved
   during the term of his employment. 


   



	(e) 	  	
 Enforcement. Executive and the Employer acknowledge and agree that any of
 the covenants contained in this Section 13 may be specifically enforced through
 injunctive relief but such right to injunctive relief shall not preclude the
 Employer from other remedies which may be available to it. 


 



	(f) 	  	
 Continuing Obligation. Notwithstanding any provision to the contrary or
 otherwise contained in this Agreement, the agreement and covenants contained in
 this Section 13 shall not terminate upon Executive’s termination of his
 employment with the Employer or upon the termination of this Agreement under any
 other provision of this Agreement. 


 


    14.       
Vacation. During each year of this Agreement, Executive
shall be entitled to four (4) weeks paid vacation. 


    15.       
Health and Welfare Benefits; Profit-Sharing Plans. In
 addition to the benefits specifically provided for herein, Executive and his
 family shall be entitled to participate in all health and welfare benefit plans
 maintained by the Employer for executive or managerial employees generally
 according to the terms of such plans. Executive shall be entitled to participate
 in any profit-sharing, retirement or similar plans established by Employer in
 which executive or managerial employees of Employer participate, including any
 such plan intended to comply with Section 401(k) of the Internal Revenue Code of
 1986, as amended, and any such plan providing supplemental executive retirement
 benefits. 


     16.        
 Executive Assignment. No interest of Executive or his
 spouse or any other beneficiary under this Agreement, or any right to receive
 any payment or distribution hereunder, shall be subject in any manner to sale,
 transfer, assignment, pledge, attachment, garnishment, or other alienation or
 encumbrance of any kind, nor may such interest or right to receive a payment or
 distribution be taken, voluntarily or involuntarily, for the satisfaction of the
 obligations or debts of, or other claims against, Executive or his spouse or
 other beneficiary, including claims for alimony, support, separate maintenance,
 and claims in bankruptcy proceedings. 



    17.       
Benefits Unfunded. All rights of Executive and his spouse
or other beneficiary under this Agreement shall at all times be entirely
unfunded and no provision shall at any time be made with respect to segregating
any assets of Employer for payment of any amounts due hereunder. Neither
Executive nor his spouse or other beneficiary shall have any interest in or
rights against any specific assets of Employer, and Executive and his spouse or
other beneficiary shall have only the rights of a general unsecured creditor of
Employer. 



    18.       
Notices. Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and sent by registered or
certified mail to his residence in the case of Executive, or to its principal
office in the case of the Employer and the date of receipt shall be deemed the
date which such notice has been provided. 


    19.       
Waiver of Breach. The waiver by either party of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by the other party. 


    20.       
Assignment. The rights and obligations of the Employer
under this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Employer. The Executive acknowledges that the
services to be rendered by his are unique and personal, and Executive may not
assign any of his rights or delegate any of his duties or obligations under this
Agreement. 


    21.       
Entire Agreement. This instrument contains the entire
agreement of the parties and supersedes all other prior agreements, employment
contracts and understandings, both written and oral, express or implied with
respect to the subject matter of this Agreement and may not be changed orally
but only by an agreement in writing signed by the party against whom enforcement
of any waiver, change, modification, extension or discharge is sought. 


    22.       
Applicable Law. This Agreement shall be governed by the
laws of the State of Maryland, without giving effect to the principles of
conflicts of law thereof. 


    23.       
Headings. The sections, subjects and headings of this
 Agreement are inserted for convenience only and shall not affect in any way the
 meaning or interpretation of this Agreement. 


    24.       
Definitions. For purposes of this Agreement: 



	(a) 	  	
 “Affiliate” shall have the meaning set forth in Rule 144(a)(1)
 promulgated under the Securities Act of 1933, as amended. 


 



 	(b) 	  	
 “Good Cause” shall be deemed to exist if, and only if: 


 


        
     
              
              
  
(i) Executive engages in material acts or omissions constituting dishonesty, breach
of fiduciary obligation or intentional wrongdoing, malfeasance or non-compliance
with written directives approved by the Board of Directors which are
demonstrably injurious to Employer; 



        
     
              
              
  (ii) Executive is convicted of a violation involving fraud or dishonesty; or 



        
     
              
              
  (iii) Executive materially breaches this Agreement (other than by engaging in acts or
 omissions enumerated in paragraphs (i) and (ii) above), or materially fails to
 satisfy the conditions and requirements of his employment with Employer, and
 such breach or failure by its nature is incapable of being cured, or such breach
 or failure remains uncured for more than 30 days following receipt by Executive
 of written notice from Employer specifying the nature of the breach or failure
 and demanding the cure thereof. For purposes of this paragraph (iii),
 inattention by Executive to his duties shall be deemed a breach or failure of
 cure. 



	  	
Without
limiting the generality of the foregoing, if Executive acted in good faith and in a manner
he reasonably believed to be in, and not opposed to, the best interest of Employer and had
no reasonable cause to believe his conduct was unlawful in connection with any action
taken by Executive in connection with his duties, it shall not constitute Good Cause. 






	(c) 	  	
     “Severance Period” shall mean the period beginning on the date the
     Executive’s employment with Employer terminates without Good Cause under
     circumstances described in Section 9 and ending on the date that follows twelve
     months (12) thereafter. 


     



	(d) 	  	
 “Welfare Plans” shall mean any medical, vision and dental coverage
 made available by Employer in which Executive is eligible to participate. 


 


    25.       
Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original. 


    26.       
Severability. In the event any provision of this Agreement
is held illegal or invalid, the remaining provisions of this Agreement shall not
be affected thereby. In the event that Section 13(b) is determined by a court of
competent jurisdiction to be invalid due to overbreadth, such Section 13(b)
shall be constructed as narrowly as necessary to be enforceable. 



        IN
WITNESS WHEREOF, the parties have executed this Agreement on the day and year first
written above. 


By: /s/ Timothy Nolan

Timothy Nolan




COVENTRY HEALTH CARE, INC.





By: /s/ Thomas P. McDonough

 Thomas P. McDonough

Chief Operating Officer