2004 Management Incentive Plan (MIP)




Exhibit 10.19





Coventry Health Care,
Inc. 
2004 Management
Incentive Plan (MIP) 




Plan Objective 



The objective of Coventry Health
Care’s (CHC) 2004 Management Incentive Plan (MIP) is to reward employees for their
contribution to the achievement of company–wide, business unit, health plan, and
team/individual goals. 




Plan Year 



The plan year will be consistent with
CHC’s fiscal year, January 1 through December 31, 2004. 




Eligibility 



The CEO of CHC will determine
employee eligibility prior to the beginning of the plan year and throughout
the year as warranted by promotions and/or performance. Participants in CHC’s Sales
Incentive Plans, Team Incentive Plans and Annual Executive Incentive Plan, are not
eligible for the MIP. Participants must be actively employed at the time incentive checks
are distributed to receive an incentive payment. MIP payouts may be prorated based on hire
date or the promotion date of each participant. 




Timing of Incentive
Payouts



Incentive payouts will be made as
soon as possible after the close of the fiscal year and after CHC’s year-end
financial results are finalized (approximately February/March 2005). 




Target Incentive
Opportunity 



	Eligible Employee Title	Target Incentive %
	Sr. Vice Presidents and Coaches	50%*
	Vice Presidents	30%*
	Directors	15%*
	Managers	10%*
	 * Exceptions made on a case-by-case basis with approval from the CHC CEO






Performance Criteria 



Criteria for incentive payouts
includes the following three factors: 


	CHC Financial Results 

	Health Plan Financial
Results 

	Team and Individual
Achievements 





Coventry Health Care
Results 



The performance of CHC will be based
on the achievement of its Earnings Per Share goal. 





	2004 Goal
	Net Earnings
Per Share Budget	Budget






Incentive Pool Funding 



Target incentive pools will be
calculated separately for each Health Plan and Corporate. The number of eligible
employees, individual incentive targets and each eligible employee’s base pay will
determine each budgeted target incentive pool. 



Actual funding of incentive pools is
based on the results achieved by each Health Plan and the overall performance of Coventry
Health Care, Inc in the case of the Health Plan, and overall performance of Coventry
Health Care, Inc. in the case of Corporate. 




Health Plan Results 



The performance of each Health Plan
will be based on the achievement of its Plan Contribution and Revenue Growth goals as set
forth in the 2004 Budget. The two key goals are weighted as follows: 

	Plan
Contribution      75%

	Revenue
Growth        25%





Health Plan Incentive
Pool Funding 



Each Health Plan’s incentive
pool is funded based on the achievement of its Plan Contribution and Revenue Growth goals.
Each Health Plan’s pool will be modified based on the achievement of CHC’s EPS
goal. The following chart will be utilized to calculate the final incentive pool for each
Health Plan. 



	Level of Health Plan
Goal Achievement	% of Target Pool
Available
 for Payout (1)
	‹ =85%	0%
	86% to 99%	CEO Discretion
	100%	100%
	110%	120%
	120%	130%
	130%	140%
	140%	145%
	150%	150%
	(1) Straight–line
interpolation will be used to calculate the incentive pools when performance
falls between two levels.




Once each Health Plan’s
incentive pool is calculated, it will be modified by the achievement of CHC’s
Earnings Per Share goal. The following chart displays the scale that will be used to
modify each Health Plan’s incentive pool. 



	Level of CHC

Goal Achievement	Health Plan Incentive

Pool Modifier (2)
	‹ 90%	0
	90	.50
	95	.75
	100	1.00
	110	1.20
	120	1.30
	130	1.40
	140	1.45
	150	1.50
	(2)
Straight–line interpolation will be used to calculate the pool modifier when performance falls between
two levels





Example Incentive Pool
Calculation 



Example 1:  The Health Plan achieves
90% of its Plan Contribution and Revenue Growth goals, which results in the target
incentive pool being decreased to 50% (as determined at the discretion of the CEO) of the
budgeted target pool. CHC achieves 100% of its Earnings Per Share Goal, thus modifying the
Health Plan’s pool by 1.0. The final incentive pool remains 50% of the budgeted
target pool. 



Example 2:  The Health Plan achieves
110% of its Plan Contribution and Revenue Growth goals, which results in the target
incentive pool being increased to 120% of the budgeted target pool. CHC achieves 120% of
its Earnings Per Share Goal, thus modifying the Health Plan’s pool by 1.3. The
incentive pool equals 156% of the budgeted target pool. The final incentive pool equals
150% due to the cap. 


	Level of Health Plan
Goal Achievement	% of Target Pool
Available
 for Payout (1)
	‹ 90%	0
	90% ‹ 100%	CEO Discretion
	100%	100%
	110%	112%
	116%	130%
	130%	140%
	140%	150%
	150%	150%
	(1) Straight–line
interpolation will be used to calculate the incentive pools when performance
falls between two levels.




Individual Incentive
Payout Calculations 



Individual incentive awards will be
determined by the following: 



           1.    
          Individual Target Incentive Opportunity 



           2.    
          Incentive Pool Funding, and 



           3.    
          Achievement of established financial goals and individual/team non-financial
          goals. 



Individual incentive awards can vary
between 0% and 200% of the Individual Target Incentive based on individual performance. 



Form of Payment



Payments will be paid in cash. 




Miscellaneous 



Coventry Health Care reserves the
right to amend or discontinue this plan at any time and/or add, reduce or limit the number
of participants at any time such actions are deemed appropriate and in the best interest
of CHC. This document shall not be construed as a contract with the employee and is in no
way intended to limit the employment at will status of employees of Coventry Health Care,
Inc., or its Health Plans.