Document:

Exhibit 10.1 dated May 7, 2009

        SEPARATION OF EMPLOYMENT AGREEMENT 

        AND GENERAL RELEASE

         

        This Separation of Employment Agreement and General Release (“Agreement”) is entered into between Coventry Health Care, Inc. (“Coventry”) and Dale B. Wolf (“Mr. Wolf”).

         

        WHEREAS, Mr. Wolf was employed by Coventry as Chief Executive Office pursuant to an Employment Agreement, as amended, dated December 19, 2007 (“2007 Employment Agreement”);

         

        WHEREAS, Mr. Wolf’s employment by Coventry is being terminated as of April 30, 2009 (“Separation Date”); and

         

        WHEREAS, Coventry and Mr. Wolf desire to resolve any and all issues relating to Mr. Wolf’s employment with and termination of employment from Coventry;

         

        NOW THEREFORE, Coventry and Mr. Wolf, intending to be legally bound, do hereby agree as follows:

         

        1.   The 2007 Employment Agreement is incorporated herein by reference.

         

        2.   Coventry shall continue to pay Mr. Wolf his current base compensation and benefits through the Separation Date of April 30, 2009.

         

        3.   Coventry shall pay to Mr. Wolf twenty-four (24) monthly payments for the two-year period from May 1, 2009 through April 30, 2011 of One Hundred Sixty Seven Thousand, Nine Hundred, Sixteen Dollars and Sixty Seven Cents ($167,916.67) each (which is equal to 1/24 of two times the aggregate of (a) Mr. Wolf’s current base salary; and (b) the average bonus
        compensation for Mr. Wolf for the calendar years 2007 and 2008 under Coventry’s 162(m) plan). Payments shall commence on May 1, 2009, subject to the six-month delay described in Section 16 below (which means that the delayed payment for the first six months will be made on November 13, 2009, the first pay period date of the seventh month following the Separation Date).

         

        4.   Mr. Wolf’s accounts under the Mid-Term Executive Retention Program and any predecessor program (other than amounts credited for the current program year ending June 30, 2009) shall become fully vested on the Separation Date and shall be distributed within thirty (30) days after the Separation Date.

         

        5.   Coventry shall pay to Mr. Wolf, on May 15, 2009, the lump sum payout of four weeks of accrued but unused vacation days earned by Mr. Wolf through April 30, 2009.

         

        6.   Coventry shall pay Mr. Wolf for non-reimbursed business, auto, and travel expenses incurred by Mr. Wolf through April 30, 2009, and Mr. Wolf shall submit such expenses to Coventry no later than June 15, 2009.

         

        7.   Coventry shall continue to provide medical, dental and vision insurance for Mr. Wolf and his dependents for the two-year period from May 1, 2009 through April 30, 2011, under the terms of the plans applicable to executive officers of Coventry. If Mr. Wolf elects such continued coverage, he shall pay the COBRA cost of such coverage and Coventry shall reimburse Mr.
        Wolf for the COBRA cost paid by Mr. Wolf.

         

        8.    All outstanding stock options and restricted stock that were granted to Mr. Wolf and that would have vested through April 30, 2010 if Mr. Wolf had remained employed shall become vested (and, in the case of options, exercisable) as of the Separation Date. Coventry and Mr. Wolf agree that Mr. Wolf’s stock and vested stock options will be treated in the
        same manner as such equity of all other executive officers of Coventry in the event of a Change in Control of Coventry (as defined in Section 4.4(a) of the 2007 Employment Agreement or a Change in Control under the 2004 Stock Incentive Plan (or a predecessor plan) (the “Equity Plan”).

         

        9.   Coventry acknowledges that Mr. Wolf is entitled to an Early Retirement Benefit under the Equity Plan of three years of exercise credit for vested stock options following termination by reason of Mr. Wolf being age 55 with more than 10 years of service as of April 30, 2009. As a result, all of Mr. Wolf’s vested stock options (including options that vest
        pursuant to Section 8 above) shall remain outstanding and exercisable for three years after the Separation Date (or until the expiration of the applicable option term, if earlier).

         

        
            

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        10. Coventry shall match any contribution by Mr. Wolf to the Coventry Health Care, Inc. 401(k) Restoration and Deferred Compensation Plan made according to plan terms for 2008, with the match credited no later than April 30, 2009 or such earlier date as such match is credited to other executive officers of Company.  All of Mr. Wolf’s matching contributions under the
        Coventry Health Care, Inc. 401(k) Restoration and Deferred Compensation Plan will become fully vested as of the Separation Date.  Coventry shall provide a lump sum payout of Mr. Wolf’s accrued benefits under such Plan during the seven month after the Separation Date and no later than November 13, 2009.

         

        11. Mr. Wolf shall be allowed to roll over his Coventry Health Care, Inc. Retirement Savings Plan balance by June 30, 2009.

         

        12. Mr. Wolf shall resign from all officer and director positions with Coventry, and any subsidiaries and affiliates of Coventry, effective April 30, 2009.

         

        13. In the event of Mr. Wolf’s death, Coventry shall continue payout of all benefits provided under the Separation Agreement to Mr. Wolf’s designated beneficiary(ies), and Mr. Wolf’s dependents may continue family medical, dental, and vision insurance benefits through April 30, 2012 and receive COBRA and tax reimbursements as described in Section 7
        above.

         

        14. Coventry and Mr. Wolf agree that the post-employment restrictions contained in Section 6.4 of the 2007 Employment Agreement, incorporated herein by reference, shall remain in effect through April 30, 2011. Coventry and Mr. Wolf further agree that all other post-employment restrictions in any other agreements or plans are hereby waived, and that Mr. Wolf will not be required
        to sign any future post-employment restrictions as a condition of the receipt of any benefits under paragraph 9 herein.

         

        15. In exchange for a full release and waiver of claims by Mr. Wolf, Coventry shall provide Mr. Wolf with a lump sum payment of Six Hundred and Fifty Thousand Dollars ($650,000) on May 1, 2009. 

         

        16. All payments under this Agreement will be made in accordance with section 409A of the Internal Revenue Code. As required by section 409A, the monthly payments that would otherwise be made under Section 3 above, and the tax gross up amounts described in Section 7 above, shall be postponed for the six-month period following the Separation Date. The postponed amounts shall be
        paid in a lump sum payment on the first pay-period date of the seventh month following the Separation Date (November 13, 2009), or within five days after Mr. Wolf’s date of death, if earlier. 

         

        17.  All payments under this Agreement shall be subject to applicable tax withholding. Tax withholding with respect to the restricted stock vesting under Section 8 above shall be made by share withholding on the vesting date. The shares withheld shall have a fair market value on the vesting date equal to the applicable tax withholding amount. 

         

        18.   Release and Waiver by the Parties

         

        a.          In consideration for the benefits provided to Mr. Wolf under this Agreement, Mr. Wolf hereby RELEASES, AND FOREVER DISCHARGES Coventry, together with its parent, subsidiaries and affiliates, and its and their officers, directors, employees, agents, predecessors,
        shareholders, partners, successors, assigns, heirs, executors and administrators (hereinafter referred to collectively as “RELEASEES”), of and from any and all manner of actions and causes of actions, suits, debts, claims and demands whatsoever in law or in equity, which he ever had, now has or hereafter may have, or which his heirs, executors or administrators hereafter may have, by reason of any matter, cause, or thing
        whatsoever from the beginning of his employment with Coventry until the execution date of this Agreement, and particularly, but without limitation of the foregoing general terms, any claims concerning or relating in any way to his employment relationship or the termination of his employment relationship with Coventry, and including, but not limited to, any claims arising under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e et seq.,
        as amended (“Title VII”), the Age Discrimination in Employment Act, 29 U.S.C. §621 et.seq., (the “ADEA”), the Older Workers Benefit Protection Act, 29 U.S.C. §621 et seq., the Americans with Disabilities Act, 42 U.S.C.§12101 et seq., (the “ADA”), the Employee Retirement Income
        Security Act of 1974, 29 U.S.C. §1001 et seq., as amended (“ERISA”), the Family and Medical Leave Act, 29 U.S.C. 261 et. seq., and any and all other federal, state, or local laws, and any common law claims now or hereafter recognized, as well as all claims for counsel fees and costs.

         

        
            

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        b.          In consideration for the agreements made by Mr. Wolf under this Agreement, Coventry hereby RELEASES, AND FOREVER DISCHARGES, Mr. Wolf of and from any and all manner of actions and causes of actions, suits, debts, claims and demands whatsoever in law or in equity, which Coventry ever had, now has or hereafter may have, by
        reason of any matter, cause or thing whatsoever from the beginning of Mr. Wolf’s employment with Coventry until the execution date of this Separation Agreement.

         

        c.         Mr. Wolf further agrees and covenants that neither he, nor any person, organization, or other entity on his behalf, will file, charge, claim, sue, or cause or permit to be filed, charged, or claimed, any civil action, suit, or legal proceeding seeking any type of personal relief, or share in any remedy against any of the
        RELEASEES, involving any matter occurring at any time in the past up to and including the date of this Agreement, or involving any continuing effects of any actions or practices which may have arisen or occurred on or prior to the date of this Separation Agreement, except for breach of this Separation Agreement. In addition, Mr. Wolf also agrees and covenants that should he or any other person, organization or entity on his behalf,
        file, charge, claim, sue or cause or permit to be filed, charged, or claimed, any action for personal injunctive, declaratory, monetary relief, despite his agreement not to do so hereunder, then he will pay all of the costs and expenses of the RELEASEES (including reasonable attorneys’ fees) incurred in the defense of any such action or undertaking.

         

                                            19.   Mr. Wolf hereby certifies and acknowledges that:

         

        a.              He has read the terms of this Separation Agreement and understands its terms and effects, including the fact that he has agreed to RELEASE AND FOREVER DISCHARGE RELEASEES from any claims arising out of his employment relationship with Coventry, the
        terms and conditions of that employment relationship, and the termination of that employment relationship;

         

        b.              He has signed this Agreement voluntarily and knowingly in exchange for the consideration provided, which he acknowledges is adequate and satisfactory;

         

        c.              He has been advised in writing to consult with an attorney concerning this Agreement prior to signing this Agreement, and in fact has done so;

         

        d.              Neither Coventry, nor any of its agents, representatives, employees, or attorneys, has made any representations concerning the terms or effects of this Agreement other than those contained herein; and

         

        e.              He has been advised that the signing of this Agreement does not waive rights or claims that may arise after the date the Agreement is fully executed.

         

                                             20.   Mr. Wolf understands and agrees that:

         

        a.              Any notices due or sent pursuant to the terms of this Agreement shall be sent by registered mail, return receipt requested, by same-day or overnight courier service, or by email to:

         

        
            	
                    	If to Mr. Wolf, then to:
	
                    	Steven R. Wall
	
                    	
                        1701 Market Street

                    
	
                    	
                        Philadelphia, PA 19103

                    
	
                         

                    	
                        swall@morganlewis.com

                    

        

         

         

         

        
            

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                    	If to Coventry, then to:
	
                    	
                        Thomas C. Zielinski

                    
	
                    	
                        Senior Vice President and General Counsel

                    
	
                    	
                        Coventry Health Care, Inc.

                    
	
                    	
                        401 Plymouth Road, Suite 350

                    
	
                         

                    	
                        Plymouth Meeting, PA 19462

                    

        

         

             b.               This Agreement can only be modified by a written agreement duly signed by the persons authorized to sign agreements on behalf of the parties to this Agreement; and

         

             c.               A waiver of a breach under this Agreement shall not be a waiver of any other or subsequent breach or default, and the failure or delay by either party enforcing compliance with any term or condition of this Agreement shall not constitute a waiver of
        such term or condition unless such term or condition is expressly waived in writing.

         

        21. The parties agree and acknowledge that this Agreement contains and comprises the entire agreement and understanding among the parties, that no other representation, promise, covenant or agreement of any kind whatsoever has been made to cause any party to execute this Agreement, and that all agreements and understandings between the parties are embodied and
        expressed herein. The parties further agree and acknowledge that the terms of this Agreement are contractual and not a mere recital and the parties intend this Agreement to be a contract, not an executory accord. 

         

        IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties execute the foregoing Separation of Employment Agreement and General Release on the date so indicated below:

         

         

        
            	
                        /s/ Dale B. Wolf

                    	
                         

                    	
                        May 5, 2009

                    
	
                        Dale B. Wolf

                    	
                         

                    	
                        Date

                    
	
                         

                    	
                         

                    	
                        /s/ Mary Gail B. Wolf

                    
	
                         

                    	
                         

                    	
                        Witness

                    
	
                        Coventry Health Care, Inc.

                    	
                         

                    	
                         

                    
	
                        /s/ Tom Zielinski

                    	
                         

                    	
                        May 4, 2009

                    
	
                        By:

                    	
                         

                    	
                        Date

                    

        

         

         

        
            

            4Exhibit 10.1 dated May 7, 2009

        EMPLOYMENT AGREEMENT

         

        This Employment Agreement (“Agreement”) is made the 30th of April 2009, effective as of January 26, 2009, by and between Coventry Health Care, Inc., a Delaware corporation (the “Company”) and Allen F. Wise (the “Executive”).

         

        WHEREAS, the Company employs the Executive as its Chief Executive Officer and the parties desire to enter into this Agreement to set forth the terms of such employment.

         

        In consideration of the mutual covenants contained in this Agreement, the parties hereby agree as follows:

         

        1.  TERM AND DUTIES

        1.1       The term of the Executive’s employment commenced on January 26, 2009 and shall continue through December 31, 2010 (the “Initial Term”), and will continue on a year-to-year basis thereafter (each such year a “Renewal Term”), until the Executive’s employment is terminated as outlined in Section 4 herein.
        

        1.2       The Executive shall serve as Chief Executive Officer, shall report to the Board of Directors of the Company (the “Board”) and shall be responsible for the overall direction, administration and leadership of the Company, including, but not limited to, the establishment and implementation of policies and directives, formulation of
        long range plans, goals and objectives, effective management of employees, and such other powers and duties normally associated with such position or as may be delegated or assigned to the Executive by the Board. During the Initial Term or any Renewal Term, the Executive shall also serve, without additional compensation, in such other offices of the Company or its subsidiaries or affiliates to which he may be elected or appointed. 

        2.  COMPENSATION AND BENEFITS

        2.1       The Company shall pay the Executive a base salary (“Base Salary”) of not less than Six Hundred Thousand Dollars ($600,000) per annum, subject to applicable withholdings. The Base Salary shall be payable in accordance with the customary payroll practices of the Company. The Base Salary shall be reviewed annually and shall be
        subject to increase by the Compensation Committee of the Board of Directors (the “Committee”) from time to time.

        2.2       The Executive shall be eligible for an annual bonus (“Bonus”) in accordance with the Company’s performance-based plan for the purposes of Section 162(m) of the Internal Revenue Code, as amended (the “Code”), which is currently administered as the Company’s Executive Management Incentive Plan. During the
        Initial Term, the Executive’s target annual bonus shall equal 300% of his base salary and in no event will such bonus exceed 200% of such target amount.

        2.3       The Executive will be entitled to participate in all employee benefit plans or programs and receive all benefits to which any salaried employee is eligible under any existing or future plan or program for salaried employees, including, without limitation, all plans developed for executive officers of the Company. These plans or programs may
        include group health care, dental care, vision care, life or other insurance, tax qualified retirement, savings, thrift and profit sharing plans, sick leave plans, travel or accident insurance, disability insurance, and contingent compensation plans, including capital accumulation programs, deferred compensation plans, restricted stock programs, stock purchase programs and stock option plans. Nothing in this Agreement will preclude the Company from amending or terminating any of the
        plans or programs applicable to salaried employees or executive officers. 

        2.4       The Executive will be entitled to four (4) weeks of annual paid vacation.

        
        

        2.5       The Company will reimburse the Executive for all reasonable travel and other expenses incurred by the Executive in connection with the performance of his duties upon proper documentation in accordance with Company policies. In his sole discretion, the Executive may elect to use aircraft owned by AW, LLC for business related travel in lieu
        of using the Company’s private aircraft. In such cases, the Company, upon receipt of proper documentation from the Executive, will reimburse the Executive the stated hourly and other associated costs for the use of such aircraft but only to the extent such all-in hourly costs do not exceed six thousand five hundred dollars ($6,500). 

        2.6       On the date hereof, the Company shall pay the Executive a sign-on bonus in cash of $2,750,000. Subject to the Executive’s continued employment as Chief Executive Officer of the Company through January 4, 2010, the Company, on such date, shall pay the Executive an additional cash bonus of $2,750,000. 

        2.7       On January 4, 2010 and subject to the Executive’s employment as Chief Executive Officer with the Company through such date, the Company shall grant the Executive 300,000 performance share units under the Company’s then-effective 2004 Incentive Plan (the “Incentive Plan”) which will vest on December 31, 2010 upon the
        attainment of certain performance targets to be set by the Committee in connection with such grant. On April 8, 2009, the Company granted the Executive 300,000 performance share units under the Incentive Plan, which will vest on December 31, 2009 subject to the attainment of certain performance targets and 1,000,000 nonqualified stock options (500,000 of which will vest on December 31, 2009 and 500,000 of which will vest on December 31, 2010).

        3.  DEATH AND DISABILITY COMPENSATION

        3.1       In the event of the Executive’s death during the Initial or Renewal Term, the Agreement terminates and all payments under the Agreement shall cease as of the date of death, except for the following benefits to be paid to the Executive's beneficiaries:

        (a)        any earned but unpaid Base Salary and a lump sum payment equal to the target annual incentive bonus of Executive set by the Committee under the Company’s Executive Management Incentive Plan for the year in which the Executive’s death occurs;

        (b)        for thirty-six (36) months following the date of the Executive’s death, the Company shall pay the cost of medical, dental, and vision premiums as in effect at the date of the Executive’s death for Executive’s surviving spouse, subject to a formal election by the spouse; 

        (c)        the Executive’s designated beneficiary will be entitled to receive the proceeds of any life or other insurance or other death benefit programs provided or referred to in this Agreement;

        (d)        if the Executive’s death occurs prior to December 31, 2009, 50% of all unvested outstanding stock options will vest. If the Executive’s death occurs on or after December 31, 2009, all unvested outstanding stock options will fully vest. If so vested, such stock options will remain exercisable until the earlier of
        twenty-four (24) months from the date of death or the expiration of the term of such option pursuant to the underlying award agreement; and

        (e)        upon the Executive’s death, any unvested performance share units will vest in full.

        3.2       Notwithstanding the short-term disability of the Executive, the Company will continue to pay the Executive pursuant to Section 2 hereof during the Initial Term or any Renewal Term, unless the Executive’s employment is earlier terminated in accordance with this Agreement. In the event the Executive becomes disabled (as defined by the
        Company’s long-term disability plan), the Executive’s employment will be terminated and the Company will pay the Executive the following:

        (a)        any earned but unpaid Base Salary and a lump sum payment equal to the target annual incentive bonus of Executive set by the Committee under the Company’s Executive Management Incentive Plan for the year in which the Executive’s termination due to disability occurs; 

         

        
            

             

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        (b)        for thirty-six (36) months following the date of the Executive’s termination due to disability, the cost of the Executive’s (or his spouse’s in the event of Executive’s death during such period) medical, dental, and vision insurance premiums in effect at the date of the Executive’s termination, subject
        to a formal election by the Executive;

        (c)        if the Executive’s disability occurs prior to December 31, 2009, 50% of all of the Executive’s unvested outstanding stock options will vest. If the Executive’s disability occurs on or after December 31, 2009, all of the Executive’s unvested outstanding stock options will fully vest. If so vested, such stock
        options will remain exercisable until the earlier of five (5) years from the date of disability or the end of the term under the applicable award agreement; and 

        (d)        upon the Executive’s disability, any of the Executive’s unvested performance share units will vest in full.

        3.3       During the period the Executive is receiving payments following his disability and as long as he is physically and mentally able to do so, the Executive will furnish information and assistance to the Company and from time to time will make himself available to the Company to undertake assignments consistent with his position or prior
        position with the Company and his physical and mental health. 

        3.4       For purposes of this Agreement, the term “disabled” or “disability” will have the same meaning as is attributed to such term, or any substantially similar term, in the Company’s long-term disability income plan in effect from time to time. The Company’s group long-term disability policy in existence at
        the time of disability shall be considered to be a part of this Agreement.

        4.  TERMINATION OF EMPLOYMENT

        4.1       The Company may terminate this Agreement with or without cause at any time during the Initial or Renewal Term of the Agreement with ninety (90) days prior written notice. However, except in the case of a two (2) year period following a Change in Control (hereinafter defined) and if during the Initial Term or annual Renewal Term, the
        Executive suffers a Termination Without Cause (hereinafter defined) or a Constructive Termination (as hereinafter defined), the Company will pay the Executive the following: 

        (a)        his then-current Base Salary until the date of termination plus the pro rata portion (based upon the number of full months elapsed during the performance period) of the annual incentive bonus of Executive under the Company’s Executive Management Incentive Plan for the then-current year if the performance criteria set by the
        Committee is achieved;

        (b)        a lump sum severance payment on the date of termination equal to the greater of (i) if one year or less remains under the term of this Agreement, the sum of (a) the annual amount of the Executive’s then-current Base Salary plus (b) the target annual incentive bonus of Executive set by the Committee under the Company’s
        Executive Management Incentive Plan for the then-current year or (ii) if more than one year remains under the term of this Agreement, the sum of (a) the annual amount of the Executive’s then-current Base Salary plus (b) the target annual incentive bonus of Executive set by the Committee under the Company’s Executive Management Incentive Plan for the then-current year, multiplied by a fraction, the numerator of which is the number of days remaining in the term of this
        Agreement and the denominator of which is 365;

        (c)        for twenty-four (24) months following such Termination Without Cause or Constructive Termination, the cost of the Executive’s medical, dental, and vision insurance in effect at the date of termination, subject to a formal election by the Executive; 

         

         

        
            

             

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        (d)        if the Executive’s Termination Without Cause or Constructive Termination occurs prior to December 31, 2009, 50% of all of the Executive’s unvested outstanding stock options will vest. If the Executive’s termination under this Section 4.1 occurs on or after December 31, 2009, all of the Executive’s unvested
        outstanding stock options will fully vest. If so vested, such stock options will remain exercisable until the earlier of five (5) years from the date of disability or the end of the term under the applicable award agreement; and

        (e)        upon the Executive’s termination under this Section 4.1, the pro rata portion (based upon the number of full months elapsed during the performance period) of the Executive’s total number of performance share units which are subject to vesting during the applicable performance period will vest and be settled with a cash
        payment provided that the performance trigger set by the Committee for the vesting of those performance share units has been achieved.

        4.2       If the Executive suffers a Termination Without Cause or Constructive Termination within two (2) years following a Change in Control, the Company will pay to the Executive the following:

        (a)        his then-current Base Salary until the date of termination plus the pro rata portion (based upon the number of full months elapsed during the performance period) of the target annual incentive bonus of Executive set by the Committee under the Company’s Executive Management Incentive Plan for the then-current year; 

        (b)        a lump sum severance payment on the date of termination equal to the greater of (i) if one year or less remains under the term of this Agreement, the sum of (a) the annual amount of the Executive’s then-current Base Salary plus (b) the target annual incentive bonus of Executive set by the Committee under the Company’s
        Executive Management Incentive Plan for the then-current year or (ii) if more than one year remains under the term of this Agreement, the sum of (a) the annual amount of the Executive’s then-current Base Salary plus (b) the target annual incentive bonus of Executive set by the Committee under the Company’s Executive Management Incentive Plan for the then-current year, multiplied by a fraction, the numerator of which is the number of days remaining in the term of this
        Agreement and the denominator of which is 365;

        (c)        for thirty-six (36) months following such Termination Without Cause or Constructive Termination, the cost of the Executive’s medical, dental, and vision insurance in effect at the date of termination, subject to a formal election by the Executive; 

        (d)        if the Executive’s termination under this Section 4.2 occurs prior to December 31, 2009, 50% of all of the Executive’s unvested outstanding stock options will vest. If the Executive’s termination under this Section 4.2 occurs on or after December 31, 2009, all of the Executive’s unvested outstanding stock
        options will vest and will be immediately settled with a cash payment based on the price per share paid in the Change in Control, less the exercise price; and 

        (e)        upon the Executive’s termination under this Section 4.2, any of the Executive’s unvested performance share units will vest in full and will be immediately settled with a cash payment based on the price per share paid in the Change in Control.

        4.3       The Executive may terminate his employment hereunder at any time during the term of this Agreement with ninety (90) days prior written notice. If the Executive suffers a Termination with Cause or the Executive terminates his employment with the Company not due to a Constructive Termination, death or disability (as defined in Section 3.4) (a
        “Voluntary Termination”), then the Company will not be obligated to pay the Executive any amounts of compensation or benefits following the date of termination, except earned but unpaid Base Salary through the date of termination, which will be paid in a lump sum. The stock options and any other outstanding equity awards granted to the Executive shall be governed by the applicable award agreements and incentive plans.

         

        
            

             

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        4.4       Upon notice of termination or resignation of employment, regardless of reason, Executive shall submit his resignation as a director of the Company, effective as of the notice date of his termination or resignation of employment. 

        4.5       For purposes of this Employment Agreement, the following terms have the following meanings:

        (a)        “Change in Control” shall occur if at any time, substantially all of the assets of the Company are sold or transferred by sale, merger or otherwise, to an entity which is not a direct or indirect subsidiary of the Company, or if any “person” (as such term is used in Sections 13(d) or 14(d) of the Securities
        Exchange Act of 1934, as amended) is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 35% or more of the combined voting power of the then existing outstanding securities of the Company.

        (b)        “Constructive Termination” means termination by the Executive which follows (1) a reassignment of duties, responsibilities, title, or reporting relationships (including being required to report to anyone other than the ultimate controlling entity’s board of directors after a Change in Control) that are not at least
        the equivalent of his then current position as set forth in Section 1.2, or a material reduction in the compensation and benefits provided herein, (2) the intentional or material breach by the Company of this Agreement, or (3) the continuous and material involvement of the Board in the management of the Company, on a level not warranted by exceptional circumstances, that is clearly greater than that previously exercised by the Board or (4) a reassignment, after a Change of Control, to a
        geographic location more than fifty (50) miles from the Executive’s primary office location. The Executive shall have a period of ninety (90) days after the occurrence of a condition defined in 4.5(b)(1) to (4) herein to notify the Company in writing that such condition constitutes grounds for a Constructive Termination, after which the Company shall have thirty (30) days to cure the condition. If the Company fails to cure the condition within this thirty (30) day period, the
        Executive’s subsequent voluntary resignation within ninety (90) days following the occurrence of the underlying condition shall constitute a Constructive Termination. The Executive’s failure to resign within the ninety (90) day period shall be deemed to be an irrevocable waiver of the right to assert Constructive Termination for such condition.

        (c)        “Termination With Cause” means termination by the Company, acting in good faith, by written notice to the Executive specifying the event relied upon for such termination, due to; (i) the Executive’s indictment or conviction of a felony, (ii) the Executive’s intentional perpetration of a fraud, theft,
        embezzlement or other act of dishonesty or (iii) the Executive’s intentional breach of a trust or fiduciary duty which materially adversely affects the Company or its shareholders.

        (d)        “Termination Without Cause” means termination by the Company other than due to the Executive’s death or disability or Termination With Cause.

        5.  OTHER DUTIES OF THE EXECUTIVE 

        5.1       The Executive shall devote substantially all of his working time to the business of the Company and during the Initial Term or any Renewal Term shall not take, directly or indirectly, an active role in any other business without the prior written consent of the Company; but except as provided in Section 5.4, this Section shall not prevent
        the Executive from serving as a director of other entities not affiliated with the Company, from making real estate or other investments of a passive nature or from participating in the activities of a charitable organization where such participation does not adversely affect the Executive’s ability to perform his duties under this Agreement.

        5.2       The Executive will, upon reasonable notice, during or after the Initial Term or any Renewal Term, furnish information as may be in his possession and cooperate with the Company as may reasonably be requested in connection with any claims or legal actions in which the Company is or may become a party. The Executive shall receive reasonable
        compensation for the time expended by him pursuant to this Section 5.2 after termination of employment hereunder.

         

        
            

             

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        5.3       The Executive acknowledges that certain information pertaining to the business and operations of the Company, such as strategic plans, product development, financial costs, pricing terms, sales data or new or developing business opportunities (“Confidential Information”) is confidential and is a unique and valuable asset of the
        Company. Access to and knowledge of this Confidential Information are essential to the performance of the Executive’s duties under this Agreement. The Executive will not during the term of this Agreement or following termination of his employment, except to the extent reasonably necessary in the performance of his duties under this Agreement, give to any person, firm, association, corporation or governmental agency any Confidential Information except as required by law. The
        Executive will not make use of this Confidential Information for his own purposes or for the benefit of any person or organization other than the Company. The Executive will also use his best efforts to prevent the disclosure of this Confidential Information by others. All records, memoranda, etc. relating to the business of the Company whether made by the Executive or otherwise coming into his possession will remain the property of the Company.

        5.4       The Executive will not Compete with the Company (as hereinafter defined) at any time while he is employed by the Company. Except after a Change in Control or after non-renewal under Section 1.1, in the event of Termination Without Cause or Constructive Termination pursuant to Section 4.1, the Executive will not Compete with the Company for
        a period of one (1) year from the date of such termination. In the event of a termination after a Change in Control that gives rise to payments to the Executive under Section 4.2, the Executive will not Compete with the Company for one (1) year from the date of termination. In the event of a Voluntary Termination in which the Executive only receives payment as defined under Section 4.3, or which follows a Company non-extension notice delivered pursuant to Section 1.1, there will be no
        restriction on the Executive’s right to Compete with the Company after the date his employment terminates. For the purposes of this Section 5.4, the term “Compete with the Company” means action by the Executive, direct or indirect, either as an officer, director, stockholder, owner, partner, employee or in any other capacity, resulting in the Executive having any legal or equitable ownership or other financial or non-financial interest in or employment with, any HMO,
        managed care or health insurance business within a fifty (50) mile radius of any location where the Company or any subsidiary or affiliate of the Company conducts such business at the date of a termination of the Executive’s employment; provided, however, that the term “Compete with the Company” shall not include ownership (without any more extensive relationship) of a less than a five percent (5%) interest in any publicly-held corporation or other business entity. The
        Executive acknowledges that the covenants contained herein are reasonable as to geographic and temporal scope. The Executive acknowledges that his breach or threatened or attempted breach of any provision of this Section 5.4 may cause irreparable harm to the Company not compensable in monetary damages and that the Company may be entitled, in addition to all other applicable remedies, to a temporary and permanent injunction and a decree for specific performance of the terms of this
        Section 5.4.

        5.5       The Executive agrees that, following his termination of employment, he shall not, in any communications with the press or other media or in any communications with any potential or actual stockholder, lender, investor, customer, client or supplier of the Company of any of its affiliates, criticize, ridicule or make any statement that
        disparages or is derogatory of the Company or any of its affiliates or any of their respective directors, officers or employees. The foregoing will not apply to any non-public oral statements made by the Executive to the Company or to any of the Company’s representatives or any compelled testimony or production, either by legal process, subpoena or otherwise; provided, however, in the event that the Executive is requested pursuant
        to, or required by, applicable law, regulation, or legal process to testify or otherwise respond to a request for information from any governmental authority, the Executive will notify the Company promptly (to the extent allowed by any such law, regulation or legal process) so that the Company may seek a protective order or other appropriate remedy.

        6.  INDEMNIFICATION OF EXECUTIVE

        The Company shall indemnify the Executive and shall reimburse the Executive’s expenses under the circumstances described, and to the maximum extent provided under the mandatory and the permissive indemnification and expense reimbursement provisions of Delaware law. The provisions of this Section 7.1 shall continue in full force and effect after Executive ceases to serve as an
        officer, director, employee or in any other capacity with the Company or any of its affiliates and shall inure to the benefit of his heirs, executors or administrators.

         

        
            

             

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        7.  MISCELLANEOUS

        7.1       This Agreement contains the entire understanding between the Company and the Executive with respect to the subject matter and supersedes any prior employment or severance agreements between the Company and its affiliates and the Executive.

        7.2       This Agreement may not be modified or amended except in writing signed by the parties. No term or condition of this Agreement will be deemed to have been waived except in writing by the party charged with waiver. A waiver shall operate only as to a specific term or condition waived and will not constitute a waiver for the future or act on
        anything other than that which is specifically waived.

        7.3       Any payments to be made by the Company to the Executive hereunder shall be made net of any applicable tax withholdings.

        7.4       This Agreement shall be deemed to conform to all requirements of the Securities and Exchange Act of 1934, as amended, and all requirements of the Code, including but not limited to Sections 280G and 409A of the Code. It is intended that (i) each payment or installment of payments provided under this Agreement is a separate
        “payment” for purposes of Section 409A of the Code and (ii) that the payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code, including those provided under Treasury Regulations 1.409A-1(b)(4) (regarding short-term deferrals), 1.409A-1(b)(9)(iii) (regarding the two-times, two year exception), and 1.409A-1(b)(9)(v) (regarding reimbursements and other separation pay). Notwithstanding anything to the contrary in this
        Agreement, if the Company determines (i) that on the date of the Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)) or at such other time that the Company determines to be relevant, the Executive is a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)(1)) of the Company and (ii) that any payments to be provided to the Executive pursuant to this Agreement are or may become
        subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A of the Code (the “Section 409A Taxes”) if provided at the time otherwise required under this Agreement, then such payments shall be delayed until the date that is six (6) months after the date of the Executive’s separation from service with the Company, or such shorter period that, as determined by the Company, is sufficient to avoid the
        imposition of Section 409A Taxes.  Any payments delayed pursuant to this Section 7.3 shall be made in a lump sum on the first day of the seventh month following the Executive’s separation from service, or such earlier date that, as determined by the Company, is sufficient to avoid the imposition of any Section 409A Taxes.

        7.5       Should any part of this Agreement be declared invalid for any reason, such invalidity shall not affect the validity of any remaining portion hereof and such remaining portion shall continue in full force and effect as if this Agreement had been originally executed without including the invalid part. Should any covenant of this Agreement be
        unenforceable because of its geographic scope or term, its geographic scope or term shall be modified to such extent as may be necessary to render such covenant enforceable.

        7.6       Titles and captions in no way define, limit, extend or describe the scope of this Agreement nor the intent of any provision thereof.

        7.7       This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

         

         

         

        
            

             

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        7.8       This Agreement has been executed and delivered in the State of Maryland and its validity, interpretation, performance and enforcement shall be governed by the laws of that state. Any dispute among the parties hereto shall be settled by arbitration in Bethesda, Maryland, in accordance with the rules then obtaining of the American Arbitration
        Association and judgment upon the award rendered may be entered in any court having jurisdiction thereof. All provisions hereof are for the protection and are intended to be for the benefit of the parties hereto and enforceable directly by each party. Each party hereto agrees that the remedy at law of the other party for any actual or threatened breach of this Employment Agreement would be inadequate and that the other party shall be entitled to specific performance hereof or injunctive
        relief or both, by temporary or permanent injunction or such other appropriate judicial remedy, writ or orders as may be decided by a court of competent jurisdiction in addition to any damages which the complaining party may be legally entitled to recover.

        7.9       All notices, requests, consents and other communications hereunder shall be in writing and shall be deemed to have been made when delivered or mailed first-class postage prepaid by registered mail, return receipt requested, or when delivered if by hand, overnight delivery service or confirmed facsimile transmission to the
        following:

        (i)          If to the Company, at 6705 Rockledge Drive, Suite 900, Bethesda, Maryland, 20817, Attention: Chairman of the Compensation Committee, or at such other address as may have been furnished to the Executive by the Company in writing; or

         

        (ii)         If to the Executive, at 6705 Rockledge Drive, Suite 900, Bethesda, Maryland, 20817, or to the Executive’s primary home address on record with the company, or such other address as may have been furnished to the Company by the Executive in writing.

         

                                  7.10      This Agreement shall be binding on the parties’ successors, heirs and assigns.

         

        7.11      The terms of this Agreement were developed consistent with current applicable tax laws and regulations. In the event there are any future changes to these laws and regulations affecting the terms of this Agreement and, as a result, either party hereunder is adversely impacted, both parties agree to cooperate to protect the current interests of
        each to the maximum extent possible.

        (Signature page follows)

        
            

             

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        IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

         

         

        
            	
                        COVENTRY HEALTH CARE, INC.:

                    	
                         

                    	
                        EXECUTIVE:

                    
	
                        By: /s/ L. Dale Crandall

                    	
                         

                    	
                        /s/ Allen F. Wise

                    
	
                        L. Dale Crandall

                    	
                         

                    	
                        Allen F. Wise

                    
	
                        Chairman, Compensation Committee

                    	
                         

                    	
                        Chief Executive Officer

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