Document:

EX-10.41

Exhibit 10.41

WELLCARE HEALTH PLANS, INC.

SPECIAL RETENTION BONUS PLAN

     Purpose. WellCare Health Plans, Inc. (the “Company”) wishes to provide under this plan (the
“Plan”), made as of October 31, 2007 (the “Effective Date”), a Special Retention Bonus to certain
individuals in recognition of their prior contributions and as an incentive for such individuals to
continue to provide services to the Company.

     Participants. Participants are those employees who were employed by the Company on the
Effective Date, who are in a position defined by the Company as Focal Point bonus-eligible, and
employees who have been specifically designated by the Compensation Committee (the “Compensation
Committee”) of the Board of Directors of the Company (the “Board”) to participate (each, a
“Participant”). Employees hired after the Effective Date will not be eligible to participate in the
Plan. Employees who are employed by the Company on the Effective Date but who are not eligible to
receive a bonus in the Focal Point process, but who subsequently are promoted to a position at
which the employee is eligible to receive a bonus in the Focal Point process will become
Participants in the Plan.

     Special Retention Bonuses. The Company will pay, in a single lump-sum payment less applicable
withholding taxes, a Special Retention Bonus to Participants in accordance with the following:

     (i) Participants will receive a letter agreement from the Company that specifies the
specific percentage of such Participant’s base salary or, as to Sales Managers, the Base Salary
Equivalent (the “Specified Percentage”) on which the Special Retention Bonus will be paid and the
terms and conditions of the Special Retention Bonus. The Participant must acknowledge delivery of
the letter agreement.

     (ii) (A) Participants who are actively employed on December 31, 2008 and who are not
on an active performance improvement plan on such date will receive a Special Retention Bonus
within thirty days of December 31, 2008 equal to the Specified Percentage multiplied by their
then-current base salary or Base Salary Equivalent, as applicable; provided, however, that if a
Change in Control is consummated prior to December 31, 2008, the Special Retention Bonus will be
equal to the Specified Percentage multiplied by the higher of the Participant’s base salary or Base
Salary Equivalent, as applicable, as in effect on the consummation of a Change in Control or
December 31, 2008.

          (B) Employees who are promoted and become Participants after the Effective Date will
receive a pro-rata portion of their Special Retention Bonus based

 

 

on the number of months from the Effective Date to December 31, 2008 that the employee was a
Participant.

          (C) Participants who experience a promotion after the Effective Date that increases the
Participant’s Specified Percentage will receive a pro-rated portion of the Special Retention Bonus
that the Participant was eligible to receive at each level of employment, based on the number of
months the Participant was employed after the Effective Time at each level of employment.

          (D) If a Participant is on a leave of absence and returns to work on or before December 31,
2008 and either (i) the Participant’s return to work rights are protected by applicable law, or
(ii) the Participant is on a Company-approved leave of absence for medical reasons, the Participant
will receive a Special Retention Bonus payable within thirty days of December 31, 2008. If a
Participant is on a leave of absence described in this section (D) on December 31, 2008 and such
Participant returns to active employment, the Participant will receive a Special Retention Bonus,
to be paid as soon as practicable following such Participant’s return to active employment.

          (E) If a Participant was on a Company-approved leave of absence for other than medical reasons
and returns to work on or before December 31, 2008, the Participant will receive a pro-rated
portion of the Special Retention Bonus that the Participant was eligible to receive for the number
of months the Participant was actively employed, payable within thirty days of December 31, 2008.
If a Participant is on a leave of absence described in this section (E) on December 31, 2008 and
such Participant returns to active employment, the Participant will receive a pro-rated portion of
the Special Retention Bonus that the Participant was eligible to receive for the number of months
the Participant was actively employed, to be paid as soon as practicable following such
Participant’s return to active employment.

     (iii) Participants who are terminated prior to December 31, 2008 as a result of their death,
disability, a reduction in force or an elimination of position while the Participant is not on an
active performance improvement plan, will, within 30 days of the date of termination, receive a
Special Retention Bonus equal to the Specified Percentage multiplied by their base salary or Base
Salary Equivalent, as applicable, on the date of termination multiplied by a fraction, the
numerator of which is the number of months from the Effective Date to the date of the Participant’s
termination and the denominator of which is the number of months from the Effective Date to
December 31, 2008, provided, however, that in the event a termination described in this section
(iii) or a termination without Cause occurs after a Change in Control, the Special Retention Bonus
payable to a Participant will not be pro-rated.

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     (iv) Participants who are terminated by the Company without Cause prior to December 31, 2008
but after negotiations regarding a Change in Control have commenced will, if the Change in Control
contemplated by such negotiations is consummated before December 31, 2008 receive the payment
described in (iii) above, at the time specified in (iii) above, and a payment equal to the
difference between the payment described in (ii)(A) above (calculated as though the Participant
were employed on the date of the consummation of the Change in Control) and the payment described
in (iii) above, paid within 30 days of December 31, 2008.

     (v) Participants who are terminated for Cause after a Change in Control or who voluntarily
terminate their employment for any reason prior to December 31, 2008 will not be eligible to
receive a Special Retention Bonus.

     (vi) For purposes of all pro-rated calculations made under the Plan, if a Participant is
actively employed through or employed at a certain level through the fifteenth of the month, the
Participant will be considered to have been employed for the entire month or employed at a certain
employment level for the entire month.

       Definition of “Base Salary Equivalent.” For purposes of the Plan, “Base Salary
Equivalent” shall mean a Sales Manager’s (i) base pay, plus (ii) budgeted commissions, minus
(iii) applicable corporate target bonus equivalent.

       Definition of “Change in Control.” For purposes of the Plan, “Change in Control” shall mean
the occurrence of one of the following events:

          (i) if any “person” or “group,” as those terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) or any successors thereto, other
than any employee benefit plan of the Company or any subsidiary, or a trustee or other
administrator or fiduciary holding securities under an employee benefit plan of the Company or any
subsidiary (each, an “Exempt Person”), is or becomes the “beneficial owner” (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing
more than 50% of either the then outstanding shares or the combined voting power of the then
outstanding securities of the Company; or

          (ii) during any period of two consecutive years, individuals who at the beginning of such
period constitute the Board and any new directors whose election by the Board or nomination for
election by the Company’s stockholders was approved by at least two-thirds of the directors then
still in office who either were directors at the beginning of the period or whose election was
previously so approved, cease for any reason to constitute a majority thereof; or

          (iii) the consummation of a merger or consolidation of the Company with any other corporation
or other entity, other than a merger or consolidation which

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would result in all or a portion of the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after such merger or
consolidation; or

          (iv) the consummation of a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or substantially all the Company’s assets, other than a
sale to an Exempt Person.

       Definition of “Cause.” For purposes of this Plan, with respect to any Participant, “Cause”
shall have the equivalent meaning as the term “cause” or “for cause” in any employment agreement
between the Participant and the Company or any subsidiary, or in the absence of such an agreement
that contains such a defined term, shall mean the occurrence of one or more of the following
events:

          (i) Conviction of any felony or any crime or offense lesser than a felony involving the
property of the Company or a subsidiary; or

          (ii) Deliberate or reckless conduct that has caused demonstrable and serious injury to the
Company or a subsidiary, monetary or otherwise, or any other serious misconduct of such a nature
that the Participant’s continued relationship with the Company or a subsidiary may reasonably be
expected to adversely affect the business or properties of the Company or any subsidiary; or

          (iii) Willful refusal to perform or reckless disregard of duties properly assigned, as
determined by the Company; or

          (iv) Breach of duty of loyalty to the Company or a subsidiary or other act of fraud or
dishonesty with respect to the Company or a subsidiary.

          Any good faith determination of “Cause” made by the Compensation Committee shall be
binding and conclusive on all interested parties.

     Administration. The Compensation Committee is responsible for the general operation and
administration of the Plan and for carrying out the provisions thereof and has full discretion in
designating Participants and interpreting and administering the provisions of the Plan in a manner
consistent with the Plan’s intent. The Compensation Committee from time to time may delegate its
powers and authorities related to the operation and administration of the Plan to one or more
officers or other members of management of the Company.

     Effect on Other Plans. The accrual or payment of the amounts under this Plan shall not affect
the Participant’s participation under any other plan.

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     Nontransferability. Neither the Participant nor his or her beneficiaries nor anyone claiming
an interest through him shall have any right to assign, pledge, or otherwise transfer the right to
receive a payment under this Plan. Any rights to such payments are expressly declared to be
nonassignable and nontransferable. Unless the law requires otherwise, no unpaid amounts shall be
subject to attachment, alienation, garnishment, or execution, or be transferable if the Participant
becomes bankrupt or insolvent, for the satisfaction of the debts of, or other obligations or claims
against, the Participant or his beneficiaries, or any person or entity claiming an interest through
him or them, including claims for alimony, support, or separate maintenance.

     Plan Amendments. The Compensation Committee may amend or terminate the Plan at any time,
without the consent of the Participants; provided, however, that no amendment will deprive any
Participant of any benefits set forth in the Plan that were earned before any such amendment or
termination.

     Plan Termination. The Plan will terminate after all payments of Special Retention Bonuses have
been paid, which will be as soon as practicable after December 31, 2008.

     No Employment Contract. Nothing contained in his Plan constitutes an employment contract
between the Company and any Participant. The Plan does not give any Participant any right to be
retained in the Company’s employ, nor does it enlarge or diminish the Company’s right to terminate
any Participant’s employment.

     Unfunded; unsecured. This Plan will at all times be entirely unfunded and no provisions will
at any time be made with respect to segregating assets of any entity for payment of any benefits
hereunder. Any assets set aside or earmarked for the payment of benefits hereunder shall belong
exclusively to the Company. As to any claim for any unpaid amounts under this Plan, a Participant
or any other person having a claim for payment shall have no rights greater than the rights of an
unsecured general creditor of the Company.

     Repayment of Special Retention Bonus. If it is ever determined by the Board, in its sole and
absolute discretion, that actions by a Participant have constituted: (i) wrongdoing that
contributed to (A) any material misstatement or omission from any report or statement filed by the
Company with the U.S. Securities and Exchange Commission or (B) any statement, certification, cost
report, claim for payment, or other filing made under Medicare or Medicaid that was false,
fraudulent, or for an item or service not provided as claimed; (ii) gross misconduct; (iii) breach
of fiduciary duty to the Company; or (iv) fraud, then the Participant’s participation in this Plan
shall be immediately terminated and the Participant shall

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be required to pay to the Company an amount equal to any payments the Participant has
received pursuant to this Plan.

     Tax Withholding; Code Section 409A. The Company will withhold from any payments under this
Plan any amount required to satisfy its income and employment tax withholding obligations under
federal, state and local law. This Plan is intended to comply with, or be exempt from, the
requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and must be
interpreted consistently therewith.

     Applicable Law. The laws of the State of Delaware govern this Plan and its interpretation.

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Specified Percentage Summaries

Vice Presidents and Above — 50%

Senior Directors — 40%

Directors — 33%

Managers (Excluding Sales) — 25%

Individual Contributors/Supervisors (Excluding Sales) — 20%

Sales Managers — Amount deposited into SPA account with 5% of balance available per month

7EX-10.27

 

  

 

 

 

 

WellCare Health Plans, Inc.

The WellCare Group of Companies

WellCare of Florida, inc.

HealthEase of Florida, inc.

WellCare of New York, inc.

WellCare of Connecticut, inc.

 WellCare of Louisiana, inc.

WellCare of Georgia, inc.

WellCare of Ohio, inc.

WellCare Prescription Insurance, inc.

Harmony Health Plan of Illinois, inc.

Harmony Health Plan of Indian, inc.

Harmony Behavioral Health, inc.

Comprehensive Health Management, inc.

Comprehensive Reinsurance, ltd.

 

 

 

8735 Henderson Road, Ren 1

Tampa, Florida 33634

Telephone: (813) 290-6353

Fax: (813) 290-6210

Thad. Bereday@wellcare.com

Exhibit 10.27

Heath Schiesser

President and Chief Executive Officer

July 2, 2008

Anil Kottoor

1600 Gulf Blvd., #313

Clearwater, Florida 33767

Dear Mr. Kottoor:

On behalf of Comprehensive Health Management, Inc., I am pleased to offer you the compensation
arrangements and other terms of continued employment as set forth in Exhibit A attached
hereto and incorporated herein by reference.

Exhibit A constitutes the entire agreement with respect to the subject matters thereof and
shall supersede any prior written or oral agreements, understandings or arrangements between the
parties regarding any of the items addressed in Exhibit A. Except as modified in
Exhibit A, the terms of any prior written or oral agreements, understandings or
arrangements between the parties shall remain in full force and effect.

To accept this offer, please sign and date this letter where indicated below and return it to my
attention. This offer, if not accepted, will expire on July 8, 2008. Your acceptance of the
compensation arrangements and other terms of continued employment set forth in Exhibit A is
contingent upon you signing the enclosed Restrictive Covenant Agreement. We are also enclosing an
Indemnification Agreement for your signature.

Very truly yours,

/s/ Heath Schiesser

Heath Schiesser

President and Chief Executive Officer

AGREED AND ACCEPTED:

	 	 	 	 	 	 	 
	/s/ Anil Kottoor
 

Anil Kottoor

	 	 
	 	July 8, 2008
 

Date
	 	 

 

 

EXHIBIT A

EMPLOYMENT TERM SHEET

ANIL KOTTOOR

	 	 	 
	Position & Responsibilities

	 	Senior Vice President and Chief
Information Officer of WellCare
Health Plans, Inc. (“WellCare”) and
Comprehensive Health Management,
Inc. (the “Company”).
	 
	 	 
	Salary

	 	Executive will continue to earn a
base salary of $315,000 per annum.
This salary will be reviewed and
subject to increase annually at the
discretion of the Board (the
“Board”) of WellCare or the
Compensation Committee (the
“Compensation Committee”) of the
Board.
	 
	 	 
	Special Retention Bonus

	 	$157,500 in cash will be paid in
January 2009 in accordance with the
Special Retention Bonus Plan or upon
termination of employment if
employment is terminated by the
Company without Cause prior to
payment in accordance with the
Special Retention Bonus Plan. The
foregoing payment is subject to
Executive remaining in continuous
employment (other than as a result
of being terminated by the Company
without Cause) with the Company
through the payment date in January
2009.
	 
	 	 
	2008 Long-Term Incentive Cash Award 

Program

	 	Executive’s 2008 long term incentive
bonus target of $354,375 will be
paid at target upon termination of
employment if employment is
terminated (a) by Executive after
the earlier of (i) May 1, 2009 or
(ii) six months following a change
in the reporting relationship
whereby Executive does not report
directly to the Chief Executive
Officer of WellCare (“Change in
Reporting Relationship”) or (b) by
the Company without Cause if prior
to (i) or (ii) above; provided,
however, if employment is not
terminated prior to September 2009,
the bonus will be paid at the
adjusted amount (+/- up to 50%) at
the same time as the Company’s other
senior executives in September 2009
in accordance with the 2008
Long-Term Incentive Cash Award
Program. The foregoing payment is
subject to Executive remaining in
continuous employment (other than as
a result of being terminated by the
Company without Cause) with the
Company through the earlier of May
1, 2009 or six months following a
Change in Reporting Relationship.
	 
	 	 
	2009 Focal Point Bonus (for 

performance year 2008)

	 	Executive’s 2009 Focal Point bonus
target of $252,000 (subject to
adjustment as provided below) will
be paid in cash in March 2009 in
accordance with the Company’s past
policies and practices or upon
termination of employment if
employment is terminated (a) by
Executive after six months following
a Change in Reporting Relationship
or (b) by the Company without Cause
prior to payment in March 2009 in
accordance with the Company’s past
policies and practices. Such bonus
target will be increased or
decreased based on Executive’s
individual performance and the
performance of the Company as
determined at the discretion of the
Board or Compensation Committee.
The foregoing payment is subject to
Executive remaining in continuous
employment (other than as a result
of being terminated by the Company
without Cause) with the Company
through the earlier of the payment
date in March 2009 or six months
following a Change in Reporting
Relationship.

 

 

	 	 	 
	2009 Focal Point LTI (for 

performance year 2008)

	 	Executive’s 2009 Focal Point
long-term incentive equity target of
$472,500 (subject to adjustment as
provided below) will be awarded in
March 2009 in accordance with the
Company’s past policies and
practices. Such equity award target
will be increased or decreased based
on Executive’s individual
performance and performance of the
Company as determined at the
discretion of the Board or
Compensation Committee. The exact
terms of the equity award, as well
as the determination as to whether
or not an equity award will be
granted, remains in the sole and
absolute discretion of the Board or
Compensation Committee. If approved
by the Board or Compensation
Committee, the equity award would be
based on the standard valuation
methodologies used by the Company
under FAS123(R) and applicable
internal policies and subject to
vesting and other conditions of the
equity plan pursuant to which your
equity award would be granted and
the Company’s standard policies and
practices.
	 
	 	 
	2009 Additional Retention Bonus

	 	Executive will be entitled to
receive a cash payment in the amount
of $236,250 (representing 50% of
Executive’s 2009 Focal Point LTI
target of $472,500) on May 1, 2010
if employment is terminated (a) by
Executive following the earlier of
(i) May 1, 2009 and (ii) six months
following a Change in Reporting
Relationship or (b) by the Company
without Cause if prior to (a)(i) or
(ii) above; provided, however,
Executive’s right to receive the
payment will lapse if Executive’s
employment is not terminated (for
any reason) prior to June 1, 2009.
The foregoing payment is subject to
Executive (a) remaining in
continuous employment (other than as
a result of being terminated by the
Company without Cause) with the
Company through the earlier of May
1, 2009 and six months following a
Change in Reporting Relationship,
(b) complying with all
post-termination covenants,
including non-competition,
non-solicitation, confidentiality
and non-disparagement and (c) within
30 days of termination of
employment, entering into a waiver
and release agreement with the
Company.
	 
	 	 
	Outstanding Restricted Stock Awards

	 	Executive’s restricted stock award
agreements dated January 2, 2007,
March 13, 2007 and August 3, 2007
(the “Outstanding Restricted Stock
Award Agreements”) are hereby
amended so that upon termination of
employment if employment is
terminated (a) by Executive after
the earlier of (i) May 1, 2009 and
(ii) six months following a Change
in Reporting Relationship or (b) by
the Company without Cause, all
unvested shares will immediately
vest in full; provided that
Executive remains continuously
employed (other than as a result of
being terminated by the Company
without Cause) with the Company
through the earlier of May 1, 2009
and six month following a Change in
Reporting Relationship; provided
further, that the original vesting
schedule set forth in each
Outstanding Restricted Stock Award
Agreement shall apply if Executive’s
employment is not terminated (for
any reason) prior to June 1, 2009.
Restricted stock awards granted as
part of the 2009 Focal Point LTI
will not include the foregoing
provision.
	 
	 	 
	March 5, 2008 Stock Option Award

	 	Executive’s Non-Qualified Stock
Option Award Agreement dated March
5, 2008 (the “Retention Option Award
Agreement”) will be amended so that
upon termination of employment if
employment is terminated (a) by
Executive after the earlier of (i)
May 1, 2009 and (ii) six months
following a Change in Reporting
Relationship or (b) by the Company
without Cause, all shares

 

 

	 	 	 
	 

	 	subject to
the award will immediately vest in
full; provided that Executive
remains continuously employed (other
than as a result of being terminated
by the Company without Cause) with
the Company through the earlier of
May 1, 2009 and six month following
a Change in Reporting Relationship;
provided further, that the original
vesting schedule set forth in the
Retention Option Award Agreement
shall apply if Executive’s
employment is not terminated (for
any reason) prior to June 1, 2009.
	 
	 	 
	Severance Benefits

	 	Executive will be entitled to the
continuation of Executive’s then
current annual base salary and
health benefits through May 1, 2010
if employment is terminated (a) by
Executive after the earlier of (i)
May 1, 2009 or (ii) six months
following a Change in Reporting
Relationship or (b) by the Company
without Cause if prior to (a)(i) or
(ii) above; provided, however,
Executive’s right to receive
continuation of salary and health
benefits will lapse if Executive’s
employment is not terminated (for
any reason) prior to June 1, 2009.
The foregoing severance benefits are
subject to Executive (a) remaining
in continuous employment (other than
as a result of being terminated by
the Company without Cause) with the
Company through the earlier of May
1, 2009 and six months following a
Change in Reporting Relationship,
(b) complying with all
post-termination covenants,
including non-competition,
non-solicitation, confidentiality
and non-disparagement and (c) within
30 days of termination of
employment, entering into a waiver
and release agreement with the
Company.
	 
	 	 
	Termination of Executive for Cause

	 	“Cause” shall exist if any willful
act or willful omission, other than
as a result of Executive’s
disability, that represents a breach
of any of the terms of the Agreement
to the material detriment of
WellCare or the Company; bad faith
by Executive in the performance of
his duties, consisting of willful
acts or willful omissions, other
than as a result of Executive’s
disability, to the material
detriment of WellCare or the
Company; or Executive’s conviction
of, or pleading guilty or nolo
contendre to, a crime that
constitutes a felony involving
fraud, conversion, misappropriation,
or embezzlement under the laws of
the United States or any political
subdivision thereof, which
conviction has become final and
non-appealable.
	 
	 	 
	Section 409A

	 	In the event that any of the
foregoing payments to be made upon
termination of employment is
“deferred compensation” within the
meaning of Section 409A of the
Internal Revenue Code of 1986, as
amended, such payments will be
delayed for six months and one day
if Executive is a “specified
employee” for Section 409A purposes.

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