Document:

exhibit1019_12312011.htm

Exhibit 10.19

Coventry Health Care, Inc. (“Coventry”)

Summary of Non-Employee Directors’ Compensation

The following table summarizes the components and amounts of the compensation to be paid to eligible non-employee directors for their services in 2012 under the Compensation Program for Non-Employee Directors (the “Program”).

	
Compensation Components

	
Board or Committee

	 	
Compensation

	 
	
Annual Compensation for Attendance at Regular Board Meetings1 (paid/vested/deferred quarterly in arrears in accordance with the Plan and includes compensation for five regularly scheduled Board meetings)

	
Board

	 	$	225,000	 
	
Annual Committee Chair Retainer

(Paid annually in arrears)

	
Chair of Board

	 	$	125,000	2
	  	
Lead Director

	 	 	25,000	 
	  	
Chair of Audit Committee

	 	 	15,000	 
	  	
Chair of Comp Committee

	 	 	10,000	 
	  	
Chair of N/CG Committee

	 	 	10,000	 
	
Attendance at In-Person Special Meeting

	
Board

	 	$	3,000	 
	  	
Audit Committee

	 	 	3,000	 
	  	
Comp Committee

	 	 	3,000	 
	  	
N/CG Committee

	 	 	3,000	 
	
Participation in a Special Telephonic Meeting

	
Board

	 	$	1,000	 
	  	
Audit Committee

	 	 	1,000	 
	  	
Comp Committee

	 	 	1,000	 
	  	
N/CG Committee

	 	 	1,000	 
	
Reimbursement of Reasonable Travel Expenses

	
All Directors

	 	
Actual Costs

	 
	
New Director Stock Option Grant

	
New Director

	 	
10,000 options to acquire shares which vest in equal amounts over four years

	 
	
Health and Basic Life Insurance Coverage

	
All Non-Employee Directors

	 	 	 	 
	  	
(voluntary participation)

	 	 	 	 

Subject to the terms of the Program, non-employee directors may elect the form and the timing of their compensation on an individual basis as summarized in the table below. All elections of the form of payment must be made in multiples of 25%.  Payment in the form of cash is limited to 50% of the total annual compensation (i.e., $112,500), unless a waiver is approved by the Chairman of the Compensation Committee.  The table below summarizes the forms of compensation each individual non-employee director may select as well as certain material terms related to those forms of compensation.

 

 

  

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

  

2   Annual retainer established for the Chairman of the Board. Allen F. Wise, our Chairman of the Board, became our Chief Executive Officer effective January 30, 2009. In light of this, he will receive no compensation in 2012 for his services as a director.  See the Executive Compensation Summary for Mr. Wise’s compensation as Chief Executive Officer of our Company.

  

  

  

	
Payment

“Form” 3

	
Maximum Allocation

	
Payment

“Current”

	
Payment

“Deferred”

	
Vesting

	
Cash

	
50% 4

	
Paid at the end of each quarter

	
Credited at the end of each quarter 5

	
None

	
Restricted Stock/

Stock Units

	
100%

	
Granted at beginning of year

	
Stock Units deferred until termination of service or unforeseeable emergency

 

	
Quarterly over the year of service

	
Stock Options

	
100%

	
Granted at beginning of year

	
Exercisable when vested and subject to a 10-year term

	
Quarterly over the year of service

	  

  

3   The value of stock options, restricted stock awards and stock units are determined in accordance with FASB Accounting Standards Codification Topic 718 “Compensation-Stock Compensation” (“ASC Topic 718”).

  

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

  

5   Deferred cash will be credited quarterly with interest based on the Company’s borrowing rate set at the beginning of each year (the 2011 rate is approximately LIBOR + 1.75%).exhibit1028_12312011.htm

Exhibit 10.28

PERFORMANCE SHARE UNITS AGREEMENT

THIS PERFORMANCE SHARE UNITS AGREEMENT (“Agreement”) is made and entered into as of ____________, 20__ by and between COVENTRY HEALTH CARE, INC., a Delaware corporation, (the “Company”) and ____________ (“Holder”).

1.           Award.  The Company hereby awards Holder _______ Performance Share Units (collectively, “PSUs”, singularly, “PSU”), subject to the terms and conditions of this Agreement and the terms and conditions of the Amended and Restated 2004 Incentive Plan.  If the terms of this Agreement conflict with or are inconsistent with the terms of the Amended and Restated 2004 Incentive Plan, the Amended and Restated 2004 Incentive Plan shall control.  Defined terms used herein and not defined shall have the meanings ascribed to them in the Amended and Restated 2004 Incentive Plan.

2.           Definition of PSU.  A PSU is a hypothetical share of the Company’s common stock.  The value of a PSU on any given date shall be equal to the closing market price of the Company’s common stock on the New York Stock Exchange as of such date.  A PSU does not represent an equity interest in the Company and carries no voting rights.  The Holder shall have no rights as a shareholder with respect to the hypothetical shares of the Company’s common stock to which this award relates.

3.           Restrictions, Performance Goals and Conditions:   (a)  Restrictions. Commencing with the date hereof, the Holder agrees that Holder has no right to, and shall not, sell, transfer, pledge or assign, in whole or in part, the PSUs.  The PSUs (x) shall not be earned until one of the performance goals set forth herein shall have been attained and (y) shall not vest until the required time period with respect to the PSUs shall have lapsed.

(b)  2012-2013 Cumulative Performance Goals.  This award of PSUs (“Award”) is performance-based and conditioned upon the Company’s attainment of the performance goals set forth below:

[INSERT PERFORMANCE GOALS]

(d) Forfeiture.  In the event of Holder’s termination of employment with the Company during the term of this Agreement, the PSUs will vest, if at all, in accordance with the terms of Holder’s Employment Agreement with the Company, as in effect as of the date hereof.

4.           Adjustments.  In the event of any merger, reorganization, consolidation, recapitalization, extraordinary cash dividend, stock dividend, stock split or other change in corporate structure affecting the Company’s common stock, such substitution or adjustment shall be made in the number of PSUs as may be determined to be appropriate by the Compensation Committee of the Company’s Board of Directors, in its sole discretion, provided that the number of PSUs subject to any award shall always be a whole number.  Additional shares of PSUs shall be subject to the same restrictions and other terms and conditions that apply to the original shares of PSUs with respect to which such adjustments are made.

5.           Payment.  All payments under this Agreement shall be made in cash, subject to the restrictions set forth in the Amended and Restated 2004 Incentive Plan, including any limitations on the maximum annual amount of cash settled performance awards that can be earned in any performance period.  As soon as reasonably practicable after vesting, the PSUs earned shall be paid to Holder as set forth herein.  The amount of cash that shall be paid to Holder shall equal the number of PSUs earned and vested multiplied by the average closing market price of the Company’s common stock on the New York Stock Exchange for the trading days from December 15, 2013 through January 15, 2014 for the 2012-2013 performance period ending on December 31, 2013, minus any withholding for taxes.

6.           Non transferability.  The Holder’s rights hereunder shall not be transferable otherwise than as provided in the Amended and Restated 2004 Incentive Plan, and the terms thereof shall be binding on the executors, administrators, heirs and successors of Holder.

7.           Defined Terms.  Defined terms used herein and not defined shall have the meanings ascribed to them in the Amended and Restated 2004 Incentive Plan.

8.           Amendment:  Choice of Law.  This Agreement may be amended as provided in the Amended and Restated 2004 Incentive Plan.  This Agreement shall be governed by Delaware law.

 

	 COVENTRY HEALTH CARE, INC. 	 	 HOLDER:exhibit1029_12312011.htm

Exhibit 10.29

RESTRICTED STOCK UNITS AGREEMENT

THIS RESTRICTED STOCK UNITS AGREEMENT (“Agreement”) is made and entered into as of ________, 20___ by and between COVENTRY HEALTH CARE, INC., a Delaware corporation, (the “Company”) and _________________ (“Holder”).

1.           Award.  The Company hereby awards Holder _______ Restricted Stock Units (collectively, “RSUs”, singularly, “RSU”), subject to the terms and conditions of this Agreement and the terms and conditions of the Amended and Restated 2004 Incentive Plan.  If the terms of this Agreement conflict with or are inconsistent with the terms of the Amended and Restated 2004 Incentive Plan, the Amended and Restated 2004 Incentive Plan shall control.  Defined terms used herein and not defined shall have the meanings ascribed to them in the Amended and Restated 2004 Incentive Plan.

2.           Definition of RSU.  An RSU is a hypothetical share of the Company’s common stock.  The value of an RSU on any given date shall be equal to the closing market price of the Company’s common stock on the New York Stock Exchange as of such date.  An RSU does not represent an equity interest in the Company and carries no voting rights.  The Holder shall have no rights as a shareholder with respect to the hypothetical shares of the Company’s common stock to which this award relates.

3.           Restrictions, Performance Goals and Conditions:

(a)           Restrictions. Commencing with the date hereof, the Holder agrees that Holder has no right to, and shall not, sell, transfer, pledge or assign, in whole or in part, the RSUs.  The RSUs (x) shall not be earned until the performance goal set forth below shall have been attained and (y) shall not vest until the required time period with respect to the RSUs shall have lapsed.

(b)           2012 Performance Goals.

[INSERT PERFORMANCE GOALS]

(d)           Forfeiture.  In the event of Holder’s termination of employment with the Company during the term of this Agreement, the RSUs will vest, if at all, in accordance with the terms of Holder’s Employment Agreement with the Company, as in effect as of the date hereof.

4.           Adjustments.  In the event of any merger, reorganization, consolidation, recapitalization, extraordinary cash dividend, stock dividend, stock split or other change in corporate structure affecting the Company’s common stock, such substitution or adjustment shall be made in the number of RSUs as may be determined to be appropriate by the Compensation Committee of the Company’s Board of Directors, in its sole discretion, provided that the number of RSUs subject to any award shall always be a whole number.  Additional shares of RSUs shall be subject to the same restrictions and other terms and conditions that apply to the original shares of RSUs with respect to which such adjustments are made.

5.           Payment.  All payments under this Agreement shall be made in cash, subject to the restrictions set forth in the Amended and Restated 2004 Incentive Plan, including any limitations on the maximum annual amount of cash settled performance awards that can be earned in any performance period.  As soon as reasonably practicable after vesting, the RSUs earned shall be paid to Holder as set forth herein.  The amount of cash that shall be paid to Holder shall equal the number of RSUs earned and vested multiplied by the average closing market price of the Company’s common stock on the New York Stock Exchange for the trading days from December 15, 2013 through January 15, 2014 for the 2012 performance period ending on December 31, 2012, minus any withholding for taxes.

6.           Non transferability.  The Holder’s rights hereunder shall not be transferable otherwise than as provided in the Amended and Restated 2004 Incentive Plan, and the terms thereof shall be binding on the executors, administrators, heirs and successors of Holder.

7.           Defined Terms.  Defined terms used herein and not defined shall have the meanings ascribed to them in the Amended and Restated 2004 Incentive Plan.

8.           Amendment:  Choice of Law.  This Agreement may be amended as provided in the Amended and Restated 2004 Incentive Plan.  This Agreement shall be governed by Delaware law.

 

 

 

	 COVENTRY HEALTH CARE, INC. 	 	 HOLDER:

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