Document:

bergletteragreement.htm

    Back to Form 10-Q

    Exhibit
10.2

     

    

    
      Thomas
F. O'Neil III

      Vice
Chainnan

    

    
      

       

      August
10, 2009

       

      PERSONAL
AND CONFIDENTIAL

    

    
       

      Mr.
Charles G. Berg

    

    
      48 Turkey
Hill Road South

    

    
      Westport,
CT 06880

    

    
       

      Dear Mr.
Berg:

    

    
       

      The terms
and conditions of your employment with WellCare Health Plans, Inc. ("WellCare"
or the "Company") and its subsidiary, Comprehensive Health Management, Inc.,
currently are governed by the letter agreement dated January 25, 2008, between
you and the Company (the "Prior Agreement"), which continues until January 25,
2010. The Prior Agreement established your responsibilities as Executive
Chairman of the Board of Directors (the "Board"), which included advising, and
working closely with, the Chief Executive Officer with respect to the activities
of the Company and providing leadership concerning critical issues that had
arisen in late 2007.

    

    
       

                     
Under your leadership and during your tenure, WellCare has achieved a number of
important milestones. Among other things, the Company has become current in its
filings with the United States Securities and Exchange Commission, successfully
managed, to date, its liquidity position, resolved certain criminal and
regulatory enforcement investigations, implemented various measures to enhance
the Company's reporting of operational and financial results, and undertaken to
respond to changing business conditions and strengthen the Company's position in
government-sponsored heath care programs.

       

    

    
      Notwithstanding
this significant progress, as we have discussed, many sector and
Company-specific challenges remain to be addressed. They include various
compliance and operational issues, most notably the intermediate sanctions
imposed in February 2009 by the Centers for Medicare & Medicaid Services,
pending securities class and shareholder derivative actions, and the ongoing
search for the next President and Chief Executive Officer of WellCare. Your
service as Chairperson of the recently-formed Committee on leadership and
Executive Succession is, in the view of the Board, very important to the future
of WellCare.

    

    
       

      Under
such circumstances, the Board believes it is advisable and in the best interests
of the Company and its stockholders to extend, until December 31, 2010, your
term as Executive Chairman of WellCare. Accordingly, the purpose of this letter
agreement ("Agreement") is to amend and restate the Prior Agreement as set forth
below, effective as of the date hereof (the "Effective Date").

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

    

    
      
         

        Mr.
Charles G. Berg 

        August
10, 2009 

        Page 2 of
11

      

      
        
 

      

      
                       
1.             Term. The term of
your employment with the Company pursuant to this Agreement
shall be extended until, and include. December 3 I. 2010 (the
"Term").

      

      
         

        2.         
   Position
and Duties. During the Term, you will continue serving as the Executive
Chairman of the Board. Your responsibilities as Executive Chairman will include
leadership and presiding at meetings of the Board, chairing the Committee on
Leadership and Executive Succession, leading the Board's search for a new Chief
Executive Officer, and continuing to work with the senior management team on
financial and operating initiatives and to resolve pending legal and regulatory
challenges, in particular the qui tarn and securities class actions and the
intermediate sanctions imposed in 2009 by the Centers for Medicare &
Medicaid Services. You will not be required to relocate your principal
residence. However, it is anticipated that a reasonable amount of
business-related travel will be required. During the Term, you will devote such
business time and attention as is reasonably required to perform your duties to
the Company. You will be permitted to engage in other activities as disclosed
to, and approved by, the Board from time to time, so long as such activities do
not interfere and are consistent with your duties and obligations to
WellCare.

      

      
         

        3.         
   Base
Salary. During the Term, you will receive a base salary at the annual
rate of $750,000, paid in accordance with the regular payroll practices of the
Company. Your base salary will be reviewed by the Board annually and may be
adjusted upward, but not downward.

      

      
         

        4.     
       Annual Bonus. For
2009, you will receive a guaranteed annual bonus of $750,000 to be paid by
WellCare, and received by you, no later than December 31, 2009. For 2010, you
will be eligible to receive an annual bonus with a target of $750,000 based on
your above-described responsibilities, payable no later than December
31,2010.

         

        5.    
        New Equity Awards. On
the Effective Date, the Company will grant you 125,000 shares of restricted
Company common stock which will vest on December 31, 2010. At your election,
required tax withholding resulting from the vesting of the restricted stock will
be satisfied by withholding shares of WellCare common stock. On the Effective
Date, the Company will amend and restate your current option grant to you for
the purchase of 300,000 shares of WellCare common stock, with an exercise price
per share equal to the closing price per share of Company common stock on the
Effective Date. The options will vest and become exercisable with respect to
fifty percent (50%) of the shares covered by the options on April 1, 2010 and on
December 31, 2010. The options will remain exercisable until December 31, 2015
so long as you do not terminate your employment with the Company prior to the
end of the Term without Good Reason (as defined in Annex A hereto) and you are
not terminated by the Company for Cause (as defined in Annex A hereto). If you
terminate your employment with the Company prior to the end of the Term without
Good Reason, any unvested restricted stock and unvested options will be
forfeited and vested options will remain exercisable for 90 days after such
termination of employment. In the event you are terminated by the Company for
Cause, all unvested restricted stock will be forfeited and all options, whether
vested or unvested, will be forfeited. The options and restricted stock will be
granted under the Company's 2004 Equity Incentive Plan (the "Company Stock
Plan"), and the Company shall use its best efforts to cause shares of Company
common stock received on exercise of options to be registered on Form S-8 filed
with the Securities and Exchange Commission. In the event that WellCare enters
into a transaction that could affect the term of the options, it will use its
reasonable best efforts to have them assumed so that they will remain
outstanding for their full term through December 31, 2015.

        

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

        
Mr.
Charles G. Berg 

        August
10, 2009 

        Page 3 of
11

      

      
         

         

      

      
        6.           
 Vesting of
Equity Awards. All shares of restricted WellCare common stock and all
options to purchase Company common stock held by you will become immediately
vested in full (and exercisable in full in the case of the options) upon a
Change in Control (as defined in the Company Stock Plan). In the event your
employment is terminated prior to the end of the Term by the Company not for
Cause, by you for Good Reason, due to your Disability (as defined in Annex A
hereto) or due to your death, all shares of restricted Company common stock and
all options to purchase WellCare common stock held by you will become
immediately vested in full (and exercisable in full in the case of
options).

         

        7.      
      Severance. In the
event of your "separation from service" with the Company (as defined in Treas.
Reg. § 1.409A-l(h)) prior to the end of the Term by the Company not for Cause,
by you for Good Reason or due to your Disability or death, subject (other than
in the case of death) to your execution and delivery of the Release attached
hereto within 30 days after your separation from service, and not revoking it
during the revocation period, you (or your estate) will receive (i) an amount
equal to your base salary for the remainder of the Term, (ii) any unpaid amount
of your guaranteed bonus for 2009, and (iii) an amount equal to your target
annual bonus for 2010, and such amounts provided for in clauses (i), (ii) and
(iii) hereof shall be paid, subject to Section 16(iv) below, in a single lump
sum 38 days after the date of such separation from service. If the Company does
not also execute and deliver (and not revoke) the Release, your Release shall be
null, void and without effect, and you shall still receive the payment described
in this Section.

      

      
         

        8.        
    Benefits. You will be eligible to participate in the employee
benefit plans maintained by WellCare and its subsidiaries for senior executives
on the same basis as other executive officers, and you will be eligible to
receive additional long-term incentive compensation awards. You also will be
entitled to use Company-provided fractional or chartered aircraft appropriate
for senior executive travel to and from Tampa, Florida, and for other required
Company travel.

      

      
         

        9.        
    Business Expenses.
WellCare shall promptly reimburse you for all documented reasonable business and
travel expenses incurred by you in the performance of your duties
hereunder.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    Mr.
Charles G. Berg 

    August
10, 2009 

    Page 4 of
11

    
       

                    
10.   Office and Secretarial
Support. You will be provided with an office and secretarial support
through December 31, 2011, which will be your office, secretary and related
support as of the date of this Agreement.

       

    

    
                     
11.  
Certain Additional
Payments.

      
      

       

      
        	 	(i)	In the event it
      shall be determined that any payment, benefit or
      distribution by the Company (or any other payor described in Treas. Reg.
      Sec. 1.280G-1, Q&A 
	 	 	10)
      to you or for your benefit (a "Payment") would be subject to the excise
      tax (the "Excise Tax") imposed under Section 4999 of the Internal Revenue
      Code of 1986, as amended (the "Code"), you shall be entitled to receive an
      additional payment (a "Gross-Up Payment") in an amount such that, after
      payment by you of all taxes (and any interest or penalties imposed with
      respect to such taxes), including any income and employment taxes and
      Excise Taxes imposed upon the Gross-Up Payment, you retain an amount of
      the Gross-Up Payment equal to the Excise Tax imposed upon such Payments.
      Notwithstanding the foregoing provisions of this Section, if it shall be
      determined that you are entitled lo a Gross-Up Payment, but that the
      portion of the Payments that would be treated as "parachute payments"
      under Section 280G of the Code docs not exceed $50,000, then no Gross-Up
      Payment shall be made to you and the amounts payable under Section 7 of
      this Agreement shall be reduced so that the Payments, in the aggregate,
      are reduced to the Safe Harbor Amount. The "Safe Harbor Amount" is the
      greatest amount of payments in the nature of compensation that are
      contingent on a Change in Control for purposes of Section 280G of the Code
      that could be paid to you without giving rise to any Excise Tax. If the
      reduction of the amounts payable under Section 7 of this Agreement would
      not result in a reduction of the Payments to the Safe Harbor Amount, no
      amounts payable under this Agreement shall be reduced pursuant hereto and
      a Gross-Up Payment will be made to you.
	 	 	 
	 	(ii)	All determinations
      required to be made under this Section, including whether a Gross-Up
      Payment or reduction is required and the amount of any Gross-Up
  
	 	 	Payment or
      reductions of Payments, shall be made by a nationally recognized certified
      public accounting firm that shall be designated by WellCare and reasonably
      acceptable to you (the "Accounting Finn"). The Accounting Finn shall
      provide detailed supporting calculations both to WellCare and you within
      15 business days of the receipt of notice from you that there has been a
      Payment or such earlier time as is requested by the Company or you. All
      fees and expenses of the Accounting Firm shall be borne solely by
      WellCare. Any Gross-Up Payment, as determined pursuant to this Section,
      shall be paid by the Company to you within five business days of the
      receipt of the Accounting Firm's determination and in any event not later
      than the last day of the calendar year after the calendar year in which
      the applicable Excise Tax is paid. If the Accounting Firm determines that
      no Excise Tax is payable by you or that a reduction is required, it shall
      so indicate to you in writing.

      

       

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      Mr.
Charles G. Berg 

      August
10, 2009 

      Page 5 of
11

    

    
       

      
        
        

         

        
          	 	(iii)	Any determination by
      the Accounting Finn shall be binding upon the Company and you (absent
      manifest error) provided that,
      in the event that your tax advisor
	 	 	delivers
      to the Accounting Firm and the Company a written opinion that the actual
      Excise Tax payable by you is greater than the Excise Tax amount initially
      determined by the Accounting Firm by reason of (A) manifest error, (B) any
      Payment the existence or amount of which could not have been, or was not,
      determined or known at the time the Excise Tax was initially determined or
      (C) any determination, claim or assertion made by any tax authority that
      the actual Excise Tax is greater than the amount initially determined by
      the Accounting Firm, then, in any such case, the Accounting Firm shall
      recalculate the amount of the Excise Tax and any required (or additional)
      Gross-Up Payment. Any such additional calculation or determination shall
      be performed consistent with this Section.
	 	 	 
	 	(iv)	You shall notify
      WellCare in writing of any written claim by the Internal Revenue Service
      that, if successful, would require the payment by the Company of a
    
	 	 	Gross-Up Payment.
      You shall apprise WellCare of the nature of such claim and the date on
      which such claim is requested to be paid. You shall not pay such claim
      prior to the expiration of the 30-day period following the date on which
      you give such notice to the Company (or such shorter period ending on the
      date that any payment of taxes with respect to such claim is due). If
      WellCare notifies you in writing prior to the expiration of such period
      that the Company desires to contest such claim, you shall (i) give the
      Company any information reasonably requested by the Company relating to
      such claim, (ii) take such action in connection with contesting such claim
      as the Company shall reasonably request in writing from time to time,
      including accepting legal representation with respect to such claim by an
      attorney reasonably selected by the Company, (iii) cooperate with the
      Company in good faith in order effectively to contest such claim, and (iv)
      permit the Company to participate in any proceedings relating to such
      claim; provided,
      however, that (A) WellCare shall bear and pay directly all costs
      and expenses (including additional income taxes, interest and penalties)
      incurred in connection with such contest, and shall indemnify and hold you
      harmless, on an after-tax basis, for any Excise Tax or income tax
      (including interest or penalties) imposed as a result of such
      representation and payment of costs and expenses, and (B) your obligation
      to cooperate with the Company shall not require you to take any action, or
      forego taking any action, that would have an adverse effect on your
      overall tax position.

        

         

      

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      Mr.
Charles G. Berg 

      August
10, 2009

      Page 6 of
11

    

    
      
        
           

          
            
            

             

            
              	 	(v)	Anything in this
      Agreement to the contrary notwithstanding, in no event shall any payment
      by the Company pursuant to this Section be made later than the
  
	 	 	end
      of your taxable year next following your taxable year in which you remit
      the related taxes.

            

             

          

        

      

                     
12.           Indemnification and
Insurance. During and after the Term, WellCare shall indemnify you in
your capacity as a director and/or officer of the Company or its subsidiaries to
the fullest extent permitted by applicable law and the Company's charter and
by-laws (including an indemnity against any loss or cost arising out of any
claim made by United Health Group Incorporated or one or more of its
subsidiaries ("United") that your activities as a director or officer of the
Company or its subsidiaries have resulted in a breach of any obligation owed to
it or them), including advancement of attorneys' fees and other fees and
expenses, and in all events provide you with director and officer liability
insurance coverage on a basis that is not less favorable to you than as provided
to any other director or officer of WellCare or its subsidiaries. The parties
hereto presently believe that you will be able to carry out your duties and
obligations with and to the Company hereunder in a manner that complies with
your continuing obligations to United. It is agreed that you shall also be
entitled to the rights under the Indemnification Agreement dated May 14, 2009
(the "Indemnification Agreement") and in the event of any conflict between this
Agreement and the Indemnification Agreement with respect to the rights to
indemnification, such conflict shall be resolved in a manner most favorable to
you. Further, the Indemnification Agreement is hereby amended so that references
therein to the Employment Agreement (as defined therein) are intended to be
references to this Agreement.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Mr.
Charles G. Berg 

    August
10, 2009 

    Page 7 of
11

     

     

                   
13.  
Legal Fees. The
Company shall reimburse you for the reasonable legal fees and expenses incurred
by you in connection with your review and negotiation of this Agreement and the
agreements for the equity awards described herein (including your due diligence
regarding the Company) and in connection with your ongoing performance of duties
hereunder. The Company shall also reimburse you for all reasonable legal fees
and expenses that you may incur in connection with any dispute between you and
the Company involving this Agreement, your employment with the Company or the
termination thereof, but only in the event that you substantially prevail on any
material claim in such dispute. All reimbursements described in this paragraph
shall be made promptly after demand is made by you and your provision to the
Company of reasonably satisfactory evidence of such fees and expenses, but no
later than the last day of the calendar year following the calendar year in
which you incur such fees and expenses. Your right to reimbursement under this
Section in any calendar year shall not affect the amount eligible for
reimbursement in any other calendar year and shall not be subject to liquidation
or exchange.

    
       

                     
14.  
Confidentiality.

    

    
       

      
        
          
            	 	(i)	You acknowledge
      that, by reason of your employment by the Company,
      you will have access to Confidential Information (as defined in Annex A
      hereto) of the 
	 	 	Company
      and its subsidiaries (the "WellCare Companies"). You acknowledge that such
      Confidential Information is a valuable and unique asset of the WellCare
      Companies and covenant that, both during and after the Term, you will not
      disclose any Confidential Information to any person (except as your duties
      as an employee or director of any of the WellCare Companies may require)
      without the prior written authorization of the
    Board.
	 	 	 
	 	(ii)	All records,
      designs, business plans, financial statements, customer lists, manuals,
      memoranda, lists, research and development plans, Intellectual Property
      and 
	 	 	other property
      delivered to or compiled by you by or on behalf of any WellCare Company or
      its providers, clients or customers that pertain to the business of any
      WellCare Company shall be and remain the property of such WellCare Company
      and be subject at all times to its discretion and control. Likewise, all
      correspondence, reports, records, charts, advertising materials and other
      similar data pertaining to the business, activities, research and
      development, Intellectual Property or future plans of any WellCare Company
      that is collected by you shall be delivered promptly to such WellCare
      Company without request by it upon termination of your employment. For
      puiposes of
      this   Section,   "Intellectual   Property"   shall   mean   patents,
      copyrights, trademarks, trade dress, trade secrets, other such rights, and
      any applications.

          
                   

      

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    Mr.
Charles G. Berg 

    August
10, 2009 

    Page 8 of
11

     

     

                   
15.           Unfair Competition.
You agree that during any period in which you are serving as Executive Chairman
of the Company or receiving severance payments under Section 7 above (which
shall not include any period after you have received all payments thereunder or
waived further payments thereunder) you shall not, directly or indirectly, for
yourself or on behalf of or in conjunction with any other Person (as defined in
Annex A hereto), without the prior written consent of the Board:

    
       

    

    
      
        
          
            	
                                            
        (i)

                  	
                    engage
      as an officer, director, shareholder, owner, partner, joint venturer,
      or in any managerial capacity, whether as an employee, independent
      contractor, consultant or advisor (paid or unpaid), or as a sales
      representative, or otherwise participate, in each case, in any business
      that sells, markets, or provides any benefits or services within any state
      in which a WellCare Company is doing business at the time you cease to be
      employed by the Company that are in direct competition with the benefits
      or services provided by such WellCare Company in such
      state;

                  

          

        

        
           

        

      

      
        	
                                           
      (ii)

              	
                recruit,
      hire or solicit any employee or former employee of any WellCare Company or
      encourage any employee of any WellCare Company to leave such WellCare
      Company's employ, unless such former employee has not been employed by a
      WellCare Company for a period in excess of six months; provided, however, that
      the provisions of this clause (ii) shall not apply to any member of your
      immediate family;

              

      

    

    
       

      
        	
                                          
        (iii)

              	
                call
      upon any Person who is at the time you cease to be employed by the
      Company, or who was at any time during the one year period prior to the
      date you cease to be employed by the Company, a provider, customer or
      agent of any WellCare Company for the purpose of soliciting or selling
      benefits or services that would violate clause (i) above;
    or

              

      

       

      
        	
                                            
      (iv)

              	
                request or advise any provider,
      customer or agent of any WellCare Company to withdraw,
      curtail or cancel its business dealings with such WellCare
      Company; provided, however, that nothing in this Section 15
      shall be construed to preclude you from making any investment in
      the securities of any business enterprise whether or
      not engaged in competition with any WellCare Company, to the
      extent that such securities are actively traded on a national
      securities exchange or in the over-the-counter market in the United
      States or on any foreign securities exchange, but only if
      such investment does not exceed two percent (2%) of the outstanding voting
      securities of such
enterprise.

              

      

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      Mr.
Charles G. Berg 

      August
10, 2009 

      Page 9 of
11

       

    

    
       

    

    
                     
16.          Miscellaneous.

       

      
        
          
            	
                                               
      (i)

                  	
                    This
      Agreement shall  be governed  by and
      construed  in accordance
      with the laws of the State of New York (other than its choice of laws
      rules).

                  

          

        

        
           

        

      

    

    
    

    
      
        	
                                         
        (ii)

              	
                This
      Agreement and the Indemnification Agreement constitute the entire
      understanding and agreement between the parties with respect to the
      subject matter hereof, and supersedes any prior discussions, negotiations
      or other written materials in respect of the subject matter hereof.
      Without limiting the generality of the foregoing, this Agreement
      supersedes the Prior Agreement. This Agreement may not be amended, unless
      such amendment is in writing and signed by both of the parties
      hereto.

              

      

    

    
       

      
        	
                                          
        (iii)

              	
                The
      Company may withhold from any amounts payable under this Agreement such
      federal, state, local or foreign taxes as shall be required to be withheld
      pursuant to any applicable law or
regulation.

              

      

    

    
       

      
        	
                                             
      (iv)

              	
                To
      the extent that you are a "specified employee" (within the meaning of
      Treas. Reg. § 1.409A-l(i)) on the date of your "separation from service"
      (within the meaning of Treas. Reg. § 1.409A-1(h)) from the Company, no
      amount that constitutes a deferral of compensation that is payable on
      account of such separation from service and is subject to the six-month
      delay rule of Section 409A(a)(2)(B)(i) of the Code shall be paid to you
      before the date (the "Delayed Payment Date') that is the first day of the
      seventh month after the date of your separation from service or, if
      earlier, the date of your death following such separation from service.
      All such amounts that would, but for this Section, become payable prior to
      the Delayed Payment Date will be accumulated and paid on the Delayed
      Payment Date. The Company intends that income provided to you pursuant to
      this Agreement will not be subject to taxation under Section 409A of the
      Code. The provisions of this Agreement shall be interpreted and construed
      in favor of satisfying any applicable requirements of Section 409A of the
      Code and the regulations promulgated thereunder. With respect to any
      reimbursement or in-kind benefit arrangements of the Company and its
      subsidiaries provided for herein that constitute deferred compensation for
      purposes of Section 409A of the Code, the following conditions
      shall be applicable: (i)the amount eligible for reimbursement, or in-kind
      benefits provided, under any such arrangement in one calendar year may not
      affect the amount eligible for reimbursement, or in-kind benefits to be
      provided, under such arrangement in any other calendar year, (ii) any
      reimbursement must be made on or before the last day of the calendar year
      following the calendar year in which the expense was incurred, and (iii)
      the right to reimbursement or in-kind benefits is not subject to
      liquidation or exchange for another benefit. Whenever payments under this
      Agreement are to be made in installments, each such installment shall be
      deemed to be a separate payment for purposes of Section
  409A.

              

      

    

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Mr.
Charles G. Berg 

    August
10, 2009 

    Page 10
of 11

     

    
      
        
           

          
            	
                                              
        (v)

                  	
                    WellCare
      represents and warrants that it is fully authorized and empowered to enter
      into this Agreement and to perform its obligations
    hereunder.

                  

          

        

        
           

        

      

      
        
          
            	
                                              
        (vi)

                  	
                    The
      respective rights and obligations of the parties hereunder shall survive
      any termination of this Agreement and your employment with the Company to
      the extent necessary to preserve the intended rights and obligations of
      the parties.

                  

          

           

          
            
              
                	
                                               
            (vii)

                      	
                        The
      invalidity or unenforceability of any provision of this Agreement, or any
      provisions of any agreement referred to herein, shall not affect the
      validity or enforceability of any other provision herein or
      therein.

                      

              

               

              
                
                  
                    	
                                              
                  
      (viii)

                          	
                            
                              For
      purposes of this Agreement, the term "including" shall mean "including,
      without
limitation."

                            

                          

                  

                

              

            

          

        

      

       

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    Mr.
Charles G. Berg 

    August
10, 2009 

    Page 11
of 11

     

    
       

      
        
          
            	
                                                  (ix)

                  	
                    
                      This Agreement may be executed in one or more counterparts,
      including by fax or PDF, each of which shall be deemed to be an original
      but all of which together shall constitute one and the same
      instrument.

                    

                  

          

        

      

       

    

    
      	 	 	
              Very
      truly yours,

            
	 	 	
               

               

               

               

            
	 	 	
              WELLCARE
      HEALTHPLANS, INC.

               

               

              By: /s/ Thomas F.
      O'Neill                            
      

            
	 	 	Thomas F. O'Neil
      III 
	 	 	
               

              Title: Vice Chairman

              WellCare Health Plans,  Inc. 

            

    

     

     

     

    
       

      
        	 	 	
                COMPREHENSIVE
      HEALTH MANAGEMENT, INC

              
	 	 	
                 

                 

                 

                By: /s/ Thomas F.
      O'Neill                            
      

              
	 	 	Thomas F. O'Neil
      III 
	 	 	
                 

                Title: Vice Chairman

                WellCare Health Plans,  Inc.

              

      

    

    
       

      
        
           

          
            	 	 	
                    
                       

                    

                  
	 	 	Acknowledged and
      Agreed
	 	 	
                     

                    /s/ Charles G.
      Berg                                             
      

                  
	 	 	Charles G.
      Berg

          

        

        
          

            
              
                 

              

              
                 

                
                  

                

              

              
                 

              

            

          

           

        

      

    

    
      
        
          Annex A

           

        

        
           

          The
following definitions shall have the following meanings for purposes of the
Agreement.

        

        
           

          "Cause" shall mean (i) your willful failure or
refusal to perform your lawful and proper duties hereunder (other than as a
result of Disability), (ii) your conviction of or plea of nolo contendere to any felony
(other than a traffic infraction), or (iii) an act or acts on your part
constituting fraud, theft or embezzlement or that otherwise constitutes a felony
under the laws of the United States or any state thereof which results or was
intended to result directly or indirectly in gain or personal enrichment by you
at the expense of the Company. In the case of any item described in the previous
sentence, you shall be given written notice of the alleged act or omission
constituting Cause, which notice shall set forth in reasonable detail the reason
or reasons that the Board believes you are to be terminated for Cause, including
any act or omission that is the basis for the decision to terminate you. In the
case of an act or omission described in clause (i) of the definition of Cause,
(A) if reasonably capable of being cured, you shall be given 30 days from the
date of such notice to effect a cure of such alleged act or omission
constituting "Cause" which, upon such cure to the reasonable satisfaction of the
Board, shall no longer constitute a basis for Cause, and (B) you shall be given
an opportunity to make a presentation to the Board (accompanied by counsel or
other representative, if you so desire) at a meeting of the Board held promptly
following such 30-day cure period if the Board intends to determine that no cure
has occurred. At or following such meeting, the Board shall determine whether or
not to terminate you for "Cause" and shall notify you in writing of its
determination and the effective date of such termination (which date may be no
earlier than the date of the aforementioned Board meeting). For purposes hereof,
no act or omission shall be deemed "willful" if it was done with a good faith
belief that it was in the best interests of the Company.

        

        
           

          "Confidential Information"
means information that is not generally known to the public and that was
or is used, developed or obtained by the WellCare Companies in connection with
their business. It shall not include information (a) required to be disclosed by
court or administrative order or by applicable law, (b) lawfully obtainable from
other sources or which is in the public domain through no fault of yours, or (c)
the disclosure of which is consented to in writing by the
Company.

        

        
           

          "Disability" means any
physical or mental disability or incapacity that can be expected to result in
your death or that has rendered you unable to carry out your duties and
obligations to the Company for a period of 90 consecutive days or for shorter
periods aggregating to 120 days (whether or not consecutive) during any
consecutive 12 months of the Term.

           

        

        
          "Good Reason" shall mean, without your written
consent, (i) the failure of the Company to pay any compensation or provide any
benefits to you when due hereunder, (ii) you are no longer the Executive
Chairman of (A) the Company or (B) in the event of a merger, consolidation or
other business combination involving the Company, the successor to the Company's
business or assets, or (C) if all or substantially all of the voting stock of
the Company is held by another public company, such public company, (iii) the
assignment to you of any duties or responsibilities materially inconsistent with
your status under clause (ii) of this sentence, (iv) your failure to be
appointed or elected (or reelected) to the Board, other

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          than due
to your decision not to stand for election or reelection, or your removal from
the Board not for Cause and not due to your Disability or death, or (v) any
material breach by the Company of any terms of this Agreement; provided, however, that for any
of the foregoing to constitute Good Reason, you must provide written
notification of such event or condition constituting Good Reason within ninety
(90) days after you know or have reason to know of the occurrence of any such
event or condition, and the Company shall have thirty (30) days from the date of
receipt of such written notice to effect a cure of the event or condition
constituting Good Reason, and, upon cure thereof by the Company, such event or
condition shall no longer constitute Good Reason.

           

        

        
          "Person" shall have the
meaning set forth in the Securities Exchange Act of 1934, as
amended.

        

        
           

          -2-

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          EXHIBIT
A

        

        
           

          MUTUAL
WAIVER AND RELEASE AGREEMENT

        

        
           

          THIS
MUTUAL, WAIVER AND RELEASE AGREEMENT (this "Release") is entered into as
of [TO BE DETERMINED AT TERMINATION OF EMPLOYMENT] (the "Effective Date"), by Charles
G. Berg (the "Executive")
and WellCare Health Plans, Inc., a Delaware corporation (the "Company"), pursuant to the
Employment Agreement by and between the Company and the Executive (the "Employment
Agreement").

        

        
           

          1.       
     Executive's
Waiver and Release.
Subject to the last sentence of the first paragraph of this Section 1,
the Executive, on his own behalf and on behalf of his heirs, executors,
administrators, attorneys and assigns, hereby unconditionally and irrevocably
releases, waives and forever discharges the Company and each of its affiliates,
parents, successors, predecessors, and the subsidiaries, directors, owners,
members, shareholders, officers, agents, and employees of the Company and its
affiliates, parents, successors, predecessors, and subsidiaries (collectively,
all of the foregoing are referred to as the "Employer"), from any and all
causes of action, claims and damages, including attorneys' fees, whether known
or unknown, foreseen or unforeseen, presently asserted or otherwise arising
through the date of his signing of this Release, concerning his employment or
separation from employment. Subject to the last sentence of the first paragraph
of this Section 1, this Release includes, but is not limited to, any payments,
benefits or damages arising under any federal law (including, but not limited
to, Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Employee Retirement Income Security Act of 1974, the
Americans with Disabilities Act, Executive Order 11246, the Family and Medical
Leave Act, and the Worker Adjustment and Retraining Notification Act, each as
amended); any claim arising under any state or local laws, ordinances or
regulations (including, but not limited to, any state or local laws, ordinances
or regulations requiring that advance notice be given of certain workforce
reductions); and any claim arising under any common law principle or public
policy, including, but not limited to, all suits in lort or contract, such as
wrongful termination, defamation, emotional distress, invasion of privacy or
loss of consortium. Notwithstanding any other provision of this Release to the
contrary, this Release does not encompass, and Executive does not release, waive
or discharge, the obligations of the Company (a) to make the payments and
provide the other benefits contemplated by the Employment Agreement, or (b)
under any restricted stock agreement, option agreement or other agreement
pertaining to Executive's equity ownership, or (c) under any indemnification or
similar agreement with Executive, including under the charter and by-laws of the
Company.

        

        
           

                                         
The Executive understands that by signing this Release, he is not waiving any
claims or administrative charges which cannot be waived by law. He is waiving,
however, any right to monetary recovery or individual relief should any federal,
stale or local agency (including the Equal Employment Opportunity Commission)
pursue any claim on his behalf arising out of or related to his employment with
and/or separation from employment with the Company.

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
           

          The
Executive further agrees without any reservation whatsoever, never to sue the
Employer or become a party to a lawsuit on the basis of any and all claims of
any type lawfully and validly released in this Release.

           

        

        
                         
2.           
Company
Waiver and Release. The Company, on its own behalf and on behalf
of each of its affiliates, parents, successors, predecessors, and subsidiaries
hereby unconditionally and irrevocably releases, waives and forever discharges
the Executive, his heirs, executors, administrators, attorneys and assigns, from
any and all causes of action, claims and damages, including attorneys' fees,
whether known or unknown, foreseen or unforeseen, presently asserted or
otherwise arising through the date of his signing of this Release, concerning
his service or separation from service. This Release includes, but is not
limited to, any payments, benefits or damages arising under any federal law; any
claim arising under any state or local laws, ordinances or regulations; and any
claim arising under any common law principle or public policy, including, but
not limited to, all suits in tort or contract. The Company further agrees
without any reservation whatsoever, never to sue the Executive or become a party
to a lawsuit on the basis of any and all claims of any type lawfully and validly
released in this Release.

           

        

        
                          
3.            Acknowledgments.
The Executive is signing this Release knowingly and voluntarily. He acknowledges
that:

          
            
               

              
                	
                                                   
      (a)  

                      	
                        He
      is hereby advised in writing to consult an attorney before signing this
      Release Agreement;

                      

              

            

            
               

              
                
                  
                    	
                                                       
      (b)  

                          	
                            He
      has relied solely on his own judgment and/or that of his attorney regarding
      the consideration for and the terms of this Release and is signing this
      Release Agreement
      knowingly and voluntarily of his own free
  will;

                          

                  

                

                
                         

                

              

            

          

        

        
          
            	
                                               
      (c)  

                  	
                    He
      is not entitled to the severance payment under Section 7 of the Employment
      Agreement (the "Severance Payment") unless he agrees to and honors the
      terms of this Release;

                  

          

        

        
           

          
            	
                                               
      (d)  

                  	
                    He
      has been given at least twenty-one (21) calendar days to consider this
      Release, or he or she expressly waives his right to have at least
      twenty-one (21) days to consider this
Release;

                  

          

        

        
           

          
            	
                                               
      (e)  

                  	
                    He
      may revoke this Release within seven (7) calendar days after signing it by
      submitting a written notice of revocation to the Employer. He further
      understands that this Release is not effective or enforceable until after
      the seven (7) day period of revocation has expired without revocation, and
      that if he revokes this Release within the seven (7) day revocation
      period, he will not receive the Severance
  Payment;

                  

          

        

        
           

          
            	
                                                (f)  

                  	
                    He
      has read and understands the Release and further understands that, subject
      to the limitations contained herein, it includes a general release of any
      and all known and unknown, foreseen or unforeseen claims presently
      asserted or otherwise arising through the dale of his signing of this
      Release that he may have against the Employer concerning his employment or
      separation from employment;
and

                  

          

        

        
           

          -2-

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
           

        

        
          
            	
                                              
      (g)

                  	
                    No
      statements made or conduct by the Employer has in any way coerced or
      unduly influenced him or her to execute this
  Release.

                  

          

        

        
           

                         
4.             No
Admission of Liability. This Release does not constitute an
admission of liability or wrongdoing on the part of the Employer or the
Executive, the Employer and the Executive do not admit there has been any
wrongdoing whatsoever against the Executive or the Employer, and the Employer
and the Executive expressly deny that any wrongdoing has
occurred.

        

        
           

                         
5.             Entire
Agreement. There are no other agreements of any nature between the
Employer and the Executive with respect to the matters discussed in this Release
Agreement, except as expressly stated herein, and in signing this Release,
neither the Employer nor the Executive are relying on any agreements or
representations, except those expressly contained in this
Release.

        

        
           

                         
6.             Execution.
This Release shall be effective only if executed by both
parties.

        

        
           

                         
7.            
Severability.
If any provision of this Release is found, held or deemed by a court of
competent jurisdiction to be void, unlawful or unenforceable under any
applicable statute or controlling law, the remainder of this Release shall
continue in full force and effect.

        

        
           

                          8.            
Governing Law. This Release shall be governed by the laws of
the State of New York, excluding the choice of law rules
thereof.

        

        
           

                         
9.     Headings.
Section and subsection headings contained in this Release are inserted for the
convenience of reference only. Section and subsection headings shall not be
deemed to be a part of this Release for any purpose, and they shall not in any
way define or affect the meaning, construction or scope of any of the provisions
hereof.

        

        
           

          -3-

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        
          IN
WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the day
and year first herein above written.

        

        
           

          EXECUTIVE:

           

           

          ______________________________

        

        
          Charles
G, Berg

        

        
           

           

           

          WELLCARE
HEALTH PLANS, INC.

        

        
           

          By:
___________________________                                                     

        

        
           

          Title:
__________________________                                                     

        

        
          

           

          -4-bergstockoptionagreement.htm

Back to Form 10-Q

    Exhibit
10.3

     

    

    WELLCARE
HEALTH PLANS, INC.

    2004
EQUITY INCENTIVE PLAN

    

    AMENDED
AND RESTATED NON-QUALIFIED STOCK OPTION AGREEMENT

    FOR

    CHARLES
G. BERG

     

    Agreement

     

    WHEREAS, on January 25, 2008, WellCare
Health Plans, Inc. (the “Company”) granted to Charles G. Berg (the “Optionee”),
an option (the “Option”) to purchase up to 300,000 shares of the Company’s
Common Stock, $0.01 par value per share (the “Shares”), at an exercise price per
share equal to $43.12, as evidenced by that certain Non-Qualified Stock Option
Agreement dated as of January 25, 2008 between the Company and the Optionee, as
amended and restated on February 16, 2009 (the “Prior Non-Qualified Stock Option
Agreement”);

     

    WHEREAS, on the date hereof, the
Company, Optionee and Comprehensive Health Management, Inc. are entering into an
amended and restated employment agreement (the “Employment Agreement”) pursuant
to which Optionee’s term of employment has been extended and the Company has
agreed to amend and restate the terms of the Prior Non-Qualified Stock Option
Agreement to (i) amend the exercise price of the Option to be equal to the
closing price per share on the date of the amendment and restatement of the
Option, (ii) reduce the term of the Option to December 31, 2015, and (iii)
extend the vesting period of the Option, each as set forth herein;

     

    WHEREAS, the Optionee and the Company
now desire to amend and restate the Prior Non-Qualified Stock Option Agreement
by entering into this Amended and Restated Non-Qualified Stock Option Agreement
(this “Agreement”) in order to reflect the terms and conditions of the
Employment Agreement;

     

    NOW, THEREFORE, in consideration of the
mutual promises, covenants and agreements set forth herein, the parties hereto
agree as follows:

     

    1.   
         Grant of
Option.  The Company granted, as of January 25, 2008, to the
Optionee an Option to purchase up to 300,000 Shares.  The Option was
amended and restated as set forth herein on August 10, 2009.  The
exercise price per share of such Option shall be $23.88 (the “Option
Price”).  The Option shall be subject to the terms and conditions set
forth herein.  The Option was issued pursuant to the Company’s 2004
Equity Incentive Plan (the “Plan”), which is incorporated herein for all
purposes.  The Option is a Non-Qualified Stock Option, and not an
Incentive Stock Option.  The Optionee hereby acknowledges receipt of a
copy of the Plan and agrees to be bound by all of the terms and conditions
hereof and thereof and all applicable laws and regulations.  However,
in the event of any conflict between the provisions in this Agreement and the
Plan, the provisions of this Agreement shall govern.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    2.             Definitions.  Unless
otherwise provided herein, terms used herein that are defined in the Plan and
not defined herein shall have the meanings attributed thereto in the
Plan.

     

    3.     
       Exercise
Schedule.  Except as otherwise provided in Sections 6 and 7 of
this Agreement, the Option will become vested and exercisable in installments as
provided below, which shall be cumulative. To the extent that the Option has
become vested with respect to a percentage of Shares as provided below, the
Option may thereafter be exercised by the Optionee, in whole or in part, at any
time or from time to time prior to the expiration of the Option as provided
herein. The Option shall vest and become exercisable with respect to 150,000
Shares on April 1, 2010 and with respect to the remaining 150,000 Shares on
December 31, 2010 (each, a “Vesting Date”), provided (except as otherwise set
forth below) that the Optionee’s employment or service with the Company and its
Subsidiaries continues through and on the applicable Vesting
Date.

     

    Notwithstanding
anything contained herein to the contrary, once the Option has vested and become
exercisable with respect to 100% of the Shares, then the Option shall be fully
vested and exercisable and the provisions of the preceding sentence shall cease
to apply.

     

    Except as
otherwise specifically provided herein, there shall be no proportionate or
partial vesting in the periods prior to each Vesting Date, and all vesting shall
occur only on the appropriate Vesting Date. Except as otherwise set forth below,
upon the termination of the Optionee’s employment or service with the Company
and its Subsidiaries, any unvested portion of the Option shall terminate and be
null and void.

     

    4.             Method of
Exercise.  The vested portion of this Option shall be
exercisable in whole or in part in accordance with the exercise schedule set
forth in Section 3 hereof by written notice which shall state the election to
exercise the Option, the number of Shares in respect of which the Option is
being exercised (which number must be a whole number), and such other
representations and agreements as to the holder’s investment intent with respect
to such Shares as may be required by the Company pursuant to the provisions of
the Plan.  Such written notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Secretary of the
Company.  The written notice shall be accompanied by payment of the
Option Price.  This Option shall be deemed to be exercised after both
(a) receipt by the Company of such written notice accompanied by the Option
Price and (b) arrangements that are satisfactory to the Committee in its sole
discretion have been made for Optionee’s payment to the Company of the amount,
if any, that is necessary to be withheld in accordance with applicable Federal
or state withholding requirements.  No Shares will be issued pursuant
to the Option unless and until such issuance and such exercise shall comply with
all relevant provisions of applicable law, including the requirements of any
stock exchange upon which the Shares then may be traded.

     

    5.             Method of
Payment.    Payment of the Option Price shall be by
any of the following, or a combination thereof, at the election of the
Optionee:  (a) in cash (including check, bank draft, money order or
wire transfer of immediately available funds), (b) by delivery of outstanding
shares of Common Stock with a Fair Market Value on the date of exercise equal to
the aggregate exercise price payable with respect to the Options’ exercise, (c)
by simultaneous sale through a broker reasonably acceptable to the Committee of
Shares acquired on exercise, as permitted under Regulation T of the Federal
Reserve Board, (d) by authorizing the Company to withhold from issuance a number
of Shares issuable upon exercise of the Option which, when multiplied by the
Fair Market Value of a share of Common Stock on the date of exercise, is equal
to the Option Price payable with respect to the portion of the Option being
exercised or (e) by any combination of the foregoing.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

       
        In the event the Optionee elects
to pay the Option Price pursuant to clause (b) above, only a whole number of
share(s) of Common Stock (and not fractional shares of Common Stock) may be
tendered in payment and the Common Stock must be delivered to the
Company.  Delivery for this purpose may, at the election of the
Optionee, be made either by (A) physical delivery of the certificate(s) for all
such shares of Common Stock tendered in payment of the Option Price, accompanied
by duly executed instruments of transfer in a form acceptable to the Company, or
(B) direction to the Optionee’s broker to transfer, by book entry, such shares
of Common Stock from a brokerage account of the Optionee to a brokerage account
specified by the Company.  When payment of the Option Price is made by
delivery of Common Stock, the difference, if any, between the Option Price
payable with respect to the portion of the Option being exercised and the Fair
Market Value of the shares of Common Stock tendered in payment (plus any
applicable taxes) shall be paid in cash.  The Optionee may not tender
shares of Common Stock having a Fair Market Value exceeding the Option Price
payable with respect to the portion of the Option being exercised (plus any
applicable taxes).

     

              
In the event the Optionee elects to pay the Option Price pursuant to clause (d)
above, only a whole number of Share(s) (and not fractional Shares) may be
withheld in payment.  When payment of the Option Price is made by
withholding of Shares, the difference, if any, between the Option Price payable
with respect to the portion of the Option being exercised and the Fair Market
Value of the Shares withheld in payment (plus any applicable taxes) shall be
paid in cash.  The Optionee may not authorize the withholding of
Shares having a Fair Market Value exceeding the Option Price payable with
respect to the portion of the Option being exercised (plus any applicable
taxes).  Any withheld Shares shall no longer be issuable under the
Option.

     

    6.             Termination of Optionee’s
Service.

     

    (a)           Death or
Disability.  If the Optionee ceases to be an officer or
employee of, or to perform other services for, the Company or any Subsidiary due
to the Optionee’s death or Disability, the Option shall become fully vested and
exercisable on the date of such cessation and shall remain exercisable until the
expiration date provided in Section 7(a) below.

     

    (b)           Termination Without Cause or
for Good Reason.  If the Optionee’s employment by, or other
performance of services for, the Company or any Subsidiary is terminated by the
Company or any Subsidiary without Cause or by the Optionee for Good Reason, the
Option shall become fully vested and exercisable on the date of such cessation
and shall remain exercisable until the expiration date provided in Section 7(a)
below.

     

    (c)           Termination for
Cause.  If the Optionee’s employment by, or other performance
of services for, the Company or any Subsidiary is terminated by the Company or
any Subsidiary for Cause, the Option shall expire and be forfeited immediately
upon such termination, whether or not then exercisable.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (d)           Other Termination of
Service.  In the event the Optionee terminates his employment
with, or other performance of services for,  the Company or any
Subsidiary without Good Reason prior to December 31, 2010, then all unvested
options shall be forfeited immediately upon such termination of employment or
service and the Optionee shall be entitled to exercise all vested options for 90
days following such termination of employment or service.  In the
event the Optionee’s employment with, or other performance of services for, the
Company or any Subsidiary terminates for any reason (other than by the Company
or any Subsidiary for Cause) on or after December 31, 2010, the Option shall
remain exercisable until the expiration date provided in Section 7(a)
below.

     

    (e)           Change in
Control.  Notwithstanding the foregoing, if there is a Change
in Control of the Company, then the Option shall be immediately fully
exercisable and shall remain so until the expiration date provided in Section
7(a) below.

     

              
     (f)           Extension of
Post-Termination of Service Exercise Period.  The period during which the Option can be exercised
after a termination of service subject to Sections 6(a), (b), (d) or (e) above
will be extended for any period during which the Optionee cannot exercise the
Option because such an exercise would violate an applicable Federal, state,
local, or foreign law, until 30 days after the exercise of the
Option first would no longer violate
an applicable Federal, state, local, and foreign laws.

     

    (g)           Certain Defined
Terms.  For purposes of this
Agreement, the terms “Cause”, “Good
Reason,” and “Disability” shall have the meanings set forth in the
Employment Agreement and the determination of whether a termination of
employment or service is for Cause, for Good Reason or on account of Disability
shall be determined under the Employment Agreement.

     

    7.       
     Other Termination of
Option.

     

    (a)          
Expiration of
Option.  Notwithstanding anything to the contrary, any
unexercised portion of the Option shall automatically and without notice
terminate and become null and void on December 31, 2015.

     

    (b)           Cancellation by the
Committee.  Except as provided in Section 7(d), in connection
with any transaction of the type specified by clause (iii) of the definition of
a Change in Control in Section 2(c) of the Plan, the Committee may, in its
discretion, (i) cancel the Option in consideration for payment to the Optionee
of an amount equal to the portion of the consideration that would
have  been payable to the Optionee pursuant to such transaction if the
Option had been fully exercised immediately prior to such transaction, less the
aggregate Option Price that would have been payable therefor, or (ii) if the
amount that would have been payable to the Optionee pursuant to such transaction
if the Option had been fully exercised immediately prior thereto would be equal
to or less than the aggregate Option Price that would have been payable
therefor, cancel the Option for no consideration or payment of any
kind.  Payment of any amount payable pursuant to the preceding
sentence may be made in cash or, in the event that the consideration to be
received in such transaction includes securities or other property, in cash
and/or securities or other property in the Committee’s discretion.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (c)           Corporate
Transactions.  Except as provided in Section 7(d), to the
extent not previously exercised, the Option shall terminate immediately in the
event of the liquidation or dissolution of the Company.

     

    (d)           Notwithstanding
anything herein to the contrary, in the event the Company enters into a
transaction that could affect the term of the Option, it will use its reasonable
best efforts to have the Option assumed so that it will remain outstanding for
its full term through December 31, 2015.

     

    8.       
    Transferability.  Unless
otherwise determined by the Committee, the Option is not transferable otherwise
than by will or under the applicable laws of descent and distribution, and
during the lifetime of the Optionee the Option shall be exercisable only by the
Optionee, or the Optionee’s guardian or legal representative. In addition, the
Option shall not be assigned, negotiated, pledged or hypothecated in any way
(whether by operation of law or otherwise), and the Option shall not be subject
to execution, attachment or similar process. Upon any attempt to transfer,
assign, negotiate, pledge or hypothecate the Option, or in the event of any levy
upon the Option by reason of any execution, attachment or similar process
contrary to the provisions hereof, the Option shall immediately become null and
void.  The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.

     

    9.       
    No Rights of
Stockholders.  Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights and
privileges of, a stockholder of the Company with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.

     

    10.           No Right to Continued
Employment or Service.  Neither the Option nor this Agreement
shall confer upon the Optionee any right to continued employment or service with
the Company.

     

    11.           Law
Governing.  This Agreement shall be governed in accordance with
and governed by the internal laws of the State of Delaware.

     

    12.   
       Interpretation. This
Agreement is subject to all the terms, conditions and provisions of the Plan,
including, without limitation, the amendment provisions thereof, and to such
rules, regulations and interpretations relating to the Plan adopted by the
Committee as may be in effect from time to time. However, if and to the extent
that this Agreement conflicts or is inconsistent with the terms, conditions and
provisions of the Plan, this Agreement shall control. The Optionee accepts the
Option subject to all the terms and provisions of the Plan and this
Agreement.  Except as otherwise set forth in Section 6(g) above, the
undersigned Optionee hereby accepts as binding, conclusive and final all
decisions or interpretations of the Committee upon any questions arising under
the Plan and this Agreement.

     

    13.           Notices.  Any
notice under this Agreement shall be in writing and shall be deemed to have been
duly given when delivered personally or when deposited in the United States
mail, registered, postage prepaid, and addressed, in the case of the Company, to
the Company’s Secretary at:

     

    8735
Henderson Road

    Renaissance
Two

    Tampa, FL 33634

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    or if the
Company should move its principal office, to such principal office, and, in the
case of the Optionee, to the Optionee’s last permanent address as shown on the
Company’s records, subject to the right of either party to designate some other
address at any time hereafter in a notice satisfying the requirements of this
Section.

     

    14.           Tax
Consequences.  Set forth below is a brief summary as of the
date of this Option of some of the federal tax consequences of exercise of this
Option and disposition of the Shares.  THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE.  THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.

     

    (a)           The
Optionee will not recognize any income on receipt of the Option.

     

    (b)           The
Optionee will recognize ordinary income at the time he exercises the Option
equal to the amount by which the Fair Market Value of the Shares on the date of
exercise exceeds the Option Price paid for the Shares.  The amount so
recognized is subject to federal withholding and employment taxes if the
Optionee is an employee.

     

    (c)           The
Optionee’s tax basis for the Shares received as a result of the exercise of the
Option will be equal to the Fair Market Value of those Shares on the date of the
exercise.

     

    (d)           Upon
the sale of the Shares, the Optionee will recognize a capital gain or loss on
the difference between the amount realized from the sale of the Shares and the
Fair Market Value on the date of exercise.  The gain or loss would be
short- or long-term depending upon whether the Shares were held for at least one
year after the date of exercise of the Option.

     

    15.           This
Agreement supersedes the Prior Non-Qualified Stock Option
Agreement.

    

     

    *  *  *  *  *

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the 10th day
of  August, 2009.

     

    

     

    COMPANY:

     

    WELLCARE
HEALTH PLANS, INC.

     

    By:     /s/
Thomas F. O’Neil
III                                                                

    Name:
Thomas F. O’Neil III

    Title:
Vice Chairman

    

    

    Optionee
acknowledges receipt of a copy of the Plan.  Optionee has reviewed the
Plan and this Option in their entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Option, and fully understands all
provisions of the Option.

     

    

     

    
      	Dated:     8/10/09                                              
                 
      	 	OPTIONEE:	 
	 	 	 	 
	 	 	
               

              /s/ Charles
      Berg                
      

            	 

    

     

    
      
         

      

      
        7

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