Document:

Exhibit 10.12 dated December 31, 2008

Exhibit 10.12

 

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 2009.   

 

	
            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
 	
            *
 
	
             
 	
            Lead Director
 	
             
 	
            10,000
 	
             
 
	
             
 	
            Chair of Audit Committee
 	
             
 	
            15,000
 	
             
 
	
             
 	
            Chair of Comp Committee
 	
             
 	
            10,000
 	
             
 
	
             
 	
            Chair of N/CG Committee
 	
             
 	
            5,000
 	
             
 
	
            Attendance at In-Person Special Meeting                    
 	
            Board
 	
            $
 	
            3,000
 	
             
 
	
             
 	
            Audit Committee
 	
             
 	
            3,000
 	
             
 
	
             
 	
            Comp Committee
 	
             
 	
            3,000
 	
             
 
	
             
 	
            N/CG Committee
 	
             
 	
            1,500
 	
             
 
	
            Participation in a Special Telephonic Meeting                                               
 	
            Board
 	
            $
 	
            1,000
 	
             
 
	
             
 	
            Audit Committee
 	
             
 	
            1,000
 	
             
 
	
             
 	
            Comp Committee
 	
             
 	
            1,000
 	
             
 
	
             
 	
            N/CG Committee
 	
             
 	
            500
 	
             
 
	
            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)
 	
             
 	
                                                                                                                              
 	
             
 

 

*   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, his compensation for 2009 for his services as both a director and executive is currently under discussion and his compensation for board services will be appropriate for that of an employee director. 

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

Exhibit 10.12

 

Subject to the terms of the Plan, 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%.  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. 

 

 

	
            Payment

“Form” 2
 	
            Maximum Allocation
 	
            Payment

“Current”
 	
            Payment

“Deferred”
 	
            Vesting
 
	
            Cash
 	
            50%3
 	
            Paid at the end of each quarter
 	
            Credited at the end of each quarter4
 	
            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
 

 

_________________________

2   Value of stock options, restricted stock awards and stock units determined in accordance with SFAS 123R.

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

4 cash will be credited quarterly with interest based on the Company’s borrowing rate set at the beginning of each year (the 2008 rate is approximately 5.71%).ex10_6.htm

    Exhibit
10.6

      

        [CARTER’S
LETTERHEAD]

        

        

        January
19, 2009

        

        

        
          	
                  Mr.
      Richard F. Westenberger

                

        

        224 East
Sheridan Road

        Lake
Bluff, Illinois  60044

        

        Re:  Severance
Terms

        

        Dear
Richard,

        

        This
letter agreement (this “Agreement”) confirms
the understanding between The William Carter Company (the
“Company”) and
you with respect to your severance compensation from the Company, notably
that:

        

        
          	
                  1.

                	
                  Position.

                
	 
      	 
      	 
      
	 
      	
                  (a)

                	
                  You
      will continue to be an At Will employee, serving as the Executive Vice
      President and Chief Financial Officer for Carter's, and have the normal
      duties, responsibilities, and authority of such position, subject to the
      Company’s ability to expand, limit, or otherwise change these duties,
      responsibilities, and authorities.

                
	 
      	 
      	 
      
	 
      	
                  (b)

                	
                  Your
      base salary will be a minimum of $400,000 per year and your current target
      annual cash incentive award (“Target Bonus”)
      under the Company’s Amended and Restated Annual Incentive Plan (“Plan”) will be
      a minimum of seventy-five percent (75%) of your base salary as in effect
      during the calendar year for which the award is made, each subject to
      upward adjustments based on your performance.

                
	 
      	 
      
	
                  2.

                	
                  Severance
      Compensation.

                
	 
      	 
      	 
      
	 
      	
                  (a)

                	
                  If
      the Company terminates your employment for any reason other than because
      of your conviction of a felony, your commission of fraud (or other act
      involving dishonesty) or misconduct that is injurious to the Company, or
      your willful refusal to perform your job responsibilities, then you shall
      be entitled to receive (i) your base salary as in effect during the
      calendar year during which such termination occurs (“Termination
      Year”) for a period of twelve (12) months following your
      termination (“Severance
      Period”); and (ii) the Target Bonus you would have earned under the
      Plan for the Termination Year, provided that
      the calculation of any such Target Bonus shall take into account whether
      the Company’s performance goals established pursuant to the Plan were
      achieved, and provided, further, that
      any such Target Bonus payment shall be pro-rated for the amount of time
      you were employed by the Company during the Termination Year (the
      compensation referenced in subclauses (i) and (ii) above are collectively
      referred to as the (“Severance
      Compensation”).  Except to the extent modification is
      required to comply with the requirements of Section 409A of the Internal
      Revenue Code of 1986, as amended (“Section 409A”), as described in Section
      4 below, the portion of your Severance Compensation described in subclause
      (i) shall be paid in accordance with the Company’s normal pay cycles and
      the portion described in subclause (ii) shall be paid in accordance with
      the terms of the Plan.

                
	 
      	 
      	 
      
	 
      	
                  (b)

                	
                  In
      addition to the Severance Compensation described above, during the
      Severance Period, you can continue to receive coverage under the
      Company-sponsored medical, dental, vision, or group life insurance plans
      for you (and any eligible dependents who are enrolled in those plans at
      the time of your termination of employment) at the same cost for such
      coverage as is paid by active employees.  In order to receive
      the Company’s subsidy for these benefits, you (and any dependents) must
      qualify for continued coverage under the terms and conditions of the plans
      or by law; must elect to continue the coverage in accordance with the
      terms of each plan; and must pay the cost of your coverage through
      deduction from the salary continuation payments under subclause (i) of
      Section 2(a) above.  The Company’s subsidy for these benefits
      will expire with the end of the Severance Period.

                
	 
      	 
      	 
      
	 
      	
                  (c)

                	
                  The
      amount of your Severance Compensation will be reduced by the amount of any
      severance compensation you are otherwise entitled to pursuant to any
      Company Severance Plan.

                
	 
      	 
      	 
      
	
                  3.

                	
                  Other
      Benefits.  Your eligibility for all Company-subsidized
      benefits will cease on the last day of the Severance Period or, if later,
      on the date provided by the plan documents for such
      benefits.  Coverage for medical, dental and vision insurance may
      be continued under COBRA.  Group life insurance may be continued
      pursuant to the terms and conditions of that plan.

                
	 
      	 
      	 
      
	
                  4.

                	
                  Section
      409A Compliance.

                
	 
      	 
      	 
      
	 
      	
                  (a)  It
      is intended that the payment of benefits described in this Agreement will
      comply with Section 409A and all guidance and regulations
      thereunder.  This Agreement will at all times be construed
      in a manner to comply with Section 409A and should any provision be
      found not in compliance with Section 409A, you
      hereby agree to any changes to the terms of
      this Agreement reasonably deemed necessary and required by the
      Company to achieve compliance with Section 409A, including any
      applicable exemptions.  In no event will any
      payment pursuant to this Agreement that is considered “deferred
      compensation” within the meaning of Section 409A, and that does not
      satisfy any of the applicable exemptions under Section 409A, be
      accelerated or delayed in violation of Section 409A.  If you are a
      “specified employee,” as defined in Section 409A and Section 4(c) below,
      at the time that payments to you under this Agreement are to commence, no
      payment under this Agreement that is considered to be “deferred
      compensation” within the meaning of Section 409A that does not satisfy any
      of the applicable exemptions under Section 409A may be made before the
      date that is six (6) months after your separation from service (or death,
      if earlier).  To the extent that payments to you under this
      Agreement are subject to the six-month delay rule, all payments that would
      have been made to you during the six (6) months following your separation
      from service will be accumulated and paid to you during the seventh
      (7th)
      month following your separation from service, and any remaining payments
      due will be made in their ordinary course according to the terms of this
      Agreement.  The Company will notify you if you are subject to
      the six (6) month delay rule.  In no event shall amounts be paid
      to you pursuant to Section 2(a) unless you incur a separation from service
      within the meaning of Section 409A(a)(2)(A)(i) and the Treasury
      Regulations promulgated thereunder.

                
	 
      	 
      	 
      
	 
      	
                  (b)  Notwithstanding
      the provisions of Section 4(a), so much of the Severance Compensation
      payable pursuant to Section 2(a) as does not exceed the "exempt amount" as
      hereinafter defined shall be paid in accordance with the Company’s normal
      pay cycles or the terms of the Plan, which is applicable; provided,
      that in no event shall such amounts be paid later than by December 31
      of the second calendar year following the calendar year in which your
      involuntary separation from service occurs.  For purposes of the
      immediately preceding sentence, the "exempt amount" means the lesser of
      (i) your total Severance Compensation, if any, or (ii) the lesser of (A)
      two times the applicable limit under Section 401(a)(17) of the Internal
      Revenue Code for the year in which your involuntary separation from
      service occurs, or (B) two times the annualized compensation determined
      under applicable Treasury Regulations by reference to the annual rate of
      pay for the calendar year preceding the calendar year in which your
      involuntary separation from service occurs.  For purposes of the
      Treasury Regulations under Section 409A, each payment described in this
      Section shall be treated as a separate payment.

                
	 
      	 
      	 
      
	 
      	
                  (c)  For
      purposes of this Section, the term "specified employee" means an
      individual who is determined by the Company to be a specified employee as
      defined in subsection (a)(2)(B)(i) of Section 409A.  The Company
      may, but need not, elect in writing, subject to the applicable limitations
      under Section 409A, any of the special elective rules prescribed in
      Section 1.409A-1(i) of the Treasury Regulations for purposes of
      determining "specified employee" status.  Any such written
      election shall be deemed part of this Agreement.

                
	 
      	 
      	 
      
	
                  5.

                	
                  Release
      and Compliance.  Your right to receive Severance
      Compensation is expressly conditional upon (a) your execution (and
      non-revocation) of a general release of liability of the Company and its
      Affiliates in form and substance satisfactory to the Company, and (b) your
      compliance with each of the terms of this Agreement.

                
	 
      	 
      	 
      
	
                  6.

                	
                  Non-Competition/Non-Solicitation.  During
      the Severance Period, you will not: work or provide services in a similar
      capacity for any company a material component of whose business is
      competitive with the Company; solicit, induce, or hire (or attempt to do
      any of the same) any Company employee for employment with another company;
      induce or attempt to induce any customer of the Company to, in any way,
      diminish their relationship with the Company; or otherwise interfere with
      any relationship between the Company and any employee or
      customer.

                
	 
      	 
      	 
      
	
                  7.

                	
                  Confidential
      Information.  The information you obtain while working
      for the Company (whether written, oral, or any other form) relating to the
      business or operations of the Company that is not generally known by the
      public is proprietary to the Company.  You agree not to use any
      of such confidential information outside of your performance of your job
      responsibilities for the Company, and you agree to return or destroy any
      physical copies that may contain such confidential
      information.  You agree not to discuss or disclose the terms or
      existence of this letter agreement.  The obligations of this
      paragraph survive the termination of your employment with the
      Company.

                
	 
      	 
      	 
      
	
                  8.

                	
                  Miscellaneous.  This
      letter sets forth the entire understanding between the Company and you
      with respect to your severance compensation.  The interpretation
      of any of these provisions will be governed by the laws of the State of
      New York.  Whenever possible, each provision of this Agreement
      will be interpreted in such manner as to be effective and valid under
      applicable law, but if any provision of this Agreement is held to be
      invalid,
      illegal or unenforceable in any respect under any applicable law or rule
      in any jurisdiction, such invalidity, illegality or unenforceability will
      not affect any other provision or any other jurisdiction, but this
      Agreement will be reformed, construed and enforced in such jurisdiction as
      if such invalid, illegal or unenforceable provision had never been
      contained herein.

                

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        

        

        Please
acknowledge your acceptance of these terms by counter-signing
below.

        

        

        Sincerely,

        

        
          	 
      
	 
      
	
                  /s/ BRENDAN
      M. GIBBONS

                
	
                  Brendan
      M. Gibbons

                
	
                  Vice
      President, General Counsel, and

                  Corporate
      Secretary

                

        

        

        

        AGREED
AND ACCEPTED

        

        
          	 
      
	 
      
	
                  /s/ RICHARD
      F. WESTENBERGER

                
	
                  Richard
      F. Westenberger

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