Coventry Health Care, Inc. (Coventry) Summary of Director Compensation

by Coventry Health Care
February 28th, 2007

Exhibit 10.12

 

Coventry Health Care, Inc. (“Coventry”)

 

Summary of Director Compensation

 

Non-employee directors of Coventry are compensated pursuant to the 2006 Directors Compensation Program for non-employee directors, previously filed as Exhibit 10.13 to Coventry Current Report on Form 8-K, filed on November 10, 2005 (the “Program”), which authorizes Coventry to make certain compensatory awards to non-employee directors pursuant to Coventry’s 2004 Incentive Plan and allows non-employee directors to defer portions of their compensation in accordance with Coventry’s Deferred Compensation Plan for Non-Employee Directors. The following table summarizes the components and amounts of the compensation package paid offered to eligible non-employee directors in 2006 and 2007.

 

Compensation Components

Board or Committee

Compensation

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

Board

$ 225,000

Annual Committee Chair Retainer
(Paid annually in arrears)

Lead Director

$   10,000

 

Chair of Audit Committee

10,000

 

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)

 

Subject to the terms of the Program, non-employee directors may elect the form and the timing of their compensation on an individual basis as summarized in the table below. All elections of the form of payment must be made in multiples of 25%. 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

 

_________________________

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

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

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

Deferred cash will be credited quarterly with interest based on the Company’s borrowing rate set at the beginning of each year (2005 rate is approximately 5%)

 


 

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