WELLCARE HEALTH PLANS, INC. RESTRICTED STOCK AGREEMENT FOR THOMAS F. O’NEIL III
Exhibit
10.2
FOR
XXXXXX
X.
X’XXXX
III
This RESTRICTED STOCK AGREEMENT
(the “Agreement”)
is made and entered into effective as of April 1, 2008, by and between WellCare
Health Plans, Inc., a Delaware corporation (the “Company”),
and Xxxxxx X. X’Xxxx III (the “Grantee”).
RECITALS
In consideration of services to be
rendered by the Grantee and to provide an incentive to the Grantee to remain
with the Company and its Subsidiaries, it is in the best interests of the
Company to make a grant of Restricted Stock to Grantee in accordance with the
terms of this Agreement.
NOW, THEREFORE, for and in
consideration of the mutual premises, covenants and agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Award of Restricted
Stock. The Company hereby grants, as of April 1, 2008, the
Grantee’s first day of employment (the “Date of
Grant”), to the Grantee, 50,000 restricted shares of Common Stock
(collectively, the “Restricted
Stock”), which Restricted Stock is and shall be subject to the terms,
provisions and restrictions set forth in this Agreement. The purchase
price per share of Restricted Stock is $.01 per share (the par value of a
share of Common Stock), which shall be deemed paid by your services to the
Company. The Restricted Stock is being granted as an “employee
inducement award” within the meaning of Section 303A(8) of the New York Stock
Exchange Listed Company Manual. As a
condition to entering into this Agreement, and as a condition to the issuance of
the Restricted Stock, the Grantee agrees to be bound by all of the terms and
conditions herein.
2. Vesting of Restricted
Stock.
(a) Except
as otherwise provided in Section 3 hereof, the Restricted Stock shall
become vested in equal annual installments on each of April, 2009, 2010, 2011
and 2012 (each such date being a “Vesting
Date”), provided that the Grantee’s employment or service with the
Company and its Subsidiaries continues through and on the applicable Vesting
Date.
(b) Except
as otherwise provided in Section 3 hereof, there shall be no proportionate
or partial vesting of Restricted Stock in or during the months, days or periods
prior to each Vesting Date, and all vesting of Restricted Stock shall occur only
on the applicable Vesting Date.
3. Termination of
Employment
(a) Upon
the termination or cessation of Grantee’s employment with the Company and its
Subsidiaries (the “Date of
Termination”), for any reason whatsoever, any portion of the
Restricted
Stock which is not yet then vested, and which does not then become vested
pursuant to this Section 3, shall automatically and without notice terminate, be
forfeited and become null and void.
(b) Notwithstanding
Section 3(a), if the Grantee ceases to be a director, officer or employee of, or
to perform other services for, the Company and any Subsidiary, and the Grantee’s
employment was terminated (i) by the Company without Cause or (ii) by the
Grantee for Good Reason, within twelve months after there is a Change in Control
of the Company, then, in each case, the unvested Restricted Stock shall become
immediately vested as of the Date of Termination.
(c)
Notwithstanding any other term or provision of this Agreement, in the event that
the Grantee’s employment with the Company and its Subsidiaries is terminated on
account of the Grantee’s death or Disability any unvested portion of the
Restricted Stock shall become immediately vested as of the Date of the
Termination.
(d) Notwithstanding
any other term or provision of this Agreement, the Committee shall be
authorized, in its sole discretion, based upon its review and evaluation of the
performance of the Grantee and of the Company and its Subsidiaries, to
accelerate the vesting of all or any portion of the Restricted Stock under this
Agreement, at such times and upon such terms and conditions as the Committee
shall deem advisable.
4. Delivery of Restricted
Stock. The Company shall make a book entry in its stock ledger
for the Restricted Stock registered in the Grantee’s name. Upon
vesting, certificates for the Restricted Stock will be issued in the name of the
Grantee and shall be delivered to the Grantee’s address on record with the
Company or to such other address as the Grantee may instruct the
Company. The Company shall retain the right to determine if any stock
certificates issued under the Plan or under this Agreement shall bear a
restrictive legend.
5. Rights with Respect to
Restricted Stock.
(a) Except
as otherwise provided in this Agreement, the Grantee shall have, with respect to
all of the shares of Restricted Stock, whether vested or unvested, all of the
rights of a holder of shares of Common Stock, including without limitation
(i) the right to vote such Restricted Stock, (ii) the right to receive
dividends, if any, as may be declared on the Restricted Stock from time to time,
and (iii) the rights available to all holders of shares of Common Stock
upon any merger, consolidation, reorganization, liquidation or dissolution,
stock split-up, stock dividend or recapitalization undertaken by the
Company.
(b) In
the event that the Committee shall determine that any stock dividend, stock
split, share combination, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination, exchange
of shares, warrants or rights offering to purchase Common Stock at a price
substantially below fair market value, or other similar corporate event affects
the Common Stock such that an adjustment is required in the number of shares of
Restricted Stock in order to preserve, or to prevent the enlargement of, the
benefits or potential benefits intended to be made available under this Award,
then the Committee shall, in its sole discretion, and in such manner as the
Committee may deem equitable, adjust any or all of
- 2
-
the
number and kind of shares of Restricted Stock and/or, if deemed appropriate,
make provision for a cash payment to the Grantee, provided, however, that,
unless the Committee determines otherwise, the number of shares of Restricted
Stock subject to this Award shall always be a whole number.
(c) Notwithstanding
any term or provision of this Agreement to the contrary, the existence of this
Agreement, or of any outstanding Restricted Stock awarded hereunder, shall not
affect in any manner the right, power or authority of the Company to make,
authorize or consummate: (i) any or all adjustments, recapitalizations,
reorganizations or other changes in the Company’s capital structure or its
business; (ii) any merger, consolidation, reorganization or similar
transaction by or of the Company; (iii) any offer, issue or sale by the
Company of any capital stock of the Company, including any equity or debt
securities, or preferred or preference stock that would rank prior to or on
parity with the Restricted Stock and/or that would include, have or possess
other rights, benefits and/or preferences superior to those that the Restricted
Stock includes, has or possesses, or any warrants, options or rights with
respect to any of the foregoing; (iv) the dissolution or liquidation of the
Company; (v) any sale, transfer or assignment of all or any part of the
stock, assets or business of the Company; or (vi) any other corporate
transaction, act or proceeding (whether of a similar character or
otherwise).
6. Transferability. Unless
otherwise determined by the Committee, the shares of Restricted Stock granted
hereby are not transferable until and unless they become vested in accordance
with this Agreement. The terms of this Agreement shall be binding
upon the executors, administrators, heirs, successors and assigns of the
Grantee. Any attempt to effect a Transfer of any shares of Restricted
Stock prior to the date on which the shares of Restricted Stock become vested
shall be void ab
initio. For purposes of this Agreement, “Transfer” shall mean
any sale, transfer, encumbrance, gift, donation, assignment, pledge,
hypothecation, or other disposition, whether similar or dissimilar to those
previously enumerated, whether voluntary or involuntary, and including, but not
limited to, any disposition by operation of law, by court order, by judicial
process, or by foreclosure, levy or attachment.
7. Tax Withholding
Obligations.
(a) The
Company shall withhold a number of shares of Common Stock (rounded up) otherwise
deliverable to the Grantee having a Fair Market Value sufficient to satisfy the
statutory minimum of all or part of the Grantee’s estimated total federal, state
and local tax obligations associated with the award or vesting of the Restricted
Stock; provided,
however, the Grantee may elect, by providing the Company with at least
two weeks prior notice, to satisfy such tax withholding obligations by
depositing with the Company an amount of cash equal to the amount determined by
the Company to be required with respect to any withholding taxes, FICA
contributions or the like under federal, state or local statute, ordinance rule
or regulation in connection with the award or vesting of the Restricted
Stock. Alternatively, the Company may, in its sole discretion and to
the extent permitted by law, deduct from any payment of any kind otherwise due
to the Grantee any federal, state or local taxes of any kind required by law to
be withheld with respect to the Restricted Stock.
(b) Tax
consequences on the Grantee (including without limitation federal, state, local
and foreign income tax consequences) with respect to the Restricted Stock
(including
- 3
-
without
limitation the grant, vesting and/or forfeiture thereof) are the sole
responsibility of the Grantee. The Grantee shall consult with his or
her own personal accountant(s) and/or tax advisor(s) regarding these matters,
the making of a Section 83(b) election and the Grantee’s filing, withholding and
payment (or tax liability) obligations.
8. Amendment, Modification and
Assignment; Non-Transferability. This Agreement may only be
modified or amended in a writing signed by the parties hereto. No
promises, assurances, commitments, agreements, undertakings or representations,
whether oral, written, electronic or otherwise, and whether express or implied,
with respect to the subject matter hereof, have been made by either party which
are not set forth expressly in this Agreement. Unless otherwise
consented to in writing by the Company, in its sole discretion, this Agreement
(and Grantee’s rights hereunder) may not be assigned, and the obligations of
Grantee hereunder may not be delegated, in whole or in part. The
rights and obligations created hereunder shall be binding on the Grantee and his
heirs and legal representatives and on the successors and assigns of the
Company.
9. Complete
Agreement. This Agreement (together with the Employment
Agreement and those agreements and documents expressly referred to herein, for
the purposes referred to herein) embody the complete and entire agreement and
understanding between the parties with respect to the subject matter hereof, and
supersede any and all prior promises, assurances, commitments, agreements,
undertakings or representations, whether oral, written, electronic or otherwise,
and whether express or implied, which may relate to the subject matter hereof in
any way.
10. Definitions.
i. “Board”
means the Board of Directors of the Company.
ii. “Cause”
shall have such meaning as otherwise set forth in the Employment Agreement
dated April 1, 2008 between the Grantee, the Company and Comprehensive
Health Management, Inc., a Florida corporation (the “Employment
Agreement”).
iii. “Change in
Control” shall have such meaning as otherwise set forth in the
Employment Agreement.
iv. “Committee”
means the Compensation Committee of the Board.
v. “Common
Stock” means the Common Stock, par value $.01 per share, of the Company,
and any other shares into which such stock may be changed by reason of a
recapitalization, reorganization, merger, consolidation or any other change in
the corporate structure or capital stock of the Company.
vi. “Disability” shall have
such meaning as otherwise set forth in the Employment Agreement.
vii. “Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
- 4
-
viii. “Fair Market
Value” of a share of Common Stock means, as of the date in question,
the officially-quoted closing selling price of the stock (or if no selling price
is quoted, the bid price) on the principal securities exchange on which the
Common Stock is then listed for trading (the New York Stock Exchange) or
interdealer quotation system (the “Market”) for the applicable
trading day or, if the Common Stock is not then listed or quoted in the Market,
the Fair Market Value shall be the fair value of the Common Stock determined in
good faith by the Board.
ix. “Good
Reason” shall have such meaning as otherwise set forth in the Employment
Agreement.
xii. “Subsidiary”
means a corporation or other entity of which outstanding shares or ownership
interests representing 50% or more of the combined voting power of such
corporation or other entity entitled to elect the management thereof, or such
lesser percentage as may be approved by the Committee, are owned directly or
indirectly by the Company.
11. Requirements of
Law.
(a) The
Company shall in no event be obligated to register any securities covered hereby
pursuant to the Securities Act of 1933, as amended (the “1933
Act”).
(b) Grantee
Representations. The Grantee hereby represents and warrants to
the Company that: (i) the Grantee understands and accepts that the
grant of Restricted Stock by the Company to the Grantee is intended to be exempt
from registration under the 1933 Act by virtue of Section 4(2) of the 1933 Act;
(ii) the Grantee understands and accepts that the grant of Restricted Stock by
the Company to the Grantee is intended to be exempt from registration under the
securities laws of the state or states in which the grant of such Restricted
Stock is deemed to be made, by virtue of transactional exemptions set forth
therein; (iii) the shares of Restricted Stock of the Company acquired by the
Grantee hereunder are being acquired solely for his own account, for investment
purposes only and not with a view to, or for sale in connection with, any
distribution (as such term is used in Section 2(11) of the 0000 Xxx) of such
shares of Restricted Stock nor with the present intention of distributing or
selling any of such shares of Restricted Stock; (iv) the Grantee has made a
detailed inquiry concerning the Company and its business and services, officers
and personnel, including the ongoing governmental investigations and the
investigation by special committee of the Board (“Special Committee”); (v) the
Company has made available to the Grantee, or such Grantee has had access to,
any and all information, financial or otherwise, concerning the Company and its
businesses and services, officers and personnel (including information regarding
the ongoing investigations of the Company by certain federal and state agencies
and other regulatory bodies, as well as related private party proceedings, the
Special Committee investigation and the Company’s ongoing response thereto);
(vi) the Grantee has such knowledge and experience in financial and business
matters in order to evaluate the merits and risks of investment in the shares of
Restricted Stock of the Company and to make an informed investment decision with
respect thereto; (vii) the Grantee is an “accredited investor” as defined in
Regulation D promulgated under the 1933 Act; and (viii) the Grantee can bear a
complete loss of the value of the shares of Restricted Stock and is able to bear
the economic risks of holding the Restricted Stock for an indefinite
period. The Grantee also understands that his shares of Restricted
Stock have not been registered under the 1933 Act or
- 5
-
any
applicable state securities laws and regulations and that such shares of
Restricted Stock cannot be transferred or sold unless subsequently registered
under the 1933 Act, unless an exemption from such registration is available, and
any applicable state securities laws and regulations. The Grantee
further acknowledges that if an exemption from registration is available, it may
be conditioned on various requirements including, but not limited to, the time
and manner of sale, the holding period for the shares of Restricted Stock, and
on information and other requirements relating to the Company which are outside
of the Grantee’s control.
12. Miscellaneous.
(a) No Right to Continued
Employment or Service. This Agreement and the grant of
Restricted Stock hereunder shall not confer, or be construed to confer, upon the
Grantee any right to employment or service, or continued employment or service,
with the Company or any Subsidiary.
(b) No Limit on Other
Compensation
Arrangements. Nothing contained in this Agreement shall
preclude the Company or any Subsidiary from adopting or continuing in effect
other or additional compensation plans, agreements or arrangements, and any such
plans, agreements and arrangements may be either generally applicable or
applicable only in specific cases or to specific persons.
(c) Severability. If
any term or provision of this Agreement is or becomes or is deemed to be
invalid, illegal or unenforceable in any jurisdiction or under any applicable
law, rule or regulation, then such provision shall be construed or deemed
amended to conform to applicable law (or if such provision cannot be so
construed or deemed amended without materially altering the purpose or intent of
this Agreement and the grant of Restricted Stock hereunder, such provision shall
be stricken as to such jurisdiction and the remainder of this Agreement and the
award hereunder shall remain in full force and effect).
(d) No Trust or Fund
Created. Neither this Agreement nor the grant of Restricted
Stock hereunder shall create or be construed to create a trust or separate fund
of any kind or a fiduciary relationship between the Company or any Subsidiary
and the Grantee or any other person. To the extent that the Grantee
or any other person acquires a right to receive payments from the Company or any
Subsidiary pursuant to this Agreement, such right shall be no greater than the
right of any unsecured general creditor of the Company.
(e) Electronic Delivery and
Signatures. Grantee
hereby consents and agrees to electronic delivery of any proxy materials, annual
reports and other related documents. If the Company establishes
procedures for an electronic signature system for delivery and acceptance of
documents, Grantee hereby consents to such procedures and agrees that his or her
electronic signature is the same as, and shall have the same force and effect
as, his or her manual signature. Grantee consents and agrees that any
such procedures and delivery may be effected by a third party engaged by the
Company to provide administrative services related to the Restricted
Stock.
(f) Law
Governing. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Delaware
(without reference to the conflict of laws rules or principles
thereof).
- 6
-
(g) Interpretation. The
Grantee accepts the Restricted Stock subject to all of the terms, provisions and
restrictions of this Agreement. The undersigned Grantee hereby
accepts as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under this Agreement.
(h) Headings. Section,
paragraph and other headings and captions are provided solely as a convenience
to facilitate reference. Such headings and captions shall not be
deemed in any way material or relevant to the construction, meaning or
interpretation of this Agreement or any term or provision hereof.
(i) 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 0000 Xxxxxxxxx Xxxx, Xxx Two, Xxxxx, Xxxxxxx 00000,
or if the Company should move its principal office, to such principal office,
and, in the case of the Grantee, to the Grantee’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.
(j) Non-Waiver of
Breach. The waiver by any party hereto of the other party’s
prompt and complete performance, or breach or violation, of any term or
provision of this Agreement shall be effected solely in a writing signed by such
party, and shall not operate nor be construed as a waiver of any subsequent
breach or violation, and the waiver by any party hereto to exercise any right or
remedy which he or it may possess shall not operate nor be construed as the
waiver of such right or remedy by such party, or as a bar to the exercise of
such right or remedy by such party, upon the occurrence of any subsequent breach
or violation.
(k) Counterparts. This
Agreement may be executed in two or more separate counterparts, each of which
shall be an original, and all of which together shall constitute one and the
same agreement.
* * * * *
* * *
IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
executed this Agreement as of the date first written above.
|
|
|||||
| By: /s/ Xxxxx Xxxxxxxxx | |||||
|
Name:
Xxxxx Xxxxxxxxx
|
|||||
|
Title:
President & CEO
|
|||||
- 7
-
Grantee
hereby accepts this Agreement subject to all of the terms and provisions
thereof. Grantee has reviewed this Agreement in its entirety, has had
an opportunity to obtain the advice of counsel prior to executing this
Agreement, and fully understands all provisions of this Agreement.
|
GRANTEE:
|
|||||
| By: /s/ Xxxxxx X. X’Xxxx III | |||||
|
Xxxxxx
X. X’Xxxx III
|
|||||
|
|
|||||
- 8
-
