NON-QUALIFIED STOCK OPTION AGREEMENT FOR CHARLES G. BERG Agreement
Exhibit
10.9
2004
EQUITY INCENTIVE PLAN
FOR
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Agreement
1.
Grant
of Option. WellCare Health Plans, Inc. (the “Company”) has
granted on January 25, 2008, to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ (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 (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.
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.
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.
In the event the Optionee elects to pay the Option Price pursuant to clause
(b)
above, (i) only a whole number of share(s) of Common Stock (and not fractional
shares of Common Stock) may be tendered in payment, (ii) the Optionee must
present evidence acceptable to the Company that the Optionee has owned any
such
shares of Common Stock tendered in payment of the Option Price (and that
such
tendered shares of Common Stock have not been subject to any substantial
risk of
forfeiture) for at least six months prior to the date of exercise, and (iii)
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, (i) only a whole number of Share(s) (and not fractional Shares) may
be
withheld in payment and (ii) the Optionee must present evidence acceptable
to
the Company that the Optionee has owned a number of shares of Common Stock
at
least equal to the number of Shares to be withheld in payment of the Option
Price (and that such owned shares of Common Stock have not been subject to
any
substantial risk of forfeiture) for at least six months prior to the date
of
exercise. 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.
(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 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
for
Cause, the Option shall expire and be forfeited immediately upon such
termination, whether or not then exercisable.
(d)
Other
Termination of Service. If the Optionee ceases to be an
officer or employee of, or to perform other services for, the Company or
any
Subsidiary for any reason other than death, Disability, by the Company without
Cause, for Good Reason or Cause, the portion of the Option that was exercisable
on the date of such cessation shall remain so for a period of ninety days
after
the date of such cessation, but in no event after 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
Optionfirst
wouldno
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
themeaningsset
forth in
the employment
agreement between the Grantee and the Company dated
January
25, 2008 (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
the tenthanniversary
of
the date onwhich
the Option
is granted.
(b)
Cancellation
by the Committee. Notwithstanding
anything to the contrary, 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.
(c)
Corporate
Transactions. Notwithstanding
anything
to the
contrary, to the extent not previously exercised, the Option shall terminate
immediately in the event of the liquidation or dissolution of the
Company.
8.
Transferability. Unless
otherwise determined by the Committee, the Option granted herebyis
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
/ Provisions
of Plan Control.
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
Agreementshall
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:
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▇▇▇▇
Renaissance
Two
Tampa,
FL 33634
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
basisfor
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.
*
* * *
*
IN
WITNESS WHEREOF, the undersigned have
executed this Agreement as of the 25thday
of January,
2008.
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COMPANY:
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By: /s/ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Name:
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Title:
Chairman
of the Compensation
Committee
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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.
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Dated: January
25, 2008
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OPTIONEE:
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/s/ ▇▇▇▇▇▇▇
▇. ▇▇▇▇
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