WELLCARE HEALTH PLANS, INC. AMENDED AND RESTATED NON-QUALIFIED STOCK OPTION AGREEMENT FOR CHARLES G. BERG Agreement
Back to Form 10-Q
Exhibit
10.3
2004
EQUITY INCENTIVE PLAN
AMENDED
AND RESTATED NON-QUALIFIED STOCK OPTION AGREEMENT
FOR
XXXXXXX
X. XXXX
Agreement
WHEREAS, on January 25, 2008, WellCare
Health Plans, Inc. (the “Company”) granted to Xxxxxxx X. Xxxx (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.
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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.
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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.
(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.
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(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.
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(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:
0000
Xxxxxxxxx Xxxx
Renaissance
Two
Tampa, FL 33634
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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.
* * * * *
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IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the 10th day
of August, 2009.
COMPANY:
By: /s/
Xxxxxx X. X’Xxxx
XXX
Name:
Xxxxxx X. X’Xxxx XXX
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/ Xxxxxxx
Xxxx
|
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