NON-QUALIFIED STOCK OPTION AGREEMENT FOR HEATH SCHIESSER Agreement
Exhibit
10.8
2004
EQUITY INCENTIVE PLAN
FOR
XXXXX
XXXXXXXXX
Agreement
1.
Grant
of Option. WellCare Health Plans, Inc. (the “Company”) hereby
grants, as of January 25, 2008, to Xxxxx Xxxxxxxxx (the
“Optionee”) an option (the “Option”) to purchase up to 500,000 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.
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 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. 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 on
the date of such cessation and shall remain exercisable for a period of one
year
from the date of such death or Disability, but in no event after 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 vesting
of the
Option shall be accelerated such that the Options are vested as of the date
of
the Optionee’s termination of employment to the same extent that the Option
would have vested had the Optionee’s employment continued for twenty-four months
(or, if the date of termination occurs on or after January 25, 2009, twelve
months) after the date of termination and such vested Options shall remain
so
for a period of one year from the date of such termination, but in no event
after the expiration date provided in Section 7(a) below.
(c)
Intentionally Omitted.
(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, Without Cause or
for
Good Reason, the portion of the Option that was exercisable on the date of
such
cessation shall remain so for a period of one year 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 vested
and fully exercisable immediately prior to such Change in Control and shall
remain so for a period of one year from the date of the Change in Control
but in
no event after 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
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,”“Disability”and
“Change
in Control” shall have
such meaning as otherwise set forth in the Employment Agreement dated
January
25, 2008 between the Grantee, the Company and Comprehensive Health Management,
Inc., a Floridacorporation.
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
tenth
anniversary of the date as of which 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 hereby 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. 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. If and to the extent
that this Agreement conflicts or is inconsistent with the terms, conditions
and
provisions of the Plan, the Plan shall control, and this Agreement shall
be
deemed to be modified
accordingly. The Optionee accepts the Option subject to all the terms and
provisions of the Plan and this Agreement. 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
Statesmail,
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
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.
* * * * *
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/ Xxxx
Xxxxxxxxxx
Name:
Xxxx Xxxxxxxxxx
Title:
Chairman of the Compensation Committee
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Optionee
acknowledges receipt of a copy of the Plan and represents that he or she
is
familiar with the terms and provisions thereof, and hereby accepts this Option
subject to all of the terms and provisions thereof. 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/ Xxxxx
Xxxxxxxxx
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