WELLCARE HEALTH PLANS, INC. NON-QUALIFIED STOCK OPTION AGREEMENT
Exhibit 10.4
[Associate Version]
2004
EQUITY INCENTIVE PLAN
This NON-QUALIFIED STOCK OPTION
AGREEMENT (the “Agreement”)
is made and entered into effective as of _________________, by and between
WellCare Health Plans, Inc., a Delaware corporation (the “Company”),
and ____________________ (the “Optionee”).
RECITALS
In consideration of services to be
rendered by the Optionee as an employee of or service provider to the Company or
any of its Subsidiaries and to provide incentive to the Optionee to remain with
the Company or any of its Subsidiaries, it is in the best interests of the
Company to make a grant of an Option to Option in accordance with the terms of
this Agreement; and
The Option is granted pursuant to the
WellCare Health Plans, Inc. 2004 Equity Incentive Plan (the “Plan”)
which is incorporated herein for all purposes. The Optionee hereby
acknowledges receipt of a copy of the Plan. Unless otherwise provided
herein, terms used herein that are defined in the Plan and not defined herein
shall have the meanings attributable thereto in the Plan.
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. Grant of
Option. The Company hereby grants, on the date set forth
above, to Optionee, an option (the “Option”)
to purchase up to _________ shares of the Company’s Common Stock, $0.01 par
value per share (the “Shares”),
at an exercise price per share equal to $_______ (the “Option
Price”). The Option shall be subject to the terms and
conditions set forth in this Agreement and in the Plan. The Option is
a Non-Qualified Stock Option, and not an Incentive Stock Option. As a
condition to entering into this Agreement, and as a condition to the issuance of
the Option, the Optionee agrees to be bound by all of the terms and conditions
herein and in the Plan. 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.
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Percentage
of Shares
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Vesting
Date
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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 portion of the Option that was
exercisable on the date of such cessation shall remain so for a period of 180
days from the date of such death or Disability, but in no event after the
expiration date provided in Section 7(a) below; provided that the Option shall
immediately terminate and become null and void in the event that the Optionee
engages in Competition during such 180 day period, unless the Optionee has
received written consent to do so from the Company.
(b) Retirement. 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 Retirement,
the portion of the Option that was exercisable on the date of such cessation
shall remain so for a period of 90 days from the date of such Retirement, but in
no event after the expiration date provided in Section 7(a) below; provided that
the Option shall immediately terminate and become null and void in the event
that the Optionee engages in Competition during such 90 day period, unless the
Optionee has received written consent to do so from the Company.
(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, Retirement or Cause, the portion of the
Option that was exercisable on the date of such cessation shall remain so for a
period of 90 days after the date of such cessation, but in no event after the
expiration date provided in Section 7(a) below; provided that the Option shall
immediately terminate in the event that the Optionee engages in Competition
during such 90 day period, unless the Optionee has received written consent to
do so from the Company.
(e) Termination of Service
Following a Change in Control. Notwithstanding the foregoing,
if the Optionee ceases to be an officer or employee of, or to perform other
services for, the Company or any Subsidiary, and the Optionee’s service was
terminated (i) by the Company without Cause, (ii) by reason of the Optionee’s
death, Disability, or Retirement, or (iii) by the Optionee for Good Reason,
within twelve months after there is a Change in Control of the Company, as
defined in Section 2(c) of the Plan, then the Option shall be immediately fully
exercisable and shall remain so for the applicable period following the
Optionee’s termination of service, as described in this Section 6.
(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.
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 seventh 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. Rights of with Respect to the
Option.
(a) 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.
(b) If
at any time while this Agreement is in effect (or the Option granted hereunder
shall be or remain unvested while Optionee’s employment or provision of services
continues and has not yet terminated or ceased for any reason), there shall be
any increase or decrease in the number of issued and outstanding shares of the
Company through the declaration of a stock dividend or through any
recapitalization resulting in a stock split-up, combination or exchange of such
shares, then and in that event, the Committee shall make any adjustments it
deems fair and appropriate, in view of such increase or decrease, in the number
of Shares and to the Option Price then subject to this Agreement. If
any such adjustment shall result in a fractional share, such fraction shall be
disregarded and no share will be issued in connection with such
fraction.
(c) In
the event of any merger, consolidation or other reorganization in which the
Company is not the surviving or continuing corporation or in which a Change in
Control is to occur, all of the Company’s obligations regarding the Option
shall, on such terms as may be approved by the Committee prior to such event, be
assumed by the surviving or continuing corporation or canceled in exchange for
property (including cash).
(d) Notwithstanding
any term or provision of this Agreement to the contrary, the existence of this
Agreement, or the Option 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
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 Option and/or that would include, have or possess other rights,
benefits and/or preferences superior to those that the Option 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).
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 States
mail, registered, postage prepaid, and addressed, in the case of the Company, to
the Company’s Secretary at 0000 Xxxxxxxxx Xxxx, Xxxxxxxxxxx Xxx, 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.
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.
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(a)
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The
Optionee will not recognize any income on receipt of the
Option.
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(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 parties hereto,
intending to be legally bound, have executed this Agreement as of the date first
written above.
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WELLCARE
HEALTH PLANS, INC
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By:
______________________________
Name:
Xxxxx X. Xxxxxxxxx
Title:
President and Chief Executive
Officer
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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.
OPTIONEE:
By: ___________________________
[Insert
name of Optionee]
