WELLCARE HEALTH PLANS, INC. RESTRICTED STOCK AGREEMENT FOR THOMAS TRAN
Exhibit 10.3
2004
EQUITY INCENTIVE PLAN
FOR
XXXXXX
XXXX
This RESTRICTED STOCK AGREEMENT
(the “Agreement”)
is made and entered into effective as of __________ ___, 2008, by and
between WellCare Health Plans, Inc., a Delaware corporation (the “Company”),
and Xxxxxx Xxxx (the “Grantee”).
RECITALS
In consideration of services to be
rendered by the Grantee and to provide 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; and
The Restricted Stock is granted
pursuant to the WellCare Health Plans, Inc. 2004 Equity Incentive Plan (the
“Plan”)
which is incorporated herein for all purposes. The Grantee 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. Award of Restricted
Stock. The Company hereby grants, on the date set forth above
(the “Date
of Grant”), to the Grantee, 50,000 shares of common stock, par value $.01
per share, of the Company (collectively, the “Restricted
Stock”), which Restricted Stock is and shall be subject to the terms,
provisions and restrictions set forth in this Agreement and in the
Plan. As a condition to entering into this Agreement, and as a
condition to the issuance of the Restricted Stock (or any other securities of
the Company), the Grantee agrees to be bound by all of the terms and conditions
herein and in the Plan. The purchase price per share of Restricted
Stock is $.01 per share (the par value of a share of common stock of the
Company), which shall be paid in cash within ten days of the Date of
Grant.
2. Vesting of Restricted
Stock.
(a) Except
as otherwise provided in Section 3 hereof, 25% of Restricted Stock shall become
vested on each anniversary of the Date of Grant (each such date being a “Vesting Date”),
provided that the
Grantee’s employment with the Company, Comprehensive Health Management, Inc.
(“CHMI”)
or any other Subsidiary continues through and on the applicable Vesting
Date.
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(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
Services.
(a) If
the Grantees ceases to be an officer or employee of the Company, CHMI and any
other Subsidiary (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
the foregoing, if the Grantee ceases to be an officer or employee of the
Company, CHMI or any other Subsidiary, and the Grantee’s employment was
terminated (i) by the Company, CHMI or any other Subsidiary without Cause, as
defined in the Employment Agreement dated as of July 21, 2008 among the Grantee,
the Company and CHMI (the “Employment
Agreement”) or (ii) by the Grantee for Good Reason, as defined in the
Employment Agreement, in either case, within twelve months after there is a
Change in Control of the Company, as defined in Section 2(c) of the Plan, then
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, CHMI or any other Subsidiary is terminated on
account of the Grantee’s death or Disability, as defined in the Employment
Agreement, 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 but subject to the provisions of
the Plan, 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 include a restrictive legend on any stock
certificates evidencing shares of Restricted Stock issued under the Plan or
under this Agreement or, in the case of uncertificated shares of Restricted
Stock issued thereunder, on the required notices described in Section 151(f) of
the Delaware General Corporation Law (the “DGCL”).
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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 of the Company, 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
of the Company upon any merger, consolidation, reorganization, liquidation or
dissolution, stock split-up, stock dividend or recapitalization undertaken by
the Company.
(b) If
at any time while this Agreement is in effect (or shares of Restricted Stock
granted hereunder shall be or remain unvested while Grantee’s employment
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 change, in the number of shares of
Restricted Stock then subject to this Agreement. If any such
adjustment shall result in a fractional share, such fraction shall be
disregarded.
(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 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 are not
transferable until and unless they become vested in accordance with this
Agreement, provided, that in no event may shares of Restricted Stock be
transferred unless there is an available exemption under federal and applicable
state securities laws and regulations (as determined in the sole and absolute
discretion of the Company). 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.
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7. Tax Withholding
Obligations.
(a) Subject
to the availability of “surplus” within the meaning of the DGCL, the Company
shall withhold a number of shares of the Company’s common stock (rounded down)
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 and absolute 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. In the event there is no available surplus (as determined in
the sole and absolute discretion of the Committee), the Grantee shall be
required to satisfy any required tax withholding obligations by making a cash
payment to the Company. In the event there is no available surplus
and the Grantee does not make a cash payment to the Company to satisfy any
required tax withholding obligations within one (1) business day of a request by
the Company to do so, the shares of Restricted Stock that otherwise would have
vested shall be forfeited.
(b) Tax
consequences on the Grantee (including without limitation federal, state, local
and foreign income tax consequences) with respect to the Restricted Stock
(including 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. 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 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.
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10. Requirements of
Law.
(a) The
Company shall in no event be obligated to register for resale 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
which the Grantee has requested or deemed relevant (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 any applicable state securities laws and regulations and that
such shares of Restricted Stock cannot be transferred or sold unless an
exemption from registration under federal and any applicable state securities
laws and regulations is available. 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.
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11. Miscellaneous.
(a) No Right to Continued
Employment. 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 continued employment, 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 Plan documents, proxy materials, annual reports and other related
documents. If the Company establishes procedures for an electronic
signature system for delivery and acceptance of Plan documents (including
documents relating to any programs adopted under the Plan), 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 Plan, including any program adopted under
the Plan.
(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).
(g) Interpretation.
The Grantee accepts the Restricted Stock subject to all of the terms, provisions
and restrictions of this Agreement and the Plan. The undersigned
Grantee hereby accepts as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under this
Agreement.
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(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, 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.
(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.
12. Company Right to
Recover.
If it is ever determined by the Board
of Directors, in its sole and absolute discretion, that actions by the Grantee
have constituted: (i) wrongdoing that contributed to (A) any material
misstatement or omission from any report or statement filed by the Company with
the U.S. Securities and Exchange Commission or (B) any statement, certification,
cost report, claim for payment, or other filing made under Medicare or
Medicaid that was false, fraudulent, or for an item or service not provided as
claimed; (ii) gross misconduct; (iii) breach of fiduciary duty to the Company or
any Subsidiary; or (iv) fraud, then the Restricted Stock, including any
shares of Restricted Stock that previously vested, shall be immediately
forfeited and thereupon the Restricted Stock, including any shares of Restricted
Stock that previously vested, shall be cancelled; provided, further, that if the
vested shares have been sold prior to the Board of Director’s determination, the
Grantee shall be required to pay to the Company an amount equal to the amount
realized on such sale. In addition, the Restricted Stock, including any shares
of Restricted Stock that previously vested and gains resulting from the sale of
such vested shares, shall be subject to forfeiture in accordance with the
Company’s standard policies relating to such forfeitures and clawbacks, as such
policies are in effect at the time of grant of the Restricted
Stock.
* * * * *
* * *
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IN WITNESS WHEREOF, the parties hereto,
intending to be legally bound, have executed this Agreement as of the date first
written above.
By:
_____________________________
Name: Xxxxx X. Xxxxxxxxx
Title: President and Chief Executive
Officer
Grantee 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 Agreement subject to all of the
terms and provisions thereof. Grantee has reviewed the Plan and this
Agreement in their 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: __________________________________
Xxxxxx Xxxx
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