FIRST HEALTH GROUP CORP. Downers Grove, IllinoisMerger Agreement • October 19th, 2004 • First Health Group Corp • Hospital & medical service plans
As you have been advised, First Health Group Corp. (“First Health”) is contemplating entering into a merger agreement with a subsidiary of Coventry Health Care, Inc. (“Coventry”), pursuant to which First Health would merge with such subsidiary and become a subsidiary of Coventry and each holder of common stock of First Health will receive shares of Coventry common stock and cash, as has been orally described to you when we provided you this letter (such consideration or any other price paid by Coventry in the merger being the “Deal Consideration”). In connection with such merger, Coventry and First Health intend to offer to holders of First Health stock options the election to have their options accelerated and cashed out, instead of being rolled over into options of Coventry pursuant to the merger agreement without additional vesting. The following briefly describes each of these treatments:
