Ex-10.12 Summary of Non-Employee Directors Compensation
Exhibit 10.12
Coventry Health Care, Inc. (“Coventry”)
Summary of Director Compensation
Non-employee directors of Coventry are compensated pursuant to the 2006 Directors Compensation Program for non-employee directors, previously filed as Exhibit 10.13 to Coventry Current Report on Form 8-K, filed on November 10, 2005 (the “Program”), which authorizes Coventry to make certain compensatory awards to non-employee directors pursuant to Coventry’s 2004 Incentive Plan and allows non-employee directors to defer portions of their compensation in accordance with Coventry’s Deferred Compensation Plan for Non-Employee Directors. The following table summarizes the components and amounts of the compensation package paid offered to eligible non-employee directors in 2006 and 2007.
| Compensation Components | Board or Committee | Compensation |
| Annual Compensation for Attendance at Regular Board Meetings1 (paid/vested/deferred quarterly in arrears in accordance with the Program and includes compensation for five regularly scheduled Board meetings) | Board | $ 225,000 |
| Annual Committee Chair Retainer | Lead Director | $ 10,000 |
|
| Chair of Audit Committee | 10,000 |
|
| Chair of Comp Committee | 10,000 |
|
| Chair of N/CG Committee | 5,000 |
| Attendance at In-Person Special Meeting | Board | $ 3,000 |
|
| Audit Committee | 3,000 |
|
| Comp Committee | 3,000 |
|
| N/CG Committee | 1,500 |
| Participation in a Special Telephonic Meeting | Board | $ 1,000 |
|
| Audit Committee | 1,000 |
|
| Comp Committee | 1,000 |
|
| N/CG Committee | 500 |
| Reimbursement of Reasonable Travel Expenses | All Directors | Actual Costs |
| New Director Stock Option Grant | New Director | 10,000 options to acquire shares which vest in equal amounts over four years |
| Health and Basic Life Insurance Coverage | All Non-employee Directors | |
|
| (voluntary participation) |
Subject to the terms of the Program, non-employee directors may elect the form and the timing of their compensation on an individual basis as summarized in the table below. All elections of the form of payment must be made in multiples of 25%. The table below summarizes the forms of compensation each individual non-employee director may select as well as certain material terms related to those forms of compensation.
| Payment “Form” 2 | Maximum Allocation | Payment “Current” | Payment “Deferred” | Vesting |
| Cash | 50%3 | Paid at the end of each quarter | Credited at the end of each quarter4 | None |
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1 Any non-employee directors who become eligible to participate in the Program after January 1 will receive a pro rata portion of the Annual Compensation.
2 Value of stock options, restricted stock awards and stock units determined in accordance with SFAS 123R.
3 Percentage limit may be waived with the approval of the Chairman of the Compensation Committee
4 Deferred cash will be credited quarterly with interest based on the Company’s borrowing rate set at the beginning of each year (2005 rate is approximately 5%)
| Restricted Stock/ | 100% | Granted at beginning of year | Stock Units deferred until termination of service or unforeseeable emergency
| Quarterly over the year of service |
| Stock Options | 100% | Granted at beginning of year | Exercisable when vested and subject to a 10 year term | Quarterly over the year of service |
