Coventry Health Care, Inc. (Coventry)

The following table summarizes the components and amounts of the compensation to be paid to eligible non-employee directors for their services in 2011 under the Compensation Program for Non-Employee Directors (the “Program”).

Compensation Components		Board or Committee		Compensation
Annual Compensation for Attendance at Regular Board Meetings1 (paid/vested/deferred quarterly in arrears in accordance with the Plan and includes compensation for five regularly scheduled Board meetings)		Board		$	225,000
Annual Committee Chair Retainer (Paid annually in arrears)		Chair of Board		$	125,000	2
		Lead Director			25,000
		Chair of Audit Committee			15,000
		Chair of Comp Committee			10,000
		Chair of N/CG Committee			10,000
Attendance at In-Person Special Meeting		Board		$	3,000
		Audit Committee			3,000
		Comp Committee			3,000
		N/CG Committee			3,000
Participation in a Special Telephonic Meeting		Board		$	1,000
		Audit Committee			1,000
		Comp Committee			1,000
		N/CG Committee			1,000
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%.  Payment in the form of cash is limited to 50% of the total annual compensation (i.e., $112,500), unless a waiver is approved by the Chairman of the Compensation Committee.  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” 3		Maximum Allocation		Payment “Current”		Payment “Deferred”		Vesting
Cash		50%4		Paid at the end of each quarter		Credited at the end of each quarter5		None
Restricted Stock/ Stock Units		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

 

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