Coventry Health Care, Inc. (Coventry) Summary of Non-Employee Directors Compensation
Exhibit 10.12
Coventry Health Care, Inc. (“Coventry”)
Summary of Non-Employee Directors’ Compensation
The following table summarizes the components and amounts of the compensation to be paid to eligible non-employee directors for their services in 2009.
| 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 | Chair of Board | $ | 125,000 | * |
|
| Lead Director |
| 10,000 |
|
|
| Chair of Audit Committee |
| 15,000 |
|
|
| 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) |
|
|
* Annual retainer established for the Chairman of the Board. Allen F. Wise, our Chairman of the Board, became our Chief Executive Officer effective January 30, 2009. In light of this, his compensation for 2009 for his services as both a director and executive is currently under discussion and his compensation for board services will be appropriate for that of an employee director.
1 Any non-employee directors who become eligible to participate in the Plan after January 1 will receive a pro rata portion of the Annual Compensation.
Exhibit 10.12
Subject to the terms of the Plan, 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 |
| 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 |
_________________________
2 Value of stock options, restricted stock awards and stock units determined in accordance with SFAS 123R.
3 limit may be waived with the approval of the Chairman of the Compensation Committee.
4 cash will be credited quarterly with interest based on the Company’s borrowing rate set at the beginning of each year (the 2008 rate is approximately 5.71%).
