Exhibit 10.2
WELLCARE HEALTH PLANS,
INC.
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION
AGREEMENT (this “Agreement”) is entered into as of
May 8 , 2009, and effective as of January 25, 2008
(the “Effective Date”), by and between WellCare Health
Plans, Inc., a Delaware corporation (the “Company”),
and Heath Schiesser, President and Chief Executive Officer of the
Company (“Indemnitee”). Capitalized terms
used and not otherwise defined in the section or provision of this
Agreement in which they are used have the meanings set forth in
Section 10 hereof.
RECITALS
A.
The Board of Directors of the Company has
determined that the increasing difficulty in attracting and
retaining qualified persons as directors and officers is
detrimental to the best interests of the Company’s
stockholders and that the Company should act to assure such persons
that there will be adequate insurance and indemnification against
risks of claims and actions against them arising out of their
service to and activities on behalf of the Company.
B.
Section 145 of the General Corporation Law
of the State of Delaware (the “DGCL”) empowers the
Company to indemnify and advance expenses to its officers,
directors, employees and agents by agreement and to indemnify and
advance expenses to persons who serve, at the request of the
Company, as directors, officers, employees, or agents of other
corporations or enterprises, and expressly provides that the
indemnification provided by Section 145 is not
exclusive.
C.
The Company has adopted
provisions in its Certificate of Incorporation providing for
mandatory indemnification of its officers and directors to the
fullest extent permitted by applicable law, subject to certain
limitations specified in the Certificate of Incorporation, and the
Company wishes to clarify and enhance the rights and obligations of
the Company and the Indemnitee with respect to indemnification and
advancement of expenses.
D.
To the extent that
Indemnitee previously has entered into an indemnification
or advancement of expenses agreement with the Company that remains
in full force and effect, including, without limitation, that
Affirmation and Undertaking of Officer of WellCare Health Plans,
Inc. executed by Indemnitee on December 17, 2007 (a “Previous
Agreement”), the Company desires that such Previous Agreement
shall govern the indemnification, advancement of expenses and other
related rights and obligations of Indemnitee and the Company with
respect to Proceedings (as defined below) that arose or may arise
from actual or alleged events, occurrences, acts or omissions
occurring prior to the Effective Date (regardless of whether such
Proceedings were or are initiated before, on or after the Effective
Date).
E.
Regardless of whether an Indemnitee has
entered into a Previous Agreement, the Company desires that this
Agreement shall govern the indemnification rights and obligations
of Indemnitee and the Company with respect to Proceedings
initiated on or after the Effective Date and arising out of
actual or alleged events, occurrences, acts or
omissions occurring on or after the Effective Date.
F.
The Company desires to attract and
retain the services of highly qualified individuals, such as
Indemnitee, to serve the Company and/or one or more of its
Subsidiaries and, in order to induce Indemnitee to provide or to
continue to provide services to the Company and/or one or more of
its Subsidiaries, wishes to provide for the indemnification and
advancing of expenses to Indemnitee to the maximum extent permitted
by law.
G.
In view of the considerations set
forth above, the Company desires that Indemnitee be entitled to
indemnification and advancement, subject to and in accordance with
the terms and conditions set forth herein.
NOW, THEREFORE, the Company
and Indemnitee hereby agree as follows:
1.
Indemnification and Advancement of Expenses
(a)
Indemnification for
Losses
To the fullest extent
permitted by applicable law and in a manner permitted by such law,
if Indemnitee is or was or becomes, a party to or is otherwise
involved in any Proceeding, or is or was threatened to be made a
party to or a participant in any such Proceeding, by reason of the
Indemnitee’s Corporate Status, or by reason of (or arising in
part out of) any actual or alleged event or occurrence related to
the Indemnitee’s Corporate Status, or by reason of any actual
or alleged act or omission on the part of Indemnitee taken or
omitted in or relating to the Indemnitee’s Corporate Status,
then the Company shall indemnify Indemnitee against any and all
Losses actually and reasonably incurred by the Indemnitee or on the
Indemnitee’s behalf in connection with such a Proceeding or
any claim, issue, or matter therein.
(b)
Indemnification for Expenses as a Witness
Notwithstanding anything in
this Agreement to the contrary, to the fullest extent permitted by
applicable law and in a manner permitted by such law, to the extent
that the Indemnitee, by reason of the
Indemnitee’s Corporate Status, is or was or
becomes, or is or was threatened to be made, a witness in any
Proceeding to which the Indemnitee is not a party, the Indemnitee
shall be indemnified against all Expenses actually and reasonably
incurred by the Indemnitee or on the Indemnitee’s
behalf in connection therewith.
(c)
Mandatory Payment of Expenses
Notwithstanding any other
provision of this Agreement to the contrary, to the extent that
Indemnitee has been successful on the merits or otherwise,
including, without limitation, the dismissal of an action without
prejudice, in defense of any Proceeding or in the defense of any
claim, issue or matter therein, Indemnitee shall be indemnified
against all Expenses incurred by Indemnitee in connection
therewith.
(d)
Procedure for Determination of Entitlement to
Indemnification
(i)
To obtain indemnification under this
Agreement, the Indemnitee shall submit to the Company a written
request for indemnification, including therein or therewith, except
to the extent previously provided to the Company in connection with
a request or requests for advancement pursuant to Section 1(e)
hereof, a statement or statements reasonably evidencing all Losses
incurred or paid by or on behalf of the Indemnitee and for which
indemnification is requested. The Secretary of the
Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that the
Indemnitee has requested indemnification.
(ii)
Upon written request by the Indemnitee for
indemnification pursuant to the first sentence of Section 1(d)(i)
hereof, if required by applicable law and to the extent not
otherwise provided pursuant to the terms of this Agreement, a
determination with respect to the Indemnitee’s entitlement to
indemnification shall be made in the specific case by the Reviewing
Party. If there has not been a Change in Control, or if
there has been a Change in Control which has been approved by a
majority of the directors of the Company who were directors
immediately prior to the Change in Control (the “Incumbent
Directors”), the Reviewing Party shall be selected by the
Board of Directors of the Company by a majority vote of the
Disinterested Directors, and if there has been a Change in Control
which has not been approved by a majority of the Incumbent
Directors, the Reviewing Party shall be Independent Legal
Counsel.
(iii)
Notice in writing of any determination as to the
Indemnitee’s entitlement to indemnification shall be
delivered to the Indemnitee promptly after such determination is
made, and if such determination of entitlement to indemnification
has been made by Independent Counsel, such determination shall be
set forth in a written opinion addressed to the Board of Directors,
and such notice to Indemnitee shall be accompanied by a copy of
such written opinion. If it is determined that the
Indemnitee is entitled to indemnification, then payment to the
Indemnitee of all amounts to which the Indemnitee is determined to
be entitled shall be made within thirty (30) days after such
determination. If it is determined that the Indemnitee
is not entitled to indemnification, then the written notice to the
Indemnitee (or, if such determination has been made by Independent
Counsel in a written opinion, the copy of such written opinion
delivered to the Indemnitee) shall disclose the basis upon which
such determination is based.
Notwithstanding
anything in this Agreement to the contrary, but subject to Section
8(b) hereof, if Indemnitee is or was or becomes a party to or is
otherwise involved in any Proceeding (including as a witness), or
is or was threatened to be made a party to or a participant
(including as a witness) in any such Proceeding, by reason of the
Indemnitee’s Corporate Status, or by reason of (or arising in
part out of) any actual or alleged event or occurrence related to
the Indemnitee’s Corporate Status, or by reason of any actual
or alleged act or omission on the part of Indemnitee taken or
omitted in or relating to the Indemnitee’s Corporate Status,
then the Company shall advance all Expenses actually and reasonably
incurred by or on behalf of the Indemnitee in connection with any
such Proceeding in advance of the final disposition of such
Proceeding within ten (10) calendar days after the receipt by the
Company of invoices presented to Indemnitee for such Expenses;
provided Indemnitee shall undertake to repay any Expenses advanced
if it shall ultimately be determined that the Indemnitee is not
entitled to be indemnified against such Expenses under this
Agreement or otherwise. Any advances and undertakings to
repay pursuant to this Section 3 shall be unsecured and interest
free.
2.
Remedies of Indemnitee
(a)
Adjudication of Entitlement to Indemnification or
Advancement
In the event
that (i) a determination is made by the Reviewing Party pursuant to
Section 1(d) of this Agreement that the Indemnitee is not entitled
to indemnification, (ii) advancement of Expenses is not timely made
pursuant to Section 2 of this Agreement, (iii) if the determination
of entitlement to indemnification is not to be made by Independent
Counsel pursuant to Section 1(d) hereof, no determination of
entitlement to indemnification shall have been made pursuant to
Section 1(d) within thirty (30) days after receipt by the Company
of the Indemnitee’s written request for indemnification, (iv)
if the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 1(d) hereof, no
determination of entitlement to indemnification shall have been
made pursuant to Section 1(d) hereof within sixty (60) days after
receipt by the Company of the Indemnitee’s written request
for indemnification, (v) payment of indemnification is not made
pursuant to Section 1(b) or Section 1(c) of this Agreement within
thirty (30) days after receipt by the Company of a written request
therefor, or (vi) payment of indemnification pursuant to Section
1(a) of this Agreement is not made within thirty (30) days after a
determination has been made pursuant to Section 1(d) that the
Indemnitee is entitled to indemnification, then the Indemnitee
shall be entitled to commence a proceeding in the Court of Chancery
of the State of Delaware (or other court of competent jurisdiction)
seeking to establish or enforce the Indemnitee’s entitlement
to such indemnification or advancement of Expenses, and the Company
hereby consents to service of process and to appear in any such
proceeding commenced in the Court of Chancery of the State of
Delaware. If a determination shall have been made by the Reviewing
Party pursuant to Section 1(d) of this Agreement that the
Indemnitee is not entitled to indemnification, any judicial
proceeding commenced pursuant to this Section 2(a) shall be
conducted in all respects as a de novo trial on the merits
and the Indemnitee shall not be prejudiced by reason of any adverse
determination by the Reviewing Party.
Indemnitee shall, as a
condition precedent to Indemnitee’s right to be indemnified
under this Agreement, provide the Company notice in writing as soon
as practicable of any Proceeding for which indemnification will or
could be sought under this Agreement. The failure of the
Indemnitee to so notify the Company shall not relieve the Company
of any obligation that it may have to the Indemnitee under this
Agreement or otherwise, except to the extent the Company is
materially prejudiced by such failure.
(c)
No Presumptions; Burden of Proof
(i) For
purposes of this Agreement, the termination of any Proceeding by
judgment, order, settlement (whether with or without court
approval) or conviction, or upon a plea of nolo contendre or its
equivalent, shall not create a presumption that Indemnitee did not
meet any particular standard of conduct or have any particular
belief or that a court has determined that indemnification is not
permitted by applicable law. In addition, neither the
failure of the Reviewing Party to have made a determination as to
whether Indemnitee has met any particular standard of conduct or
had any particular belief, nor an actual determination by the
Reviewing Party that Indemnitee has not met such standard of
conduct or did not have such belief, prior to the commencement of
legal proceedings by Indemnitee to secure a judicial determination
that Indemnitee should be indemnified under applicable law, shall
be a defense to Indemnitee’s claim or create a presumption
that Indemnitee has not met any particular standard of conduct or
did not have any particular belief.
(ii) In
connection with any determination by the Reviewing Party or the
Court of Chancery of the State of Delaware (or other court of
competent jurisdiction) as to whether Indemnitee is entitled to be
indemnified hereunder, the burden of proof shall be on the Company
to establish that Indemnitee is not so entitled.
If, at the time of the
receipt by the Company of a notice of a Proceeding pursuant to
Section 2(b) hereof, the Company has liability insurance in
effect which may cover such Proceeding, the Company shall give
prompt notice of the commencement of such Proceeding to the
insurers in accordance with the procedures set forth in the
respective policies. The Company shall thereafter take
all necessary or desirable action to cause such insurers to pay, on
behalf of Indemnitee, all amounts payable as a result of such
action, suit, proceeding, inquiry or investigation in accordance
with the terms of such policies.
3.
Scope; Nonexclusivity
It is understood that the
parties to this Agreement intend for this Agreement to be
interpreted and enforced so as to provide indemnification and
advancement of Expenses to Indemnitee to the fullest extent now or
hereafter permitted by law, subject only to the express exceptions
and limitations otherwise set forth in this
Agreement. In the event of any change after the date of
this Agreement in any applicable law, statute or rule which expands
the right of a member of the Board of Directors or an officer,
employee, agent or fiduciary of the Company or any Subsidiary, as
applicable, to receive indemnification from the Company, it is the
intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits afforded by such
change. In the event of any change in any applicable
law, statute or rule which narrows the right of a member of the
Board of Directors or an officer, employee, agent or fiduciary of
the Company or any Subsidiary, as applicable, to receive
indemnification from the Company, such change, to the extent not
otherwise required by such law, statute or rule to be applied to
this Agreement, shall have no effect on this Agreement or the
parties’ rights and obligations hereunder.
The indemnification and advancement of Expenses provided by
this Agreement shall be in addition to any rights to which
Indemnitee may be entitled under the certificate of incorporation,
bylaws, or similar organizational documents of the Company or any
Subsidiary, any agreement, any vote of stockholders or
disinterested directors, the General Corporation Law of the State
of Delaware, or otherwise. Notwithstanding anything in
this Section 3(b) to the contrary, to the extent the time periods
specified in Sections 1 and 2 hereof with respect to the time at
which the Indemnitee shall be entitled to seek an adjudication as
to the Indemnitee’s entitlement to indemnification or
advancement differ from similar time periods specified in the
Company’s Certificate of Incorporation or Bylaws, the time
periods set forth in Sections 1 and 2 hereof shall control and be
binding on the Indemnitee and the Company and shall be deemed a
waiver of any contrary right specified in the Company’s
Certificate of Incorporation or Bylaws.
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No
Duplication of Payments
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Except to the extent required
by applicable law, the Company shall not be liable under this
Agreement to make any payment to Indemnitee with respect to amounts
otherwise indemnifiable hereunder (or for which advancement is
otherwise provided hereunder) if and to the extent that the
Indemnitee has otherwise actually received such payment under any
insurance policy, contract, agreement, governing documents of the
Company or Another Enterprise, or otherwise. Nothing
hereunder is intended to affect any right of contribution of or
against the Company in the
