Exhibit 10.2
EXECUTION COPY
WELLCARE HEALTH PLANS, INC.
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION
AGREEMENT (this “Agreement”) is entered into as
of July 17, 2008, by and between WellCare Health Plans, Inc.,
a Delaware corporation (the “Company”), and
Thomas Tran,
(“Indemnitee”). Capitalized terms used
and not otherwise defined in this Agreement have the meanings
set forth in Section 10 hereof.
RECITALS
A. The
Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for the directors, officers,
employees, agents and fiduciaries of the Company and its
Subsidiaries, the significant increases in the cost of such
insurance and the general reductions in the coverage of such
insurance.
B. The
Company and Indemnitee further recognize the substantial
increase in corporate litigation in general, subjecting
directors, officers, employees, agents and fiduciaries to
expensive litigation risks at the same time as the
availability and coverage of liability insurance has been
severely limited.
C. Indemnitee
does not regard the current protection available as adequate
under the present circumstances, and Indemnitee and other
directors, officers, employees, agents and fiduciaries of the
Company may not be willing to continue to serve in such
capacities without additional protection.
D. 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.
E. In
view of the considerations set forth above, the Company
desires that Indemnitee be indemnified by the Company as set
forth herein.
NOW, THEREFORE, the Company
and Indemnitee hereby agree as follows:
1.
Indemnification
(a)
Indemnification
of Expenses
The Company shall indemnify
Indemnitee to the fullest extent permitted by law if
Indemnitee was or is or becomes a party to or witness or
other participant in, or is threatened to be made a party to
or witness or other participant in, any Proceeding, against
any and all Expenses, including all interest, assessments and
other charges paid or payable in connection with or in
respect of such Expenses. Subject to
Section 1(b) hereof, such payment of Expenses shall be
made by the Company as soon as practicable but in any event
no later than thirty (30) days after written demand by
Indemnitee therefor is presented to the Company.
(b)
Reviewing
Party
Notwithstanding anything to
the contrary in Sections 1(a) or 2(a)
hereof:
(i) the
indemnification obligations of the Company under
Section 1(a) hereof shall be subject to the condition
that the Reviewing Party shall not have determined that
Indemnitee would not be permitted to be indemnified under
applicable law; and
(ii) the
obligation of the Company to make an advance payment of
Expenses to Indemnitee pursuant to Section 2(a) hereof
(an “Expense Advance”) shall be subject to the
condition that, if, when and to the extent that the Reviewing
Party determines that Indemnitee would not be permitted to be
indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid
by Company to Indemnitee; provided
, however
, that if Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to
secure a determination that Indemnitee should be indemnified
under applicable law, any determination made by the Reviewing
Party that Indemnitee would not be permitted to be
indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for
any Expense Advance until a final judicial determination is
made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed).
Indemnitee’s
obligation to reimburse the Company for any Expense Advance
shall be unsecured and no interest shall be charged
thereon. If there has not been a Change in
Control, or it 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,
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 the Independent Legal
Counsel. If there has been no determination by the
Reviewing Party or if the Reviewing Party determines that
Indemnitee would not be permitted to be indemnified in whole
or in part under applicable law, Indemnitee shall have the
right to commence litigation seeking an initial determination
by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, including the legal or
factual bases therefor, and the Company hereby consents to
service of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and
Indemnitee.
(c)
Contribution
If the indemnification
obligations of the Company under Section 1(a) hereof shall be
held by a court of competent jurisdiction for any reason
other than that set forth in Section 8(a) hereof to be
unavailable to Indemnitee in respect of any Expense, then the
Company, in lieu of indemnifying Indemnitee thereunder, shall
contribute to the amount paid or payable by Indemnitee as a
result of such Expense (i) in such proportion as is
appropriate to reflect the relative benefits received by the
Company and Indemnitee, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the
relative fault of the Company and Indemnitee in connection
with the action or inaction which resulted in such Expense,
as well as any other relevant equitable
considerations. The Company and Indemnitee agree
that it would not be just and equitable if contribution
pursuant to this Section 1(c) were determined by pro rata or
per capita allocation or by any other method of allocation
which does not take account of the equitable considerations
referred to in the immediately preceding
sentence.
(d)
Mandatory
Payment of Expenses
Notwithstanding any other
provision of this Agreement, 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.
2. Expenses;
Indemnification Procedure
(a)
Advancement of
Expenses
Subject to the terms and
conditions of Section 1(b) hereof and to the extent not
prohibited by applicable law, the Company shall advance all
Expenses incurred by Indemnitee. The advances to
be made hereunder shall be paid by the Company to Indemnitee
as soon as practicable but in any event no later than thirty
(30) days after written demand by Indemnitee therefor to the
Company.
(b)
Notice;
Cooperation by Indemnitee
Indemnitee shall, as a
condition precedent to Indemnitee’s right to be
indemnified under this Agreement, give the Company notice in
writing as soon as practicable of any Proceeding for which
indemnification will or could be sought under this
Agreement. In addition, Indemnitee shall give the
Company such information and cooperation as it may reasonably
require and as shall be within Indemnitee’s
power.
(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
otherwise 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.
(d)
Notice to
Insurers
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.
(e)
Selection of
Counsel
In the event the Company
shall be obligated hereunder to pay the Expenses of a
Proceeding, the Company shall be entitled to assume the
defense of such Proceeding with counsel approved by
Indemnitee, which approval shall not be unreasonably withheld
or delayed, upon the delivery to Indemnitee of written notice
of its election so to do. After delivery of such notice,
approval of such counsel by Indemnitee and the retention of
such counsel by the Company, the Company will not be liable
to Indemnitee under this Agreement for any fees of counsel
subsequently incurred by Indemnitee with respect to the same
Proceeding; provided
that (i) Indemnitee shall have the right to employ
Indemnitee’s counsel in any such Proceeding at
Indemnitee’s expense and (ii) if (A) the
employment of counsel by Indemnitee has been previously
authorized by the Company, (B) Indemnitee shall have
reasonably concluded that there is a conflict of interest
between the Company and Indemnitee in the conduct of any such
defense, or (C) the Company shall not continue to retain
such counsel to defend such Proceeding, then the fees and
expenses of Indemnitee’s counsel shall be at the
expense of the Company. The Company shall have the
right to conduct such defense as it sees fit in its sole
discretion, provided that the Company has the right to settle
any claim against Indemnitee only with the consent of
Indemnitee, which shall not be unreasonably withheld or
delayed.
3. Scope;
Nonexclusivity
(a)
Scope
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 the Company to indemnify a
member of the Board of Directors or an officer, employee,
agent or fiduciary of the Company or any Subsidiary, as
applicable, 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 the Company to indemnify a member of the Board
of Directors or an officer, employee, agent or fiduciary of
the Company or any Subsidiary, as applicable, 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.
(b)
Nonexclusivity
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 charter 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.
4.
No
Duplication of Payments
