WELLCARE HEALTH PLANS, INC. 2004 EQUITY INCENTIVE PLAN NON-QUALIFIED STOCK OPTION AGREEMENT FOR REX M. ADAMS

Back to Form 8-K Exhibit 10.4  


WELLCARE HEALTH PLANS, INC. 2004 EQUITY INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT FOR REX M. ADAMS   Agreement   1.           Grant of Option.  WellCare Health Plans, Inc. (the “Company”) hereby grants, as of September 2, 2008, to Rex M. Adams (the “Optionee”) an option (the “Option”) to purchase up to 100,000 shares of the Company’s Common Stock, $0.01 par value per share (the “Shares”), at an exercise price per share equal to $41.54 (the "Option Price").  The Option shall be subject to the terms and conditions set forth herein.  The Option was issued pursuant to the Company’s 2004 Equity Incentive Plan (the “Plan”), which is incorporated herein for all purposes.  The Option is a Non-Qualified Stock Option, and not an Incentive Stock Option.  The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all of the terms and conditions hereof and thereof and all applicable laws and regulations.   2.           Definitions.  Unless otherwise provided herein, terms used herein that are defined in the Plan and not defined herein shall have the meanings attributed thereto in the Plan.   3.           Exercise Schedule.  Except as otherwise provided in Sections 6 and 7 of this Agreement, or in the Plan, the Option is exercisable in installments as provided below, which shall be cumulative. To the extent that the Option has become exercisable with respect to a percentage of Shares as provided below, the Option may thereafter be exercised by the Optionee, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein. The following table indicates each date (the “Vesting Date”) upon which the Optionee shall be entitled to exercise the Option with respect to the percentage of Shares granted as indicated beside the date, provided that the Optionee’s employment or service with the Company and its Subsidiaries during the period beginning on September 2, 2008 (the “Vesting Commencement Date”) continues through and on the applicable Vesting Date:  

Notwithstanding anything contained herein to the contrary, once the Option has vested and become exercisable with respect to 100% of the Shares, then the Option shall be fully vested and the provisions of the preceding sentence shall cease to apply.  NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE OPTION CANNOT BE EXERCISED UNTIL THE COMPANY IS AGAIN CURRENT IN ITS PERIODIC REPORT FILINGS WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) AND HAS FILED ALL PERIODIC REPORTS REQUIRED TO BE FILED BY THE COMPANY WITH THE SEC WITHIN THE PRECEDING TWELVE MONTHS.                 Except as otherwise specifically provided herein, there shall be no proportionate or partial vesting in the periods prior to each Vesting Date, and all vesting shall occur only on the appropriate Vesting Date. Except as otherwise specifically provided herein, upon the termination of the Optionee’s employment or service with the Company and its Subsidiaries, any unvested portion of the Option shall terminate and be null and void.   4.           Method of Exercise.  The vested portion of this Option shall be exercisable in whole or in part in accordance with the exercise schedule set forth in Section 3 hereof by written notice which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (which number must be a whole number), and such other representations and agreements as to the holder’s investment intent with respect to such Shares as may be required by the Company pursuant to the provisions of the Plan.  Such written notice shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company.  The written notice shall be accompanied by payment of the Option Price.  This Option shall be deemed to be exercised after both (a) receipt by the Company of such written notice accompanied by the Option Price and (b) receipt by the Company of the Optionee’s cash payment of the amount, if any, that is necessary to be withheld in accordance with applicable Federal or state withholding requirements.  No Shares will be issued pursuant to the Option unless and until such issuance and such exercise shall comply with all relevant provisions of applicable law, including the requirements of any stock exchange upon which the Shares then may be traded.   5.           Method of Payment.    Payment of the Option Price shall be by any of the following, or a combination thereof, at the election of the Optionee:  (a) in cash (including check, bank draft, money order or wire transfer of immediately available funds), (b) by simultaneous sale through a broker reasonably acceptable to the Committee of Shares acquired on exercise, as permitted under Regulation T of the Federal Reserve Board, (c) by authorizing the Company to withhold from issuance a number of Shares issuable upon exercise of the Option which, when multiplied by the Fair Market Value of a share of Common Stock on the date of exercise, is equal to the Option Price payable with respect to the portion of the Option being exercised or (d) by any combination of the foregoing.  
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              In the event the Optionee elects to pay the Option Price pursuant to clause (c) above, (i) only a whole number of Share(s) (and not fractional Shares) may be withheld in payment and (ii) the Optionee must present evidence acceptable to the Company that the Optionee has owned a number of shares of Common Stock at least equal to the number of Shares to be withheld in payment of the Option Price (and that such owned shares of Common Stock have not been subject to any substantial risk of forfeiture) for at least six months prior to the date of exercise.  When payment of the Option Price is made by withholding of Shares, the difference, if any, between the Option Price payable with respect to the portion of the Option being exercised and the Fair Market Value of the Shares withheld in payment (plus any applicable taxes) shall be paid in cash.  The Optionee may not authorize the withholding of Shares having a Fair Market Value exceeding the Option Price payable with respect to the portion of the Option being exercised (plus any applicable taxes).  Any withheld Shares shall no longer be issuable under the Option.   6.           Termination of Optionee’s Service.                 (a)           Death or Disability.  If the Optionee ceases to be an officer or employee of, or to perform other services for, the Company, Comprehensive Health Management, Inc. (“CHMI”) or any other Subsidiary due to the Optionee’s death or Disability, as defined in the Employment Agreement dated as of September 2, 2008 among the Optionee, the Company and CHMI (the “Employment Agreement”), the Option shall become fully vested on the date of such cessation and shall remain exercisable for a period of one year from the date of such cessation, but in no event after the expiration date provided in Section 7(a) below; provided, that the Option shall immediately terminate and become null and void in the event that the Optionee engages in Competition during any such post-termination exercise period, unless the Optionee has received written consent to do so from the Company.                 (b)           Termination for Cause.  If the Optionee’s employment by, or other performance of services for, the Company, CHMI or any other Subsidiary is terminated for Cause, as defined in the Employment Agreement, the Option shall expire and be forfeited immediately upon such termination, whether or not then exercisable.                 (c)           Other Termination of Service.  If the Optionee ceases to be an officer or employee of, or to perform other services for, the Company, CHMI and any other Subsidiary for any reason other than death, Disability, as defined in the Employment Agreement, or Cause, as defined in the Employment Agreement, the portion of the Option that was exercisable on the date of such cessation shall remain so for a period of 90 days after the date of such cessation, but in no event after the expiration date provided in Section 7(a) below; provided, that the Option shall immediately terminate in the event that the Optionee engages in Competition during any such post-term