form8-k.htm
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported): July 17, 2008
WELLCARE
HEALTH PLANS, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-32209
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47-0937650
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(State
or other jurisdiction of
incorporation)
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(Commission
File Number)
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(IRS
Employer Identification
Number)
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8725
Henderson Road, Renaissance One
Tampa,
Florida
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33634
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(Address
of principal executive offices)
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(Zip
Code)
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(813) 290-6200
Registrant’s
telephone number, including area code
Not
applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
o Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Item
5.02. Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
Election of Thomas L. Tran
as Senior Vice President and Chief Financial Officer
On July
17, 2008, WellCare Health Plans, Inc. (the “Company”) announced that the
Board of Directors of the Company (the “Board”) had elected Mr. Thomas
L. Tran as the Company’s new Senior Vice President and Chief Financial
Officer. Mr. Tran’s election will be effective upon Mr. Tran’s
commencement of employment with the Company on or about July 21,
2008.
Mr. Tran,
age 51, was the President, Chief Operating Officer and Chief Financial Officer
of CareGuide, Inc., a publicly-traded population health management company, from
June 2007 to June 2008. In such capacities, Mr. Tran was responsible
for profit and loss accountability for all business lines, field operations,
clinical management, centralized service support, technology, network
management, finance (including SEC reporting and Sarbanes-Oxley compliance) and
investor relations. From July 2005 to June 2007, Mr. Tran was Senior
Vice President and Chief Financial Officer of Uniprise, one of the principal
operating businesses of UnitedHealth Group that manages health care benefits
programs for employers, where he was responsible for overseeing financial
reporting, business and financial planning, strategic cost management,
actuarial, underwriting, customer banking, business development, business risk
management, real estate and procurement. From December 1998 to July 2005, Mr.
Tran served as Chief Financial Officer of ConnectiCare, Inc., a health
maintenance organization based in Connecticut. Prior to ConnectiCare, Mr. Tran
was Chief Financial Officer of Blue Cross Blue Shield of Massachusetts from May
1996 to July 1997 and Vice President of Finance and Controller of CIGNA
HealthCare from February 1993 to May 1996. Mr. Tran holds a B.S.
degree in accounting from Seton Hall University and an MBA in Finance from New
York University.
In
connection with Mr. Tran’s election as Senior Vice President and Chief Financial
Officer of the Company, Mr. Tran, the Company and Comprehensive Health
Management, Inc., a subsidiary of the Company, have entered into an employment
agreement and an indemnification agreement, each effective as of the date Mr.
Tran commences his employment with the Company, and the Company and Mr. Tran
will enter into a restricted stock agreement and a stock option agreement, each
effective as of the date Mr. Tran commences his employment with the
Company. Copies of the employment agreement and the indemnification
agreement, and the forms of restricted stock agreement and stock option
agreement that the Company will enter into with Mr. Tran are attached to this
report as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, and are incorporated
herein by reference. The summaries set forth below of Mr. Tran’s
employment agreement, restricted stock agreement and stock option agreement are
qualified in their entirety by reference to the text of such
agreements.
Summary of Employment Agreement
The term
of Mr. Tran’s employment agreement will commence on or about July 21, 2008, the
date that Mr. Tran is expected to commence his employment with the Company, and
has an initial term of four years. Effective as of the expiration of
the initial four-year term, the employment agreement automatically extends for
additional one-year periods unless either party gives notice of non-renewal at
least 90 days before the expiration of the term.
Mr. Tran
will receive a minimum base salary of $475,000 and a one-time sign-on bonus of
$75,000 payable in a lump sum within thirty days of his commencement of
employment. Mr. Tran also will be entitled to receive an annual cash
bonus based on his achievement of performance objectives set by the Compensation
Committee of the Board with a targeted bonus of 100% of his annual salary for
each fiscal year (with a minimum guaranteed bonus of $475,000 for the initial
calendar year of Mr. Tran’s employment, pro rated for the portion of the year
Mr. Tran is employed). In addition, Mr. Tran will be entitled to earn
equity compensation awards granted under and subject to the terms and conditions
of the Company’s 2004 Equity Incentive Plan (the “2004 Plan”) based upon Mr.
Tran’s achievement of specified performance objectives, with an annual equity
compensation award target of 150% of Mr. Tran’s annual salary for each fiscal
year (with a minimum guaranteed annual equity compensation award in 2009 of 100%
of Mr. Tran’s annual salary for 2008, prorated for the portion of the year
employed). During the term of the employment agreement, Mr. Tran will
be entitled to receive the same benefits accorded to other senior executives of
the Company.
If Mr.
Tran’s employment is terminated without “cause” or by Mr. Tran for “good reason”
(as defined in his employment agreement), he will be entitled to severance
benefits that include: (i) a lump sum cash payment equal to one times (or if the
termination date occurs within one year of a “change in control”, as defined in
the employment agreement, one-and-a-half times) the sum of Mr. Tran’s annual
salary as in effect on the termination date and the average of the two highest
cash bonuses earned by Mr. Tran over the three prior years or, if Mr. Tran has
not been employed for three years, the target cash bonus for the year in which
the termination occurs, and (ii) for the duration of the applicable COBRA period
(generally 18 months, but under certain circumstances up to 36 months following
termination), reimbursement on an after-tax basis for the cost of continued
participation in the medical, dental and vision care and life insurance benefits
in which Mr. Tran and his family participated prior to the termination date,
provided Mr. Tran elects to continue health insurance coverage pursuant to
COBRA. Mr. Tran’s employment agreement also provides for certain
benefits upon Mr. Tran’s death or disability.
The
employment agreement requires that to the extent that any payment or benefit
received or to be received by Mr. Tran (including any benefits upon a change in
control) would be subject to an excise tax under the Internal Revenue Code of
1986, as amended (the “Code”), the Company will pay
to Mr. Tran an additional amount such that the net amount received by Mr. Tran
is equal to what he would have received if none of his payments or benefits were
subject to an excise tax, provided that if the amount of payments subject to an
excise tax exceeds the safe harbor under Section 280G of the Code by less than
ten percent of Mr. Tran’s base salary, then Mr. Tran’s payment will be reduced
so that no amounts are subject to an excise tax.
The
employment agreement also includes confidentiality and non-competition
provisions, including a requirement that Mr. Tran not seek employment with, or
ownership in, a company in direct competition with the Company and its
subsidiaries for a period of one-year after the termination of his
employment.
Summary of Restricted Stock Award
The
employment agreement provides that Mr. Tran will receive 50,000 restricted
shares (the “Restricted
Shares”) of the Company’s common stock, par value $0.01 per share (“Common Stock”) under the 2004
Plan. On the date on which Mr. Tran commences his employment with the
Company, the Company and Mr. Tran will enter into a restricted stock agreement
setting forth the terms of such grant. Pursuant to the terms the
restricted stock agreement, 25% of the Restricted Shares will become vested on
each anniversary of the date of grant (i.e., the date on which Mr. Tran
commences his employment with the Company). In addition, if Mr. Tran
is terminated by the Company without “cause” or he terminates employment for
“good reason” (each as defined in his employment agreement), in either case,
within twelve months of a change in control of the Company (as defined in the
2004 Plan), then any unvested Restricted Shares will immediately vest on the
date of Mr. Tran’s termination.
Summary Non-Qualified Stock Option Award
The employment agreement provides that
Mr. Tran will receive 100,000 options (the “Options”) to purchase shares of Common Stock
under the 2004 Plan. On the date on which Mr. Tran commences his
employment with the Company, the Company and Mr. Tran will enter into a stock
option agreement, setting forth the terms of such grant. Pursuant to
the terms of the stock option agreement, 25% of the Options will become vested
on each anniversary of the date of grant (i.e., the date on which Mr. Tran
commences his employment with the Company), and have an exercise price equal to
the closing price of one share of the Common Stock on the New York Stock
Exchange on the date of grant. In addition, if Mr. Tran is terminated
by the Company without “cause” or terminates employment for “good reason” (each
as defined in his employment agreement), in either case, within twelve months of
a change in control of the Company (as defined in the 2004 Plan), then any
unvested Options will immediately vest on the date of Mr. Tran’s
termination.
Item
9.01.
Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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WELLCARE
HEALTH PLANS, INC.
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Date:
July 17, 2008
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By:
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/s/ Heath
Schiesser |
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Name:
Heath Schiesser
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Title:President
and Chief Executive Officer
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EXHIBIT INDEX