UNITED STATES
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): December 14, 2016

CENTENE CORPORATION
(Exact Name of Registrant as Specified in Charter)

Delaware
 
001-31826
 
42-1406317
(State or Other Jurisdiction
of Incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)

7700 Forsyth Blvd.
St. Louis, Missouri
 
63105
(Address of Principal Executive Offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (314) 725-4477
(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.

(e) On December 14, 2016, Centene Corporation (the “Company”) entered into an amendment to the executive employment agreement (the “Amendment”) with Michael F. Neidorff, its Chairman, President and Chief Executive Officer (the “Executive”). The Amendment anticipates that Mr. Neidorff’s successor as Chief Executive Officer will be appointed on or prior to the date of the Company’s annual stockholder meeting in April 2020. The Amendment:

•
provides that Mr. Neidorff will serve as Executive Chairman for one year after his successor is appointed and as Non-Executive Chairman thereafter;

•
provides for the grant of 20,000 stock options; and

•
provides for payments to Mr. Neidorff in the event of termination on or prior to December 31, 2018.

The Board of Directors and Mr. Neidorff agreed to extend his contract beyond the previous termination date in December 2017 to ensure leadership continuity in the business under the current regulatory environment and an orderly transition of leadership. Mr. Neidorff will continue to serve as Chief Executive Officer until his successor is appointed.

The 20,000 stock options granted pursuant to the Amendment will vest in three equal annual installments on the anniversary of the grant date beginning on December 14, 2017. If he is terminated on or before December 31, 2017, the termination payment will be two times his base salary plus his target bonus. If termination occurs during 2018, the termination payment will be his base salary plus a proportionate share of his target bonus.

The Amendment is filed as Exhibit 10.1 to this Form 8-K and the description of the Amendment is qualified in its entirety by reference to such exhibit, which is incorporated herein by reference.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

10.1 Amendment No. 5 to Executive Employment Agreement between Centene Corporation and Michael F. Neidorff







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.
 
 
CENTENE CORPORATION
 
 
 
 
 
Date: December 14, 2016
 
By:
 
/s/ Jeffrey A. Schwaneke
 
 
 
 
Jeffrey A. Schwaneke
Executive Vice President & Chief Financial Officer







EXHIBIT INDEX
Exhibit Number
 
Description
10.1
 
Amendment No. 5 to Executive Employment Agreement between Centene Corporation and Michael F. Neidorff






Exhibit 10.1
AMENDMENT OF EXECUTIVE EMPLOYMENT AGREEMENT
This Amendment of Executive Employment Agreement is entered into as of December 14, 2016 by and between Centene Corporation, a Delaware corporation, together with its successors and assigns permitted under this Agreement (“Employer”), and Michael F. Neidorff (the “Executive”).
WHEREAS, the parties entered into that certain Executive Employment Agreement dated as of November 8, 2004, which has been amended from time to time (“Agreement”); and
WHEREAS, the parties desire to amend the Agreement in order to extend the current term of the Agreement and to make various related changes to the Agreement.
NOW THEREFORE, the parties hereto agree as follows:
1.
As consideration for entering into this Agreement, on the date hereof, Executive shall be granted a ten year option to purchase 20,000 shares of common stock of the Employer with a strike price of $57.02 (“2016 Extension Option Grant”) (each a “2016 Extension Option”). One-third of the 2016 Extension Option Grant will vest and become non-forfeitable on each of the first three anniversaries of the date of grant. Once vested, the 2016 Extension Options will remain exercisable for the balance of their full ten year term.

2.
Section 1(a) is amended so that the first sentence thereof reads as follows:

Subject to earlier termination as provided herein, Employer hereby agrees to employ and continue in its employ the Executive, and the Executive hereby accepts such employment and agrees to remain in the employ of Employer, for the period commencing on the date hereof and ending on the date of the annual shareholders meeting in 2021 (the “2021 Shareholders’ Meeting”).
3.
Section 2(a) is amended to read as follows:

(a)    Executive’s Position and Title. The Executive’s positions and titles shall continue to be Chairman, President and Chief Executive Officer of the Employer. If elected to the Board of Directors (the “Board”) by the Company’s shareholders, the Executive shall continue to be a member of, and Chairman of, the Board. If the Board has designated a successor Chief Executive Officer of the Company on or before December 31, 2019, it is expected that the Executive will cease to serve as President and Chief Executive Officer of the Company at the Company’s annual shareholders’ meeting in 2020, but will continue serving as Executive Chairman of the Board until the 2021 Shareholders’ Meeting, or such other date as is mutually agreed between the Executive and the Board. Effective with the 2021 Shareholders’ Meeting, Executive will become Non-Executive Chairman of the Board. While Executive serves as Executive Chairman of the Board, the Executive and the Board will mutually agree on his compensation.
4.
Section 2(b) is amended to add new sentences at the end thereof to read as follows:

As Executive Chairman of the Board, Executive shall continue to report directly to the Board, and for the avoidance of doubt shall not report to any specific member of the Board or to any member of management. In addition to performing his duties as Executive Chairman of the Board, Executive shall assist the new Chief Executive Officer with transition matters, culture of the Company, strategy, mergers and acquisitions and community relations, and shall make himself reasonably available to assist the new Chief Executive Officer with government affairs, investor relations, investment banking relationships, and other matters reasonably requested by the Board.
5.
Section 3(d) is amended to add the following sentence to read as follows:

Executive shall continue to vest in all of his outstanding long term incentive awards while he serves as Chairman of the Board, regardless of whether he is serving as Executive Chairman or Non-Executive Chairman, and shall fully vest in any outstanding long term incentives (subject to any performance measures to be determined at the end of any applicable performance period) upon his ultimate termination from the Board.




6.
Section 3(g) is amended to add the following sentence to read as follows:

Upon Executive ceasing to be the Executive Chairman of the Board, he may at his own expense elect to assume the Company’s lease on a Company aircraft.
7.
Section 5(d)(ii) is amended to read as follows:

(ii)    If the Date of Termination occurs on or before December 31, 2017, the Executive shall be entitled to receive the product of (A) two (2) times (B) the sum of his (I) then-current Base Salary plus (II) the maximum amount the Executive could have earned as a Target Bonus for the year of termination if all goals and targets for payment were achieved (the “Severance Amount”), payable in cash in substantially equal installments pursuant to Employer’s payroll practices as in effect from time to time over 24 months. If the Date of Termination occurs on or after January 1, 2018 and on or before December 31, 2018, the Severance Amount will be the product of (A) one (1) times (B) the sum of his (I) then-current Base Salary plus (II) the maximum amount the Executive could have earned as a Target Bonus for the year of termination if all goals and targets for payment were achieved, which product will be multiplied by a fraction, the numerator of which is the number of full and fractional months remaining until December 31, 2018 (but not less than six (6), and the denominator of which is twelve (12). The amount determined in the preceding sentence shall be payable in cash in substantially equal installments pursuant to the Employer’s payroll practices as in effect from time to time over the number of months used in the numerator in the preceding sentence. Notwithstanding the foregoing, to the extent delay in payments under this Section 5(d)(ii) is determined to be necessary to prevent the application of and/or adverse tax consequences under Code Section 409A, then such payments shall not commence until the date which is six (6) months after the date of the Executive’s “separation from service” as that term is defined in regulations or other guidance issued under Code Section 409A;
8.
The Agreement is affirmed, ratified and continued, as amended hereby.

IN WITNESS WHEREOF, the parties hereto have signed their names as of the day and year first written above.
MICHAEL F. NEIDORFF
 
CENTENE CORPORATION
/s/ Michael F. Neidorff
 
By: /s/ Robert K. Ditmore
 
 
Its: Lead Director