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): September 2, 2014

WELLCARE HEALTH PLANS, INC.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
Delaware
 
001-32209
 
47-0937650
(State or other jurisdiction
 
(Commission File Number)
 
(IRS Employer
of incorporation)
 
 

 
Identification No.)
 
8735 Henderson Road, Renaissance One
 
 
 
Tampa, Florida
 
33634
 
(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code: (813) 290-6200

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):

¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
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.

WellCare Health Plans, Inc. (the “Company”) believes that focus on its operational and strategic goals is critical to the Company’s future success. The Compensation Committee of the Board of Directors of the Company approved awards of performance stock units (“PSU awards”) and restricted stock units (“RSU awards”), effective as of September 2, 2014, to certain executive officers, including the named executive officers listed below, on the terms described below, to align rewards with future performance.

 
 
Target Number of
PSUs
 
Number of
RSUs
Lisa G. Iglesias
 
1,532
 
1,532
Blair W. Todt
 
2,528
 
2,528
Lawrence D. Anderson
 
1,685
 
1,685

Terms of Performance Stock Unit Awards

The terms of the PSU awards provide that 50% of the shares subject to the award will vest on March 1, 2016 based on the achievement of targeted adjusted earnings per share as will be included in the Company’s 2015 operating plan, and 50% will vest on March 1, 2017 based on the achievement of targeted adjusted earnings per share as will be included in the Company’s 2016 operating plan. In addition to the financial goals, payouts would be subject to achieving quality and compliance standards as determined in the discretion of the Compensation Committee. The terms of these awards are more fully described in the Performance Stock Unit Award Notice and Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K, and the previously adopted Performance Stock Unit Award Agreement and the 2013 Incentive Compensation Plan. A copy of the Performance Stock Unit Award Agreement is attached as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on May 22, 2013. A copy of the 2013 Incentive Compensation Plan is attached as Exhibit A to the Company’s Proxy Statement filed with the Commission on April 10, 2013.

Terms of Restricted Stock Unit Awards

The terms of the RSU awards provide that 50% of the shares subject to the award will vest on September 1, 2015 and 50% will vest September 1, 2016. The terms of these awards are more fully described in the previously adopted Restricted Stock Unit Award Notice and Agreement, Restricted Stock Unit Award Agreement and the 2013 Incentive Compensation Plan. Copies of the Restricted Stock Unit Award Notice and Agreement and Restricted Stock Unit Award Agreement are attached as Exhibits 10.9 and 10.10, respectively, to the Company’s Current Report on Form 8-K filed with the Commission on May 22, 2013.

Item 9.01        Financial Statements and Exhibits.
           
(d)   Exhibits.





SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



Date: September 4, 2014
WELLCARE HEALTH PLANS, INC.

/s/ Lisa G. Iglesias
 
Lisa G. Iglesias
Senior Vice President, General Counsel and Secretary
 
 






EXHIBIT INDEX
 

Exhibit Number
Description





Back to Form-8K
Exhibit 10.1

WELLCARE HEALTH PLANS, INC. 2013 INCENTIVE COMPENSATION PLAN
FORM OF PERFORMANCE STOCK UNIT AWARD NOTICE AND AGREEMENT

This award is made to the Participant named below by WellCare Health Plans, Inc., a Delaware corporation (the “ Company ”). Subject to the terms and conditions of this Performance Stock Unit Award Notice and Agreement, including Appendix A attached hereto and incorporated herein, and the terms and conditions of the Performance Stock Unit Award Agreement that is available to you on the Company’s Intranet site and is an integral part of this award (together, the “ Award Documentation ”), the Company hereby awards under the WellCare Health Plans, Inc. 2013 Incentive Compensation Plan (the “ Plan ”) the Restricted Stock Units, the vesting of which is conditioned upon the achievement of one or more performance goals (“ PSUs ”), described below to Participant effective as of the Grant Date set forth below. Capitalized terms used in the Award Documentation that are not defined herein have the meanings attributed to them in the Plan.
1.
Participant :
2.
Grant Date : September 2, 2014
3.
Performance Cycles : There shall be two “ Performance Cycles ” for this Award of PSUs. The first Performance Cycle shall commence on January 1, 2015 and shall end on December 31, 2015. The second Performance Cycle shall commence on January 1, 2016 and shall end on December 31, 2016. Any PSUs earned on account of the first Performance Cycle shall vest and be issued to the Participant on the first Vesting Date, and any PSUs earned on account of the second Performance Cycle shall vest and be issued to the Participant on the second Vesting Date.
4.
Number of PSUs : __________, subject to adjustment as provided in the Award Documentation and the Plan. 50% of PSUs relate to the first Performance Cycle and 50% of PSUs relate to the second Performance Cycle. The actual number of PSUs that become eligible for vesting shall be determined by the Committee, in its sole discretion, in accordance with Appendix A .
5.
Normal Vesting Schedule : Except as set forth below, the PSUs related to the first Performance Cycle shall vest on March 1, 2016 and the PSUs related to the second Performance Cycle shall vest on March 1, 2017 (each such date, a “ Vesting Date ”), provided that the Continuous Service of Participant continues through and on the applicable Vesting Date. Except as otherwise provided in the Award Documentation, the PSUs shall vest only on the Vesting Dates specified above and no partial vesting will occur prior to any Vesting Date. To the extent the performance criteria have not been achieved for a Performance Cycle, the unvested PSUs related to that Performance Cycle shall be forfeited automatically without any payment to Participant and become null and void.
6.
Description of PSUs : Each PSU constitutes an unfunded and unsecured promise of the Company to deliver one Share to Participant on the Delivery Date (defined below).
7.
Termination of Continuous Service : Except as set forth in Section 8 below, upon the termination of Participant’s Continuous Service for any reason, any then-unvested PSUs shall be forfeited automatically without any payment to Participant and become null and void.
8.
Change in Control : In the event of a Change in Control that occurs on or prior to March 1, 2016, 50% of the PSUs shall vest on March 1, 2016 and 50% of the PSUs shall vest on March 1, 2017, provided that the Participant’s Continuous Service continues through and on the applicable Vesting Date. In the event of a Change of Control that occurs after March 1, 2016, 50% of the PSUs shall vest on March 1, 2017, provided that, Participant’s Continuous Service continues through March 1, 2017. Notwithstanding the foregoing, to the extent not previously forfeited on or before March 1, 2016 in accordance with Section 5 above, any then-unvested PSUs shall become immediately vested on the effective date of the termination of Participant’s Continuous Service if, within twenty-four (24) months following a Change in Control, Participant’s Continuous Service is terminated by (i) the Company or a Subsidiary without Cause or (ii) Participant for Good Reason.


9.
Delivery Date : The Shares underlying the number of vested PSUs shall be delivered as soon as practicable after the Vesting Date, but in no event later than March 15th of the year immediately following the year in which such PSUs vest.
By signing below, Participant hereby consents and agrees to the electronic delivery of the Award Documentation. Participant acknowledges and agrees that (1) the Performance Stock Unit Award Agreement, the Plan and the Plan prospectus are available for Participant’s review on the Company’s Intranet under the Legal Services section, and, upon request, a paper version of each document will be provided to Participant and (2) Participant has reviewed and fully understands the Award Documentation, the Plan and the Plan prospectus and agrees to be bound by the terms and conditions of the Plan and the Award Documentation.
PARTICIPANT
 
WELLCARE HEALTH PLANS, INC.
 
 
 
 
 
 
 
 
 
 
 
 
By:
 
 
By:
 
 
 
 
 
 
Name:
 
 
 
 
 
 
Title:
 

2


APPENDIX A
VESTING CRITERIA FOR PERFORMANCE STOCK UNITS

All terms used in the chart below shall be defined and interpreted in the Committee’s sole discretion.

First Performance Cycle

Financial Goal:
Achieving 100% of targeted Adjusted Earnings Per Share as included in the Company’s 2015 operating plan that is approved by the Board of Directors (the “ 2015 EPS Target ”); provided that if the 2015 EPS Target is not achieved, the Committee may determine in its sole discretion the number of PSUs that are earned, if any.

Quality Goal:
The number of PSUs earned may be reduced in the sole discretion of the Committee based on a comprehensive view of the Company’s quality performance (both forward and backward looking).

Compliance Goal:
The number of PSUs earned may be reduced in the discretion of the Committee if the Company incurs a regulatory sanction resulting in a significant business loss or has a material breach of its Corporate Integrity Agreement obligations.

Second Performance Cycle

Financial Goal:
Achieving 100% of targeted Adjusted Earnings Per Share as included in the Company’s 2016 operating plan that is approved by the Board of Directors (the “ 2016 EPS Target ”); provided that if the 2016 EPS Target is not achieved, the Committee may determine in its sole discretion the number of PSUs that are earned, if any.

Quality Goal:
The number of PSUs earned may be reduced in the sole discretion of the Committee based on a comprehensive view of the Company’s quality performance (both forward and backward looking).

Compliance Goal:
The number of PSUs earned may be reduced in the sole discretion of the Committee if the Company incurs a regulatory sanction resulting in a significant business loss or has a material breach of its Corporate Integrity Agreement obligations.
Regardless of whether any criteria set forth in Appendix A have been achieved, in making a determination as to whether or not PSUs vest pursuant to this Award, and the number of PSUs that vest pursuant to this Award, if any, the Committee may take into consideration other factors, including, but not limited to, unanticipated events, acquisition and expansion costs, non-recurring and extraordinary items, and other equitable factors, as determined by the Committee in its sole discretion, if such factors occur; provided, however, if this Award is subject to Section 8 of the Plan, no adjustment may be made if and to the extent that such adjustment would cause the Award to fail to qualify as “performance-based compensation” under Section 162(m) of the Code.
Notwithstanding the foregoing or as a limitation of Section 18 of the Performance Stock Unit Award Agreement, the Committee shall be authorized, in its sole discretion, at any time prior to the Delivery Date to reduce or otherwise amend the number of Shares deliverable with respect to the PSUs (including determining that zero Shares shall be delivered), regardless of whether any criteria set forth in this Appendix A have been achieved.