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Employment Agreement - COVENTRY HEALTH CARE INC - 8-14-1998

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Employment Agreement - COVENTRY HEALTH CARE INC - 8-14-1998 Powered By Docstoc
					EXHIBIT 10.32 FORM OF EMPLOYMENT AGREEMENT This Employment Agreement is entered into as of the _____day of ___________, 1998, by and between [Name of Executive] ("Executive") and Coventry Health Care, Inc. ("Employer"), a Delaware corporation with its principal place of business at 6705 Rockledge Drive, Bethesda, Maryland 20817. W I T N E S S E T H: WHEREAS, Executive desires to enter into an employment relationship with Employer and Employer desires to employ Executive; and WHEREAS, Executive and Employer desire to set forth in a written agreement the terms and conditions of such employment. NOW, THEREFORE, in consideration of the premises hereof and of the mutual promises and agreements contained herein, the parties hereto, intending to be legally bound, hereby agree as follows: 1. EMPLOYMENT. On the Date of Employment (as defined in Section 3 below), Executive shall be engaged by Employer as a [Office]. Executive hereby agrees to such employment on and after the Date of Employment under the terms and conditions hereinafter set forth. 2. DUTIES. As [Office], Executive shall report to the _______________ of Employer. Executive's powers and duties shall be those normally associated with such position or as may be delegated or assigned to Executive by Employer's Chief Operating Officer or the President and Chief Executive Officer or by the Board of Directors of Employer. During the term of this Agreement, Executive shall also serve without additional compensation in such other offices of the Employer or its subsidiaries or affiliates to which he may be elected or appointed by the Board of Directors of Employer or its subsidiaries or affiliates, respectively. 3. DATE OF EMPLOYMENT. Executive's employment shall commence on the date of closing of the Merger and the Capital Contribution as those terms are defined in that certain Capital Contribution and Merger Agreement, as amended, effective as of November 3, 1997, by and among Employer, Coventry Corporation, Coventry Health Care, Inc., (a Maryland corporation), Principal Health, Principal Holding Company and Principal Mutual Life Insurance Company, (the "Date of Employment").

4. INITIAL TERM. Subject to the terms and conditions set forth herein, Executive shall be employed hereunder for an initial term of one year beginning on the Date of Employment. If at the end of the initial term a new employment contract is not executed, the term of this Agreement shall continue on a year-to-year basis in the absence of notice by either party. 5. BASE COMPENSATION. For all duties rendered and all hours worked by Executive, Employer shall pay Executive a base salary ("Base Salary") of [Compensation], annually, to be reviewed on an annual basis based upon the performance of Executive. The Base Salary shall be paid to Executive in accordance with Employer's normal payroll policies. 6. ADDITIONAL COMPENSATION. During the period of this Agreement and as a result of employment under this Agreement, Executive shall receive or be eligible for the following additional compensation: EMPLOYER STOCK OPTIONS: Employer shall assume that certain Non-Qualified Stock Option Agreement (the "Stock Option Agreement") between Executive and Principal Health Care, Inc., an Iowa corporation ("Principal Health"), as of the Closing of the Merger and the Capital Contribution as those terms are defined in that certain Capital Contribution and Merger Agreement, as amended, effective as of November 3, 1997, by and

4. INITIAL TERM. Subject to the terms and conditions set forth herein, Executive shall be employed hereunder for an initial term of one year beginning on the Date of Employment. If at the end of the initial term a new employment contract is not executed, the term of this Agreement shall continue on a year-to-year basis in the absence of notice by either party. 5. BASE COMPENSATION. For all duties rendered and all hours worked by Executive, Employer shall pay Executive a base salary ("Base Salary") of [Compensation], annually, to be reviewed on an annual basis based upon the performance of Executive. The Base Salary shall be paid to Executive in accordance with Employer's normal payroll policies. 6. ADDITIONAL COMPENSATION. During the period of this Agreement and as a result of employment under this Agreement, Executive shall receive or be eligible for the following additional compensation: EMPLOYER STOCK OPTIONS: Employer shall assume that certain Non-Qualified Stock Option Agreement (the "Stock Option Agreement") between Executive and Principal Health Care, Inc., an Iowa corporation ("Principal Health"), as of the Closing of the Merger and the Capital Contribution as those terms are defined in that certain Capital Contribution and Merger Agreement, as amended, effective as of November 3, 1997, by and among Employer, Coventry Corporation, Coventry Health Care, Inc., (a Maryland corporation), Principal Health, Principal Holding Company and Principal Mutual Life Insurance Company, which grants to Executive a nonqualified stock option to purchase ___________ shares of Common Stock of Principal Health Care, Inc., at an exercise price of $14.50 per share, vesting at a rate of one-fourth of the shares per year over a four-year vesting period commencing March 31, 1999, or in the event of a change in control (as defined in Principal Health's 1997 Non-Qualified Stock Option Plan). The Stock Option Agreement and Principal Health's 1997 Non-Qualified Stock Option Plan are incorporated herein by reference. OTHER BONUS COMPENSATION: Executive shall be eligible for an annual bonus ("Bonus") potential of up to [50% to 70%]% of Base Compensation, which shall be determined as follows: (i) up to 50% of the Bonus shall be based upon achievement of budget and other operational performance factors, and (ii) all or any part of the remaining 50% of the Bonus shall be granted in the sole discretion of the Compensation and Benefits Committee (the "Committee") of the Board of Directors of Employer. Executive's bonus and performance factors shall be determined on an annual basis by the Committee. The Bonus may be paid in cash, stock or such other compensation and in such proportion as may be determined from time to time by the Committee. DISCRETIONARY CAR ALLOWANCE: Executive shall be entitled to a discretionary car allowance of $600.00 per month. OTHER BENEFITS: Executive will be eligible for participation in any employee benefit programs available to officers of Employer from time to time as provided in Section 15 below. 2

7. EXPENSES AND RELOCATION. Executive shall be reimbursed for ordinary and necessary business expenses incurred by Executive on behalf of Employer and its subsidiaries or affiliates upon presentation of vouchers in accordance with the usual and customary procedure of Employer in relation to such expense items, except that Employer may elect, at its option, to pay such expense items directly rather than reimburse Executive therefor. Executive shall also be reimbursed for expenses associated with Executive's relocation to Employer's designated location. The extent and amount of such expense shall be consistent with Employer's current relocation policy. 8. EXTENT OF SERVICE. Executive shall devote substantially all of her working time, attention and energies to the business of the Employer and shall not, during the term of this Agreement, take, directly or indirectly, an active role in any other business activity without the prior written consent of the Employer; but except as provided in Section 13(b), this Section shall not prevent Executive from serving as a director of other entities not affiliated with Employer, from making real estate or other investments of a passive nature or from participating in the activities of a nonprofit charitable organization where such participation does not require a substantial amount of time and does not adversely affect Executive's ability to perform her duties under this Agreement.

7. EXPENSES AND RELOCATION. Executive shall be reimbursed for ordinary and necessary business expenses incurred by Executive on behalf of Employer and its subsidiaries or affiliates upon presentation of vouchers in accordance with the usual and customary procedure of Employer in relation to such expense items, except that Employer may elect, at its option, to pay such expense items directly rather than reimburse Executive therefor. Executive shall also be reimbursed for expenses associated with Executive's relocation to Employer's designated location. The extent and amount of such expense shall be consistent with Employer's current relocation policy. 8. EXTENT OF SERVICE. Executive shall devote substantially all of her working time, attention and energies to the business of the Employer and shall not, during the term of this Agreement, take, directly or indirectly, an active role in any other business activity without the prior written consent of the Employer; but except as provided in Section 13(b), this Section shall not prevent Executive from serving as a director of other entities not affiliated with Employer, from making real estate or other investments of a passive nature or from participating in the activities of a nonprofit charitable organization where such participation does not require a substantial amount of time and does not adversely affect Executive's ability to perform her duties under this Agreement. 9. TERMINATION OF EMPLOYMENT. Employer may terminate Executive's employment hereunder with or without cause or for Good Cause (as defined in Section 24 below), in the sole discretion of Employer, at any time during the term of this Agreement. If the employment of Executive with Employer is terminated by Employer for any reason other than Good Cause (as defined in Section 24 below): (a) Employer shall during the Severance Period (as defined in Section 24 below), continue to pay Executive an amount equal to: (i) Executive's Base Salary at the time of termination of employment; and (ii) That portion of Executive's Bonus based on achievement of budget and other operational performance factors, if the criteria are met. Such amount will be paid during the Severance Period in monthly or other installments, similar to those being received by Executive at the date of termination of employment, and will commence as soon as practicable following the date of termination of employment. (b) During the Severance Period Executive and her spouse and family will continue to be covered by all Welfare Plans (as defined in Section 24 below), maintained by Employer in which she or her spouse or family were participating 3

immediately prior to the date of her termination as if she continued to be an employee of Employer; provided that, if participation in any one or more of such Welfare Plans is not possible under the terms thereof, Employer will provide substantially identical benefits to the extent possible. If, however, Executive obtains employment with another employer during the Severance Period, such coverage shall be provided until the earlier of: (i) the end of the Severance Period or (ii) the date on which the Executive and her spouse and family can be covered under the plans of a new employer without being excluded from full coverage because of any actual pre-existing condition. Executive's eligibility for and the Employer match to the 401(k) Plan, Supplemental Executive Retirement Plan and/or any other retirement savings program in which the Employee participates shall end at the date of termination of employment. (c) Executive shall not be entitled to payments during the Severance Period attributable to compensation for vacation periods she would have earned had her employment continued during the Severance Period or to unused vacation periods accrued as of the date of termination of employment. (d) During the Severance Period Executive shall not be entitled to reimbursement for fringe benefits such as car

immediately prior to the date of her termination as if she continued to be an employee of Employer; provided that, if participation in any one or more of such Welfare Plans is not possible under the terms thereof, Employer will provide substantially identical benefits to the extent possible. If, however, Executive obtains employment with another employer during the Severance Period, such coverage shall be provided until the earlier of: (i) the end of the Severance Period or (ii) the date on which the Executive and her spouse and family can be covered under the plans of a new employer without being excluded from full coverage because of any actual pre-existing condition. Executive's eligibility for and the Employer match to the 401(k) Plan, Supplemental Executive Retirement Plan and/or any other retirement savings program in which the Employee participates shall end at the date of termination of employment. (c) Executive shall not be entitled to payments during the Severance Period attributable to compensation for vacation periods she would have earned had her employment continued during the Severance Period or to unused vacation periods accrued as of the date of termination of employment. (d) During the Severance Period Executive shall not be entitled to reimbursement for fringe benefits such as car allowance, dues and expenses related to club memberships, and expenses for professional services. Compensation under Section 9(a) and (b) hereof is contingent upon Executive's compliance with Section 13 hereof. 10. TERMINATION BY EXECUTIVE. Executive may terminate her employment hereunder at any time upon sixty (60) days prior written notice. Upon such termination by Executive, the Employer shall pay the Executive only her Base Salary due through the date on which her employment is terminated at the rate in effect at the time of notice of termination. The Employer shall then have no further obligation to Executive under this Agreement, except for the payout of benefits already accrued under any Employee Benefit Plans or other employee benefits. 11. SETOFF. (a) With respect to Section 9, payments or benefits payable to or with respect to Executive or her spouse pursuant to this Agreement shall be reduced by the amount of any claim of Employer against Executive or her spouse or any debt or obligation of Executive or her spouse owing to Employer. (b) With respect to Section 9, payments or benefits payable to or with respect to Executive pursuant to this Agreement shall be reduced by any amount Executive may earn or receive from employment with another employer or other professional services, except as expressly provided in Section 9(b). Employee 4

shall notify Employer immediately in writing of the date upon which such services or other work commenced and shall provide Employer with such documentation as Employer shall require to determine the amount of any such setoff. Employee's failure to provide such written notice and documentation as required herein shall immediately release Employer from its obligations under this Agreement and Employer shall have the right to recover all amounts paid hereunder. 12. DEATH. If Executive dies during the Severance Period: (a) All amounts payable hereunder to Executive shall, during the remainder of the Severance Period, be paid to her surviving spouse. On the death of the survivor of Executive and her spouse, no further benefits will be paid under the Agreement. (b) The spouse and family of Executive shall, during the remainder of the Severance Period, be covered under all Welfare Plans made available by Employer to Executive or her spouse immediately prior to the date of her death to the extent possible. Any benefits payable under this Section 12 are in addition to any other benefit due to Executive or her spouse or beneficiaries from Employer, including, but not limited to, payments under any Incentive Plans.

shall notify Employer immediately in writing of the date upon which such services or other work commenced and shall provide Employer with such documentation as Employer shall require to determine the amount of any such setoff. Employee's failure to provide such written notice and documentation as required herein shall immediately release Employer from its obligations under this Agreement and Employer shall have the right to recover all amounts paid hereunder. 12. DEATH. If Executive dies during the Severance Period: (a) All amounts payable hereunder to Executive shall, during the remainder of the Severance Period, be paid to her surviving spouse. On the death of the survivor of Executive and her spouse, no further benefits will be paid under the Agreement. (b) The spouse and family of Executive shall, during the remainder of the Severance Period, be covered under all Welfare Plans made available by Employer to Executive or her spouse immediately prior to the date of her death to the extent possible. Any benefits payable under this Section 12 are in addition to any other benefit due to Executive or her spouse or beneficiaries from Employer, including, but not limited to, payments under any Incentive Plans. 13. RESTRICTIVE COVENANTS. (a) Confidential Information. Executive agrees not to disclose, either during the time she is employed by the Employer or following termination of her employment hereunder, to any person (other than a person to whom disclosure is necessary in connection with the performance of her duties as an employee of Employer or to any person specifically authorized by the Board of Directors of Employer) any material confidential information concerning the Employer or any of its Affiliates, including, but not limited to, strategic plans, customer lists, contract terms, financial costs, pricing terms, sales data or business opportunities whether for existing, new or developing businesses. (b) Non-Competition. During the term of employment provided hereunder and during the Severance Period, Executive will not directly or indirectly own, manage, operate, control or participate in the ownership, management, operation or control of, or be connected as an officer, employee, partner, director or otherwise with, or have any financial interest in, or aid or assist anyone else in the conduct of, any business which is in competition with any business conducted by the Employer or any Affiliate of Employer in any state in which the Employer or 5

any Affiliate of Employer is conducting business on the date of termination or expiration of this Agreement, provided that ownership of 5% or less of the voting stock of any public corporation shall not constitute a violation hereof. In the event Executive enters into any of the foregoing arrangements in competition with Employer or any Affiliate of Employer, Executive shall forfeit all rights to further payments and other benefits under Section 9, above, on and after the date Executive enters into competition with Employer. Such forfeiture shall be Employer's sole remedy against Executive for violation of this Section 13(b). (c) Non-Solicitation. During the term of employment provided for hereunder and during the Severance Period, Executive will not (i) directly or indirectly solicit business which could reasonably be expected to conflict with the interest of Employer or any Affiliate of Employer from any entity, organization or person which has contracted with the Employer or any Affiliate of Employer, which has been doing business with the Employer or any Affiliate of Employer, from which the Employer or any Affiliate of Employer was soliciting business at the time of the termination of employment or from which Executive knew or had reason to know that Employer or any Affiliate of Employer was going to solicit business at the time of termination of employment, or (ii) employ, solicit for employment, or advise or recommend to any other persons that they employ or solicit for employment, any employee of the Employer or any Affiliate of Employer. (d) Consultation. Executive shall, at the Employer's written request, during the Severance Period cooperate with

any Affiliate of Employer is conducting business on the date of termination or expiration of this Agreement, provided that ownership of 5% or less of the voting stock of any public corporation shall not constitute a violation hereof. In the event Executive enters into any of the foregoing arrangements in competition with Employer or any Affiliate of Employer, Executive shall forfeit all rights to further payments and other benefits under Section 9, above, on and after the date Executive enters into competition with Employer. Such forfeiture shall be Employer's sole remedy against Executive for violation of this Section 13(b). (c) Non-Solicitation. During the term of employment provided for hereunder and during the Severance Period, Executive will not (i) directly or indirectly solicit business which could reasonably be expected to conflict with the interest of Employer or any Affiliate of Employer from any entity, organization or person which has contracted with the Employer or any Affiliate of Employer, which has been doing business with the Employer or any Affiliate of Employer, from which the Employer or any Affiliate of Employer was soliciting business at the time of the termination of employment or from which Executive knew or had reason to know that Employer or any Affiliate of Employer was going to solicit business at the time of termination of employment, or (ii) employ, solicit for employment, or advise or recommend to any other persons that they employ or solicit for employment, any employee of the Employer or any Affiliate of Employer. (d) Consultation. Executive shall, at the Employer's written request, during the Severance Period cooperate with the Employer in concluding any matters in which Executive was involved during the term of her employment and will make herself available for consultation with the Employer on other matters otherwise of interest to the Employer. The Employer agrees that such requests shall be reasonable in number and will consider Executive's time required for other employment and/or employment search. In the event of voluntary termination by Executive, Employer agrees to pay Executive a reasonable fee for any such consultation services requested by Employer; provided, however, Executive agrees to cooperate with Employer, at no cost to Employer, in concluding any matters in which Executive was involved during the term of her employment. (e) Enforcement. Executive and the Employer acknowledge and agree that Subsections (a), (c) and (d) contained in this Section 13 may be specifically enforced through injunctive relief but such right to injunctive relief shall not preclude the Employer from other remedies which may be available to it. (f) Continuing Obligation. Notwithstanding any provision to the contrary or otherwise contained in this Agreement, the agreement and covenants contained in this Section 13 shall not terminate upon Executive's termination of her 6

employment with the Employer or upon the termination of this Agreement under any other provision of this Agreement. 14. VACATION. During each year of this Agreement, Executive shall be entitled to vacation accrued in accordance with corporate policies currently in effect from time to time. 15. HEALTH AND WELFARE BENEFITS; PROFIT-SHARING PLANS. In addition to the benefits specifically provided for herein, Executive and her family shall be entitled to participate in all health and welfare benefit plans maintained by the Employer for executive or managerial employees generally according to the terms of such plans. Executive shall be entitled to participate in any profit-sharing, retirement or similar plans established by Employer in which executive or managerial employees of Employer participate, including any such plan intended to comply with Section 401(k) of the Internal Revenue Code of 1986, as amended, and any such plan providing supplemental executive retirement benefits. 16. EXECUTIVE ASSIGNMENT. No interest of Executive or her spouse or any other beneficiary under this Agreement, or any right to receive any payment or distribution hereunder, shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind, nor may such interest or right to receive a payment or distribution be taken, voluntarily or involuntarily, for the satisfaction of the obligations or debts of, or other claims against, Executive or her spouse or other beneficiary, including claims for alimony, support, separate maintenance, and claims in bankruptcy proceedings.

employment with the Employer or upon the termination of this Agreement under any other provision of this Agreement. 14. VACATION. During each year of this Agreement, Executive shall be entitled to vacation accrued in accordance with corporate policies currently in effect from time to time. 15. HEALTH AND WELFARE BENEFITS; PROFIT-SHARING PLANS. In addition to the benefits specifically provided for herein, Executive and her family shall be entitled to participate in all health and welfare benefit plans maintained by the Employer for executive or managerial employees generally according to the terms of such plans. Executive shall be entitled to participate in any profit-sharing, retirement or similar plans established by Employer in which executive or managerial employees of Employer participate, including any such plan intended to comply with Section 401(k) of the Internal Revenue Code of 1986, as amended, and any such plan providing supplemental executive retirement benefits. 16. EXECUTIVE ASSIGNMENT. No interest of Executive or her spouse or any other beneficiary under this Agreement, or any right to receive any payment or distribution hereunder, shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind, nor may such interest or right to receive a payment or distribution be taken, voluntarily or involuntarily, for the satisfaction of the obligations or debts of, or other claims against, Executive or her spouse or other beneficiary, including claims for alimony, support, separate maintenance, and claims in bankruptcy proceedings. 17. BENEFITS UNFUNDED. Except as required by law, all rights of Executive and her spouse or other beneficiary under this Agreement shall at all times be entirely unfunded and no provision shall at any time be made with respect to segregating any assets of Employer for payment of any amounts due hereunder. Neither Executive nor her spouse or other beneficiary shall have any interest in or rights against any specific assets of Employer, and Executive and her spouse or other beneficiary shall have only the rights of a general unsecured creditor of Employer. 18. NOTICES. Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and sent by registered or certified mail to her residence in the case of Executive, or to its principal office in the case of the Employer and the date of receipt shall be deemed the date which such notice has been provided. 19. WAIVER OF BREACH. The waiver by either party of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by the other party. 20. ASSIGNMENT. The rights and obligations of the Employer under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Employer. The Executive acknowledges that the services to be rendered by her are unique and 7

personal, and Executive may not assign any of her rights or delegate any of her duties or obligations under this Agreement. 21. ENTIRE AGREEMENT. This instrument contains the entire agreement of the parties and, with the exception of the terms and conditions set forth in Exhibit B to that certain Employment Agreement between Executive and Principal Health Care, Inc. dated as of October 1, 1997, supersedes all other prior agreements, employment contracts and understandings, both written and oral, express or implied with respect to the subject matter of this Agreement and may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. 22. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of Maryland, without giving effect to the principles of conflicts of law thereof. 23. HEADINGS. The sections, subjects and headings of this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

personal, and Executive may not assign any of her rights or delegate any of her duties or obligations under this Agreement. 21. ENTIRE AGREEMENT. This instrument contains the entire agreement of the parties and, with the exception of the terms and conditions set forth in Exhibit B to that certain Employment Agreement between Executive and Principal Health Care, Inc. dated as of October 1, 1997, supersedes all other prior agreements, employment contracts and understandings, both written and oral, express or implied with respect to the subject matter of this Agreement and may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. 22. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of Maryland, without giving effect to the principles of conflicts of law thereof. 23. HEADINGS. The sections, subjects and headings of this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 24. DEFINITIONS. For purposes of this Agreement: (a) "Affiliate" shall have the meaning set forth in Rule 144(a)(1) promulgated under the Securities Act of 1933, as amended. (b) "Good Cause" shall be deemed to exist if, and only if: (i) Executive is indicted or convicted of a felony; (ii) Executive is involved in the commission of theft or embezzlement of Employer's property or similar acts involving moral turpitude; or (iii) Executive willfully fails to substantially perform her material duties under this Agreement (excluding nonperformance resulting from Executive's disability), which willful failure is not cured within (30) days after written notice from the President of the Company specifying the act of willful nonperformance or within such longer period (but no longer than ninety (90) days in any event) as is reasonably required to cure such willful nonperformance. Without limiting the generality of the foregoing, if Executive acted in good faith and in a manner she reasonably believed to be in, and not opposed to, the best interest of Employer and had no reasonable cause to believe her conduct 8

was unlawful in connection with any action taken by Executive in connection with her duties, it shall not constitute Good Cause. (c) "Severance Period" shall mean the period beginning on the date the Executive's employment with Employer terminates without Good Cause under circumstances described in Section 9 and ending on the date that follows eighteen months thereafter. (d) "Welfare Plans" shall mean any health and dental plan, disability plan, survivor income plan and life insurance plan or arrangement currently or hereafter made available by Employer in which Executive is eligible to participate. 25. COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original. 26. SEVERABILITY. In the event that any provision of this Agreement is held illegal or invalid, the remaining provisions of this Agreement shall not be affected thereby. In the event that Section 13(b) is determined by a court of competent jurisdiction to be invalid due to overbreadth, such Section 13(b) shall be constructed as

was unlawful in connection with any action taken by Executive in connection with her duties, it shall not constitute Good Cause. (c) "Severance Period" shall mean the period beginning on the date the Executive's employment with Employer terminates without Good Cause under circumstances described in Section 9 and ending on the date that follows eighteen months thereafter. (d) "Welfare Plans" shall mean any health and dental plan, disability plan, survivor income plan and life insurance plan or arrangement currently or hereafter made available by Employer in which Executive is eligible to participate. 25. COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original. 26. SEVERABILITY. In the event that any provision of this Agreement is held illegal or invalid, the remaining provisions of this Agreement shall not be affected thereby. In the event that Section 13(b) is determined by a court of competent jurisdiction to be invalid due to overbreadth, such Section 13(b) shall be constructed as narrowly as necessary to be enforceable. IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first written above. [Executive] COVENTRY HEALTH CARE, INC. By: Allen F. Wise President and Chief Executive Officer 9

EXHIBIT 10.33 EMPLOYMENT AGREEMENT This Employment Agreement is entered into as of the 13 day of March, 1998, by and between Thomas McDonough ("Executive") and Coventry Corporation ("Employer"), a Delaware corporation with its principal place of business at 501 Corporate Centre Drive, Suite 400, Franklin, TN 37067. W I T N E S S E T H: WHEREAS, Executive desires to enter into an employment relationship with Employer and Employer desires to employ Executive; and WHEREAS, Executive and Employer desire to set forth in a written agreement the terms and conditions of such employment. NOW, THEREFORE, in consideration of the premises hereof and of the mutual promises and agreements contained herein, the parties hereto, intending to be legally bound, hereby agree as follows: 1. EMPLOYMENT. On the Date of Employment (as defined in Section 3 below), Executive shall be engaged by Employer as its Executive Vice President. Executive hereby agrees to such employment on and after the Date of Employment under the terms and conditions hereinafter set forth. 2. DUTIES. As Executive Vice President, Executive shall report to the President and Chief Executive Officer of Employer and shall be responsible for such powers and duties normally associated with such position or as may

EXHIBIT 10.33 EMPLOYMENT AGREEMENT This Employment Agreement is entered into as of the 13 day of March, 1998, by and between Thomas McDonough ("Executive") and Coventry Corporation ("Employer"), a Delaware corporation with its principal place of business at 501 Corporate Centre Drive, Suite 400, Franklin, TN 37067. W I T N E S S E T H: WHEREAS, Executive desires to enter into an employment relationship with Employer and Employer desires to employ Executive; and WHEREAS, Executive and Employer desire to set forth in a written agreement the terms and conditions of such employment. NOW, THEREFORE, in consideration of the premises hereof and of the mutual promises and agreements contained herein, the parties hereto, intending to be legally bound, hereby agree as follows: 1. EMPLOYMENT. On the Date of Employment (as defined in Section 3 below), Executive shall be engaged by Employer as its Executive Vice President. Executive hereby agrees to such employment on and after the Date of Employment under the terms and conditions hereinafter set forth. 2. DUTIES. As Executive Vice President, Executive shall report to the President and Chief Executive Officer of Employer and shall be responsible for such powers and duties normally associated with such position or as may be delegated or assigned to Executive by Employer's President and Chief Executive Officer. During the term of this Agreement, Executive shall also serve without additional compensation in such other offices of the Employer or its subsidiaries or affiliates to which he may be elected or appointed by the Board of Directors of Employer or its subsidiaries or affiliates, respectively. 3. DATE OF EMPLOYMENT. Executive's employment shall commence on April 1, 1998 (the "Date of Employment"). 4. INITIAL TERM. Subject to the terms and conditions set forth herein, Executive shall be employed hereunder for an initial term of three years beginning on the Date of Employment. If at the end of the initial term a new employment contract is not executed, the term of this Agreement shall continue on a year-to-year basis in the absence of notice of either party. 5. BASE COMPENSATION. For all duties rendered by Executive, Employer shall pay Executive a base salary ("Base Salary") of Four Hundred Thousand Dollars ($400,000), annually, to be reviewed on an annual basis based upon the performance of Executive. The Base Salary shall be paid to Executive in accordance with Employer's normal payroll policies. 6. ADDITIONAL COMPENSATION. During the period of this Agreement and as a result of employment under this Agreement, Executive shall receive or be eligible for the following additional compensation:

EMPLOYER STOCK OPTIONS: Executive will be granted a nonqualified stock option to purchase 300,000 shares of Common Stock of Employer at an exercise price per share equal to the closing price per share of the Common Stock of Employer as reported on The Nasdaq National Market on either the date Executive accepted Employer's offer of employment or the Date of Employment, whichever date has the lower closing price. The option will vest at a rate of one-fourth of the shares per year over a four-year vesting period beginning on the date of grant. The option will expire on the tenth anniversary of the Date of Employment unless sooner terminated by Executive terminating his employment hereunder. The option shall be granted under and in accordance with the terms and conditions of Employer's 1997 Stock Incentive Plan and a letter agreement between Executive and Employer dated the date of grant.

EMPLOYER STOCK OPTIONS: Executive will be granted a nonqualified stock option to purchase 300,000 shares of Common Stock of Employer at an exercise price per share equal to the closing price per share of the Common Stock of Employer as reported on The Nasdaq National Market on either the date Executive accepted Employer's offer of employment or the Date of Employment, whichever date has the lower closing price. The option will vest at a rate of one-fourth of the shares per year over a four-year vesting period beginning on the date of grant. The option will expire on the tenth anniversary of the Date of Employment unless sooner terminated by Executive terminating his employment hereunder. The option shall be granted under and in accordance with the terms and conditions of Employer's 1997 Stock Incentive Plan and a letter agreement between Executive and Employer dated the date of grant. EMPLOYER RESTRICTED STOCK AWARD: At the Date of Employment, Executive will be granted a restricted stock award of 100,000 shares of Common Stock of Employer which shall vest in equal one-fourth increments over a three-year period. The first increment shall vest at the end of six months from the Date of Employment, and the remaining three increments shall vest on the first, second and third anniversary of the Date of Employment. The restricted stock award shall be granted under and in accordance with the terms and conditions of Employer's 1997 Stock Incentive Plan and a restricted stock award agreement between Executive and Employer dated the Date of Employment. BONUS COMPENSATION: Executive shall be eligible for an annual bonus ("Bonus") potential of up to 75% of Base Compensation, which shall be determined as follows: (i) up to 50% shall be based upon achievement of budget and other operational performance factors, and (ii) all or any part of the remaining 50% shall be granted in the sole discretion of the Compensation and Benefits Committee (the "Committee") of the Board of Directors of Employer. Executive's bonus and performance factors shall be determined on an annual basis by the Committee. Executive shall receive a guaranteed 1998 Bonus in the amount of $150,000, payable at the time other executive bonuses are paid for 1998 performance; but only if Executive begins his employment with Employer on April 1, 1998. LONG TERM COMPENSATION: Executive shall be eligible to participate in a three-year long term incentive compensation plan awarding up to $3,000,000. Payment under the plan will be paid in accordance with a formula and based upon the achievement by Executive of mutually agreed upon performance criteria, including, but not limited to, reductions in per member per month administrative expenses and other expense ratios and attainment of earnings per share targets for Coventry Corporation and its successor corporation, Coventry Health Care, Inc. The terms and conditions of the plan will be mutually agreed upon by Employer and Executive within sixty (60) days from the Date of Employment and will be included as an amendment to this Agreement. SIGNING BONUS: In lieu of payment by Employer of a search fee for retaining Executive and the costs of relocating Executive, at his option, from Virginia to Maryland, Executive shall receive a signing bonus of Two Hundred Fifty Thousand Dollars ($250,000), to be payable in cash within 30 days from the Date of Employment. DISCRETIONARY EXPENSE ALLOWANCE: Executive shall be entitled to a discretionary expense allowance of $900.00 per month. OTHER BENEFITS: Executive will be eligible for participation in any employee benefit programs available to officers of Employer from time to time as provided in Section 16 below. 7. EXPENSES AND COSTS OF RELOCATION. Executive shall be reimbursed for ordinary and necessary business expenses incurred by Executive on behalf of Employer and its subsidiaries or affiliates upon presentation of vouchers in accordance with the usual and customary procedure of Employer in relation to such expense items, except that Employer may elect, at its option, to pay such expense items directly rather than reimburse Executive therefor. 2

Executive shall also be reimbursed for expenses associated with the relocation of Executive to Employer's designated location during the term of this Agreement. The extent and amount of such expense shall be consistent with the Executive Relocation Policy in effect at the time of relocation.

Executive shall also be reimbursed for expenses associated with the relocation of Executive to Employer's designated location during the term of this Agreement. The extent and amount of such expense shall be consistent with the Executive Relocation Policy in effect at the time of relocation. 8. EXTENT OF SERVICE. Executive shall devote substantially all of his working time, attention and energies to the business of the Employer and shall not, during the term of this Agreement, take, directly or indirectly, an active role in any other business activity without the prior written consent of the Employer; but, except as provided in Section 14(b), this Section shall not prevent Executive from serving as a director of other entities not affiliated with Employer, from making real estate or other investments of a passive nature or from participating in the activities of a nonprofit charitable organization where such participation does not require a substantial amount of time and does not adversely affect Executive's ability to perform his duties under this Agreement. 9. TERMINATION OF EMPLOYMENT. Employer may terminate this Agreement with or without cause at any time during the term of this Agreement. If the employment of Executive with Employer is terminated (i) by Employer for any reason other than Good Cause (as defined in Section 25 below) or (ii) by Executive for Good Reason (as defined in Section 25 below), the following provisions will apply: (a) Employer shall during the Severance Period (as defined in Section 25 below), continue to pay Executive an amount equal to: (i) Executive's Base Salary at the time of termination of employment; and (ii) That portion of Executive's Bonus based on achievement of budget and other operational performance factors, if the criteria is met. Such amount will be paid during the Severance Period in monthly or other installments, similar to those being received by Executive at the date of termination of employment, and will commence as soon as practicable following the date of termination of employment. (b) Upon the date of termination of employment, Executive shall fully vest in the 100,000 shares of Employer's Common Stock granted pursuant to a restricted stock award on the Date of Employment. (c) During the Severance Period Executive shall continue to vest in stock options granted to Executive during the term of his employment in accordance with the terms of each letter agreement awarding such stock options. For this purpose only, Executive shall be deemed to be an employee of Employer during the Severance Period. (d) During the Severance Period Executive and his spouse and family will continue to be covered by all Welfare Plans (as defined in Section 25 below), maintained by Employer in which he or his spouse or family were participating immediately prior to the date of his termination as if he continued to be an employee of Employer; provided that, if participation in any one or more of such Welfare Plans is not possible under the terms thereof, Employer will provide substantially identical benefits to the extent possible. If, however, Executive obtains employment with another employer during the Severance Period, such coverage shall be provided until the earlier of: (i) the end of the Severance Period or (ii) the date on which the Executive and his spouse and family can be covered under the plans of a new employer without being excluded from full coverage because of any actual preexisting condition. Executive's eligibility for and the Employer match to the 401(k) Plan, Supplemental Executive Retirement Plan and/or any other retirement savings program in which the Employee participates shall end at the date of termination of employment. 3

(e) Executive shall not be entitled to payments during the Severance Period attributable to compensation for vacation periods he would have earned had his employment continued during the Severance Period or to unused vacation periods accrued as of the date of termination of employment. (f) During the Severance Period Executive shall not be entitled to reimbursement for fringe benefits such as car allowance, dues and expenses related to club memberships, and expenses for professional services.

(e) Executive shall not be entitled to payments during the Severance Period attributable to compensation for vacation periods he would have earned had his employment continued during the Severance Period or to unused vacation periods accrued as of the date of termination of employment. (f) During the Severance Period Executive shall not be entitled to reimbursement for fringe benefits such as car allowance, dues and expenses related to club memberships, and expenses for professional services. Compensation under Sections 9(a), (b), (c) and (d) hereof is contingent upon Executive's compliance with Section 14 hereof. 10. TERMINATION BY EXECUTIVE. Executive may terminate his employment hereunder at any time upon sixty (60) days prior written notice. Upon such termination by Executive for other than Good Reason, the Employer shall pay the Executive only his Base Salary due through the date on which his employment is terminated at the rate in effect at the time of notice of termination. The Employer shall then have no further obligation to Executive under this Agreement; provided, however, Employer shall have the option of paying Executive in accordance with the provisions of Section 9, above, if Employer desires to continue to enforce Executive's continuing obligations under Sections 14(b), (c) and (d) below. 11. OTHER PAYMENT. If Executive is not elected by the Board of Directors of Employer to the position and responsibilities of Chief Executive Officer or Chief Operating Officer of Employer, or its successor, within eighteen (18) months from the Date of Employment and Executive shall have been continuously employed by Employer during that period of time, Employer shall pay Executive One Million Dollars ($1,000,000), to be payable either in a lump sum or in installments, as Employer and Executive mutually determine. 12. SETOFF. (a) With respect to Section 9, payments or benefits payable to or with respect to Executive or his spouse pursuant to this Agreement shall be reduced by the amount of any valid claim of Employer against Executive or his spouse or any debt or obligation of Executive or his spouse owing to Employer. (b) With respect to Section 9, payments or benefits payable to or with respect to Executive pursuant to this Agreement shall be reduced by any amount Executive may earn or receive from employment with another employer during the Severance Period, except as expressly provided in Section 9(d). 13. DEATH. If Executive dies during the Severance Period: (a) All amounts payable hereunder to Executive shall, during the remainder of the Severance Period, be paid to his surviving spouse. On the death of the survivor of Executive and his spouse, no further benefits will be paid under the Agreement. (b) The spouse and family of Executive shall, during the remainder of the Severance Period, be covered under all Welfare Plans made available by Employer to Executive or his spouse immediately prior to the date of his death to the extent possible. Any benefits payable under this Section 13 are in addition to any other benefit due to Executive or his spouse or beneficiaries from Employer, including, but not limited to, payments under any Incentive Plans. 4

14. RESTRICTIVE COVENANTS. (a) Confidential Information. Executive agrees not to disclose, either during the time he is employed by the Employer or following termination of his employment hereunder, to any person (other than a person to whom disclosure is necessary in connection with the performance of his duties as an employee of Employer or to any person specifically authorized by the Board of Directors of Employer) any material confidential information concerning the Employer or any of its Affiliates, including, but not limited to, strategic plans, customer lists, contract terms, financial costs, pricing terms, sales data or business opportunities whether for existing, new or

14. RESTRICTIVE COVENANTS. (a) Confidential Information. Executive agrees not to disclose, either during the time he is employed by the Employer or following termination of his employment hereunder, to any person (other than a person to whom disclosure is necessary in connection with the performance of his duties as an employee of Employer or to any person specifically authorized by the Board of Directors of Employer) any material confidential information concerning the Employer or any of its Affiliates, including, but not limited to, strategic plans, customer lists, contract terms, financial costs, pricing terms, sales data or business opportunities whether for existing, new or developing businesses. (b) Non-Competition. During the term of employment provided hereunder and during the Severance Period, Executive will not directly or indirectly own, manage, operate, control or participate in the ownership, management, operation or control of, or be connected as an officer, employee, partner, director or otherwise with, or any have financial interest in, or aid or assist anyone else in the conduct of, any business which is in competition with any business conducted by the Employer or any Affiliate of Employer in any state in which the Employer or any Affiliate of Employer is conducting business on the date of termination or expiration of this Agreement, provided that ownership of 5% or less of the voting stock of any public corporation shall not constitute a violation hereof. (c) Non-Solicitation. During the term of employment provided for hereunder and during the Severance Period, Executive will not (i) directly or indirectly solicit business which could reasonably be expected to conflict with the interest of Employer or any Affiliate of Employer from any entity, organization or person which has contracted with the Employer or any Affiliate of Employer, which has been doing business with the Employer or any Affiliate of Employer, from which the Employer or any Affiliate of Employer was soliciting business at the time of the termination of employment or from which Executive knew or had reason to know that Employer or any Affiliate of Employer was going to solicit business at the time of termination of employment, or (ii) employ, solicit for employment, or advise or recommend to any other persons that they employ or solicit for employment, any employee of the Employer or any Affiliate of Employer. (d) Consultation. Executive shall, at the Employer's written request, during the Severance Period cooperate with the Employer in concluding any matters in which Executive was involved during the term of his employment and will make himself available for consultation with the Employer on other matters otherwise of interest to the Employer. The Employer agrees that such requests shall be reasonable in number and will consider Executive's time required for other employment and/or employment search. (e) Enforcement. Executive and the Employer acknowledge and agree that any of the covenants contained in this Section 14 may be specifically enforced through injunctive relief but such right to injunctive relief shall not preclude the Employer from other remedies which may be available to it. (f) Continuing Obligation. Notwithstanding any provision to the contrary or otherwise contained in this Agreement, the agreement and covenants contained in this Section 14 shall not terminate upon Executive's termination of his employment with the Employer or upon the termination of this Agreement under any other provision of this Agreement; provided, however, in the event of Executive's voluntary termination for other than Good Reason, the obligations under Sections 14(b), (c) and (d) shall terminate upon Executive's termination of employment unless Employer elects to pay Executive the termination benefits set forth in Section 9, above. 5

15. VACATION. During each year of this Agreement, Executive shall be entitled to vacation accrued for executives in accordance with corporate policies of Employer that are in effect from time to time. 16. HEALTH AND WELFARE BENEFITS; PROFIT-SHARING PLANS. In addition to the benefits specifically provided for herein, Executive and his family shall be entitled to participate in all health and welfare benefit plans maintained by the Employer for executive or managerial employees generally according to the terms of such plans. Executive shall be entitled to participate in any profit-sharing, retirement or similar plans established by Employer in which executive or managerial employees of Employer participate, including any such plan

15. VACATION. During each year of this Agreement, Executive shall be entitled to vacation accrued for executives in accordance with corporate policies of Employer that are in effect from time to time. 16. HEALTH AND WELFARE BENEFITS; PROFIT-SHARING PLANS. In addition to the benefits specifically provided for herein, Executive and his family shall be entitled to participate in all health and welfare benefit plans maintained by the Employer for executive or managerial employees generally according to the terms of such plans. Executive shall be entitled to participate in any profit-sharing, retirement or similar plans established by Employer in which executive or managerial employees of Employer participate, including any such plan intended to comply with Section 401(k) of the Internal Revenue Code of 1986, as amended, and any such plan providing supplemental executive retirement benefits. 17. EXECUTIVE ASSIGNMENT. No interest of Executive or his spouse or any other beneficiary under this Agreement, or any right to receive any payment or distribution hereunder, shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind, nor may such interest or right to receive a payment or distribution be taken, voluntarily or involuntarily, for the satisfaction of the obligations or debts of, or other claims against, Executive or his spouse or other beneficiary, including claims for alimony, support, separate maintenance, and claims in bankruptcy proceedings. 18. BENEFITS UNFUNDED. All rights of Executive and his spouse or other beneficiary under this Agreement shall at all times be entirely unfunded and no provision shall at any time be made with respect to segregating any assets of Employer for payment of any amounts due hereunder. Neither Executive nor his spouse or other beneficiary shall have any interest in or rights against any specific assets of Employer, and Executive and his spouse or other beneficiary shall have only the rights of a general unsecured creditor of Employer. 19. NOTICES. Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and sent by registered or certified mail to his residence in the case of Executive, or to its principal office in the case of the Employer and the date of receipt shall be deemed the date which such notice has been provided. 20. WAIVER OF BREACH. The waiver by either party of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by the other party. 21. ASSIGNMENT. The rights and obligations of the Employer under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Employer. The Executive acknowledges that the services to be rendered by him are unique and personal, and Executive may not assign any of his rights or delegate any of his duties or obligations under this Agreement. 22. ENTIRE AGREEMENT. This instrument contains the entire agreement of the parties and supersedes all other prior agreements, employment contracts and understandings, both written and oral, express or implied with respect to the subject matter of this Agreement and may not be changed orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought. 23. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of Tennessee, without giving effect to the principles of conflicts of law thereof. 24. HEADINGS. The sections, subjects and headings of this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 25. DEFINITIONS. For purposes of this Agreement: (a) "Affiliate" shall have the meaning set forth in Rule 144(a)(1) promulgated under the Securities Act of 1933, as amended. 6

(b) "Good Cause" shall be deemed to exist if, and only if:

(b) "Good Cause" shall be deemed to exist if, and only if: (i) Executive engages in material acts or omissions constituting dishonesty, breach of fiduciary obligation or intentional wrongdoing, malfeasance or non-compliance with written directives approved by the Board of Directors which are demonstrably injurious to Employer; (ii) Executive is convicted of a violation involving fraud or dishonesty; or (iii) Executive materially breaches this Agreement (other than by engaging in acts or omissions enumerated in paragraphs (i) and (ii) above), or materially fails to satisfy the conditions and requirements of his employment with Employer, and such breach or failure by its nature is incapable of being cured, or such breach or failure remains uncured for more than 30 days following receipt by Executive of written notice from Employer specifying the nature of the breach or failure and demanding the cure thereof. For purposes of this paragraph (iii), inattention by Executive to his duties shall be deemed a breach or failure of cure. Without limiting the generality of the foregoing, if Executive acted in good faith and in a manner he reasonably believed to be in, and not opposed to, the best interest of Employer and had no reasonable cause to believe his conduct was unlawful in connection with any action taken by Executive in connection with his duties, it shall not constitute Good Cause. (c) "Good Reason" shall exist if there is a material reduction in the position, nature or scope of Executive's authority or a material reduction in Executive's compensation, without Executive's prior written consent. Good Reason shall also exist if as a result of a change in control of Employer any of the foregoing events occur. A change in control shall include the following occurrences: (i) the acquisition of at least a majority of the outstanding shares of Common Stock (or securities convertible into Common Stock) of Employer by any person, entity or group (as used in Section 13(d)(3) and Rule 13d-5(b)(1) under the Exchange Act); (ii) the merger or consolidation of Employer with or into another corporation or other entity, or any share exchange or similar transaction involving Employer and another corporation or other entity, if as a result of such merger, consolidation, share exchange or other transaction, the persons who owned at least a majority of the Common Stock of Employer prior to the consummation of such transaction do not own at least a majority of the Common Stock of the surviving entity after the consummation of such transaction; (iii) the sale of all, or substantially all, of the assets of Employer; or (iv) any change in the composition of the Board of Directors of Employer as a result of a contested election such that persons who at the beginning of any period of up to two years constituted at least a majority of the Board of Directors of Employer, or persons whose nomination was approved by such majority, cease to constitute at least a majority of the Board of Directors of Employer at the end of such period. (d) "Severance Period" shall mean the period beginning on the date the Executive's employment with Employer terminates without Good Cause or Executive terminates his employment with Good Reason under circumstances described in Section 9 and ending 12 months thereafter. 7

(e) "Welfare Plans" shall mean any health and dental plan, disability plan, survivor income plan and life insurance plan or arrangement currently or hereafter made available by Employer in which Executive is eligible to participate. 26. COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original. 27. SEVERABILITY. In the event any provision of this Agreement is held illegal or invalid, the remaining provisions of this Agreement shall not be affected thereby. In the event that Section 14(b) is determined by a

(e) "Welfare Plans" shall mean any health and dental plan, disability plan, survivor income plan and life insurance plan or arrangement currently or hereafter made available by Employer in which Executive is eligible to participate. 26. COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original. 27. SEVERABILITY. In the event any provision of this Agreement is held illegal or invalid, the remaining provisions of this Agreement shall not be affected thereby. In the event that Section 14(b) is determined by a court of competent jurisdiction to be invalid due to overbreadth, such Section 14(b) shall be constructed as narrowly as necessary to be enforceable. IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first written above.
/s/Thomas McDonough --------------------------------------Thomas McDonough

COVENTRY CORPORATION
By: /s/Allen F. Wise --------------------------------------Allen F. Wise President and Chief Executive Officer

8

EXHIBIT 10.34 FEDEX May 22, 1998 Mr. James E. McGarry 1212 Dundale Circle Sherman, Texas 75093 Dear Jim: I am pleased to offer you the position of Senior Vice President of Coventry Health Care ("Coventry"). Your position would report directly to me. Your compensation package would consist of the following: 1. Annual base compensation of $275,000. Your performance and salary would be reviewed annually. 2. Participation in Coventry's 1998 Performance Incentive Plan with an annual target bonus equal to 70% of your base compensation. Plan payment may range from 0% to 200% of target, based on corporate and individual performance factors as set forth in the Plan. You will receive a guaranteed 1998 Bonus in the amount of $100,000, payable at the time other executive bonuses are paid for 1998 performance. 3. A non-qualified stock option to purchase 150,000 shares of Common Stock of Coventry at an exercise price per share equal to the closing price per share of the Common Stock of Employer as reported on The Nasdaq National Market on either the date of acceptance of this offer letter or the date of employment, whichever date has the lower closing price. The option will vest at a rate of one-fourth of the shares per year over a four-year

EXHIBIT 10.34 FEDEX May 22, 1998 Mr. James E. McGarry 1212 Dundale Circle Sherman, Texas 75093 Dear Jim: I am pleased to offer you the position of Senior Vice President of Coventry Health Care ("Coventry"). Your position would report directly to me. Your compensation package would consist of the following: 1. Annual base compensation of $275,000. Your performance and salary would be reviewed annually. 2. Participation in Coventry's 1998 Performance Incentive Plan with an annual target bonus equal to 70% of your base compensation. Plan payment may range from 0% to 200% of target, based on corporate and individual performance factors as set forth in the Plan. You will receive a guaranteed 1998 Bonus in the amount of $100,000, payable at the time other executive bonuses are paid for 1998 performance. 3. A non-qualified stock option to purchase 150,000 shares of Common Stock of Coventry at an exercise price per share equal to the closing price per share of the Common Stock of Employer as reported on The Nasdaq National Market on either the date of acceptance of this offer letter or the date of employment, whichever date has the lower closing price. The option will vest at a rate of one-fourth of the shares per year over a four-year vesting period beginning on the date of grant. Your stock option grant will be subject to approval by the Compensation and Benefits Committee. The terms and conditions of your grant will be under and in accordance with the terms and provisions of Coventry's 1998 Stock Incentive Plan and letter agreement between you and Coventry. 4. A signing bonus equal to $60,000, payable within 30 days from the date you begin employment with Coventry. 5. Car allowance of $900.00 per month. 6. Life, health, dental, and retirement benefits as provided to executives of Coventry. I have enclosed a package of information describing Coventry's benefits currently in effect. You would also be eligible for any new benefits in the future if such benefits are provided generally to Coventry executives. 7. In the event of your involuntary termination without cause, you would be provided with severance compensation equal to one year's base compensation in exchange for your execution of an agreement, to be executed as of the date of your employment, containing confidentiality, non-competition and non-solicitation provisions to be effective during the term of your employment and during the severance period.

8. Vacation accrued for executives in accordance with corporate policies in effect from time to time (currently four weeks). I believe the above terms accurately reflect the substance of our previous discussions. If you are in agreement, please execute the enclosed copy of this letter and return it to me. If we need to discuss this further, please call me. Jim, I'm excited about you joining the team and look forward to working with you again.

8. Vacation accrued for executives in accordance with corporate policies in effect from time to time (currently four weeks). I believe the above terms accurately reflect the substance of our previous discussions. If you are in agreement, please execute the enclosed copy of this letter and return it to me. If we need to discuss this further, please call me. Jim, I'm excited about you joining the team and look forward to working with you again. With best regards,
/s/Thomas P. McDonough -----------------------------------Thomas P. McDonough Executive Vice President

ACKNOWLEDGED AND AGREED this 26th day of May, 1998.
/s/ James E. McGarry -----------------------------------James E. McGarry

2

EXHIBIT 10.35 AGREEMENT AND RELEASE This Agreement and Release is made as of the 29th day of May, 1998, by and between Robert A. Mayer ("Employee"), Coventry Corporation, a Tennessee corporation, ("Coventry") and HealthAmerica Pennsylvania, Inc., a Pennsylvania corporation with its principal place of business at 2575 Interstate Drive, Harrisburg, Pennsylvania 17110 ("Employer"), relating to termination of Employee's employment with Employer. WHEREAS, the Employee voluntarily resigned from his position with Employer effective as of May 1, 1998. Employer and Employee desire to enter into a full and final settlement of all matters between them arising out of Employee's employment and the termination thereof. NOW, THEREFORE, in consideration of the terms, conditions, mutual promises, and covenants herein contained, the sufficiency of which is acknowledged by the signatures of the parties hereto, Employee and Employer agree as follows: 1. TERMINATION Effective May 1, 1998, Employee's employment with Employer in any and all capacities automatically terminated (the "Termination Date") and Employee resigned all positions held as an officer or director of Employer or any of its subsidiaries or affiliates as of the Termination Date. Employee has turned over to Employer all property of Employer and any of its affiliates or subsidiaries in Employee's possession, including but not limited to all keys, business cards, files, documents and records (and any copies thereof), information, memberships, credit cards, computer hardware and software, and portable telephones, if any, on the Termination Date. 2. SEVERANCE COMPENSATION Notwithstanding Employee's termination, Employer shall provide Employee with certain severance compensation commencing on the Termination Date and continuing for a period of fifteen months through July 31, 1999 (the "Severance Period"), as follows:

EXHIBIT 10.35 AGREEMENT AND RELEASE This Agreement and Release is made as of the 29th day of May, 1998, by and between Robert A. Mayer ("Employee"), Coventry Corporation, a Tennessee corporation, ("Coventry") and HealthAmerica Pennsylvania, Inc., a Pennsylvania corporation with its principal place of business at 2575 Interstate Drive, Harrisburg, Pennsylvania 17110 ("Employer"), relating to termination of Employee's employment with Employer. WHEREAS, the Employee voluntarily resigned from his position with Employer effective as of May 1, 1998. Employer and Employee desire to enter into a full and final settlement of all matters between them arising out of Employee's employment and the termination thereof. NOW, THEREFORE, in consideration of the terms, conditions, mutual promises, and covenants herein contained, the sufficiency of which is acknowledged by the signatures of the parties hereto, Employee and Employer agree as follows: 1. TERMINATION Effective May 1, 1998, Employee's employment with Employer in any and all capacities automatically terminated (the "Termination Date") and Employee resigned all positions held as an officer or director of Employer or any of its subsidiaries or affiliates as of the Termination Date. Employee has turned over to Employer all property of Employer and any of its affiliates or subsidiaries in Employee's possession, including but not limited to all keys, business cards, files, documents and records (and any copies thereof), information, memberships, credit cards, computer hardware and software, and portable telephones, if any, on the Termination Date. 2. SEVERANCE COMPENSATION Notwithstanding Employee's termination, Employer shall provide Employee with certain severance compensation commencing on the Termination Date and continuing for a period of fifteen months through July 31, 1999 (the "Severance Period"), as follows: (i) continued payment during the Severance Period of that portion of Employee's full base salary in effect at the Date of Termination (annualized at $250,000), subject to legal withholds and deductions, in such equal installments as are consistent with Employer's customary salary payment practices, and subject to an offset for relocation expenses; and (ii) continued coverage under all Welfare Plans (as that term is defined in that certain Employment Agreement entered into effective as of January 24, 1997, and amended as of March 12, 1997, between Employee and Employer (the "Employment Agreement") maintained by Employer in which Employee or his spouse or family were participating immediately prior to the Termination Date. If, however, Employee obtains other coverage through his spouse or obtains employment with another employer during the Severance Period, Employer's coverage shall be provided until the earlier of: (i) the end of the Severance Period or (ii) the date on which the Employee and his spouse and family can be covered under the plans of his spouse or a new employer without being excluded from full coverage because of any actual pre-existing condition. Executive's eligibility for, and the Employer match to, the 401(k) Plan (the "401(k) Plan"), the Supplemental Executive Retirement Plan (the "SERP") and/or any other retirement savings program in which the Employee participates shall end at

the Termination Date. Employee's balances in the SERP shall be distributed to him as soon as practicable, less tax withholdings, in accordance with the terms of the SERP. 3. STOCK OPTIONS Notwithstanding anything to the contrary contained in any prior agreements, either oral or written, between the

the Termination Date. Employee's balances in the SERP shall be distributed to him as soon as practicable, less tax withholdings, in accordance with the terms of the SERP. 3. STOCK OPTIONS Notwithstanding anything to the contrary contained in any prior agreements, either oral or written, between the parties or in any stock option plan of Coventry, the parties hereby agree that Employee is fully vested in the following options for shares of Common Stock of Coventry Health Care, Inc. (formerly Coventry Corporation):
No. of Options Exercisable -------------33,333 12,500 12,500

Date of Grant ------------2/10/97 3/27/97 4/14/97

Exercise Price -------------$ 7.3125 $11.6250 $11.1250

In addition, on February 10, 1999, Employee shall be deemed to vest in the next increment of stock options representing 33,333 shares of Common Stock of Coventry Health Care, Inc. Employee shall have the right to exercise his stock options, to the extent vested, at any time during the Severance Period. 4. CONFIDENTIALITY At all times hereafter, Employee will not, directly or indirectly, reveal, communicate or divulge the contents of this Agreement or any information, knowledge, data, records or documents to any person, firm, corporation or entity which relate to the confidential business of Employer or its affiliates, including but not limited to, any strategic plans, customer lists, contract terms, financial information, pricing terms, sales data or business opportunities, trade secrets, modes of operation, product information, member and Employer subscriber lists, names of firms or services, information regarding prospective, existing and former member and Employer subscribers, providers and employees, and all business and other records of Employer or its affiliates; provided, however, that the foregoing shall not apply to information which is generally known to the public or appears as a matter of public record or matters as to which disclosure is required by law or appropriate judicial or investigative proceeding. 5. RELEASES In further consideration of the severance compensation provided for in Section 2, above, Employee hereby agrees, on behalf of himself and his administrators, heirs, assigns and anyone claiming through him, to completely release and forever discharge Employer and its officers, directors, subsidiaries, Affiliates, agents, servants, representatives, underwriters, successors, heirs and assigns, and Employer on its behalf and behalf of its subsidiaries agrees to completely release and discharge Employee, from any and all claims, demands, obligations, or causes of action of any nature whatsoever, whether known or unknown, which either of them ever had, or in the future may have, arising out of or in any way connected with the Employee's employment with Employer and the termination thereof provided for hereunder, including, but not limited to, any claim relating to violation of any federal or state statute or regulation, any claim for wrongful discharge or breach of contract, or any claim relating to the state or federal employment laws (including, but not limited to, the Fair Labor Standards Act, Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act, the Employee Retirement Income Security Act, the Older Workers' Benefit Protection Act, and the Rehabilitation Act); provided, however, that nothing herein shall be construed as a release of any of either party's obligations hereunder or under the applicable terms of the Employment Agreement not otherwise amended herein.

Employee expressly acknowledges that he was advised to consult with an attorney prior to signing this Agreement and acknowledges that he has been given a period of at least twenty-one (21) days in which to consider this Agreement, which period by his signature hereto he expressly waives. Employee understands and agrees that if he breaches this release or files any claim, charge or lawsuit seeking

Employee expressly acknowledges that he was advised to consult with an attorney prior to signing this Agreement and acknowledges that he has been given a period of at least twenty-one (21) days in which to consider this Agreement, which period by his signature hereto he expressly waives. Employee understands and agrees that if he breaches this release or files any claim, charge or lawsuit seeking payment of any money or benefits in excess of the payments provided under this Agreement or seeking any equitable relief, Employer may discontinue the payment of any amount payable hereunder and be entitled to recover any amount already paid hereunder. 6. REVOCATION PERIOD The parties herein expressly agree that for a period of seven (7) days following the date of Employee's execution of this Agreement, Employee may revoke this Agreement. The Agreement shall not become effective or enforceable until such revocation period has expired. Should Employee elect to revoke this Agreement pursuant to this paragraph, written notice of such revocation must be received at Employer's corporate offices no later than the close of business on the final day of the revocation period. 7. THIRD PARTY COMMUNICATIONS In consideration of the mutual promises and covenants contained herein, each of the parties expressly agrees that they will not make statements to or initiate or participate in discussions with any other person which are derogatory, disparaging or injurious to the reputation of Employee or of Employer or any of its affiliates or which in any way characterize Employee or Employer or any of its affiliates in an unfavorable light. This provision shall in no way be construed to prohibit either party from responding truthfully to any question or interrogatory which such party is required to answer in connection with any court or other legal proceeding. 8. MISCELLANEOUS EFFECT OF THIS AGREEMENT: With the exception of applicable provisions of the Employment Agreement not revised by this Agreement, this Agreement supersedes any other agreement, express or implied, between the parties as to the matters herein. To the extent any inconsistencies exist between this Agreement and any earlier employment agreements executed by Employee and Employer, including the Employment Agreement, the terms and conditions of this Agreement will supersede and control. BINDING NATURE OF AGREEMENT: This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, trustees, administrators, successors and assigns. SEVERABILITY: If any provision of this Agreement is held to be unenforceable, this Agreement shall be considered divisible and such provision shall be deemed inoperative to the extent it is unenforceable, and in all other respects this Agreement shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by applicable law. ENTIRE AGREEMENT: This Agreement represents the entire and final Agreement between the parties regarding the subject matter of Employee's employment with Employer and the termination thereof. All prior negotiations, understandings, conversations, and communications, if any, are merged into this Agreement and have no force and effect other than as expressed in the body hereof. GOVERNING LAW: This Agreement shall be governed by and construed in accordance with the laws of the state of Pennsylvania.

AMENDMENTS: This Agreement may not be modified, amended, or waived without the express prior written consent of all parties hereto. FREE ACTS: The parties have relied solely upon their own judgment and the advice of their own counsel in making this Agreement. Employee acknowledges that he has read and fully understands the Agreement and has

AMENDMENTS: This Agreement may not be modified, amended, or waived without the express prior written consent of all parties hereto. FREE ACTS: The parties have relied solely upon their own judgment and the advice of their own counsel in making this Agreement. Employee acknowledges that he has read and fully understands the Agreement and has executed the same under his own free act and will. CAPTIONS: The captions appearing in this Agreement are inserted only as a matter of convenience and in no way define, limit, construe, or describe the scope or intent of such paragraphs. IN WITNESS WHEREOF, the parties have executed this Agreement and Release as of the day and year first above written.
/s/ Robert A. Mayer ------------------------------------Robert A. Mayer

COVENTRY CORPORATION
By: /s/ Allen F. Wise ------------------------------------Allen F. Wise President and Chief Executive Officer

HEALTHAMERICA PENNSYLVANIA, INC.
By: /s/ Francis S. Soistman, Jr. ------------------------------------Francis S. Soistman, Jr. President and Chief Executive Officer

EXHIBIT 10.36 AGREEMENT AND RELEASE This is an Agreement and Release made as of the 30th day of June, 1998, by and between Coventry Health Care, Inc., a Maryland corporation with its principal place of business at 6705 Rockledge Drive, Suite 100, Bethesda, Maryland 20817 ("Employer") and Kenneth J. Linde ("Executive"), relating to termination of Executive's employment with Employer. WHEREAS, the parties hereto desire to mutually terminate as of June 30, 1998 Executive's employment on an amicable basis by entering into a full and final settlement of all matters between them arising out of Executive's employment and the termination thereof. NOW, THEREFORE, in consideration of the terms, conditions, mutual promises, and covenants herein contained, the sufficiency of which is acknowledged by the signatures of the parties hereto, Executive and Employer agree as follows: 1. TERMINATION Effective June 30, 1998, Executive's employment with Employer in any and all capacities shall automatically be terminated (the "Termination Date") and Executive shall resign all positions held as an officer or director of Employer or any of its subsidiaries or Affiliates as of the Termination Date. Executive agrees to turn over to Employer all property of Employer and any of its Affiliates or subsidiaries in Executive's possession, including but

EXHIBIT 10.36 AGREEMENT AND RELEASE This is an Agreement and Release made as of the 30th day of June, 1998, by and between Coventry Health Care, Inc., a Maryland corporation with its principal place of business at 6705 Rockledge Drive, Suite 100, Bethesda, Maryland 20817 ("Employer") and Kenneth J. Linde ("Executive"), relating to termination of Executive's employment with Employer. WHEREAS, the parties hereto desire to mutually terminate as of June 30, 1998 Executive's employment on an amicable basis by entering into a full and final settlement of all matters between them arising out of Executive's employment and the termination thereof. NOW, THEREFORE, in consideration of the terms, conditions, mutual promises, and covenants herein contained, the sufficiency of which is acknowledged by the signatures of the parties hereto, Executive and Employer agree as follows: 1. TERMINATION Effective June 30, 1998, Executive's employment with Employer in any and all capacities shall automatically be terminated (the "Termination Date") and Executive shall resign all positions held as an officer or director of Employer or any of its subsidiaries or Affiliates as of the Termination Date. Executive agrees to turn over to Employer all property of Employer and any of its Affiliates or subsidiaries in Executive's possession, including but not limited to all keys, business cards, files, documents and records (and any copies thereof), information, memberships, credit cards, computer hardware and software, and automobile, if any, and any other equipment owned by Employer on the Termination Date; provided, however, Executive may retain the Employer's portable cell phone, pager, home computer equipment, which includes hardware, software and facsimile machine currently set up in Executive's home, and the use of voice mail for receiving personal messages through December 31, 1998. 2. SEVERANCE COMPENSATION Notwithstanding Executive's termination, Employer shall provide Executive with certain severance compensation as follows: (a) payment of Two Million Five Hundred Thousand and No/100 Dollars ($2,500,000.00), subject to legal withholds and deductions, payable in a lump sum on or before July 1, 1998. (b) continued coverage through December 31, 1998 under Employer's health plan in which Executive or his spouse or family were participating immediately prior to the Termination Date. If, however, Executive obtains employment with another employer during the Severance Period, such coverage shall be provided until the earlier of: (i) December 31, 1998 or (ii) the date on which the Executive and his spouse and family can be covered under the plans of a new employer without being excluded from full coverage because of any actual pre-existing condition. Executive's eligibility for, and the Employer match to, the 401(k) Plan (the "401(k) Plan"), the Supplemental Executive Retirement Plan (the "SERP") and/or any other retirement savings program in which the Employee participates shall end at the Termination Date. Employee's balances in the SERP shall be distributed to him as soon as practicable, less tax withholdings, in accordance with the terms of the SERP.

3. STOCK OPTIONS Notwithstanding anything to the contrary contained in any prior agreements, either oral or written, between the parties or in any Stock Option Plan of Employer, the parties hereby agree that Executive shall become fully vested on April 1, 1999 in one-third of the stock options granted to Executive on April 1, 1998 or one hundred thirty-three thousand three hundred and thirty-three (133,333) shares of Common Stock at an exercise price of

3. STOCK OPTIONS Notwithstanding anything to the contrary contained in any prior agreements, either oral or written, between the parties or in any Stock Option Plan of Employer, the parties hereby agree that Executive shall become fully vested on April 1, 1999 in one-third of the stock options granted to Executive on April 1, 1998 or one hundred thirty-three thousand three hundred and thirty-three (133,333) shares of Common Stock at an exercise price of $14.50 per share. Executive shall have ninety (90) days from the date of vesting within which to exercise his vested stock options. Upon exercise, Executive may sell the underlying shares of Common Stock at any time thereafter so long as such sale is in accordance with applicable laws and regulations. 4. RESTRICTIVE COVENANTS In consideration of the severance compensation provided for in Section 2, above, Executive expressly agrees as follows: (a) Confidential Information. At all times hereafter, Executive will not, directly or indirectly, reveal, communicate or divulge any information, knowledge, data, records or documents to any person, firm, corporation or entity which relate to the confidential business of Employer or its affiliates, including but not limited to, any strategic plans, customer lists, contract terms, financial information, pricing terms, sales data or business opportunities, trade secrets, modes of operation, product information, member and Employer subscriber lists, names of firms or services, information regarding prospective, existing and former member and Employer subscribers, providers and Executives, and all business and other records of Employer or its affiliates; provided, however, that the foregoing shall not apply to information which is generally known to the public or appears as a matter of public record or matters as to which disclosure is required by law or appropriate judicial or investigative proceeding. (b) Non-Solicitation. For a period of one year following the Termination Date, Executive will not: (i) knowingly solicit business, directly or indirectly, which could reasonably be expected to conflict with the interests of Employer or any affiliate of Employer from any entity, organization or person which has contracted with the Employer or any affiliate of Employer which has been doing business with the Employer or any affiliate of Employer, from which the Employer or any affiliate of Employer was soliciting business at the time of the termination of employment or from which Executive knew or had reason to know that Employer or any affiliate of Employer was going to solicit business at the time of termination of employment; or (ii) employ, solicit for employment, directly or indirectly, or advise or recommend to any other persons that they employ or solicit for employment, any employee of Employer or any affiliate of Employer. (d) Consultation. Executive shall, at Employer's written request, for a period of one year after termination of employment, cooperate with Employer in concluding any matters in which Executive was involved during the term of his employment and will make himself available for consultation with Employer on other matters otherwise of interest to Employer. Employer agrees that such requests shall be reasonable in number and will consider Executive's time required for other employment and/or employment search. Executive shall be reimbursed for ordinary and necessary expenses incurred by Executive on behalf of Employer and its Affiliates, in providing consultation, upon presentation of vouchers in accordance with 2

the usual and customary procedures of Employer in relation to such expense items, except that Employer may elect, at its option, to pay such expense items directly rather than reimburse Executive therefore. (e) Continuing Obligation. Notwithstanding any provision to the contrary or otherwise contained in this Agreement, the agreement and covenants contained in this Section 4 shall not terminate upon Executive's termination of his employment with Employer or upon the termination of this Agreement under any other provision of this Agreement. It is understood and agreed that in the event of a breach of the terms and provisions contained in this Section 4, no adequate legal remedy exists and Employer shall be entitled to injunctive relief and/or specific performance

the usual and customary procedures of Employer in relation to such expense items, except that Employer may elect, at its option, to pay such expense items directly rather than reimburse Executive therefore. (e) Continuing Obligation. Notwithstanding any provision to the contrary or otherwise contained in this Agreement, the agreement and covenants contained in this Section 4 shall not terminate upon Executive's termination of his employment with Employer or upon the termination of this Agreement under any other provision of this Agreement. It is understood and agreed that in the event of a breach of the terms and provisions contained in this Section 4, no adequate legal remedy exists and Employer shall be entitled to injunctive relief and/or specific performance and damages, as well as to any and all other legal or equitable remedies to which Employer may be entitled. 5. NON-COMPETITION Executive shall be fully released from the non-competition restrictions set forth in Section 14(b) of the Employment Agreement. 6. RELEASES In further consideration of the severance compensation provided for in Section 2, above, Executive hereby agrees, on behalf of himself and his administrators, heirs, assigns and anyone claiming through him, to completely release and forever discharge Employer and its officers, directors, subsidiaries, Affiliates, agents, servants, representatives, underwriters, successors, heirs and assigns, and Employer on its behalf and behalf of its subsidiaries agrees to completely release and discharge Executive, from any and all claims, demands, obligations, or causes of action of any nature whatsoever, whether known or unknown, which either of them ever had, or in the future may have, arising out of or in any way connected with the Executive's employment with Employer and the termination thereof provided for hereunder, including, but not limited to, any claim relating to violation of any federal or state statute or regulation, any claim for wrongful discharge or breach of contract, or any claim relating to the state or federal employment laws (including, but not limited to, the Fair Labor Standards Act, Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act, the Executive Retirement Income Security Act, the Older Workers' Benefit Protection Act, and the Rehabilitation Act); provided, however, that nothing herein shall be construed as a release of any of either party's obligations hereunder. Executive expressly acknowledges that he was advised to consult with an attorney prior to signing this Agreement and acknowledges that he has been given a period of at least forty-five (45) days in which to consider this Agreement, which period by his signature hereto he expressly waives. Executive understands and agrees that if he breaches this release or files any claim, charge or lawsuit seeking payment of any money or benefits in excess of the payments provided under this Agreement or seeking any equitable relief, Employer may discontinue the payment of any amount payable hereunder and be entitled to recover any amount already paid hereunder. 7. REVOCATION PERIOD The parties herein expressly agree that for a period of seven (7) days following the date of Executive's execution of this Agreement, Executive may revoke this Agreement. The Agreement shall not become effective or enforceable until such revocation period has expired. Should Executive elect to revoke this Agreement pursuant to this paragraph, written notice of such revocation must be received at Employer's corporate offices no later than the close of business on the final day of the revocation period. 3

8. THIRD PARTY COMMUNICATIONS In consideration of the mutual promises and covenants contained herein, each of the parties expressly agrees that they will not make statements to or initiate or participate in discussions with any other person which are

8. THIRD PARTY COMMUNICATIONS In consideration of the mutual promises and covenants contained herein, each of the parties expressly agrees that they will not make statements to or initiate or participate in discussions with any other person which are derogatory, disparaging or injurious to the reputation of Executive or of Employer or any of its Affiliates or which in any way characterize Executive or Employer or any of its Affiliates in an unfavorable light. This provision shall in no way be construed to prohibit either party from responding truthfully to any question or interrogatory which such party is required to answer in connection with any court or other legal proceeding. 9. MISCELLANEOUS (a) Effect of this Agreement: This Agreement supersedes any other agreement, express or implied, between the parties as to the matters herein. To the extent any inconsistencies exist between this Agreement and any earlier employment agreements executed by Executive and Employer, including the Employment Agreement, the terms and conditions of this Agreement will supersede and control. (b) Binding Nature of Agreement: This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, trustees, administrators, successors and assigns. (c) Severability: If any provision of this Agreement is held to be unenforceable, this Agreement shall be considered divisible and such provision shall be deemed inoperative to the extent it is unenforceable, and in all other respects this Agreement shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by applicable law. (d) Entire Agreement: This Agreement represents the entire and final Agreement between the parties regarding the subject matter of Executive's employment with Employer and the termination thereof. All prior negotiations, understandings, conversations, and communications, if any, are merged into this Agreement and have no force and effect other than as expressed in the body hereof. (e) Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the state of Maryland. (f) Amendments: This Agreement may not be modified, amended, or waived without the express prior written consent of all parties hereto. (g) Free Acts: The parties have relied solely upon their own judgment and the advice of their own counsel in making this Agreement. Executive acknowledges that he has read and fully understands the Agreement and has executed the same under his own free act and will. (h) Captions: The captions appearing in this Agreement are inserted only as a matter of convenience and in no way define, limit, construe, or describe the scope or intent of such paragraphs. (i) Defined Terms: All capitalized terms used herein and not defined shall have the meanings ascribed to them in the Employment Agreement. 4

IN WITNESS WHEREOF, the parties have executed this Agreement and Release as of the day and year first above written.
/s/ Kenneth J. Linde --------------------------------------------Kenneth J. Linde

COVENTRY HEALTH CARE, INC.

IN WITNESS WHEREOF, the parties have executed this Agreement and Release as of the day and year first above written.
/s/ Kenneth J. Linde --------------------------------------------Kenneth J. Linde

COVENTRY HEALTH CARE, INC.
By /s/ Allen F. Wise -----------------------------------------Allen F. Wise President and Chief Executive Officer

5

COVENTRY HEALTH CARE, INC. SUBSIDIARIES
NAME OF SUBSIDIARY -----------------Coventry Corporation Coventry Health and Life Insurance Company Coventry Healthcare Management Corporation d/b/a HealthAssurance Coventry HealthCare Management Corporation (i) (ii) 5. Southern Health Services, Inc. Southern Health Benefit Services, Inc. STATE OF INCORPORATION ---------------------Tennessee Texas Delaware

1. 2. 3.

4.

Virginia Virginia Virginia Delaware West Virginia Missouri Missouri Pennsylvania Pennsylvania Florida Missouri Pennsylvania Pennsylvania Iowa Iowa North Carolina Delaware Florida Georgia

Coventry HealthCare Development Corporation (i) Coventry Health Plan of West Virginia

6.

Group Health Plan, Inc. (i) Specialty Services of Missouri, Inc.

7.

HealthAmerica Pennsylvania, Inc. (i) Riverside Health Plan, Inc.

8.

HealthCare USA, Inc. (i) HealthCare USA of Missouri, Inc.

9. 10. 11. 12. 13. 14. 15. 16.

HealthPass, Inc. Pennsylvania HealthCare USA, Inc. Principal Health Care of Iowa, Inc. Principal Health Care Management Corporation Principal Health Care of the Carolinas, Inc. Principal Health Care of Delaware, Inc. Principal Health Care of Florida, Inc. Principal Health Care of Georgia, Inc.

COVENTRY HEALTH CARE, INC. SUBSIDIARIES
NAME OF SUBSIDIARY -----------------Coventry Corporation Coventry Health and Life Insurance Company Coventry Healthcare Management Corporation d/b/a HealthAssurance Coventry HealthCare Management Corporation (i) (ii) 5. Southern Health Services, Inc. Southern Health Benefit Services, Inc. STATE OF INCORPORATION ---------------------Tennessee Texas Delaware

1. 2. 3.

4.

Virginia Virginia Virginia Delaware West Virginia Missouri Missouri Pennsylvania Pennsylvania Florida Missouri Pennsylvania Pennsylvania Iowa Iowa North Carolina Delaware Florida Georgia Illinois

Coventry HealthCare Development Corporation (i) Coventry Health Plan of West Virginia

6.

Group Health Plan, Inc. (i) Specialty Services of Missouri, Inc.

7.

HealthAmerica Pennsylvania, Inc. (i) Riverside Health Plan, Inc.

8.

HealthCare USA, Inc. (i) HealthCare USA of Missouri, Inc.

9. 10. 11. 12. 13. 14. 15. 16. 17.

HealthPass, Inc. Pennsylvania HealthCare USA, Inc. Principal Health Care of Iowa, Inc. Principal Health Care Management Corporation Principal Health Care of the Carolinas, Inc. Principal Health Care of Delaware, Inc. Principal Health Care of Florida, Inc. Principal Health Care of Georgia, Inc. Principal Health Care of Illinois, Inc.

18. 19. 20. 21. 22. 23. 24. 25. 26.

Principal Health Care of Indiana, Inc. Principal Health Care of Louisiana, Inc. Principal Health Care of Kansas City, Inc. Principal Health Care of Nebraska, Inc. Principal Health Care of Pennsylvania, Inc. Principal Health Care of St. Louis, Inc. Principal Health Care of South Carolina, Inc. Principal Health Care of Tennessee, Inc. United HealthCare Services of Iowa, Inc.

Delaware Louisiana Missouri Nebraska Pennsylvania Delaware South Carolina Tennessee Iowa

18. 19. 20. 21. 22. 23. 24. 25. 26.

Principal Health Care of Indiana, Inc. Principal Health Care of Louisiana, Inc. Principal Health Care of Kansas City, Inc. Principal Health Care of Nebraska, Inc. Principal Health Care of Pennsylvania, Inc. Principal Health Care of St. Louis, Inc. Principal Health Care of South Carolina, Inc. Principal Health Care of Tennessee, Inc. United HealthCare Services of Iowa, Inc.

Delaware Louisiana Missouri Nebraska Pennsylvania Delaware South Carolina Tennessee Iowa

ARTICLE 5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF COVENTRY HEALTH CARE, INC. FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. MULTIPLIER: 1,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS PRIMARY EPS DILUTED

3 MOS DEC 31 1998 APR 01 1998 JUN 30 1998 279,217 180,059 79,387 22,649 0 476,376 64,008 21,163 1,061,147 575,082 43,971 0 0 591 423,308 1,061,147 0 583,804 0 635,042 (8,491) 1,159 1,987 (44,734) (16,978) (27,756) 0 0 0 (27,756) (0.47) 0

ARTICLE 5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF COVENTRY HEALTH CARE, INC. FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. MULTIPLIER: 1,000

PERIOD TYPE FISCAL YEAR END PERIOD START PERIOD END CASH SECURITIES RECEIVABLES ALLOWANCES INVENTORY CURRENT ASSETS PP&E DEPRECIATION TOTAL ASSETS CURRENT LIABILITIES BONDS PREFERRED MANDATORY PREFERRED COMMON OTHER SE TOTAL LIABILITY AND EQUITY SALES TOTAL REVENUES CGS TOTAL COSTS OTHER EXPENSES LOSS PROVISION INTEREST EXPENSE INCOME PRETAX INCOME TAX INCOME CONTINUING DISCONTINUED EXTRAORDINARY CHANGES NET INCOME EPS PRIMARY EPS DILUTED

3 MOS DEC 31 1998 APR 01 1998 JUN 30 1998 279,217 180,059 79,387 22,649 0 476,376 64,008 21,163 1,061,147 575,082 43,971 0 0 591 423,308 1,061,147 0 583,804 0 635,042 (8,491) 1,159 1,987 (44,734) (16,978) (27,756) 0 0 0 (27,756) (0.47) 0