COVENTRY HEALTH CARE INC
MIP
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<TYPE>EX-10.3
<SEQUENCE>5
<FILENAME>exhibit103_11232004.htm
<DESCRIPTION>MIP
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<TITLE>2005 Management Incentive Plan</TITLE>
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<p align=right><font size=2><b>Exhibit 10.3</b></font></p>

<hr size=3 width=100% noshade>






<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Coventry Health Care,
Inc.<BR>2005 Management
Incentive Plan (MIP) </FONT></H1>



<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><u>Plan Objective</u> </FONT></H1>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The objective of Coventry Health
Care&#146;s (CHC) 2005 Management Incentive Plan (MIP) is to reward employees for their
contribution to the achievement of company&#150;wide, business unit, health plan, and
team/individual goals. </FONT></P>



<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><u>Plan Year </u></FONT></H1>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The plan year will be consistent with
CHC&#146;s fiscal year, January 1 through December 31, 2005. </FONT></P>



<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><u>Eligibility</u> </FONT></H1>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>The CEO of CHC will determine
employee eligibility</B> prior to the beginning of the plan year and throughout
the year as warranted by promotions and/or performance. Participants in CHC&#146;s Sales
Incentive Plans, Team Incentive Plans and Annual Executive Incentive Plan, are not
eligible for the MIP. Participants must be actively employed at the time incentive checks
are distributed to receive an incentive payment. MIP payouts may be prorated based on hire
date or the promotion date of each participant. </FONT></P>



<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><u>Timing of Incentive
Payouts </u></FONT></H1>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Incentive payouts will be made as
soon as possible after the close of the fiscal year and after CHC&#146;s year&#150;end
financial results are finalized (approximately February/March 2006). </FONT></P>



<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><u>Target Incentive
Opportunity</u> </FONT></H1>


<TABLE ALIGN="CENTER" WIDTH="85%" BORDER="1">
<tr>
<TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Eligible
Employee Title</font></th>
<TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Target Incentive % </font></th>
</tr>

<tr>
<TD WIDTH="50%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Sr. Vice Presidents and Coaches</font></td>
<TD WIDTH="50%" align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>50%*</font></td>
</tr>

<tr>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Vice Presidents</font></td>
<TD align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>30%*</font></td>
</tr>

<tr>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Directors</font></td>
<TD align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>15%*</font></td>
</tr>

<tr>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Managers</font></td>
<TD align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10%*</font></td>
</tr>
</table>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=1>*Exceptions made on a case&#150;by&#150;case
basis with approval from the CHC CEO </FONT></P>



<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><u>Performance Criteria </u></FONT></H1>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Criteria for incentive payouts
includes the following three factors: </FONT></P>

<ul>
<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CHC Financial Results </FONT>
<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Health Plan Financial
Results </FONT>
<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Team and Individual
Achievements </FONT></li></ul>



<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><u>Coventry Health Care
Results </u></FONT></H1>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The performance of CHC will be based
on the achievement of its Earnings Per Share goal. </FONT></P>

<TABLE ALIGN="CENTER" WIDTH="85%" BORDER="1">
<tr>
<th colspan=2 align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2005 Goal </FONT></th>
</tr>

<tr>
<TD ALIGN="LEFT" WIDTH="50%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net
Earnings Per Share</font></td>
<TD ALIGN="LEFT" WIDTH="50%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Budget</font></td>
</tr>
</table>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><u>Incentive Pool Funding </u></FONT></H1>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Target incentive pools will be
calculated separately for each Health Plan and Corporate. The number of eligible
employees, individual incentive targets and each eligible employee&#146;s base pay will
determine each budgeted target incentive pool. </FONT></P>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Actual funding of incentive pools is
based on the results achieved by each Health Plan and the overall performance of Coventry
Health Care, Inc in the case of the Health Plan, and overall performance of Coventry
Health Care, Inc. in the case of Corporate. </FONT></P>


<A NAME=A017></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><u>Health Plan Results </u></FONT></H1>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The performance of each Health Plan
will be based on the achievement of its Plan Contribution and Revenue Growth goals as set
forth in the 2004 Budget. The two key goals are weighted as follows: </FONT></P>

<ul>
<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Plan Contribution&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;75%</font>
<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Revenue Growth&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25%</font></li></ul>


<A NAME=A018></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><u>Health Plan Incentive
Pool Funding </u></FONT></H1>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Health Plan&#146;s incentive
pool is funded based on the achievement of its Plan Contribution and Revenue Growth goals.
Each Health Plan&#146;s pool will be modified based on the achievement of CHC&#146;s EPS
goal. The following chart will be utilized to calculate the final incentive pool for each
Health Plan. </FONT></P>

<TABLE BORDER="1" ALIGN="CENTER" WIDTH="85%">
<TR VALIGN=Bottom>
     <TH ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>Level of Health<BR>
Plan Goal<BR>
Achievement</FONT></TH>
     <TH ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>% of Target Pool Available for<BR>
Payout <sup> (1) </sup></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="50%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#139; = 85%</FONT></TD>
     <TD WIDTH="50%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>0%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>86% to 99%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>Committee Discretion</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>100%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>100%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>110%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>110%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>120%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>120%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>130%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>130%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>140%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>140%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>150%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>150%</FONT></TD></TR>
</TABLE>


     <P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(1)</sup>&nbsp;&nbsp;&nbsp;&nbsp;
          Straight&#150;line interpolation will be used to calculate the incentive pools when
          performance falls between two levels. </FONT></P>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Once each Health Plan&#146;s
incentive pool is calculated, it will be modified by the achievement of CHC&#146;s
Earnings Per Share goal. The following chart displays the scale that will be used to
modify each Health Plan&#146;s incentive pool. </FONT></P>


<TABLE BORDER="1" ALIGN="CENTER" WIDTH="85%">
<TR VALIGN=Bottom>
     <TH ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>Level of CHC<BR>Goal Achievement</FONT></TH>
     <TH ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>Health Plan Incentive<BR>Pool Modifier<sup>(2)</sup></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="50%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#139; 97.75%</FONT></TD>
     <TD WIDTH="50%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>0</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>97.75%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>.50</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>100%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1.00</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>110%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1.20</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>120%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1.30</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>130%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1.40</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>140%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1.50</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>150%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1.50</FONT></TD></TR>
</TABLE>


<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(2)</sup> Straight&#150;line
interpolation will be used to calculate the pool modifier when performance falls between two
levels <U>and, the maximum modification to the Health Plan&#146;s budgeted target
pool is 1.50.</u></font></p>


<A NAME=A021></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><u>Example Incentive Pool
Calculation </u></FONT></H1>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Example 1: The Health Plan achieves
90% of its Plan Contribution and Revenue Growth goals, which results in the target
incentive pool being decreased to 50% of the budgeted target pool, determined at the
discretion of the Compensation Committee. CHC achieves 100% of its Earnings Per Share
Goal, thus modifying the Health Plan&#146;s pool by 1.0. The final incentive pool remains
50% of the budgeted target pool. </FONT></P>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Example 2: The Health Plan achieves
110% of its Plan Contribution and Revenue Growth goals, which results in the target
incentive pool being increased to 110% of the budgeted target pool. CHC achieves 120% of
its Earnings Per Share Goal, thus modifying the Health Plan&#146;s pool by 1.3. The
incentive pool equals 143% of the budgeted target pool. </FONT></P>


<A NAME=A022></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><u>Corporate Incentive Pool
Funding  </u></FONT></H1>
<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The corporate incentive pool
is funded based on the achievement of CHC&#146;s EPS goal.</font></p>

<TABLE BORDER="1" ALIGN="CENTER" WIDTH="85%">
<TR VALIGN=Bottom>
     <TH ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>Level of Target CHC Earnings<BR>Per Share Goal Achievement</FONT></TH>
     <TH ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>% of Target Pool Available<BR>for Payout<sup>(1)</sup></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="50%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#139; 97.75%</FONT></TD>
     <TD WIDTH="50%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>0</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>97.75%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>50%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>100%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>100%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>110%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>120%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>120%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>130%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>130%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>140%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>140%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>150%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>150%</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>150%</FONT></TD></TR>
</TABLE>
<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2><sup>(1)</sup> Straight&#150;line interpolation will be used to calculate the incentive pools when
               performance falls between two levels </FONT></P>

<A NAME=A023></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><u>Individual Incentive
Payout Calculations</u> </FONT></H1>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Individual incentive awards will be
determined by the following: </FONT></P>

     <P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.&nbsp;&nbsp;&nbsp;&nbsp;
          Individual Target Incentive Opportunity <BR>2.&nbsp;&nbsp;&nbsp;&nbsp;
          Incentive Pool Funding, and <BR>3.&nbsp;&nbsp;&nbsp;&nbsp;
          Achievement of established financial goals and individual/team non&#150;financial
          goals. </FONT></P>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Individual incentive awards can vary
between 0% and 200% of the Individual Target Incentive based on individual performance. </FONT></P>


<h1 ><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>Form of Payment</U></font></h1>
<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Payments will be paid in cash. </FONT></P>


<A NAME=A024></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><u>Miscellaneous</u></FONT></H1>


<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Coventry Health Care reserves the
right to amend or discontinue this plan at any time and/or add, reduce or limit the number
of participants at any time such actions are deemed appropriate and in the best interest
of CHC. This document shall not be construed as a contract with the employee and is in no
way intended to limit the employment at will status of employees of Coventry Health Care,
Inc., or its Health Plans. </FONT></P>


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