hum20190930exhibit10-1






                             Exhibit 10.1                                        HUMANA INC.                            EXECUTIVE INCENTIVE COMPENSATION PLAN                             As Amended and Restated January 1, 2020  I.     OBJECTIVES:           The objectives of the Humana Inc. Executive Management Incentive Compensation Plan, as amended and        restated (the “Plan”) are to (i) link the compensation of selected executives to certain key performance        targets; and (ii) reward them, when appropriate, for their efforts in achieving the performance targets of        Humana Inc. (the “Company”), consistent with appropriate balance of risk and reward and appropriate        risk management practices aligned to the Company’s short‐term and long‐term strategic plan.           II.   ELIGIBILITY AND AWARDS:         a. Executives participating in this Plan (“Participants”) will be limited to Section 16 officers of Humana Inc.,        as determined pursuant to Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange        Act”). Participation in the Plan will be approved by the Organization & Compensation Committee of the        Board of Directors of the Company (the “Committee”). Each Participant shall be notified of his/her        selection as a Participant.         b. Incentive compensation will be computed by measuring the Company’s achievement of predetermined        goals (“Performance Targets”) established by the Committee in accordance with Internal Revenue Service        regulations promulgated under Section 162(m) of the Internal Revenue Code as amended (the “Code”), to        the extent applicable. Performance Targets may be expressed in terms of (i) earnings per share, (ii) share        price or total shareholder return, (iii) consolidated net income, (iv) pre‐tax profits, (v) earnings or net        earnings, (vi) return on equity or assets, (vii) sales, (viii) cash flow from operating activities, (ix) return on        invested capital, (x) membership, (xi) other performance objectives as determined by the Committee, to        the extent permitted under Section 162(m) of the Code (if applicable), or (xii) any combination of the        foregoing. Performance Targets may be in respect of the performance of the Company, any of its        Subsidiaries, any of its divisions or any combination thereof. Performance Targets may be absolute or        relative (to prior performance of the Company or to the performance of one or more other entities or        external indices) and may be expressed in terms of a progression within a specified range.         c. Incentive compensation for a fiscal year or other relevant period determined by the Committee        (“Performance Period”) shall be based on the Participant’s base salary paid or accrued during such fiscal        year exclusive of any bonus, equity compensation, or fringe benefits paid or accrued during such fiscal        year (“Salary”). The Committee shall determine, subject to the limits in the Plan, the potential percentage        of Salary which any Participant shall be eligible to receive as incentive compensation, which need not be        the same for each Participant. The precise percentage earned shall be based upon a schedule of        achievement of Performance Targets. Notwithstanding anything herein to the contrary, the maximum        incentive compensation paid for any fiscal year to the CEO may not exceed Six Million Dollars        ($6,000,000), or Three Million Dollars ($3,000,000) for any other Participant.         d. The Company’s achievement of any relevant Performance Targets will be determined in accordance        with generally accepted accounting principles. Any incentive compensation generated pursuant to        incentive plans of the Company, including this Plan, shall be accrued and deducted as an expense in the        appropriate fiscal year in determining the achievement of any Performance Targets.         e. Each Participant may receive an award (“Award”) if the Performance Target(s) established by the         Committee are attained in the applicable Performance Period. The applicable Performance Period and        Performance Target(s) shall be determined by the Committee consistent with the terms of the Plan and,        to the extent applicable, Section 162(m) of the Code. Notwithstanding the fact that the Performance        Target(s) have been attained, the Committee may pay an Award of less than the amount determined by        the formula or standard established by the Committee or may pay no Award at all.        f. The specific Performance Target(s) must be established by the Committee in advance of the deadlines        applicable under Section162(m) of the Code, to the extent applicable, and while the performance relating        to the Performance Target(s) remains substantially uncertain within the meaning of Section162(m) of the        Code. The Performance Target(s) with respect to any Performance Period may be established on a    





 






         cumulative basis or in the alternative, and may be established on a stand‐alone basis with respect to the        Company or on a relative basis with respect to any peer companies or index selected by the Committee.        At the time the Performance Target(s) are selected, the Committee shall provide, in terms of an objective        formula or standard for each Participant, the method of computing the specific amount of Award payable        to the Participant if the Performance Target(s) are attained.  The objective formula or standard shall        preclude the use of discretion to increase the amount of any Award earned pursuant to the terms of the         Award.         g. If services as a Participant commence after the adoption of the Plan and the Performance Target(s) are        established for a Performance Period, the Committee may grant an Award that is proportionately        adjusted based on the period of actual service, and the amount of any Award paid to such Participant         shall not exceed that proportionate amount of the applicable maximum individual Award allowable under        the Plan.        h. Notwithstanding anything to the contrary set forth herein, the Performance Target(s) shall be adjusted        to reflect the following events resulting in a change to the applicable Performance Target in excess of the        aggregate threshold amount established by the Committee at the time of the applicable performance        period:            i. the acquisition or disposition of a business, a merger, or a similar transaction, and the related            integration costs including external costs such as legal, accounting and consulting fees and internal            costs such as severance and benefits, contract cancellation costs, lease abandonment costs, overhead            costs of integration including allocated wages and benefits and administrative costs in connection            therewith;            ii. the impact of securities issuances or repurchases in connection with an acquisition or disposition of            a business, a merger, or a similar transaction, and related expenses including both direct and            incremental costs incurred in connection therewith            iii. changes in accounting principles, tax laws, or other laws, provisions or regulation            iv. any litigation or regulatory investigations not in the ordinary course of business            v. the impact of impairment of tangible or intangible assets; including goodwill            vi. the impact of restructuring or business recharacterization activities, including but not limited to            reductions in force, that are reported publicly by the Company            vii. the impact of investments or acquisitions made during the year or, to the extent provided by the            Committee, any prior year        i. To preserve the intended incentives and benefits of an Award based on a Performance Target, the        Committee may determine at the time Performance Targets are established that certain adjustments shall        apply to the objective formula or standard with respect to the applicable Performance Target to take into        account, in whole or in part, in any manner specified by the Committee, any one or more of the following         with respect to the Performance Period: (i)the gain, loss, income or expense resulting from changes in        accounting principles that become effective during the Performance Period; (ii)the gain, loss, income or        expense reported publicly by the Company with respect to the Performance Period that are extraordinary        or unusual in nature or infrequent in occurrence; (iii)the gains or losses resulting from, and the direct        expenses incurred in connection with the disposition of a business, or the sale of investments or non‐core        assets; (iv)the gain or loss from all or certain claims and/or litigation and all or certain insurance        recoveries relating to claims or litigation;(v)the impact of impairment of tangible or intangible assets;        including goodwill; (vi)the impact of restructuring or business recharacterization activities, including but        not limited to reductions in force, that are reported publicly by the Company; or (vii)the impact of        investments or acquisitions made during the year or, to the extent provided by the Committee, any prior        year. Each of the adjustments described in this Section may relate to the Company as a whole or any part        of the Company’s business operations. The adjustments are to be determined in accordance with        generally accepted accounting principles and standards, unless another objective method of        measurement is designated by the Committee.        j. The Committee has the sole discretion to determine the standard or formula pursuant to which each        Participant’s Award shall be calculated and whether all or any portion of the amount so calculated will be         paid, subject in all cases to the terms, conditions and limits of the Plan. To this same extent, the        Committee may at any time establish (and, once established, rescind, waive or amend) additional    





 






         conditions and terms of payment of Awards (including but not limited to the achievement of other        financial, strategic or individual goals, which may be objective or subjective) as it may deem desirable in        carrying out the purposes of the Plan and may take into account such other factors as it deems         appropriate in administering any aspect of the Plan. The Committee may not, however, increase the        maximum amount permitted to be paid to any individual under the Plan or pay Awards under this Plan if        applicable Performance Target(s) have not been satisfied.                                                                    of       k. Incentive compensation shall be paid to Participants on or before March 15th   the year following the        fiscal year with respect to which it was earned or such earlier date as may be required in order that such        amount be deductible under the Code for the fiscal year with respect to which it was earned.    III.  ADMINSTRATION OF THIS PLAN:        The Committee has sole authority (except as specified otherwise herein) to determine all questions of        interpretation and application of the Plan, or of the terms and conditions pursuant to which Awards are        granted under the Plan and in general, to make all determinations advisable for the administration of the        Plan to achieve its purpose. The Committee determinations under the Plan (including without limitation,        determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms        and provisions of such Awards and any agreements evidencing such Awards) need not be uniform and        may be made by the Committee selectively among persons who receive or are eligible to receive Awards        under the Plan, whether or not such persons are similarly situated. Such determination shall be final and        not subject to further appeal.   IV.   TERMINATION OF EMPLOYMENT:        Subject to the discretion of the Committee, a Participant must be actively employed or on short‐term        disability (as determined pursuant to the applicable company policy on the last day of the applicable        Performance Period to be eligible for a payout, unless the Participant’s employment was terminated due        to the:              a. The Participant’s death or [Disability (as defined in the Amended and Restated Humana Inc. Stock            Incentive Plan            b. The Participant’s Retirement            c. The Participant’s termination of employment due to a(A) Workforce Reduction, (B) Position            Elimination, (C) Divestiture or(D) position reassignment to a Strategic Joint Venture (as each term is            defined in the Amended and Restated Humana Inc. Stock Incentive Plan)                    To the extent that a Participant is not actively employed on the last day of the applicable Performance        Period due to death, Disability, Retirement, Workforce Reduction, Position Elimination, Divestiture or        position reassignment to a Strategic Joint Venture, the Participant will be eligible to receive a pro‐rated        Award based on the period that the Participant was actively employed during the Performance Period,        with the amount of the pro‐rated Award to be based on actual performance and paid at the same time as        Awards are paid to employees who remain actively employed through the end of the applicable        Performance Period.             V.    AMENDMENT OF PLAN:                Subject to any restrictions imposed under Section 162(m) of the Code, to the extent applicable, the        Committee may at any time and from time to time alter, amend, suspend or terminate the Plan in whole or        in part, provided that no such amendment that would require the consent of the Board and/or        stockholders of the Company pursuant to Section 162(m) of the Code, to the extent applicable, or the        Exchange Act, any New York Stock Exchange (or other relevant stock exchange) rule or regulation, or any        other applicable law, rule or regulation, shall be effective without such consent.        





 






   VI.   GENERAL PROVISIONS:             a. No person has any claim or right to be included in this Plan or to be granted incentive            compensation under this Plan until such individual has been declared a Participant and received            official notice thereof in accordance with the procedures as set forth in this Plan. In addition, all of            the requirements and applicable rules and regulations of this Plan must have been met including, but            not limited to the availability of funds for incentive compensation awards and the determination by            the Committee of the extent to which Performance Targets have been met.             b. The designation of an individual as a Participant under this Plan does not in any way alter the            nature of the Participant’s employment relationship. Participation in this Plan shall not constitute a            contract of employment between the Company or any subsidiary and any person and shall not be            deemed to be consideration for, or a condition of, continued employment of any person.             c. No benefit provided under the Plan shall be subject to alienation or assignment by a Participant (or            by any person entitled to such benefit pursuant to the terms of this Plan), nor shall it be subject to            attachment or other legal process except (i) to the extent specifically mandated and directed by            applicable state or federal statute; and (ii) as requested by the Participant and approved by the            Committee to members of the Participant’s family, or a trust established by the Participant for the            benefit of family members.             d. The Company or a subsidiary may withhold any applicable federal, state or local taxes at such time            and upon such terms and conditions as required by law or determined by the Company or subsidiary.             e. Each member of the Committee (and each person to whom the Committee or any member thereof            has delegated any of its authority or power under this Plan) shall be fully justified in relying or acting            in good faith upon any report made by the independent public accountants of the Company and its            subsidiaries and upon any other information furnished the Committee in connection with the Plan. In            no event shall any person who is or shall have been a member of the Committee be liable for any            determination made or other action taken or any omission to act in reliance upon any such report or            information, or for any action taken or failure to act if in good faith.             f. In the event the Company becomes a party to a merger, consolidation, sale of substantially all of its            assets or any other corporate reorganization in which the Company will not be the surviving            corporation or in which the holders of the common stock of the Company will receive securities of            another corporation (in any such case, the “New Company”), then the New Company shall assume            the rights and obligations of the Company under this Plan.             g. All matters relating to the Plan or to Awards granted hereunder shall be governed by the laws of            the State of Delaware, without regard to the principles of conflict of laws.             h. The expenses of administering the Plan shall be borne by the Company and its subsidiaries.             i. The titles and headings of the sections in the Plan are for convenience of reference only, and in the            event of any conflict, the text of the Plan, rather than such titles or headings, shall control.     VII.  STOCKHOLDER APPROVAL           This Plan has been previously approved by the Company’s stockholders at the April 24, 2008 annual         meeting of stockholders.     VIII.  INTERNAL REVENUE CODE SECTION 162(m):           Transactions under this Plan are intended to comply with all applicable conditions of Section 162(m) of        the Internal Revenue Code, as amended, or its successor. To the extent any provision of the Plan or action        by the Committee fails to so comply, to the extent applicable, it shall be deemed null and void, to the        extent permitted by law and deemed advisable by the Committee.       IX.   INTERNAL REVENUE CODE SECTION 409A         All Awards granted under the Plan are intended to be exempt from Section 409A of the Code.        Notwithstanding this or any other provision of the Plan to the contrary, the Committee may amend the    





 






         Plan or any Award granted hereunder in any manner, or take any other action that it determines, in its        sole discretion, is necessary, appropriate or advisable (including replacing any Award) to cause the Plan or        any Award granted hereunder to not be subject to Section 409A of the Code. Any such action, once taken,        shall be deemed to be effective from the earliest date necessary to avoid a violation of Section 409A of        the Code and shall be final, binding and conclusive on all Participants and other individuals having or        claiming any right or interest under the Plan.