hum-20181231x10kxex10hh






                                                                           Exhibit 10(hh)                                         HUMANA INC.                           INCENTIVE STOCK OPTION AGREEMENT                       AND AGREEMENT NOT TO COMPETE OR SOLICIT                          UNDER THE 2011 STOCK INCENTIVE PLAN                                                         THIS  AGREEMENT (“Agreement”)  made  as  of  <award_date> (the  “Date  of  Grant”) by  and  between HUMANA INC., a corporation duly organized and existing under the laws of the State of Delaware  (hereinafter referred to as the "Company"), and <first_name> <middle_name> <last_name>, an employee  of the Company (hereinafter referred to as "Optionee").                                        WITNESSETH          WHEREAS,  the  Humana  Inc.  2011  Stock  Incentive  Plan  (the "Plan"),  was  approved  by  the  Company’s Board of Directors and stockholders; and        WHEREAS, the Company desires to grant to Optionee an option to purchase shares of common  stock of the Company in accordance with the Plan;        NOW, THEREFORE, in consideration of the premises and mutual covenants hereinafter set forth,  and other good and valuable consideration, the Company and Optionee agree as follows:    I.    OPTION GRANT        A.     Grant  of  Option.  The  Company  hereby  grants  to  Optionee,  as  a  matter  of  separate  inducement and agreement and not in lieu of salary or other compensation for services, an Incentive Stock  Option to purchase <shares_awarded> shares of the $.16-2/3 par value common stock of the Company  ("Common Stock") at the purchase price of <award_price> per share (the "Option") exercisable on the  terms and conditions set forth herein.         B.    Term.  The term of the Option shall commence upon the Date of Grant, and shall expire  on <expire_Date> (the “Expiration Date”).        C.     Vesting of Option.  Except as otherwise set forth herein, the Option shall be exercisable  by Optionee or his/her personal representative on and after the first anniversary of the Date of Grant in  cumulative annual installments of one-third of the number of Shares covered hereby (each such date, a  “Vesting Date” and the period between each Vesting Date or between the Date of Grant and a Vesting  Date, as applicable, a “Vesting Period”), subject to Optionee’s continued employment with the Company  through each Vesting Date, except as set forth in Section D below.         D.     Effect  of  Termination  of  Employment  on  Option.   If  the  employment  of  Optionee  is  terminated for any reason, the Option shall vest and remain exercisable as follows, but in no event beyond  the Expiration Date:               1.     If the employment of Optionee is terminated by the Company for Cause, all the  rights of Optionee under this Agreement, whether or not exercisable, shall terminate immediately.                 2.     In the event of Optionee’s Retirement, (i) to the extent that this Option (or portion  hereof) is exercisable as of the date of such Retirement, this Option (or portion hereof) shall be exercisable                                                                             NQ – NCNS - RE  





 






    at any time within two (2) years after the date of Retirement, but in no event beyond the Expiration Date,  and only to the extent the Option (or portion hereof) was exercisable at the date of Retirement, and (ii) to  the extent that this Option (or portion hereof) is not exercisable as of the date of such Retirement, a prorated  portion of the Option that would have vested on the next scheduled Vesting Date shall vest and become  exercisable upon the next scheduled Vesting Date, with the proration to be determined by calculating the  product of (A) the quotient of (x) the number of completed months Optionee has been employed since the  Date of Grant or the most recent Vesting Date, as applicable, divided by (y) the number of months in the  current  Vesting  Period,  multiplied  by  (B)  the  total  number  of  Options  that  were  scheduled  to  vest  and  become exercisable on the next scheduled Vesting Date. For purposes of the foregoing calculation, a month  is complete on the day in the following month that corresponds to the Date of Grant. The portion of the  Option that vests pursuant to clause (ii) of this Section I.D.2 shall be exercisable at any time within two (2)  years following the date of Optionee’s Retirement, but in no event beyond the Expiration Date.  Any portion  of the Option that is not exercisable on the date of Optionee’s Retirement and could not become exercisable  after taking into account the provisions of this Section I.D.2. shall be immediately forfeited upon Optionee’s  Retirement. Any portion of the Option that is not exercisable on the date of Optionee’s Retirement and could  not become exercisable after taking into account the provisions of this Section I.D.2. shall be immediately  forfeited upon Optionee’s Retirement.               3.     In  the  event  of  termination  due  to  death  or  Disability  of  Optionee  while  in  the  employ of the Company, this Option shall become fully vested and exercisable of the termination due to  death or Disability of Optionee and shall remain exercisable by Optionee or the person or the persons to  whom those rights pass by will or by the laws of descent and distribution or, if appropriate, by the legal  representative of Optionee or the estate of Optionee at any time within two (2) years after the date of such  death or the date of determination of Disability, but in no event beyond the Expiration Date.                4.     In the event that Optionee’s employment with the Company terminates due to a  Divestiture of the business to which Optionee provides services, (i) to the extent that this Option (or portion  hereof) is exercisable as of the date of such termination of employment, this Option (or portion hereof) shall  be exercisable until the date that is ninety (90) days following the last date on which any portion of the  Option is scheduled to vest, but in no event beyond the Expiration Date, and only to the extent the Option  (or portion hereof) was exercisable at the date of such termination of employment, and (ii) to the extent that  this Option (or portion hereof) is not exercisable as of the date of such termination of employment, [and (A)  the Company maintains a strategic interest in the divested business, as determined by the Committee in  its sole discretion,]1 the unvested portion of the Option shall continue to vest and become exercisable upon  the regular Vesting Dates through the date that the Option would become fully vested; provided that[, in the  event the Company maintains a strategic interest in the divested business, as determined by the Committee  in  its  sole  discretion,]2  the  Optionee  must  remain  employed  by  the  divested  business  on each  of  the                                                               1 NTD: Applicable only for annual award. Remove for new hire.  2 NTD: Applicable only for new hire. Remove for annual award.    2  





 






    applicable  Vesting  Dates.  For  the  avoidance  of  doubt,  if  the  Optionee’s  employment  with  the  aforementioned divested business terminates prior to a Vesting Date, the Optionee’s unvested Option will  no longer vest pursuant to this Section I.D.4 and will be forfeited upon such termination; [or (B) the Company  does not maintain a strategic interest in the divested business, as determined by the Committee in its sole  discretion, the unvested portion of the Option shall continue to vest and become exercisable upon the  regular  Vesting  Dates  that  would  occur  during  the  twelve  (12)  month  period  immediately  following  the  termination of Optionee’s employment as if Optionee continued to be employed by the Company during  such period,]3 and the portion of the Option that vests pursuant to this clause (ii) shall be exercisable for  ninety (90) days following the last date on which any portion of the Option vests, but in no event beyond  the Expiration Date. Any portion of the Option that is not exercisable on the date of Optionee’s termination  of employment and could not become exercisable after taking into account the provisions of this Section  I.D.4. shall be immediately forfeited upon Optionee’s termination of employment.               5.     In the event that Optionee’s employment with the Company terminates due to a  Workforce  Reduction  or  a  Position  Elimination,  (i)  to  the  extent  that  this  Option  (or  portion  hereof)  is  exercisable  as  of  the  date  of  such  termination  of  employment,  this  Option  (or  portion  hereof)  shall  be  exercisable until the date that is ninety (90) days following the last date on which any portion of the Option  is scheduled to vest, but in no event beyond the Expiration Date, and only to the extent the Option (or  portion hereof) was exercisable in accordance with this Section I.D.6, and (ii) to the extent that this Option  (or portion hereof) is not exercisable as of the date of such termination of employment, the unvested portion  of the Option shall continue to vest and become exercisable upon the regular Vesting Dates that would  occur  [during  the  twelve  (12)  month  period  immediately  following  the  termination  of  Optionee’s  employment]4 as if Optionee continued to be employed by the Company, and the portion of the Option that  vests pursuant to this clause (ii) shall be exercisable for ninety (90) days following the last date on which  any portion of the Option vests, but in no event beyond the Expiration Date.  Any portion of the Option that  is not exercisable on the date of Optionee’s termination of employment and could not become exercisable  after taking into account the provisions of this Section I.D.5. shall be immediately forfeited upon Optionee’s  termination of employment.               6.     In the event that Optionee’s employment with the Company terminates due to a  transfer to a Strategic Joint Venture, (i) to the extent that this Option (or portion hereof) is exercisable as of  the date of such termination of employment, this Option (or portion hereof) shall be exercisable until the  date that is ninety (90) days following the last date on which any portion of the Option is scheduled to vest,  but  in  no  event  beyond  the  Expiration  Date,  and  only  to  the  extent  the  Option  (or  portion  hereof)  was  exercisable at the date of such termination of employment, and (ii) to the extent that this Option (or portion  hereof) is not exercisable as of the date of such termination of employment, the unvested portion of the  Option shall continue to vest and become exercisable upon the regular Vesting Dates through the date that                                                               3 NTD: Applicable only for annual award. Remove for new hire.  4 NTD: Applicable for annual awards. Remove for new hires.    3  





 






    the Option would become fully vested as if Optionee continued to be employed through such Vesting Date,  and the portion of the Option that vests pursuant to this clause (ii) shall be exercisable for ninety (90) days  following the last date on which any portion of the Option vests, but in no event beyond the Expiration Date.   Any portion of the Option that is not exercisable on the date of Optionee’s termination of employment and  could  not  become  exercisable  after  taking  into  account  the  provisions  of  this  Section  I.D.6.  shall  be  immediately forfeited upon Optionee’s termination of employment.               7.     In the event of a Change in Control Termination, this Option (or any option or other  award for which this Option is substituted or into which this Option is converted into in connection with the  Change in Control) shall become fully vested and immediately exercisable in its entirety, and this Option  (or any substitute or converted award) shall remain exercisable at any time within two (2) years after the  date of termination of Optionee’s employment, but in no event beyond the Expiration Date.                8.     If the employment of Optionee terminates for any reason other than for Cause,  Retirement, death or Disability, Position Elimination, Workforce Reduction, Divestiture, due to a transfer to  a Strategic Joint Venture or as a result of a Change in Control Termination, unless otherwise specified  herein, all the rights of Optionee under this Agreement then exercisable shall remain exercisable at any  time within ninety (90) days after the later of the date of such termination and the last date that the Option  vests pursuant to the terms of this Agreement, but in no event beyond the Expiration Date.  Any portion of  the Option that is not exercisable on the date of the Optionee’s termination of employment and could not  become exercisable after taking into account the provision of Section I.D. shall be immediately forfeited  upon Optionee’s termination of employment.         E.    Exercise of Option.               1.     The  Option  shall  be  exercisable  only  by  written  notice  to  the  Secretary  of  the  Company at the Company's principal executive offices, or through the online procedure to such broker- dealer as designated by the Company, Optionee or his/her legal representative as herein provided.  Such  notice shall state the number of Shares with respect to which the Option is being exercised and shall be  signed, or authorized electronically, by Optionee or his/her legal representative, as applicable.               2.     The purchase price shall be paid as follows:                      a)     In full in cash upon the exercise of the Option;                       b)     By tendering to the Company Shares owned by Optionee prior to the date  of exercise and having an aggregate Fair Market Value equal to the cash exercise price applicable to the  Option; or                      c)    A combination of I.E.(2)(a) and I.E.(2)(b) above.               3.     Federal, state and local income and employment taxes and other amounts as may  be required by law to be collected by the Company (“Withholding Taxes”) in connection with the exercise  of the Option shall be paid pursuant to the Plan by Optionee prior to the delivery of any Common Stock  under this Agreement.  The Company shall, at Optionee’s election, withhold delivery of a number of Shares  with a Fair Market Value as of the exercise date equal to the Withholding Taxes in satisfaction of Optionee’s  obligations hereunder.     4  





 






      II.    AGREEMENT NOT TO COMPETE AND AGREEMENT NOT TO SOLICIT. Optionee agrees and  understands that the Company’s business is a profit-generating business operating in a highly competitive  business environment and that the Company has a legitimate business interest in, among other things, its  confidential information and trade secrets (including as protected in other agreements and policies between  the Company and Optionee) that it is providing Optionee, and in the significant time, money, training, team  building and other efforts it expends to develop Optionee’s skills to assist in performing Optionee’s duties  for  the  Company,  including  with  respect  to  establishing,  developing  and  maintaining  the  goodwill  and  business  relationships  with  Protected  Relationships  (defined  below)  and  employees,  each  of  which  Optionee  agrees  are  valuable  assets  of  the  Company  to  which  it has  devoted  substantial  resources.  Optionee acknowledges that the grant Optionee is receiving under the Plan is a meaningful way that the  Company entrusts Optionee with its goodwill and aligns Optionee with the Company objective of increasing   the value of the Company’s business.  Accordingly, Optionee acknowledges the importance of protecting  the value of the Company’s business through, among other things, covenants to restrict Optionee from  engaging in activities that would adversely affect the value of the Company and its goodwill.        A.     Agreement Not to Compete. Optionee agrees that during the Restricted Period (defined  below) and within the Restricted Geographic Area (defined below), Optionee will not, directly or indirectly,  perform  the same  or  similar  responsibilities  Optionee  performed for  the Company  in connection with  a  Competitive  Product  or  Service (defined  below).  Notwithstanding  the  foregoing,  Optionee  may  accept  employment with a Competitor (defined below) whose business is diversified, provided that: (1) Optionee  will  not  be  engaged  in  working  on  or  providing  Competitive  Products  or  Services,  or  otherwise  use  or  disclose the Company’s confidential information or trade secrets; and (2) the Company receives written  assurances from the Competitor and Optionee that are satisfactory to the Company that Optionee will not  work on or provide Competitive Products or Services, or otherwise use or disclose confidential information  or trade secrets.  In addition, nothing in this Agreement is intended to prevent Optionee from investing  Optionee’s  funds  in  securities  of  a  person  engaged  in  a  business  that  is  directly  competitive  with  the  Company if the securities of such a person are listed for trading on a registered securities exchange or  actively traded in an over-the-counter market and Optionee’s holdings represent less than one percent (1%)  of the total number of outstanding shares or principal amount of the securities of such a person.        B.     Agreement Not to Solicit Protected Relationships. During the Restricted Period and in  connection with a Competitive Product or Service, Optionee shall not, individually or jointly with others,  directly or indirectly: (1) solicit or attempt to solicit any Protected Relationships (defined below); or (2) induce  or encourage any Protected Relationships to terminate a relationship with the Company or to otherwise  cease to accept services or products from the Company.        C.     Agreement Not to Solicit Employees.  During the Restricted Period, Optionee shall not,  individually or jointly with others, directly or indirectly: (1) or by assisting others, solicit, recruit, hire, or  encourage (or attempt to solicit, recruit, hire or encourage), any Company employees or former employees  with  whom  Optionee  worked,  had  business  contact,  or  about  whom Optionee  gained  non-public  or     5  





 






    confidential  information  (“Employees  or  Former  Employees”);  (2)  contact  or  communicate  with  Employees or Former Employees for the purpose of inducing, assisting, encouraging and/or facilitating  them to terminate their employment with the Company or find employment or work with another person or  entity; (3) provide or pass along to any person or entity the name, contact and/or background information  about any Employees or Former Employees or provide references or any other information about them; (4)  provide  or  pass  along  to  Employees  or  Former  Employees  any  information  regarding  potential  jobs  or  entities or persons to work for, including but not limited to job openings, job postings, or the names or  contact information of individuals or companies hiring people or accepting job applications; and/or (5) offer  employment or work to any Employees or Former Employees.  For purposes of this covenant, “Former  Employees” shall refer to employees who are not employed by the Company at the time of the attempted  recruiting or hiring, but were employed by, or working for the Company in the three (3) months prior to the  time of the attempted recruiting or hiring and/or interference.         D.    Effect of Termination of Employment other than a Change in Control Termination on  Agreements Not to Compete and Not to Solicit.               1.     In the event Optionee voluntarily resigns or is discharged by the Company with  Cause at any time prior to the vesting of the Option, the prohibitions on Optionee set forth in Sections II.A,  II.B and II.C shall remain in full force and effect.               2.     In  the  event  Optionee  is  discharged  by  the  Company  other  than  with  Cause,  including in connection with a Workforce Reduction or Position Elimination, or certain divestiture related  terminations, prior to the vesting of the Option, the prohibitions set forth in Section II.A shall remain in full  force and effect during the period of time following Optionee’s termination equal to the lesser of (x) the  Restricted Period or (y) the period of time during which Optionee is deemed to be entitled to severance  measured by the sum of (i) the number of weeks Optionee is entitled to severance under the Company’s  applicable  severance  policy,  plus  (ii)  a  number  of  weeks  equal to  (A)  the  value  of  the  acceleration  or  continuation of the vesting of any Options as a result of Optionee’s termination under this Agreement or the  Plan that would otherwise have been forfeited, with such value measured by multiplying the number of  Shares underlying the Options that vested as a result of the termination of employment by the difference of  the per Share Fair Market Value on the Last Day minus the applicable per Share exercise price, divided by  (B) Optionee’s then-current weekly base salary, plus (iii) any additional period that the Company determines  to provide severance to Optionee, in its discretion.               3.     In the event Optionee is discharged by Company other than with Cause prior to  vesting herein of the Option, the prohibitions set forth in Sections II.B and II.C above shall remain in full  force and effect.               4.     After the vesting of the Option, the prohibitions on Optionee set forth herein shall  remain in full force and effect, except as otherwise provided in Section II.E.        E.     Effect of a Change in Control Termination on Agreements Not to Compete and Not  to Solicit.     6  





 






                 1.     Notwithstanding anything set forth in Section II.D., in the event of a Change in  Control Termination, the prohibitions on Optionee set forth in Section II.A shall remain in full force and effect  only if the acquirer or successor to the Company following the Change in Control shall, solely at its option,  pay,  within  thirty  (30)  days  following  Optionee's  employment  termination  date  with  the  Company  or  its  successor, to Optionee the Non-Compete Payment.  Notwithstanding any previous agreement between  Optionee and the Company relating to the prohibitions set forth in Section II.A, the “Non-Compete Payment”  shall be an amount at least equal to Optionee’s then current annual base salary.  Such amount shall be in  addition to any other amounts paid or payable to Optionee with respect to other severance plans or policies  maintained by the Company.  For the avoidance of doubt, the provisions of this Section II.E shall supersede  any agreement between Optionee and the Company relating to the prohibitions on Optionee set forth in  Section  II.A,  with  the  exception  of  any  similar  agreement  contained  in  (i)  any  employment  agreement  between Optionee and the Company, (ii) any agreement between Optionee and the Company not related  to the employment of Optionee by the Company, (iii) any severance plan or policy of the Company and (iv)  any change in control severance plan or policy of the Company.               2.     In the event of a Change in Control Termination, the prohibitions on Optionee set  forth in Sections II.B. and II C. shall remain in full force and effect.        F.     Governing Law. Notwithstanding any other provision herein to the contrary, the provisions  of this Section II of the Agreement shall be governed by, and construed in accordance with, the laws of the  Commonwealth of Kentucky without regard to its conflicts or choice of laws rules or principles that might  otherwise refer construction or interpretation of this Section II to the substantive law of another jurisdiction.         G.    Injunctive Relief; Invalidity of Any Provision.  Optionee acknowledges that (1) his or  her services to the Company are of a special, unique and extraordinary character, (2) his or her position  with the Company will place him or her in a position of confidence and trust with respect to the operations  of the Company, (3) he or she will benefit from continued employment with the Company, (4) the nature  and periods of restrictions imposed by the covenants contained in this Section II are fair, reasonable and  necessary to protect the Company, (5) the Company would sustain immediate and irreparable loss and  damage if Optionee were to breach any of such covenants, and (6) the Company’s remedy at law for such  a breach will be inadequate.  Accordingly, Optionee agrees and consents that the Company, in addition to  the recovery of damages and all other remedies available to it, at law or in equity, shall be entitled to seek  both  preliminary  and  permanent  injunctions  to  prevent  and/or  halt  a  breach  or  threatened  breach  by  Optionee of any covenant contained in Section II hereof.  If any provision of this Section II is determined by  a court of competent jurisdiction to be invalid in whole or in part, it shall be deemed to have been amended,  whether as to time, area covered or otherwise, as and to the extent required for its validity under applicable  law,  and  as  so  amended,  shall  be  enforceable.   The  parties  further  agree  to  execute  all  documents  necessary to evidence such amendment.           7  





 






    III.   MISCELLANEOUS PROVISIONS        A.     Binding Effect & Adjustment.  This  Agreement  shall  be  binding  and  conclusive  upon  each successor and assign of the Company.  Optionee’s obligations hereunder shall not be assignable to  any other person or entity. It is the intent of the parties to this Agreement that the benefits of any appreciation  of the underlying Common Stock during the term of the Award shall be preserved in any event, including  but  not  limited  to  a  recapitalization,  merger,  consolidation,  reorganization,  stock  dividend,  stock  split,  reverse  stock  split,  spin-off  or  similar  transaction,  or  other change  in  corporate  structure  affecting  the  Shares, as more fully described in Sections 4.6 and 11 of the Plan.  All obligations imposed upon Optionee  and all rights granted to Optionee and to the Company shall be binding upon Optionee's heirs and legal  representatives.        B.     Amendment.  This Agreement may only be amended by a writing executed by each of the  parties hereto.        C.     Governing  Law.   Except  as  to  matters  of  federal  law  and  the  provisions  of  Section  II  hereof, this Agreement shall be governed by, and construed in accordance with, the laws of the State of  Delaware  without  regard  to  its  conflict  of  laws  rules.  This  Agreement  shall  also  be  governed  by,  and  construed in accordance with, the terms of the Plan.        D.     Jurisdiction;  Service  of  Process.   Any  action  or  proceeding  seeking  to  enforce  any  provision of, or based on any right arising out of, this Agreement may be brought against any of the parties  in the courts of the Commonwealth of Kentucky, County of Jefferson, or, if it has or can acquire jurisdiction,  in the United States District Court for the Western District of Kentucky, and each of the parties consents to  the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding  and waives any objection to venue laid therein.  Process in any action or proceeding referred to in the  preceding sentence may be served on any party anywhere in the world.         E.    No Employment Agreement.  Nothing herein confers on Optionee any rights with respect  to the continuance of employment or other service with the Company, nor will it interfere with any right the  Company would otherwise have to terminate or modify the terms of Optionee's employment or other service  at any time.        F.     Severability.  If any provision of this Agreement is or becomes or is deemed invalid, illegal  or unenforceable in any relevant jurisdiction, or would disqualify this Award under any law deemed applicable  by the Committee, such provision shall be construed or deemed amended to conform to applicable laws or  if it cannot be construed or deemed amended without, in the determination of the Committee, materially  altering the intent of the Plan, it shall be stricken and the remainder of the Agreement shall remain in full  force and effect. Any provision in this Agreement determined by competent authority to be in conflict with  422 of the Internal Revenue Code of 1986, as amended, or its successor, in regard to qualifying this Option  as an incentive stock option shall be ineffective ab initio to the extent of such conflict.         G.     Assignment.  The Option granted under this Agreement to Optionee may not be assigned,  transferred, pledged, alienated or hypothecated in any manner during Optionee's lifetime, but shall be solely  and exclusively the right of Optionee to exercise during his/her lifetime.  Should Optionee attempt to assign,     8  





 






    transfer, pledge, alienate or hypothecate the Option or any rights hereunder in any manner whatsoever,  such action shall constitute a breach of the covenants hereunder and the Company may terminate the Option  as to any then unexercised shares.        H.     Defined Terms.                  1.     Any  term  used  herein  and  not  otherwise  defined  herein  shall  have  the  same  meaning as in the Plan.  Any conflict between this Agreement and the Plan will be resolved in favor of the  Plan.  Any disputes or questions of right or obligation which shall result from or relate to any interpretation  of this Agreement shall be determined by the Committee.  Any such determination shall be binding and  conclusive upon Optionee and any person or persons claiming through Optionee as to any rights hereunder.                          2.     For the purposes of this Agreement, the following terms shall have the following  meaning:          (i)  “Change in Control Termination” means, in the  event the Option is assumed, converted,            continued or substituted in connection with a Change in Control, if the employment of Optionee            is terminated within two (2) years following the Change in Control (i) by the Company or its            acquirer or successor for any reason other than Cause or (ii) by Optionee with Good Reason.        (ii)  “Competitive  Product  or  Service”  means  any  product,  process,  system  or  service  (in            existence or under development) of any person or organization other than the Company that is            the same as, similar to, or competes with, a product, process, system or service (in existence            or under development) upon which Optionee worked or for which Optionee had responsibilities            at the Company during the twenty-four (24) months prior to the Last Day (as defined below).        (iii)  “Competitor” means Optionee or any other person or organization engaged in, or about to            become  engaged  in,  research  or development,  production,  marketing,  leasing,  selling,  or            servicing of a Competitive Product or Service.        (iv)  “Divestiture” means the sale or other transfer of equity securities of a Subsidiary to a person            or entity other than the Company or an affiliate of the Company, or if a Subsidiary leases,            exchanges  or  transfers  all or  any  portion  of  its  assets  to  such a person or  entity,  then  the            Committee may specify that such transaction or event constitutes a “Divestiture”.        (v)  “Good Reason” shall mean, unless otherwise defined in a written employment agreement in            effect  between  the  Company  or  any  of  its  Subsidiaries  and  Optionee,  the  relocation  of            Optionee’s office at which Optionee is to perform his or her duties to a location more than thirty            (30) miles from the location at which Optionee performed his or her duties prior to a Change in            Control.        (vi)  “Last Day” means Optionee’s last day of employment with the Company regardless of the            reason for Optionee’s separation.        (vii) “Position Elimination” means the elimination of Optionee’s position.     9  





 






          (viii)  “Protected  Relationship”  means  policyholders,  agents,  brokers,  dealers,  distributers,            sources of supply or customers with whom, within twenty-four (24) months prior to the Last            Day, Optionee, directly or indirectly (e.g., through employees whom Optionee supervised) had            material business contact and/or about whom Optionee obtained confidential information and            trade secrets.         (ix)  “Restricted  Geographic  Area”  means  the  territory  (i.e.:  (i)  state(s),  (ii)  county(ies),  or  (iii)            city(ies)) in which, during the twenty-four (24) months prior to the Last Day, Optionee provided            material services on behalf of the Company (or in which Optionee supervised directly, indirectly,            in whole or in part, the servicing activities).          (x)  “Restricted Period” means the period of Optionee’s employment with the Company and a            period of twelve (12) months after the Last Day.  Optionee recognizes that the durational term            is reasonably and narrowly tailored to the Company’s legitimate business interest and need for            protection with each position.        (xi)  “Strategic Joint Venture” means a business arrangement entered into by the Company with            one or more other parties to own and operate an entity in which the Company continues to            have a strategic interest.        (xii) “Workforce  Reduction”  means  a  reduction  in  force,  as  determined  by  the  Company  in            accordance with its standard coding procedures.        I.     Execution.  If Optionee shall fail to execute this Agreement, either manually with a paper  document, or through the online grant agreement procedure with the Company’s designated broker–dealer,  and, if manually executed, return the executed original to the Secretary of the Company, the Award shall  be null and void.  The choice of form will be at the Company’s discretion.                10  





 






                                  IN WITNESS WHEREOF, Company has caused this Agreement to be executed on its behalf by its  duly authorized officer, and Optionee has executed this Agreement, each as of the day first above written.                                                        "Company"                                                    ATTEST:      HUMANA INC.                   BY:       BY:            JOSEPH C. VENTURA                              BRUCE D. BROUSSARD  Chief Legal Officer & Corporate Secretary            President & Chief Executive Officer                       “Optionee”                                                                        <first_name> <middle_name> <last_name>                                                      11