hum-20181231x10kxex10aa






                                                                                                                                                   Exhibit 10(aa)                                    HUMANA INC.                           CHANGE IN CONTROL POLICY         This  Humana  Inc.  Change  in  Control  Policy  (this  “Policy”)  has  been  adopted  by  the   Organization & Compensation Committee (the “Committee”) of the Board of Directors of the   Company to avoid the departure of and provide protection to Executives in the event of a Change   in Control in order that they may act in the best interest of all shareholders and to reinforce and   encourage  their  continued  attention  and  dedication  to  their  duties  without  the  distraction  and   concern for the uncertainty that would result from the effects a Change in Control would have on   their personal situations.  This Policy shall be effective as of the Effective Date as provided herein,   and shall apply to all Executives (as defined herein).                      Definitions. For purposes of this Policy, the following terms shall have the   following meaning:                “Annual Base Salary” shall  mean  an  Executive’s  stated  annual  compensation  without regard to any bonus, perquisite or other benefits.                “Board” means the Board of Directors of the Company.                “Cause” shall mean a termination by reason of the conviction of Executive, by a  court of competent jurisdiction and following the exhaustion of all possible appeals, of a criminal  act involving the Company or its assets.                              “CEO” shall mean the Company’s President and Chief Executive Officer.                              “CEO Direct Reports” shall mean Executive Officers of the Company who are  direct reports to the Company’s President and Chief Executive Officer.                              “Change in Control” shall have the meaning set forth in Exhibit A.                “Code” means the Internal Revenue Code of 1986, as amended from time to time.               “Company”  means  Humana  Inc.,  a  Delaware  corporation,  and  any  successor  thereto.               “Compensation Committee”  means  the  Organization  and  Compensation  Committee of the Board.               “Date of Termination” shall mean the date specified in the Notice of Termination,  not to exceed thirty (30) days from the date such Notice of Termination is given, or as otherwise  agreed to by Executive and the Company.       





 






               “Executive”  shall  mean  all  eligible  employees,  which  includes  the  CEO  Direct  Reports, other Executive Officers, and such other individuals as identified by the Compensation  Committee who do not have separate agreements or arrangements that provide for payments and/or  benefits upon a Change in Control (other than equity related agreements or arrangements).               “Executive Officer” shall include those executive officers designated by the Board  under Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended.               “Good Reason” shall mean the occurrence after a Change in Control of any of the  following events without Executive’s express written consent:                     (i)   Any  material  reduction  in  Executive’s  title,  authority  or        responsibilities, including reporting responsibilities;                     (ii)  A reduction by the Company in Executive’s Annual Base Salary as        in effect on the date of the Change in Control or as the same may be increased from time        to time;                     (iii) The  relocation  of  Executive’s  office  at  which  Executive  is  to        perform his or her duties to a location more than thirty (30) miles from the location at which        Executive performed his or her duties prior to the Change in Control;                     (iv)  The  failure  by  the  Company  to  continue  in  effect  any  incentive,        bonus or other compensation plan in which Executive participates, unless the Company        substitutes a substantially equivalent benefit;                      (v)   The  failure  by  the  Company  to  continue  in  effect  any  Executive        benefit  plan  (including  any  medical,  hospitalization,  life  insurance,  dental  or  disability        benefit plan in which Executive participated) or any material fringe benefit or perquisite        enjoyed by Executive at the time of the Change in Control, unless the Company substitutes        benefits which, in the aggregate, are equivalent; or                     (vi)  The failure of the Company to obtain a satisfactory agreement from        any successor or assign of the Company to assume and agree to perform this Policy.         A termination of employment by the Executive for Good Reason shall only be effectuated        after giving the Company written notice of the termination, setting forth the conduct of the        Company  that  constitutes  Good  Reason,  within  30  days  of  the  first  date  on  which  the        Executive  has  knowledge  of  such  conduct.   The  Executive  shall  further  provide  the        Company with at least 30 days following the date on which such written notice is provided        to  cure  such  conduct.   If  the  Company  fails  to  cure  such  conduct,  a  termination  of        employment by the Executive for Good Reason shall be effective on the day following the        expiration of such 30-day cure period.               “Effective Date”  means  March  1,  2019,  which  is  the  date  that  this  Policy  is  effective.                                          2    





 






                 “Exchange Act” means the Securities Exchange Act of 1934, and any successor   statute, as it may be amended from time to time.                “Notice of Termination”  shall  mean  a  notice  which  shall  indicate  the  specific  termination provision in this Policy which is relied upon and shall set forth in reasonable detail the  facts and circumstances claimed to provide a basis for termination of Executive’s employment  under the provision so indicated.  Any purported termination by the Company or by Executive  hereunder shall not be effective until communicated by written Notice of Termination to the other  party.               “Payments”  means  any  payment  or  distribution  of  any  type  to  Executive  or  for  Executive’s  benefit  by  the  Company,  any  affiliate  of  the  Company,  any  Person  who  acquires  ownership  or  effective  control  of  the  Company  or  ownership  of  a  substantial  portion  of  the  Company’s  assets  (within  the  meaning  of  Section  280G  of  the  Code  and  the  regulations  thereunder), or any affiliate of such Person, whether paid or payable or distributed or distributable  pursuant to the terms of this Policy or otherwise.               “Person” means any individual, corporation, partnership, limited liability company,   association, trust or other entity or organization, including a government or political subdivision   or an agency or instrumentality thereof.                 “Qualifying Termination” means (i)  by the Company other than for Cause, or by  Executive for Good Reason within twenty-four (24) months following a Change in Control and   during the term of this Policy, or (ii) by the Company other than for Cause at any time prior to the   date  of  a  Change  in  Control  and such  termination  occurred  after  the  Company  entered  into  a   definitive agreement, the consummation of which would constitute a Change in Control.                “Section 409A” shall mean Section 409A of the Code.                “Separation from Service” means a termination of the employment relationship of   Executive with the Company or an affiliate within the meaning of Section 409A and Treasury   Regulation section 1.409A-1(h) or any successor thereto.                “Severance Multiple” means (i) for the CEO, two and a half (2.5) times, (ii) for   CEO Direct Reports, two (2) times, and (iii) for other Executives, no greater than one and a half   (1.5) times.                “Severance Period” means (i) for the CEO, thirty (30) months, (ii) for CEO Direct   Reports, twenty-four (24) months, and (iii) for other Executives, no greater than eighteen (18)   months or such other period as the Committee shall determine.                “Severance Rate” means an amount equal to the sum of (A) Executive’s Annual   Base Salary at the greater of the rate in effect at the time the  Change  in  Control  occurred,  if   applicable,  or  when  the  Notice  of  Termination  was  given  plus  (B)  the  target  annual  bonus  or   incentive compensation which could have been earned by Executive (including, but not limited to,  any target sales incentive compensation, to the extent applicable) calculated as if all relevant goals  had been met during the then-current fiscal year of the Company pursuant to the terms of the  incentive compensation plan in which Executive participates.  With respect to clause (B), If there                                          3     





 






   is no incentive compensation plan in effect at the time the Notice of Termination is given, then for  purposes of clause (B) hereof it shall be assumed that the amount of incentive compensation to be  paid to  Executive  shall be  the  target  amount  under  any  incentive  compensation  plan  in  which  Executive participated at the date of the Change in Control, if applicable, or the most recent plan  participated in, whichever would be greater.                     Benefits.                     (a)   In the event of a Qualifying Termination, subject to Sections 3(d), 4  and 5 hereof, the Company shall pay to Executive in a lump sum within fifteen (15) business days  after the Date of Termination:                     (i)   Executive’s base salary earned but not yet paid through the Date of        Termination at the greater of the rate in effect at the time the Change in Control occurred,        if applicable, or when the Notice of Termination was given, plus any bonuses or incentive        compensation which, pursuant to the terms of any compensation or benefit plan, have been        earned and are payable as of the Date of Termination, but have not actually been paid by        the Date of Termination.  For purposes of this Policy, bonuses and incentive compensation        shall  be  considered  payable  if  all  conditions  for  earning  them have  been  met  and  any        requirement  that  Executive  be  actively  employed  as  of  the  date of  payment  shall  be        disregarded;                      (ii)  A  lump  sum  in  an  amount  equal  to  (x)  the  applicable  Severance        Multiple for such Executive multiplied by (y) the Severance Rate.                       (b)   In addition, in the event of a Qualifying Termination the Company  shall, for the period stated below, maintain in full force and effect for the benefit of Executive and  Executive’s dependents and beneficiaries, at the Company’s expense, all life insurance, health  insurance,  dental  insurance,  accidental  death  and  dismemberment  insurance  and  disability  insurance  under  plans  and  programs  in  which  Executive  and/or  Executive’s  dependents  and  beneficiaries  participated  immediately  prior  to  the  Consummation  of  the  Change  in  Control,  provided that continued participation is possible under the general terms and provisions of such  plans and programs (the “Extended Benefits”).  The Extended Benefits shall be continued until the  earlier of (A) the end of the applicable Severance Period for such Executive, and (B) the effective  date of Executive’s coverage under equivalent benefits from a new employer (provided that no  such equivalent benefits shall be considered effective unless and until all pre-existing condition  limitations  and  waiting  period  restrictions  have  been  waived  or  have  otherwise  lapsed).   If  participation in any such plan or program is barred, the Company shall arrange at its own expense  to provide Executive with benefits substantially similar to those which Executive would have been  entitled to receive under such plans and programs.  At the end of the period of coverage, Executive  shall have the right to have assigned to him or her, at no cost and with no apportionment of prepaid  premiums, any assignable insurance policy relating specifically to him or her.  At the conclusion  of the coverage provided under this Section 3(b), Executive shall be entitled to the continuation  for a period of 18 months of the health and dental insurance then being provided to him or her at  a cost to him or her equal to the amount then being charged to employees of the Company for such  coverage provided pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA).   The  coverage  provided  pursuant  to  this  Subsection  shall  be  in  satisfaction  of  the  Company’s                                         4    





 






   obligation to provide coverage under COBRA.  The Company will use all commercially reasonable  efforts to provide for the continuation of benefits in a manner that (A) does not subject the benefits  to  Section  409A  and  (B)  does  not  cause  the  benefits  to  be  included  in  the  taxable  income  of  Executive.                     (c)   In  addition,  upon  a  Qualifying  Termination  of  employment,  the  Company will (i) provide an Executive who is the CEO or a CEO Direct Report with financial  planning services during the one year period immediately following the Date of Termination on  the same terms as the financial planning services were provided to such Executive immediately  prior to the Change in Control and (ii) provide eligible individuals with outplacement services  through an outplacement firm of the Company’s choosing at a level of services to be determined  by the Company, with such services to extend until the earlier of (A) twelve months following the  Date of Termination for the CEO or CEO Direct Reports, or six months following the Date of  Termination for other Executives, or (B) the date Executive secures full time employment.                     (d)   Benefits under this Policy shall not be duplicative of, and shall be  offset  by,  the  same  type  of  benefit  payable  under  an  agreement between  the  Company  and  Executive or another plan, program or arrangement of the Company covering Executive. To the  extent that benefits under this Policy are the same type of benefit payable under such agreement  or plan, program or arrangement which is subject to, and not exempt from, the requirements of  Section 409A, then the benefits payable under this Policy shall be payable at the same time and in  the same form as the benefits payable under such agreement or plan, program or arrangement, but  only to the extent that such other benefits are subject to and not exempt from Section 409A.                      280G Considerations.  Notwithstanding anything to the contrary contained  in this Policy, (a) to the extent that any Payments constitute “parachute payments” (within the  meaning of Section 280G of the Code), and if (b) such aggregate Payments would, if reduced by  all federal, state and local taxes applicable thereto (including the excise tax imposed under Section  4999 of the Code (the “Excise Tax”)), be less than the amount that Executive would receive, after  all taxes, if Executive received aggregate Payments equal (as valued under Section 280G of the  Code) to only three times Executive’s “base amount” (within the meaning of Section 280G of the  Code), less $1.00, then (c) such Payments will be reduced (but not below zero) if and to the extent  necessary so that no Payments to be made or benefit to be provided to Executive will be subject to  the Excise Tax.  All determinations required to be made pursuant to this letter agreement will be  made  by  a  nationally  recognized  accounting  firm  selected  by  the  Company  (the  “Accounting  Firm”),  which  will  provide  detailed  supporting  calculations  (which  will  include  specific  information  about  each  Payment  (including  the  amount  of  each  Payment)).  For  purposes  of  making the calculations required by this Section 4, the Accounting Firm may make reasonable  assumptions and approximations concerning applicable taxes and may rely on reasonable, good  faith interpretations concerning the application of Sections 280G and 4999 of the Code.  Executive  and the Company will furnish to the Accounting Firm such information and documents as the  Accounting  Firm  may  reasonably  request  in  order  to  make  a  determination  under  this  letter  agreement. The Company will bear all costs and make all payments for the Accounting Firm’s  services relating to any calculations contemplated by this Section 4 and any such determination by  the Accounting Firm will be binding upon Executive and the Company.  If a determination is made  to reduce the Payments, the Company will reduce or eliminate the Payments (i) by first reducing  or eliminating the portion of the Payments relating to the provision of outplacement services, (ii)                                         5    





 






   then by reducing or eliminating cash payments (other than cash payments that are subject to clause  (iv) hereof), (iii) then by reducing or eliminating the portion of the Payments which are not payable  in cash and are attributable to equity awards (other than that portion of such Payments that are  subject to clause (iv) hereof), and (iv) then by reducing or eliminating the portion of the Payments  (whether payable in cash or not payable in cash) to which Treasury Regulation § 1.280G-1 Q/A  24(c) applies, in each case in reverse order beginning with payments or benefits which are to be  paid the latest in time.  It is possible that, after the determinations and selections pursuant to this  letter agreement are made, Executive will receive Payments that are, in the aggregate, either more  or  less  than  the  amount  that  should  have  been  provided  (hereafter referred to as an “Excess  Payment” or “Underpayment,” respectively).   If it is established, pursuant to a final determination  of  a  court  or  an  Internal  Revenue  Service  proceeding  that  has  been  finally  and  conclusively  resolved, that an Excess Payment has been made, then Executive will promptly pay an amount  equal to the Excess Payment to the Company.  In the event that it is determined (i) by a final  determination of a court or (ii) by the Accounting Firm upon request by either Executive or the  Company, that an Underpayment has occurred, the Company will promptly pay an amount equal  to the Underpayment to Executive.                     Restrictive Covenants. In consideration of Executive’s employment by the  Company and the rights and benefits of Executive provided by this Policy, Executive will enter  into agreements that contain certain covenants regarding non-competition, non-solicitation, non- disparagement and specific enforcement with the restricted period for the non-competition and  non-solicitation covenants to be the applicable Severance Period for such Executive, commencing  upon the Date of Termination, with such covenants to  be substantially in the form attached as  Exhibit B hereto.                     Administration.   The  Compensation  Committee  is  responsible  for the  administration  of  this  Policy  and  shall  have  all  powers  and  duties  necessary  to  fulfill  its  responsibilities.  The  Compensation  Committee  shall  determine  any  and  all  questions  of  fact,  resolve all questions of interpretation of the Policy which may arise, and exercise all other powers  and discretion necessary to be exercised under the terms of the Policy which it is herein given or  for which no contrary provision is made. The Compensation Committee shall have full power and  discretion to interpret the Policy and related documents, to resolve ambiguities, inconsistencies  and omissions, to determine any question of fact, and to determine the rights and benefits, if any,  of  any  Executive  or  other  employee,  in  accordance  with  the  provisions  of  the  Policy.  The  Compensation Committee’s decision with respect to any matter shall be final and binding on all  parties concerned. The validity of any such interpretation, construction, decision, or finding of fact  shall not be given de novo review if challenged in court, by arbitration, or in any other forum, and  shall be upheld unless clearly arbitrary or capricious. The Compensation Committee may, from  time to time, by action of its appropriate officers, delegate to designated persons or entities the  right to exercise any of its powers or the obligation to carry out its duties under the Policy.                     Section 409A                     (a)   Compliance. To the extent applicable, it is intended that this Policy  comply with the provisions of Section 409A, so as to prevent inclusion in gross income of any  amounts payable or benefits provided hereunder in a taxable year that is prior to the taxable year  or years in which such amounts or benefits would otherwise actually be distributed, provided or                                         6    





 






     otherwise made available to Executive. This Policy shall be construed, administered, and governed   in a manner consistent with this intent. If and to the extent that any payment or benefit under this   Policy is determined by the Company to constitute “non-qualified deferred compensation” subject   to Section 409A and is payable to Executive by reason of Executive’s termination of employment,   then such payment or benefit shall be made or provided to Executive only upon a Separation from   Service as defined for purposes of Section 409A. Each severance payment under this Policy will   be  considered  a  “separate  payment”  and  not  one  of  a  series  of  payments  for  purposes  of   Section 409A.  To the extent that any benefits to be provided to Executive pursuant to this Policy   are considered nonqualified deferred compensation and are reimbursements subject to Treasury   Regulation Section 1.409A-3(i)(1)(iv), then (i) the reimbursement of eligible expenses related to   such  benefits  shall  be  made  on  or  before  the  last  day  of  Executive’s  taxable  year  following   Executive’s taxable year in which the expense was incurred and (ii) notwithstanding anything to   the contrary in this Policy or any plan providing for such benefits, the amount of expenses eligible   for reimbursement during any taxable year of Executive shall not affect the expenses eligible for   reimbursement in any other taxable year.  Nothing in this Policy will provide a basis for any person  to take action against the Company or its affiliates based on matters covered by Section 409A and  in no event will the Company or its affiliates be liable for any additional tax, interest or penalties  that may be imposed on Executive under Section 409A or any damages for failing to comply with  Section 409A.                     (b)   Six Month Delay for Specified Executives. To the extent that any   amount payable or benefit to be provided under this Policy constitutes a nonexempt “nonqualified   deferred compensation plan” (as defined in Section 409A) upon a Separation from Service, and to   the extent an Executive is deemed to be a “specified employee” (as that term is defined in Section   409A  and  pursuant  to  procedures  established  by  the  Company)  on the  Date  of  Termination,   notwithstanding  any  other  provision  in  this  Policy  to  the  contrary,  such  payment  or  benefit   provision will not be made to Executive during the six month period immediately following the   Date of Termination. Instead, on the first business day of the seventh month following the Date of   Termination, all amounts that otherwise would have been paid or provided to Executive during the   six month period, but were not paid or provided because of this  Section  7(b),  will be  paid  or   provided  to  Executive  at  such  time  without  interest.  This  six  month  delay  will  cease  to  be   applicable if Executive incurs a Separation from Service due to death or if Executive dies before   the six month period has expired.                      Amendment and Termination.                      (a)   This Policy may be amended by the Compensation Committee at  any time, or the Compensation Committee may determine at any time that any Executive is no  longer eligible to receive benefits under this Policy; provided, however, that any such amendment  or  determination  of  eligibility  that would  adversely affect  an Executive  will  not  be  applicable  without  such  Executive’s  consent  until  the  later  of  (i)  one  year  following  the  date  of  such  amendment, and (ii) two years following consummation of a transaction that constitutes a Change  of Control if a definitive agreement pertaining to such transaction was entered into prior to the date  of such amendment.                     (b)   This  Policy  shall  continue  indefinitely  after  the  Effective  Date,  unless the Compensation Committee shall decide to terminate this Policy by adopting resolutions                                          7     





 






     terminating this Policy; provided, however, that any such termination of the Policy shall (i) not be   effective  until  the  first  anniversary  after  the  action  to  terminate  the  Policy  is  taken  by  the   Compensation Committee and (ii) not affect any payments or benefits already owed to Executive   pursuant to the terms of  the Policy at the time the termination of the Policy becomes effective.                      Miscellaneous.                      (a)   The  Company  shall  pay  all  reasonable  legal  fees  and  related  expenses (including the costs of experts, evidence and counsel) incurred by Executive as a result  of Executive seeking to obtain or enforce any right or benefit provided by this Policy, provided the  Executive is successful on at least one material claim to obtain or enforce such rights or benefits.   The reimbursement of the eligible expense must be made on or before the last day of Executive’s  taxable year following Executive’s taxable year in which it was determined that such expense was  incurred reimbursable.                      (b)   This Policy shall be binding upon any successor in interest of the  Company  or  an  affiliate  (whether  direct  or  indirect,  by  purchase,  merger,  consolidation  or  otherwise)  to  all  or  substantially  all  of  the  business  or  assets  of  the  Company,  and  shall  be  enforceable by or on behalf of an Executive in the same manner and to the same extent as the  Company  is  bound  and  as  if  no  succession  had  taken  place. As  used in this Policy, the term  “Company” shall include any successor to all or substantially all its business or assets or which   becomes bound by the terms of this Policy by the terms hereof, by operation of law, or otherwise.   It is intended that this Policy confer vested and nonforfeitable rights for each Executive to receive   benefits to which Executive is entitled under the terms of this Policy with Executives being third  party beneficiaries.                     (c)   Except as otherwise provided herein, this Policy shall not affect any  Executive's rights or entitlement to other accrued but unpaid compensation or benefits under any  other employee benefit program offered to Executive by the Company or an affiliate as of the Date  of Termination.                     (d)   The  various  provisions  of  this  Policy  are  severable  and  any  determination of invalidity or unenforceability of any one provision shall not have any effect on  the remaining provisions.                     (e)   For the purposes of this Policy, notices and all other communications  provided for in the Policy shall be in writing and shall be deemed to have been duly given when  personally delivered or sent by electronic mail or certified mail, return receipt requested, postage  prepaid, addressed to the respective addresses last given by each party to the other, provided that  all notices to the Company shall be directed to the attention of the Chief Human Resources Officer  and Corporate Secretary of the Company. All notices and communications shall be deemed to have  been received on the date of delivery thereof or on the third business day after the mailing thereof,  except that notice of change of address shall be effective only upon receipt.                     (f)   Executive  shall  not  be  required  to  mitigate  the  amount  of  any  payment  provided  under  this  Policy  by  seeking  other  employment or  otherwise,  nor  shall  the                                           8     





 






     amount of any payment provided under this Policy be reduced by any earnings of Executive after  the Date of Termination from any subsequent employer or from any other source.                     (g)   All  payments  made  pursuant  to  this  Policy  shall  be  subject  to  withholding of required income and employment taxes.                     (h)   This Policy shall be governed by and construed in accordance with   the internal laws of the State of Kentucky.                                              9     





 






                                                                          Exhibit A    “Change in Control” shall mean the occurrence of:            1) An acquisition (other than directly from the Company) of any voting securities of the Company      (the  “Voting  Securities”)  by  any “Person”  (as  the  term  person  is  used  for  purposes  of      Section 13(d)  or  14(d)  of  the  Exchange  Act),  immediately  after which  such  Person  has      “Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange      Act) of twenty percent (20%) or more of the combined voting power of the Company’s then      outstanding Voting Securities; provided, however, in determining whether a Change in Control      has  occurred,  Voting  Securities  which  are  acquired  in  a  “Non-Control  Acquisition”  (as      hereinafter defined) shall not constitute an acquisition which would cause a Change in Control.     A “Non-Control Acquisition” shall mean an acquisition by (i) an employee benefit plan (or a     trust forming a part thereof) maintained by (A) the Company or (B) any corporation or other     Person of which a majority of its voting power or its equity securities or equity interest is     owned, directly or indirectly, by the Company (for purposes of this definition, a “Subsidiary”)     (ii) the Company or its Subsidiaries, or (iii) any Person in connection with a “Non-Control     Transaction” (as hereinafter defined);    2) The  individuals  who,  as  of  the  Effective  Date  are  members  of  the  Board  (the  “Incumbent     Board”), cease for any reason to constitute at least two-thirds of the members of the Board;     provided, however, that if the election, or nomination for election by the Company’s common     stockholders,  of  any  new  director  was  approved  by  a  vote  of  at least  two-thirds  of  the     Incumbent  Board,  such  new  director  shall,  for  purposes  of  this Policy,  be  considered  as  a     member  of  the  Incumbent  Board;  provided  further,  however,  that no  individual  shall  be     considered a member of the Incumbent Board if such individual initially assumed office as a     result of either an actual or threatened solicitation of proxies or consents by or on behalf of a     Person  other  than  the  Board  (a  “Proxy  Contest”)  including  by  reason  of  any  agreement     intended to avoid or settle any Proxy Contest; or    3) The consummation of:       a) A merger, consolidation or reorganization involving the Company, unless such merger,        consolidation  or  reorganization  is  a  “Non-Control  Transaction.”  A  “Non-Control        Transaction” shall mean a merger, consolidation or reorganization of the Company where:             i) the stockholders of the Company, immediately before such merger, consolidation or           reorganization,  own  directly  or indirectly  immediately  following  such  merger,           consolidation or reorganization, at least seventy-five percent (75%) of the combined           voting power of the outstanding Voting Securities of the corporation resulting from           such  merger  or  consolidation  or  reorganization  (the  “Surviving Corporation”)  in           substantially  the  same  proportion  as  their  ownership  of  the  Voting  Securities           immediately before such merger, consolidation or reorganization;                         ii) the individuals who were members of the Incumbent Board immediately prior to the            execution of the agreement providing for such merger, consolidation or reorganization            constitute at least two-thirds of the members of the board of directors of the Surviving                                          10     





 






            Corporation, or a corporation beneficially directly or indirectly owning a majority of           the  Voting  Securities  of  the  Surviving  Corporation,  and  no  agreement,  plan  or           arrangement is in place to change the composition of the board of directors following           the merger, consolidation or reorganization; and                iii) no Person other than (i) the Company, (ii) any Subsidiary, (iii) any employee benefit           plan (or any trust forming a part thereof) maintained by the Company, the Surviving           Corporation,  or  any  Subsidiary, or  (iv) any  Person  who,  immediately  prior  to  such           merger, consolidation or reorganization had Beneficial Ownership of twenty percent           (20%) or more of the then outstanding Voting Securities, has Beneficial Ownership of           twenty  percent  (20%) or  more  of  the  combined  voting  power  of  the  Surviving           Corporation’s then outstanding voting securities.       b) A complete liquidation or dissolution of the Company; or                                               c) The sale or other disposition of all or substantially all of the assets of the Company to any        Person (other than a transfer to a Subsidiary).    Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because  any  Person  (the  “Subject  Person”)  acquired  Beneficial  Ownership  of  more  than  the  permitted  amount of the then outstanding Voting Securities as a result of the acquisition of Voting Securities  by the Company which, by reducing the number of Voting Securities then outstanding, increases  the proportional number of Shares Beneficially Owned by the Subject Persons, provided that if a  Change in Control would occur (but for the operation of this sentence) as a result of the acquisition  of Voting Securities by the Company, and after such share acquisition by the Company, the Subject  Person becomes the Beneficial Owner of any additional Voting Securities which increases the  percentage of the then outstanding Voting Securities Beneficially Owned by the Subject Person,  then a Change in Control shall occur.   It is the intent of the Company that, with respect to any amount payable or benefit to be provided  under this Policy that is subject to, and not exempt from Section 409A, the definition of "Change  in Control" satisfies, and be interpreted in a manner that satisfies, the applicable requirements of  Section 409A.  If the definition of "Change in Control" would otherwise frustrate or conflict with  the intent expressed above, that definition to the extent possible shall be interpreted and deemed  amended so as to avoid such conflict.                                             11    





 






                                                                          Exhibit B                                  Restrictive Covenants    Confidential Information and Trade Secrets    The Executive recognizes that the Executive’s position with the Company requires considerable   responsibility and trust, and, in reliance on the Executive’s loyalty, the Company may entrust the   Executive  with  highly  sensitive  confidential,  restricted  and  proprietary  information  involving   Trade Secrets and Confidential Information.     “Trade  Secret”  shall  be  defined as  any  scientific  or  technical information,  design,  process,   procedure, formula or improvement that is valuable and not generally known to competitors of the   Company. “Confidential Information” is any data or information, other than Trade Secrets, that is   important,  competitively  sensitive,  and  not  generally  known  by the  public,  including,  but  not   limited  to,  the  Company’s  business  plans,  business  prospects,  training  manuals,  product   development  plans,  bidding  and  pricing  procedures,  market  strategies,  internal  performance   statistics,  financial  data,  confidential  personnel  information concerning  employees  of  the   Company,  supplier  data,  operational  or  administrative  plans,  policy  manuals,  and  terms  and   conditions of contracts and agreements. The terms “Trade Secrets” and “Confidential Information”   shall  not  apply  to  information  which  is  (i) already  in  the  Executive’s  possession  (unless  such   information was used in connection with formulating the Company’s business plans, obtained by   the Executive from the Company or was obtained by the Executive in the course of the Executive’s   employment by the Company), or (ii) required to be disclosed by any applicable law.    Except as may be required by law or legal process or an order of a court of competent jurisdiction,   the  Executive  will  not  use  or  disclose  any  Trade  Secrets  or  Confidential  Information  of  the   Company at any time after termination of employment and prior to such time as they cease to be   Trade Secrets or Confidential Information through no act of the Executive in violation of this   Section.    Executive will surrender to the Company all memoranda, notes, records, plans, manuals or other   documents pertaining to the Company’s business or the Executive’s employment (including all   copies thereof). The Executive will also leave with the Company all materials involving Trade   Secrets or Confidential Information of the Company. All such information and materials, whether   or  not  made  or  developed  by  the  Executive,  shall  be  the  sole  and  exclusive  property  of  the   Company, and the Executive hereby assigns to the Company all of the Executive’s right, title and   interest in and to any and all of such information and materials.    Agreement Not to Compete and Agreement Not to Solicit    The  Executive  hereby  covenants  and  agrees  that  during  the  Severance  Period  the  Executive,  directly or indirectly, personally, or as an employee, officer, director, partner, member, owner,  stockholder, investor or principal of, or consultant or independent contractor with, another entity,  shall  not  participate  in  any  business  which  competes  with  the  Company  including,  without  limitation,  health  maintenance  organizations,  insurance  companies  or  prepaid  health  plan  businesses in which the Company has been actively engaged during any part of the two (2) year  period  immediately  preceding  the  Executive’s  employment  Termination  Date  (“Company                                          12     





 






   Business”), in any Geographic Area (as defined below) in which the Company and/or any of its  Affiliates is then doing business.  For purposes of this Policy, “Geographic Area” means any state,  commonwealth or territory of the United States or any equivalent entity in any foreign country.   The  Executive  hereby  covenants  and  agrees  that  during  the  Severance  Period,  the  Executive,  directly or indirectly, personally, or as an employee, officer, director, partner, member, owner,  stockholder, investor or principal of, or consultant or independent contractor with, another entity,  shall not: (1) interfere with the relationship of the Company and any of its employees, agents,  representatives,  consultants  or  advisors;  (2)  divert,  or  attempt  to  cause  the  diversion  from  the  Company,  any  Company  Business, nor  interfere  with  relationships  of  the  Company  with  its  policyholders, agents, brokers, dealers, distributors, marketers, sources of supply or customers; or  (3)  solicit,  recruit  or  otherwise  induce  or  influence  any  employee  of  the  Company  to  accept  employment in any business which competes with the Company Business, in any Geographic Area  in which the Company and/or any of its Affiliates is then doing business.                                          13