ex101bkhumanatsa






EXECUTION VERSION       3574614.3  TRANSITION & SEPARATION AGREEMENT  This Transition & Separation Agreement (the “Agreement”) sets forth the  understanding between you, Brian A. Kane, and Humana Inc. and its affiliates and  subsidiaries (“Humana”) with respect to your separation from employment with  Humana.  RECITALS:  A. The Parties have mutually agreed that your position will be eliminated and  therefore your employment with Humana will terminate as of an agreed upon  date; and  B. In order to ensure a smooth transition prior to your exit, Humana has requested  that you continue your employment as Chief Financial Officer through May 31,  2021 (the “Transition Date”) and subsequently in an interim role as “Strategic  Advisor” to the Company reporting to the Chief Executive Officer.  NOW, THEREFORE, in consideration of your agreement to the terms set forth  below and the mutual benefits to be derived hereunder, it is agreed:  A. EMPLOYMENT STATUS  1. Acceptance of Interim and Variable Staffing Pool Roles.  You agree to  accept employment as a “Strategic Advisor,” effective June 1, 2021 (“Interim Role”),  advising Humana with respect to the finance and reporting functions.  Humana agrees  that you will remain employed in the Interim Role until December 31, 2021 and that  effective January 1, 2022, Humana will transition you to a Variable Staffing Pool  associate (the “VSP Role”), as defined in Humana’s Requisition Policy, assigned to  advise Humana with respect to the finance and reporting functions.  In order to maintain  your employment while in the VSP Role, you agree to perform at least one hour of work  every 60 days until February 28, 2022, at which time your employment will be  terminated (the “Separation Date”).  You agree and acknowledge that you are not  eligible for payments under any Humana severance policy or Humana’s Change In  Control Policy while you are in either the Interim or VSP Role, except as provided in this  Agreement and/or the Executive Severance Policy.  In the event that during the period  that you are in the Interim Role (a) Humana elects to change your status in Humana to the  VSP Role or (b) you obtain other employment and intend to accept such other  employment and continue your status at Humana in the VSP Role (a “Voluntary VSP  Status Change”), the party electing to so change your status shall give at least 30 days  prior written notice to the other party, which notice shall set forth the date of such change  in status.  Effective on such date, your status will change to the VSP Role.   Notwithstanding the change of such status prior to December 31, 2021, if Humana has  elected to change your status as contemplated by clause (a) above, you shall still be  entitled to all compensation, equity and benefits described in this Agreement as if your  status was in the Interim Role through December 31, 2021, and  you will be treated as  





 






  2  continuing in the VSP Role through the Separation Date, which shall remain February 28,  2022.  2. Compensation.    (a) Subject to your compliance with Section B (3) of this Agreement,  your current base salary of $765,000.00 will continue in the Interim Role and will  be paid bi-weekly through December 31, 2021 while in the Interim Role.  You  acknowledge and agree that you will not be eligible for future salary increases  while you are in the Interim Role.  (b) Effective January 1, 2022, you will receive an hourly rate of  $367.79 for work performed in the VSP Role, which will be paid bi-weekly.  You  acknowledge and agree that you will not be eligible for future salary increases or  to participate in the Annual Incentive Plan (the “AIP”) for the year 2022.    (c) In the event incentive compensation for the year 2021 is paid  pursuant to the terms and provisions of the AIP, you will be entitled to receive an  incentive compensation payment (without proration) for the 2021 performance  period.  For your Individual Multiplier portion of AIP, Humana will pay you  100% of the total AIP award calculation.  Any incentive compensation payable to  you will be paid at the same time as such amounts are paid to other participants in  the AIP whether or not you are then employed by Humana in any capacity or you  are in the VSP Role.  For the avoidance of doubt, your incentive compensation for  2021 will be in the same amount and payable at the same time as if you were  Chief Financial Officer for the entire year, whether or not you are then employed  by Humana in any capacity or you are in the VSP Role.  Notwithstanding the  foregoing, in the event of a Voluntary VSP Status Change, your AIP for 2021 will  be pro-rated based on full days of service as Chief Financial Officer or in the  Interim Role.  (d) During 2021 you shall also be entitled to the Company’s 401K  Plan and Retirement Equalization Plan matching contributions as if you were  Chief Financial Officer for the entire year, whether or not you are then employed  by Humana in any capacity or you are in the VSP Role.  Notwithstanding the  foregoing, in the event of a Voluntary VSP Status Change, you will not be eligible  for the Company’s 401K Plan and Retirement Equalization Plan matching  contributions while serving in the VSP Role.    3. Severance Benefits:  Upon the Separation Date you will be eligible to  receive benefits under Humana’s Executive Severance Policy, subject to your complying  with the terms and conditions of this Agreement and the Executive Severance Policy, as  modified by the terms set forth herein.  4. Equity: You agree and acknowledge that you are not eligible for future  equity grants under the 2011 Humana Inc. Stock Incentive Plan, the Amended and  Restated Humana Inc. Stock Incentive Plan, or any successor plan, while serving in either  





 






  3  the Interim or VSP Role.  Any Restricted Stock Units, Performance Stock Units and/or  Stock Options outstanding as of April 1, 2021 will (a) continue to vest while you are  providing services in your Interim and VSP Roles under the terms of the governing  Restricted Stock Unit, Performance Stock Unit and/or Stock Option Agreements (the  “Stock Agreements”) between you and Humana and (b) with respect to the Restricted  Stock Units and Stock Options, continue to vest for twelve months following the  Separation Date on the same terms as if you had continued to provide services to Humana  through the first anniversary of the Separation Date.  Exhibit A hereto sets forth the Stock  Options, Restricted Stock Units and Performance Stock Units that were granted to you  and are outstanding as of the date hereof, the date which all such equity vests, the dates  such equity becomes exercisable or, in the case of Restricted Stock Units and  Performance Stock Units, is delivered to you, and in the case of Options, the last date on  which such Options may be exercised.   5. Benefits: You may continue to participate, to the extent you may be  eligible, in the “employee benefit plans” (as defined in Section 3(3) of the Employee  Retirement Income Security Act of 1974, as amended) maintained from time to time by  Humana for employees of Humana and its subsidiaries.  Your rights to Continued Health  Benefit Coverage shall be in accordance with Section 3.1(iii) of the Executive Severance  Policy other than the last sentence thereof.  For the avoidance of doubt, such health  benefit coverage shall continue until the end of the Severance Period without regard to  your position in Humana, including but not limited to in your VSP Role, and whether or  not you are employed by Humana, unless you have obtained health benefit coverage from  a new employer that is generally comparable to the health benefit coverage provided by  Humana. You will be required to pay your portion of premiums or related payments as  designated in such employee benefit plans and/or as designated by Humana directly to  Humana.  You shall be required to comply with the conditions attendant to coverage by  such plans and shall comply with and be entitled to benefits only in accordance with the  terms and conditions of such plans as they may be amended from time to time.  Nothing  herein contained shall be construed as requiring Humana to establish or continue any  particular employee benefit plan in discharge of its obligations under this Agreement.  At  Humana’s sole discretion, Humana may replace such employee benefit plans with  employee benefit plans similar to Humana’s affiliates.  Your active coverage or  participation in such employee benefits plans shall end on the Separation Date, unless  otherwise provided by the terms of such plan, by the Executive Severance Policy or by  law.  Thereafter, you will have COBRA continuation rights for dental or medical  coverage.  You will be eligible for the same physical and charitable giving match benefits as  an Executive Officer of Humana until December 31, 2021 (“Executive Benefits”).   Thereafter, you will no longer be eligible for Executive Benefits.  In addition, and  consistent with the terms of Humana’ Executive Severance Policy, you will be eligible  for same financial planning benefits and outplacement benefits as other executive officers  through the first anniversary of the Separation Date.  Any deferred compensation benefits  that become payable to you upon the Separation Date will be paid in accordance to the  terms of the applicable plan. Humana shall continue its matching contribution to the  





 






  4  Retirement Equalization Plan for your benefit, unless you are in your VSP Role as a  result of a Voluntary VSP Status Change.  In addition, (a) during your Interim Role and VSP Role, you shall continue to be  able to use the services of your assistant, Ms. Zahira Hoback, in the same manner as you  have been utilizing her services on the date of this Agreement; and (b) notwithstanding  the provisions of the Agreement Not to Solicit or similar provisions in any agreement  with Humana to which you are a party, you may solicit, offer employment and hire Ms.  Hoback, if Ms. Hoback chooses to accept any such offer of employment.  B. MISCELLANEOUS  1. Cessation of Status as an Officer: Effective June 1, 2021, you will no  longer be an officer or director of Humana Inc., and of any subsidiaries and other  affiliates of Humana Inc. of which you are an officer or director.  Accordingly, you will  not hold yourself out as being an officer or director, or as having any authority to bind,  Humana Inc. or any such subsidiary or affiliate.  You agree to execute any documents  necessary to reflect the change in status.    2. Non-Compete Agreement and Agreement Not to Solicit: You understand  and agree that, subject to the agreed upon amendments to the Restricted Period (as set  forth on Exhibit B hereto), (i) the provisions of any Stock Agreement entered into by you  and Humana Inc. entitled “Agreement Not to Solicit” and “Agreement Not to Compete”  and (ii) the provisions of Exhibit A to Humana’s Executive Severance Policy, in each  case, remain in full force and effect and those obligations will continue during the  applicable periods set forth on Exhibit B hereto.  You understand and agree that any  violation of the provisions of (x) the Stock Agreements entitled “Agreement Not to  Solicit,” and “Agreement Not to Compete” or (y) Exhibit A to Humana’s Executive  Severance Policy, will in each case result in irreparable injury to Humana, that the  remedy at law for any violation or threatened violation of such provision(s) are  inadequate and in the event of any such breach or threatened breach, Humana, in addition  to any other remedies or damages available to it at law or in equity, shall be entitled to  temporary injunctive relief before trial as a matter of course, and to permanent injunctive  relief without the necessity of proving actual damages;  3. Confidential Information and Trade Secrets: You recognize that your  position with the Company has required considerable responsibility and trust, and, in  reliance on your loyalty, the Company has entrusted you 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,  





 






  5  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 your possession (unless such information was  used in connection with formulating the Company’s business plans, obtained by you from  the Company or was obtained by you in the course of your 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, you 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 yours in violation of this Section  B(3). Upon termination of employment, you will surrender to the Company all  memoranda, notes, records, plans, manuals or other documents pertaining to the  Company’s business or your employment (including all copies thereof).  You 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 you, shall be the sole and exclusive property of the Company, and you  hereby assign to the Company all of your right, title and interest in and to any and all of  such information and materials.  The Company will not, and will cause the Chief  Executive Officer and the other officers and directors of Humana not to, disparage you or  your performance, or otherwise take any action which could reasonably be expected to  adversely affect your personal or professional reputation.  You will not disparage the  Company or any of its executive officers, directors, agents or employees, or otherwise  take any action which could reasonably be expected to adversely affect the personal or  professional reputation of the Company or any of its directors, officers, agents or  employees.  Further, and consistent with the foregoing, as of the Transition Date,  including for the duration of the Severance Period (as defined in the Humana Inc.  Executive Severance Policy), you will not hold yourself out as a source or an expert with  respect to the Company’s financial performance or financial or strategic prospects and  you will not comment on the same, unless any such comment shall be approved in  advance in writing by the Chief Executive Officer of Humana.    4. Entire Agreement: This Agreement, the Executive Severance Policy (as  modified herein), the Retirement Equalization Plan and the Stock Agreements reflect the  entire understanding between Humana and you with respect to compensation and benefits  available during your service in the Interim Role and VSP Role, and no statements,  promises or inducements, whether written or oral, made by either party that are not  contained in this Agreement, the Executive Severance Policy (as modified herein), the  Retirement Equalization Plan or the Stock Agreements shall be valid or binding upon the  parties to this Agreement.  5. Severability: In the event any portion of this Agreement is held to be  unenforceable, the remainder of this Agreement shall remain in full force and effect and  shall be enforced in harmony with the purpose of the Agreement.  6. Code Section 409A: It is intended that this Agreement will comply with, or  be exempt from, Section 409A of the Internal Revenue Code of 1986, as amended (the  “Section 409A”) and the interpretive guidance thereunder, including, without limitation,  





 






  6  the exemptions for short-term deferrals, separation pay arrangements, reimbursements,  and in-kind distributions, and this Agreement shall be administered, interpreted and  construed in a manner that does not result in the imposition of additional taxes, penalties  or interest under Section 409A.  Humana agrees to negotiate in good faith with you to  make amendments to the Agreement, as both parties mutually agree are necessary or  desirable to avoid the imposition of taxes, penalties or interest under Section 409A.  If an  amount to be paid under this Agreement is payable in two or more installments, each  installment shall be treated as a separate payment for purposes of Section 409A.  For  purposes of this Agreement, a termination of employment shall not be deemed to have  occurred for purposes of any provision of this Agreement providing for the payment of  any amounts or benefits subject to the requirements of Section 409A upon or following a  termination of employment unless such termination is also a “separation from service”  within the meaning of Section 409A, and, for purposes of any such provision of this  Agreement, references to a “termination,” “termination of employment,” or like terms  shall mean a “separation from service” within the meaning of Section 409A.  Neither  Humana nor you will have the right to accelerate or defer the delivery of any such  payments or benefits except to the extent specifically permitted or required by Section  409A.  7. Press Release: The parties hereto agree to issue the Press Release attached  hereto as Exhibit C on March 22, 2021.   C. ACKNOWLEDGMENTS:  You and Humana hereby acknowledge and agree:  1. that you were provided a sufficient period to review and consider this  Agreement and are advised to contact an attorney,  2. that you understand each of the terms of this Agreement and the effect of  executing this Agreement by your signature; and  3. that you are executing this Agreement as your own free act and deed,  without any coercion or duress, and that you agree to each of the terms and provisions of  this Agreement.      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]  





 






[SIGNATURE PAGE – BK TRANSITION AND SEPARATION AGREEMENT]  3574614.3  IN WITNESS WHEREOF, as their free and voluntary act, the parties have  executed this Agreement as of the date indicated.  HUMANA By:  By:  Name: Bruce D. Broussard Name: Brian A. Kane  Title: President & CEO Date:   Date: March 22, 2021  





 






[SIGNATURE PAGE – BK TRANSITION AND SEPARATION AGREEMENT]  3574614.3  IN WITNESS WHEREOF, as their free and voluntary act, the parties have  executed this Agreement as of the date indicated.  HUMANA  By: By:  Name:  Title:  Name: Brian A. Kane  Date: March 22, 2021   Date: