Document:

hum20190331ex105

                                        HUMANA INC.                           INCENTIVE STOCK OPTION AGREEMENT                       AND AGREEMENT NOT TO COMPETE OR SOLICIT                UNDER THE AMENDED AND RESTATED 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  Amended  and  Restated  Humana  Inc.  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.        D.     Effect of Termination of Employment on Option. If the employment of Optionee by the  Company  is  terminated  for  Cause,  all  the  rights  of  Optionee  under  this  Agreement,  whether  or  not  exercisable,  shall  terminate  immediately.   If  the  employment  of  Optionee  is  terminated  for  any  reason  other than for Cause, the Option shall vest and remain exercisable in accordance with Sections 12 and 13  of the Plan, but in no event beyond the Expiration Date.        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.    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                                              - 2 -  

 

                                                                                         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 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                                              - 3 -  

 

                                                                                         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.               1.     Notwithstanding anything set forth in Section II.D., in the event of a Change in  Control Termination (defined below), 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                                             - 4 -  

 

                                                                                         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.    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.                                              - 5 -  

 

                                                                                                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,  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 in accordance with Section                                              - 6 -  

 

                                                                                                   11.1 of the Plan, 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)  “Last Day” means Optionee’s last day of employment with the Company regardless of the            reason for Optionee’s separation.         (v)  “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.         (vi)  “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).          (vii) “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.         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.                                                          - 7 -  

 

                                                                                                         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>                                                                                               - 8 -hum20190331ex106

                                                                                                                               HUMANA INC.                                STOCK OPTION AGREEMENT                       AND AGREEMENT NOT TO COMPETE OR SOLICIT                UNDER THE AMENDED AND RESTATED 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  Amended  and  Restated  Humana  Inc.  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, a Non-Qualified  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>.        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.        D.     Effect of Termination of Employment on Option. If the employment of Optionee by the  Company  is  terminated  for  Cause,  all  the  rights  of  Optionee  under  this  Agreement,  whether  or  not  exercisable, shall terminate immediately.  If the employment of Optionee is terminated for any reason other  than for Cause, the Option shall vest and remain exercisable in accordance with Sections 12 and 13 of the  Plan.        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                                                                             NQ – NCNS - RE  

 

    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;                      c)    A combination of I.E.(2)(a) and I.E.(2)(b) above; or                      d)     Through the cashless exercise provisions of the designated broker-dealer  as described in the procedures communicated to Optionee by the Company.               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.    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     2  

 

    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  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     3  

 

    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.               1.     Notwithstanding anything set forth in Section II.D., in the event of a Change in  Control Termination (defined below), 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     4  

 

    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.    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     5  

 

    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.        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,  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 in accordance with Section            11.1 of the Plan, 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.     6  

 

          (iv)  “Last Day” means Optionee’s last day of employment with the Company regardless of the            reason for Optionee’s separation.        (v)  “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.        (vi)  “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).         (vii) “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.        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.                7  

 

                                  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>                                                      8

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