Document:

hum20190331ex103

                                                                                                                               HUMANA INC.                            RESTRICTED STOCK UNIT AGREEMENT                       AND AGREEMENT NOT TO COMPETE OR SOLICIT                UNDER THE AMENDED AND RESTATED STOCK INCENTIVE PLAN                                                                                                    THIS RESTRICTED STOCK UNIT 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 "Grantee").         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 award to Grantee Restricted Stock Units in accordance with  the Plan.         NOW,  THEREFORE,  in  consideration  of  the  award  of  Restricted  Stock  Units  to  Grantee,  the  promises  and  mutual  covenants  hereinafter  set  forth,  and  other good  and  valuable  consideration,  the  Company and Grantee agree as follows:    I.     RESTRICTED STOCK UNIT GRANT          A.     Grant.  Subject to the terms and conditions hereinafter set forth, and in accordance with  the provisions of the Plan, the Company hereby grants to Grantee, and Grantee hereby accepts from the  Company <shares_awarded> Restricted Stock Units.  Each Restricted Stock Unit represents the right of  Grantee to receive (i) one (1) Share on the date of distribution provided for in Section I.E.  In addition,  Grantee shall also have the right to receive all of the cash or in-kind dividends that are paid with respect to  the Shares represented by the Restricted Stock Units to which this award relates (“DERs”).   Dividend  equivalents with respect to any such Share shall be paid on the same date that such Share is issued to  Grantee pursuant to Section I.E. hereof.  The DERs shall be subject to the same terms and conditions  applicable to the Restricted Stock Units, including, without limitation, the restrictions and non-transferability,  vesting,  forfeiture  and  distribution  provisions  contained  in  Sections  I.B  through  I.E.,  inclusive,  of  this  Agreement.  In the event that the Restricted Stock Units are forfeited pursuant to Section I.D. hereof, the  related DER shall also be forfeited.          B.     Restrictions and Non-Transferability.  The Restricted Stock Units and DERs may not be  sold, transferred, pledged, assigned or otherwise alienated or hypothecated.  In addition, such Restricted  Stock Units and DERs shall be subject to forfeiture in accordance with the provisions of Section I.D.          C.     Vesting of Restricted Stock Units.  The Restricted Stock Units shall vest in three equal  installments, with the first installment vesting on [December 15] of the year in which the Date of Grant  occurs, and the next two installments vesting on [December 15] of each of the next two years (each such      - 1 -   18590216.2                                                                RSU – NCNS - RE 

 

    date, a “Vesting Date”) subject to Grantee’s continued employment with the Company through each such  Vesting Date, except as set forth in Sections 12 and 13 of the Plan, or as set forth below:        1.     Section 13(c)(ii) of the Plan and any references to “Retirement” in any other section of the  Plan will not apply to the Restricted Stock Units.         2.    Notwithstanding Section 13(e)(ii)(B) of the Plan, in the event that Grantee’s employment  with the Company terminates due to a Divestiture of the business to which Grantee provides services, if  the  Company  does  not  maintain  a  strategic  interest  in  the  divested  business,  as  determined  by  the  Committee in its sole discretion, all outstanding Restricted Stock Units (and related DERs) shall continue  to vest on the regular Vesting Date(s) in the same manner as if Grantee continued to be employed by the  Company through the applicable Vesting Date(s).        3.     Notwithstanding Section 13(g)(ii) of the Plan, in the event that Grantee’s employment with  the Company terminates due to a Workforce Reduction or a Position Elimination, all outstanding Restricted  Stock Units (and related DERs) shall continue to vest on the regular Vesting Date(s) in the same manner  as if Grantee continued to be employed by the Company through the applicable Vesting Date(s).         D.    Forfeiture.   Except  as  set  forth  in  Sections  12  and  13  of  the  Plan  (as  modified  by  Section C above), upon the termination of Grantee's employment with the Company prior to the time the  Restricted Stock Units and DERs have vested, the Restricted Stock Units and DERs shall be forfeited  immediately by Grantee.          E.     Distributions.  The Company shall issue to Grantee (or, if applicable, Grantee’s estate or  personal representative) Shares (or such other securities or other property into which the Shares have been  converted,  with  any  partial  Shares  or  other  securities  to  be  settled  in  cash)  with  respect  to  Grantee’s  Restricted  Stock  Units  and  dividend  equivalents  accrued  pursuant  to  the  DERs  with  respect  to  such  Restricted Stock Units, within 30 days of the date that the Restricted Stock Units vest in accordance with  Section I.C hereof; provided, however, that, to the extent that the Restricted Stock Units are considered  deferred  compensation  subject  to  Section  409A  of  the  Code  and  the  Restricted  Stock  Units  vest  in  connection  with  Grantee’s  Change  in  Control  Termination  (defined  below),  then  unless  the  Change  in  Control is a Section 409A Change in Control, the distribution of  Shares (or such other securities or other  property into which the Shares have been converted) shall not be accelerated to the vesting date but such  distribution shall instead occur based on the Vesting Dates set forth in Section I.C. hereof.  A “Section 409A  Change in Control” shall mean a Change in Control that also constitutes a “change in ownership or effective  control” of the Company or a “change in ownership of a substantial portion of the assets of” the Company,  in each case within the meaning of Section 409A of the Code.  Notwithstanding anything to the contrary  contained herein, no Shares may be transferred to any person other than Grantee unless such other person  demonstrates to the reasonable satisfaction of the Company such person’s right to the transfer.            F.    Taxes.  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  distribution of Shares, cash or other property or, to the extent applicable, vesting of the Restricted Stock                                              - 2 -    

 

    Units  or  DERs  hereunder,  shall  be  paid  by  Grantee  at  such  time.   Notwithstanding  the  foregoing,  the  Company shall withhold delivery of a number of Shares with a Fair Market Value as of the distribution date  equal to the Withholding Taxes required to be withheld in connection with such distribution.            II.    AGREEMENT NOT TO COMPETE AND AGREEMENT NOT TO SOLICIT.  Grantee 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 Grantee) that it is providing Grantee, and in the significant time, money, training, team  building and other efforts it expends to develop Grantee’s skills to assist in performing Grantee’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 Grantee agrees  are valuable assets of the Company to which it has devoted substantial resources. Grantee acknowledges  that the grant Grantee is receiving under the Plan is a meaningful way that the Company entrusts Grantee  with its goodwill and aligns Grantee with the Company objective of increasing the value of the Company’s   business.  Accordingly, Grantee acknowledges the importance of protecting the value of the Company’s  business through, among other things, covenants to restrict Grantee from engaging in activities that would  adversely affect the value of the Company and its goodwill.        A.     Agreement Not to Compete. Grantee agrees that during the Restricted Period (defined  below) and within the Restricted Geographic Area (defined below), Grantee will not, directly or indirectly,  perform  the  same  or  similar  responsibilities  Grantee  performed for  the  Company  in  connection  with  a  Competitive  Product  or  Service (defined  below).  Notwithstanding  the  foregoing,  Grantee  may  accept  employment with a Competitor (defined below) whose business is diversified, provided that: (1) Grantee  will  not  be  engaged  in  working  on  or  providing  Competitive  Products  or  Services,  or  otherwise  use  or  disclose the Company’s confidential information or trade secrets; and (2) the Company receives written  assurances from the Competitor and Grantee that are satisfactory to the Company that Grantee 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  Grantee  from  investing  Grantee’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 Grantee’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,  Grantee  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.                                              - 3 -    

 

          C.     Agreement Not to Solicit Employees.  During the Restricted Period, Grantee 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  Grantee  worked,  had  business  contact,  or  about  whom  Grantee  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  Grantee  voluntarily  resigns  or  is  discharged  by  the  Company  with  Cause at any time prior to the vesting of the Restricted Stock Unit, the prohibitions on Grantee set forth in  Sections II.A, II.B and II.C. shall remain in full force and effect.                  2.     In  the  event  Grantee  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 Restricted Stock Unit, the prohibitions set forth in Section II.A shall  remain in full force and effect during the period of time following Grantee’s termination equal to the lesser  of (x) the Restricted Period or (y) the period of time during which Grantee is deemed to be entitled to  severance measured by the sum of (i) the number of weeks Grantee 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 the Restricted Stock Unit as a result of Grantee’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  Restricted  Stock  Units  that  vested  as  a  result  of  the  termination of employment by the per Share Fair Market Value on the Last Day, divided by (B) Grantee’s  then-current weekly base salary, plus (iii) any additional period that the Company determines to provide  severance to Grantee, in its discretion.                3.     In the event Grantee is discharged by the Company other than with Cause prior to  vesting herein of the Restricted Stock Units, the prohibitions set forth in Sections II.B and II. C above shall  remain in full force and effect.                                              - 4 -    

 

                 4.     After the vesting of the Restricted Stock Unit, the prohibitions on Grantee 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, the prohibitions on Grantee 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 Grantee's employment termination date with the Company or its successor,  to Grantee the Non-Compete Payment.  Notwithstanding any previous agreement between Grantee and  the Company relating to the prohibitions on Grantee set forth in Section II.A, the “Non-Compete Payment”  shall be an amount at least equal to Grantee’s then current annual base salary.  Such amount shall be in  addition to any other amounts paid or payable to Grantee 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 Grantee  and the  Company  relating  to  the  prohibitions  on  Grantee  set  forth  in  Section  II.A,  with  the  exception  of  any  similar  agreement  contained  in  (i)  any  employment  agreement  between Grantee and the Company, (ii) any agreement between Grantee and the Company not related to  the employment of Grantee 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 Grantee 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.  Grantee 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 Grantee were to breach any of such covenants, and (6) the Company’s remedy at law for such  a breach will be inadequate.  Accordingly, Grantee 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 Grantee  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                                              - 5 -    

 

    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.  Grantee’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 Shares 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 Grantee and all rights  granted to Grantee and to the Company shall be binding upon Grantee'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.     No Employment Agreement.  Nothing herein confers on Grantee 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 Grantee's employment or other service  at any time.        E.     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.        F.     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 Grantee and any person or persons claiming through Grantee 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 unvested Restricted Stock Units and            DERs are assumed, converted, continued or substituted in connection with a Change in Control                                             - 6 -    

 

              in accordance with Section 11.1 of the Plan, if the employment of Grantee 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 Grantee 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 Grantee worked or for which Grantee had responsibilities            at the Company during the twenty-four (24) months prior to the Last Day (as defined below).        (iii)  “Competitor”  means  Grantee  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  Grantee’s  last  day  of  employment  with  the  Company  regardless  of  the            reason for Grantee’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,            Grantee, directly or indirectly (e.g., through employees whom Grantee supervised) had material            business  contact  and/or  about  whom  Grantee  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, Grantee provided            material services on behalf of the Company (or in which Grantee supervised directly, indirectly,            in whole or in part, the servicing activities).         (vii) “Restricted  Period”  means  the  period  of  Grantee’s employment  with  the  Company  and a            period of twelve (12) months after the Last Day.  Grantee recognizes that the durational term            is reasonably and narrowly tailored to the Company’s legitimate business interest and need for            protection with each position.        G.     Execution.  If Grantee 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.        H.     Section 409A.   All Restricted Stock Units granted pursuant to this Agreement are intended  either  to  be  exempt  from  Section  409A  of  the  Code,  or,  if  subject  to  Section  409A  of  the  Code,  to  be  administered,  operated  and  construed  in  compliance  with  Section  409A  of  the  Code  and  any  guidance  issued thereunder.  This Agreement and the Plan shall be administered in a manner consistent with this  intent and any provision that would cause the Agreement or Plan to fail to satisfy the first sentence of this  section shall have no force and effect. Notwithstanding anything contained herein to the contrary, Restricted  Stock Units (and related DERs) that (a) constitute “nonqualified deferred compensation” as defined under                                              - 7 -    

 

    Section 409A of the Code and (b) vest as a consequence of Grantee’s termination of employment, shall not  be delivered until the date that Grantee incurs a “separation from service” within the meaning of Section 409A  of the Code (or, if Grantee is a “specified employee” within the meaning of Section 409A of the Code and  any  guidance  issued  thereunder,  the  date  that  is  six  months  and  one  day  following  the  date  of  such  “separation from service” (or on the date of Grantee’s death, if earlier)).  In addition, each amount to be paid  or benefit to be provided to Grantee pursuant to this Agreement that constitutes deferred compensation  subject to Section 409A of the Code, shall be construed as a separate identified payment for purposes of  Section 409A of the Code.          IN WITNESS WHEREOF, Company has caused this Agreement to be executed on its behalf by its  duly authorized officer, and Grantee 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                       “Grantee”                                                                        <first_name> <middle_name> <last_name>                                                  - 8 -hum20190331ex104

                                                                                                                               HUMANA INC.             RESTRICTED STOCK UNIT AGREEMENT WITH PERFORMANCE VESTING                       AND AGREEMENT NOT TO COMPETE OR SOLICIT                UNDER THE AMENDED AND RESTATED STOCK INCENTIVE PLAN                                                                                                    THIS RESTRICTED STOCK UNIT 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 "Grantee").         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 award to Grantee Restricted Stock Units in accordance with  the Plan.         NOW,  THEREFORE,  in  consideration  of  the  award  of  Restricted  Stock  Units  to  Grantee,  the  promises  and  mutual  covenants  hereinafter  set  forth,  and  other good  and  valuable  consideration,  the  Company and Grantee agree as follows:    I.     RESTRICTED STOCK UNIT GRANT          A.     Grant.  Subject to the terms and conditions hereinafter set forth, and in accordance with  the provisions of the Plan, the Company hereby grants to Grantee, and Grantee hereby accepts from the  Company  <shares_awarded>  Performance-Based  Restricted  Stock  Units  (the  “Restricted  Stock  Units”)  (which  represents  the  target  amount  of  shares  available  as  set out  on  Appendix  A).   Each  Restricted  Stock Unit represents the right of Grantee to receive (i) one (1) Share on the date of distribution provided  for  in  Section  I.E.   In  addition,  Grantee  shall  also  have  the  right  to  receive  all  of  the  cash  or  in-kind  dividends that are paid with respect to the Shares represented by the Restricted Stock Units to which this  award relates (“DERs”).   Dividend equivalents with respect to any such Share shall be paid on the same  date that such Share is issued to Grantee pursuant to Section I.E. hereof.  The DERs shall be subject to  the same terms and conditions applicable to the Restricted Stock Units, including, without limitation, the  restrictions and non-transferability, vesting, forfeiture and distribution provisions contained in Sections I.B  through  I.E.,  inclusive,  of  this  Agreement.   In  the  event  that the  Restricted  Stock  Units  are  forfeited  pursuant to Section I.D. hereof, the related DER shall also be forfeited.        B.     Restrictions and Non-Transferability.  The Restricted Stock Units and DERs may not  be  sold,  transferred,  pledged,  assigned  or  otherwise  alienated or  hypothecated.   In  addition,  such  Restricted  Stock  Units  and  DERs  shall  be  subject  to  forfeiture in  accordance  with  the  provisions  of  Section I.D.          C.     Vesting of Shares.  Subject to the terms set forth below, if as of the third anniversary of  the Date of Grant (the “Vesting Date”), Grantee and the Company have achieved the performance goals       PSU – NCNS - RE 

 

    to be set forth in Appendix A, the Restricted Stock Units and related DERs shall vest to the extent such  performance  goals  have  been  achieved.   Effective  on  the  Vesting  Date,  any  portion  of  the  Restricted  Stock Units and the related DERs for which the performance goals set forth in Appendix A have not been  satisfied  shall  be  immediately  forfeited.  However,  notwithstanding  the  foregoing,  upon  certain  terminations of employment (as set forth below), all or a portion of the unvested Restricted Stock Units  and DERs will vest in accordance with Sections 12 and 13 of the Plan.        D.     Forfeiture.   Except  as  set  forth  in  Sections  12  and  13  of  the  Plan,  upon  the  termination of Grantee's employment with the Company prior to the time the Restricted Stock Units and  DERs have vested, the Restricted Stock Units and DERs shall be forfeited immediately by Grantee.           E.    Distributions.  The Company shall issue to Grantee (or, if applicable, Grantee’s estate  or personal representative) Shares (or such other securities or other property into which the Shares have  been converted, with any partial Shares or other securities to be settled in cash) with respect to Grantee’s  Restricted  Stock  Units  and  dividend  equivalents  accrued  pursuant  to  the  DERs  with  respect  to  such  Restricted Stock Units, within 30 days of the date that the Restricted Stock Units vest in accordance with  Section I.C hereof; provided, however, that, to the extent that the Restricted Stock Units are considered  deferred  compensation  subject  to  Section  409A  of  the  Code  and  the  Restricted  Stock  Units  vest  in  connection  with  Grantee’s  Change  in  Control  Termination  (defined  below),  then  unless  the  Change  in  Control is a Section 409A Change in Control, the distribution of  Shares (or such other securities or other  property  into  which  the  Shares  have  been  converted)  shall  not  be  accelerated  to  the  vesting  date  but  such  distribution  shall  instead  occur  based  on  the  Vesting  Dates  set  forth  in  Section  I.C.  hereof.   A  “Section  409A  Change  in  Control”  shall  mean  a  Change  in  Control  that  also  constitutes  a  “change  in  ownership or effective control” of the Company or a “change in ownership of a substantial portion of the  assets of” the Company, in each case within the meaning of Section 409A of the Code.  Notwithstanding  anything  to  the  contrary  contained  herein,  no  Shares  may  be  transferred  to  any  person  other  than  Grantee  unless  such  other  person  demonstrates  to  the  reasonable  satisfaction  of  the  Company  such  person’s right to the transfer.           F.     Taxes.  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  distribution of Shares, cash or other property or, to the extent applicable, vesting of the Restricted Stock  Units  or  DERs  hereunder,  shall  be  paid  by  Grantee  at  such  time.   Notwithstanding  the  foregoing,  the  Company shall withhold delivery of a number of Shares with a Fair Market Value as of the distribution  date equal to the Withholding Taxes required to be withheld in connection with such distribution.             II.    AGREEMENT NOT TO COMPETE AND AGREEMENT NOT TO SOLICIT.    Grantee 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                                              - 2 -  

 

    agreements  and  policies  between  the  Company  and  Grantee)  that  it  is  providing  Grantee,  and  in  the  significant time, money, training, team building and other efforts it expends to develop Grantee’s skills to  assist in performing Grantee’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 Grantee agrees are valuable assets of the Company to which it has devoted  substantial  resources.  Grantee  acknowledges  that  the  grant  Grantee  is  receiving  under  the  Plan  is  a  meaningful  way  that  the  Company  entrusts  Grantee  with  its  goodwill  and  aligns  Grantee  with  the   Company  objective  of  increasing  the  value  of  the  Company’s  business.  Accordingly,  Grantee  acknowledges the importance of protecting the value of the Company’s business through, among other  things, covenants to restrict Grantee from engaging in activities that would adversely affect the value of  the Company and its goodwill.        A.     Agreement Not to Compete. Grantee agrees that during the Restricted Period (defined  below) and within the Restricted Geographic Area (defined below), Grantee will not, directly or indirectly,  perform  the  same  or  similar  responsibilities  Grantee  performed for  the  Company  in  connection  with  a  Competitive  Product  or  Service (defined  below).  Notwithstanding  the  foregoing,  Grantee  may  accept  employment with a Competitor (defined below) whose business is diversified, provided that: (1) Grantee  will  not  be  engaged  in  working  on  or  providing  Competitive  Products  or  Services,  or  otherwise  use  or  disclose the Company’s confidential information or trade secrets; and (2) the Company receives written  assurances from the Competitor and Grantee that are satisfactory to the Company that Grantee 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  Grantee  from  investing  Grantee’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  Grantee’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,  Grantee  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, Grantee 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 Grantee worked, had business contact, or about whom Grantee 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                                              - 3 -  

 

    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  Grantee  voluntarily  resigns  or  is  discharged  by  the  Company  with  Cause at any time prior to the vesting of the Restricted Stock Unit, the prohibitions on Grantee set forth in  Sections II.A, II.B and II.C. shall remain in full force and effect.                  2.     In  the  event  Grantee  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 Restricted Stock Unit, the prohibitions set forth in Section II.A shall  remain in full force and effect during the period of time following Grantee’s termination equal to the lesser  of (x) the Restricted Period or (y) the period of time during which Grantee is deemed to be entitled to  severance measured by the sum of (i) the number of weeks Grantee is entitled to severance under the  Company’s  applicable  severance  policy,  plus  (ii)  a  number  of  weeks  equal  to  (A)  the  value  of  the  Restricted  Stock  Units  that  would  remain  outstanding  subject  to  the  achievement  of  the  performance  goals (or the value of the acceleration, if any, of the vesting of any Restricted Stock Unit as a result of  Grantee’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  Restricted  Stock  Units.  assuming target performance has been achieved (or by the number of Shares underlying the Restricted  Stock Unit that become vested as a result of the acceleration of vesting, if any). by the per Share Fair  Market Value on the Last Day, divided by (B) Grantee’s then-current weekly base salary, plus (iii) any  additional period that the Company determines to provide severance to Grantee, in its discretion.                3.     In the event Grantee is discharged by the Company other than with Cause prior  to vesting herein of the Restricted Stock Units, 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  Restricted  Stock  Unit,  the  prohibitions  on  Grantee  set  forth herein shall remain in full force and effect, except as otherwise provided in Section II.E.                                                                                           - 4 -  

 

           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,  the  prohibitions  on  Grantee  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 Grantee's employment termination date with the Company or  its successor, to Grantee the Non-Compete Payment.  Notwithstanding any previous agreement between  Grantee  and  the  Company  relating  to  the  prohibitions  on  Grantee  set  forth  in  Section  II.A,  the  “Non- Compete Payment” shall be an amount at least equal to Grantee’s then current annual base salary.  Such  amount  shall  be  in  addition  to  any  other  amounts  paid  or  payable  to  Grantee  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  Grantee  and  the  Company  relating  to  the  prohibitions on Grantee set forth in Section II.A, with the exception of any similar agreement contained in  (i) any employment agreement between Grantee and the Company, (ii) any agreement between Grantee  and the Company not related to the employment of Grantee 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 Grantee 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.  Grantee 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 Grantee were to breach any of such covenants, and (6) the Company’s remedy at law for such  a breach will be inadequate.  Accordingly, Grantee 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  Grantee 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                                              - 5 -  

 

    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.  Grantee’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  Shares  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 Grantee  and all rights granted to Grantee and to the Company shall be binding upon Grantee'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.     No Employment Agreement.  Nothing herein confers on Grantee 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  Grantee's  employment  or  other  service at any time.        E.     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.        F.     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 Grantee and any person or persons claiming through Grantee as to any rights hereunder.         2.    For the purposes of this Agreement, the following terms shall have the following meaning:                                              - 6 -  

 

           (i)  “Change in Control Termination” means, in the event unvested Restricted Stock Units and            DERs  are  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  Grantee  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 Grantee 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  Grantee  worked  or  for  which  Grantee  had            responsibilities at the Company during the twenty-four (24) months prior to the Last Day (as            defined below).        (iii)  “Competitor”  means  Grantee  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  Grantee’s  last  day  of  employment  with  the  Company  regardless  of  the            reason for Grantee’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, Grantee, directly or indirectly (e.g., through employees whom Grantee supervised) had            material business contact and/or about whom Grantee 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, Grantee provided            material services on behalf of the Company (or in which Grantee supervised directly, indirectly,            in whole or in part, the servicing activities).         (vii) “Restricted  Period”  means  the  period  of  Grantee’s employment  with  the  Company  and a            period of twelve (12) months after the Last Day.  Grantee recognizes that the durational term            is reasonably and narrowly tailored to the Company’s legitimate business interest and need            for protection with each position.        G.     Execution.  If Grantee 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.        H.     Section  409A.   All  Restricted  Stock  Units  granted  pursuant  to  this  Agreement are  intended either to be exempt from Section 409A of the Code, or, if subject to Section 409A of the Code, to  be administered, operated and construed in compliance with Section 409A of the Code and any guidance  issued thereunder.  This Agreement and the Plan shall be administered in a manner consistent with this                                              - 7 -  

 

    intent and any provision that would cause the Agreement or Plan to fail to satisfy the first sentence of this  section  shall  have  no  force  and  effect.  Notwithstanding  anything  contained  herein  to  the  contrary,  Restricted Stock Units (and related  DERs)  that  (a) constitute  “nonqualified  deferred  compensation”  as  defined  under  Section 409A  of  the  Code  and  (b) vest  as  a  consequence  of  Grantee’s  termination  of  employment, shall not be delivered until the date that Grantee incurs a “separation from service” within the  meaning  of  Section 409A  of  the  Code  (or,  if  Grantee  is  a  “specified  employee”  within  the  meaning  of  Section 409A of the Code and any guidance issued thereunder, the date that is six months and one day  following  the  date  of  such  “separation  from  service”  (or  on  the  date  of  Grantee’s  death,  if  earlier)).   In  addition,  each  amount  to  be  paid  or  benefit  to  be  provided  to  Grantee  pursuant  to  this  Agreement  that  constitutes deferred compensation subject to Section 409A of the Code, shall be construed as a separate  identified payment for purposes of Section 409A of the Code.                                                                          - 8 -  

 

             IN WITNESS WHEREOF, Company has caused this Agreement to be executed on its behalf by its duly  authorized officer, and Grantee 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                      “Grantee”                                                                       <first_name> <middle_name> <last_name>                                                                        - 9 -  

 

                                                                                                                               APPENDIX A                                                               Payout Matrix for Performance-Based Restricted Stock Units    The <shares_awarded> Restricted Stock Units represent the target number of shares of common stock  that could potentially be earned on the Vesting Date if the below strategic measure is achieved at the  target level.  Performance above or below the target level will yield vesting of a different amount of shares  of common stock, according to the following matrix:           2019 PSU Plan Design

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