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ex10bexecutiveaip

    HUMANA INC.  EXECUTIVE INCENTIVE COMPENSATION PLAN  As Amended and Restated January 1, 2020    I. OBJECTIVES.    The objectives of the Humana Inc. Executive Incentive Compensation Plan, as amended and  restated (the “Plan”) are to (i) link the compensation of selected executives to certain key performance  targets; and (ii) reward them, when appropriate, for their efforts in achieving the performance targets of  Humana Inc. (the “Company”), consistent with appropriate balance of risk and reward and appropriate  governance and risk management practices aligned to the Company’s short-term and long-term strategic  plan.    II. ELIGIBILITY AND AWARDS.    A. Executives eligible to participate in this Plan (“Participants”) will be limited to Section 16 officers of  Humana Inc., as determined pursuant to Section 16 of the Securities Exchange Act of 1934, as  amended (the “Exchange Act”). Participation in the Plan will be approved by the Organization &  Compensation Committee of the Board of Directors of the Company (the “Committee”). Each  Participant shall be notified of his/her selection as a Participant.    B. Incentive compensation will be computed by measuring the Company’s achievement of  predetermined goals (“Performance Targets”) established by the Committee in accordance with  Internal Revenue Service regulations promulgated under Section 162(m) of the Internal Revenue  Code as amended (the “Code”), to the extent applicable. Performance Targets may be expressed  in terms of (i) earnings per share, (ii) share price, (iii) consolidated net income, (iv) pre-tax profits,  (v) earnings or net earnings, (vi) return on equity or assets, (vii) sales, (viii) cash flow from  operating activities, (ix) return on invested capital, (x) membership, (xi) other performance  objectives as determined by the Committee, to the extent permitted under Section 162(m) of the  Code (if applicable), or (xii) any combination of the foregoing. Performance Targets may be in  respect of the performance of the Company, any of its Subsidiaries, any of its divisions or any  combination thereof. Performance Targets may be absolute or relative (to prior performance of  the Company or to the performance of one or more other entities or external indices) and may be  expressed in terms of a progression within a specified range.    C. Incentive compensation for a fiscal year or other relevant period determined by the Committee  (“Performance Period”) shall be based on the Participant’s base salary paid or accrued during  such fiscal year exclusive of any bonus, equity compensation, or fringe benefits paid or accrued  during such fiscal year (“Salary”). The Committee shall determine, subject to the limits in the Plan,  the potential percentage of Salary which any Participant shall be eligible to receive as incentive  compensation, which need not be the same for each Participant. The precise percentage earned  shall be based upon a schedule of achievement of Performance Targets. Notwithstanding  anything herein to the contrary, the maximum incentive compensation paid for any fiscal year to  the CEO may not exceed Six Million Dollars ($6,000,000), or Three Million Dollars ($3,000,000)  for any other Participant.    D. The Company’s achievement of any relevant Performance Targets will be determined in  accordance with generally accepted accounting principles. Any incentive compensation  generated pursuant to incentive plans of the Company, including this Plan, shall be accrued and  deducted as an expense in the appropriate fiscal year in determining the achievement of any  Performance Targets.    E. Each Participant may receive an award (“Award”) if the Performance Target(s) established by the  Committee are attained in the applicable Performance Period. The applicable Performance  Period and Performance Target(s) shall be determined by the Committee consistent with the  terms of the Plan and, to the extent applicable, Section 162(m) of the Code. Notwithstanding the  

 

    fact that the Performance Target(s) have been attained, the Committee may pay an Award of less  than the amount determined by the formula or standard established by the Committee or may pay  no Award at all.     F. The specific Performance Target(s) must be established by the Committee in advance of the  deadlines applicable under Section 162(m) of the Code, to the extent applicable, and while the  performance relating to the Performance Target(s) remains substantially uncertain within the  meaning of Section 162(m) of the Code. The Performance Target(s) with respect to any  Performance Period may be established on a cumulative basis or in the alternative, and may be  established on a stand-alone basis with respect to the Company or on a relative basis with  respect to any peer companies or index selected by the Committee. At the time the Performance  Target(s) are selected, the Committee shall provide, in terms of an objective formula or standard  for each Participant, the method of computing the specific amount of Award payable to the  Participant if the Performance Target(s) are attained. The objective formula or standard shall  preclude the use of discretion to increase the amount of any Award earned pursuant to the terms  of the Award.    G. If services as a Participant commence after the adoption of the Plan and the Performance  Target(s) are established for a Performance Period, the Committee may grant an Award that is  proportionately adjusted based on the period of actual service, and the amount of any Award paid  to such Participant shall not exceed that proportionate amount of the applicable maximum  individual Award allowable under the Plan.    H. Notwithstanding anything to the contrary set forth herein, the Performance Target(s) shall be  adjusted to reflect the following events, subject to such event resulting in a change to the  applicable Performance Target in excess of the aggregate threshold amount established by the  Committee at the time of the granting of the applicable Award;: (A) the acquisition or disposition  of a business, a merger, or a similar transaction, and the related integration costs including  external costs such as legal, accounting and consulting fees and internal costs such as  severance and benefits, contract cancellation costs, lease abandonment costs, overhead costs of  integration including allocated wages and benefits and administrative costs in connection  therewith; (B) the impact of securities issuances or repurchases in connection with an acquisition  or disposition of a business, a merger, or a similar transaction, and related expenses including  both direct and incremental costs incurred in connection therewith; (C) changes in accounting  principles, tax laws, or other laws, provisions or regulations; (D) any litigation or regulatory  investigations not in the ordinary course of business; (E) restructuring activity, including, but not  limited to, reductions in force not in the ordinary course of business; (F) impact of exit or disposal  activities, such as the close of blocks of business, market or product exits, asset sales or  abandonments, contracts placed in run-off, related premium deficiency reserves or capital  charges; and (G) any extraordinary, natural disaster, unusual and/or infrequent event, including,  but not limited to those defined by SEC Regulation S-K Item 10(e), as appropriate for reporting as  non-GAAP financial measures. For the avoidance of doubt, the Committee shall in all events  retain the discretion to reduce (but not increase) any Award, regardless of the result of any  adjustments described above.    I. To preserve the intended incentives and benefits of an Award based on a Performance Target,  the Committee may determine at the time Performance Targets are established that certain  adjustments shall apply to the objective formula or standard with respect to the applicable  Performance Target to take into account, in whole or in part, in any manner specified by the  Committee, any one or more of the following with respect to the Performance Period: (i) the gain,  loss, income or expense resulting from changes in accounting principles that become effective  during the Performance Period; (ii) the gain, loss, income or expense reported publicly by the  Company with respect to the Performance Period that are extraordinary or unusual in nature or  infrequent in occurrence; (iii) the gains or losses resulting from, and the direct expenses incurred  in connection with the disposition of a business, or the sale of investments or non-core assets;  (iv) the gain or loss from all or certain claims and/or litigation and all or certain insurance  

 

    recoveries relating to claims or litigation; (v) the impact of impairment of tangible or intangible  assets; including goodwill; (vi) the impact of restructuring or business recharacterization activities,  including but not limited to reductions in force, that are reported publicly by the Company; or (vii)  the impact of investments or acquisitions made during the year or, to the extent provided by the  Committee, any prior year. Each of the adjustments described in this Section may relate to the  Company as a whole or any part of the Company’s business operations. The adjustments are to  be determined in accordance with generally accepted accounting principles and standards,  unless another objective method of measurement is designated by the Committee. In addition to  the foregoing, the Committee shall adjust any Performance Targets or other features of an Award  that relate to or are wholly or partially based on the number of, or the value of, any stock of the  Company, to reflect any stock dividend or split, recapitalization, combination or exchange of  shares or other similar changes in such stock.     J. The Committee has the sole discretion to determine the standard or formula pursuant to which  each Participant’s Award shall be calculated and whether all or any portion of the amount so  calculated will be paid, subject in all cases to the terms, conditions and limits of the Plan. To this  same extent, the Committee may at any time establish (and, once established, rescind, waive or  amend) additional conditions and terms of payment of Awards (including but not limited to the  achievement of other financial, strategic or individual goals, which may be objective or subjective)  as it may deem desirable in carrying out the purposes of the Plan and may take into account such  other factors as it deems appropriate in administering any aspect of the Plan. The Committee  may not, however, increase the maximum amount permitted to be paid to any individual under the  Plan or pay Awards under this Plan if applicable Performance Target(s) have not been satisfied.    K. Incentive compensation shall be paid to Participants on or before March 15th of the year following  the fiscal year with respect to which it was earned or such earlier date as may be required in  order that such amount be deductible under the Code for the fiscal year with respect to which it  was earned.    III. ADMINISTRATION OF THIS PLAN.    The Committee has sole authority (except as specified otherwise herein) to determine all  questions of interpretation and application of the Plan, or of the terms and conditions pursuant to which  Awards are granted under the Plan and in general, to make all determinations advisable for the  administration of the Plan to achieve its purpose. The Committee determinations under the Plan  (including without limitation, determinations of the persons to receive Awards, the form, amount and  timing of such Awards, the terms and provisions of such Awards and any agreements evidencing such  Awards) need not be uniform and may be made by the Committee selectively among persons who  receive or are eligible to receive Awards under the Plan, whether or not such persons are similarly  situated. Such determinations shall be final and not subject to further appeal.    IV. TERMINATION OF EMPLOYMENT.    Subject to the discretion of the Committee, a Participant must be actively employed or on short- term disability (as determined pursuant to the applicable Company policy) on the last day of the  applicable Performance Period to be eligible for a payout, unless the Participant’s employment was  terminated due to: (i) the Participant’s death or [Disability (as defined in the Amended and Restated  Humana Inc. Stock Incentive Plan)]; (ii) the Participant’s Retirement; or (iii) the Participant’s termination of  employment due to a (A) Workforce Reduction, (B) Position Elimination, (C) Divestiture or (D) position  reassignment to a Strategic Joint Venture (as each term is defined in the Amended and Restated  Humana Inc. Stock Incentive Plan). To the extent that a Participant is not actively employed on the last  day of the applicable Performance Period due to death, Disability, Retirement, Workforce Reduction,  Position Elimination, Divestiture or position reassignment to a Strategic Joint Venture, the Participant will  be eligible to receive a pro-rated Award based on the period that the Participant was actively employed  during the Performance Period, with the amount of the pro-rated Award to be based on actual  

 

    performance and paid at the same time as Awards are paid to employees who remain actively employed  through the end of the applicable Performance Period.    V. AMENDMENT OF PLAN.    Subject to any restrictions imposed under Section 162(m) of the Code, to the extent applicable,  the Committee may at any time and from time to time alter, amend, suspend or terminate the Plan in  whole or in part, provided that no such amendment that would require the consent of the Board and/or  stockholders of the Company pursuant to Section 162(m) of the Code, to the extent applicable, or the  Exchange Act, any New York Stock Exchange (or other relevant stock exchange) rule or regulation, or  any other applicable law, rule or regulation, shall be effective without such consent.    VI. GENERAL PROVISIONS.    A. No person has any claim or right to be included in this Plan or to be granted incentive  compensation under this Plan until such individual has been declared a Participant and received  official notice thereof in accordance with the procedures as set forth in this Plan. In addition, all of  the requirements and applicable rules and regulations of this Plan must have been met including,  but not limited to the availability of funds for incentive compensation awards and the  determination by the Committee of the extent to which Performance Targets have been met.    B. The designation of an individual as a Participant under this Plan does not in any way alter the  nature of the Participant’s employment relationship. Participation in this Plan shall not constitute a  contract of employment between the Company or any subsidiary and any person and shall not be  deemed to be consideration for, or a condition of, continued employment of any person.    C. No benefit provided under the Plan shall be subject to alienation or assignment by a Participant  (or by any person entitled to such benefit pursuant to the terms of this Plan), nor shall it be  subject to attachment or other legal process except (i) to the extent specifically mandated and  directed by applicable state or federal statute; and (ii) as requested by the Participant and  approved by the Committee to members of the Participant’s family, or a trust established by the  Participant for the benefit of family members.    D. The Company or a subsidiary may withhold any applicable federal, state or local taxes at such  time and upon such terms and conditions as required by law or determined by the Company or  subsidiary.     E. Each member of the Committee (and each person to whom the Committee or any member  thereof has delegated any of its authority or power under this Plan) shall be fully justified in  relying or acting in good faith upon any report made by the independent public accountants of the  Company and its subsidiaries and upon any other information furnished the Committee in  connection with the Plan. In no event shall any person who is or shall have been a member of the  Committee be liable for any determination made or other action taken or any omission to act in  reliance upon any such report or information, or for any action taken or failure to act if in good  faith.    F. In the event the Company becomes a party to a merger, consolidation, sale of substantially all of  its assets or any other corporate reorganization in which the Company will not be the surviving  corporation or in which the holders of the common stock of the Company will receive securities of  another corporation (in any such case, the “New Company”), then the New Company shall  assume the rights and obligations of the Company under this Plan. All matters relating to the Plan  or to G. Awards granted hereunder shall be governed by the laws of the State of Delaware,  without regard to the principles of conflict of laws.    G. The expenses of administering the Plan shall be borne by the Company and its subsidiaries.  

 

      H. The titles and headings of the sections in the Plan are for convenience of reference only, and in  the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.    VII. STOCKHOLDER APPROVAL.    This Plan has been previously approved by the Company’s stockholders at the April 24, 2008  annual meeting of stockholders.    VIII. INTERNAL REVENUE CODE SECTION 162(m).    Transactions under this Plan are intended to comply with all applicable conditions of Section  162(m) of the Internal Revenue Code, as amended, or its successor. To the extent any provision of the  Plan or action by the Committee fails to so comply (to the extent applicable), it shall be deemed null and  void, to the extent permitted by law and deemed advisable by the Committee.    VIII. INTERNAL REVENUE CODE SECTION 409A.    All Awards granted under the Plan are intended to be exempt from Section 409A of the Code.  Notwithstanding this or any other provision of the Plan to the contrary, the Committee may amend the  Plan or any Award granted hereunder in any manner, or take any other action that it determines, in its  sole discretion, is necessary, appropriate or advisable (including replacing any Award) to cause the Plan  or any Award granted hereunder to not be subject to Section 409A of the Code. Any such action, once  taken, shall be deemed to be effective from the earliest date necessary to avoid a violation of Section  409A of the Code and shall be final, binding and conclusive on all Participants and other individuals  having or claiming any right or interest under the Plan.                                                        Adopted: August 21, 2019ex10nn-annualnq3yr33

  NQ – NCNS - RE  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.        

 

   2  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; (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.      

 

   3  A. Agreement Not to Compete.   1.  Optionee agrees that during the Restricted Period (defined below) and within the Restricted  Geographic Area (defined below), Optionee will not, directly or indirectly, perform or engage in  Competitive Product or Services (defined below) with a Competitor (defined below). Optionee may not  accept employment with a Competitor (defined below) unless the Competitor’s business is diversified and  the Company receives Written Assurances from the Competitor and Optionee that are satisfactory to the  Company that Optionee, during the Restricted Period, will not work on or provide Competitive Products or  Services or otherwise use or disclose the Company’s confidential information or trade secrets.    2.  For Section II(A), such “Written Assurances” must contain a written statement detailing  the identity of the Competitor and the nature of the services that Optionee will provide to the Competitor  with sufficient detail to allow the Company to independently assess whether Optionee is or will be in  violation of the Agreement.  The Company must also receive such “Written Assurances” at least ten  business days before Optionee commences employment for the Competitor.  Such “Written Assurances”  shall be delivered to the Company’s Chief Human Resource Officer or his/her authorized delegate.  3.  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 (defined  below) and in connection with a Competitive Product or Service (defined below), Optionee shall not,  individually or jointly with others, directly or indirectly, or by assisting others, (1) Solicit (defined below)  any Protected Relationships (defined below); or (2) Solicit any Protected Relationships to terminate a  relationship with the Company, its subsidiaries, and/or its affiliates, reduce the volume of their business  dealings with the Company, its subsidiaries, and/or its affiliates, or to otherwise cease to accept services or  products from the Company, its subsidiaries, and/or its affiliates.   C. Agreement Not to Solicit Employees.  During the Restricted Period, Optionee shall not,  individually or jointly with others, directly or indirectly, or by assisting others, (1) Solicit any employees  or former employees of the Company, its subsidiaries, and/or its affiliates with whom Optionee worked,  had business contact, or about which Optionee gained non-public or confidential information (“Employees  or Former Employees”); (2) contact or communicate with Employees or Former Employees for the purpose  of Soliciting them to terminate their employment or find employment or work with another person or entity;  (3) provide, share, 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)  

 

   4  provide, share, 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, its subsidiaries, and/or its  affiliates at the time of the attempted recruiting or hiring, but were employed by, or working for the  Company, its subsidiaries, and/or its affiliates in the three 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 Options, 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 Options, the prohibitions set forth in Section II(A) shall remain in full force and  effect during the period of time following Optionee’s termination equal to the lesser of (x) the Restricted  Period or (y) the period of time during which Optionee is deemed to be entitled to severance measured by  the sum of (i) the number of weeks Optionee is entitled to severance under the Company’s applicable  severance policy, plus (ii) a number of weeks equal to (A) the value of the Options 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 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, assuming target performance has been achieved (or by the number of Shares underlying the  Options 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) 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 the Company other than with Cause prior to vesting  herein of the Options, 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 Options, the prohibitions on Optionee set forth herein shall remain  in full force and effect, except as otherwise provided in Section II(E).    

 

   5  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 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 the Last Day (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 on Optionee 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.  Violation of Restrictive Covenants.  This subsection sets forth the circumstances under  which Optionee shall forfeit all or a portion of any vested or unvested Options held by Optionee without  payment and/or be required to repay or otherwise reimburse the Company for the gain or value realized in  respect of all or a portion of any exercised Options.    1.  If Optionee violates any provisions of Section II of this Agreement (a “Forfeiture Event”),  Optionee shall immediately forfeit as of the date that the violation first occurs all unexercised Options  described above in Section I(A) (whether vested or unvested) without payment.  This provision does not  alter the circumstances for forfeiture of unexercised Options as described in Section I(D) of this Agreement.  2. If Optionee has exercised any of the Options prior to the Forfeiture Event, then for any  Option that has been exercised during the 12 month period prior to the Forfeiture Event or at any time after  the Forfeiture event, Optionee shall be required to repay or otherwise reimburse the Company, immediately  upon demand, an amount in Cash or Humana Inc. common stock equal to the amount described below.   To the extent that (i) any Shares related to exercised Options have been sold or transferred, the  amount shall be the aggregate gross proceeds realized by Optionee from such sale or transfer of the net  Shares acquired after payment of the exercise price and any applicable taxes  (the “Net Shares”) (or, in the  case of any disposition or transfer of the Net Shares for less than the Fair Market Value of such Net Shares,  

 

   6  Optionee will repay or reimburse to the Company an amount equal to the Fair Market Value of such Net  Shares) or (ii) if the Net Shares have not been sold at the time Company demand is made, the amount shall  be the aggregate Fair Market Value of the Net Shares on the date the Options were exercised.    3. The relief provided in this Section II(F) of the Agreement does not constitute the  Company’s exclusive remedy for the Optionee’s violation of any of the provisions of Section II of the  Agreement.  As any forfeiture and repayment provisions are not adequate remedies at law, including  because they do not repair the irreparable harm the Company will suffer from Optionee’s breaches of this  Agreement, the Company may seek any additional legal or equitable remedy, including injunctive relief,  for such violations.  The provisions in this section are essential economic conditions to the Company’s  grant of Options.  By receiving the Options, Optionee agrees upon Optionee’s violation of Section II of this  Agreement that the Company may, subject to applicable state law, deduct from any amounts the Company  owes Optionee following the Last Day any amounts Optionee owes the Company under Section II(F).   4. The provisions under this Section II(F) of the Agreement and any amounts repayable by  Optionee hereunder are intended to be in addition to any rights to repayment the Company may have under  Section 304 of the Sarbanes-Oxley Act of 2002 and other applicable law.   5. In addition, if Optionee realizes any amounts in excess of what he or she should have  received under the terms of any Options for any reason due to mistake in calculations or other administrative  error, then Optionee shall be required to repay or reimburse any such excess amounts to the Company  within thirty (30) days following the Company’s written demand for repayment.  G. 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 Kentucky’s 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.   H. Injunctive Relief; Invalidity of Any Provision.  Optionee acknowledges that (1) his or  her services to the Company, its subsidiaries, and/or its affiliates are of a special, unique and extraordinary  character, (2) his or her position with the Company, its subsidiaries, and/or its affiliates will place him or  her in a position of confidence and trust with respect to the operations of the Company, its subsidiaries,  and/or its affiliates, (3) he or she will benefit from continued employment with the Company, its  subsidiaries, and/or its affiliates, (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, its subsidiaries,  and/or its affiliates, (5) the Company, its subsidiaries, and/or its affiliates would sustain immediate and  irreparable loss and damage from Optionee’s wrongful use or disclosure of the Company, its subsidiaries,  and/or its affiliates’ confidential information or trade secrets and from Optionee’s unfair competition or  

 

   7  wrongful Solicitation of Protected Relationships, including with respect to the impairment of the  Company’s, its subsidiaries’, and/or its affiliates’ goodwill in its Protected Relationships, and (6) for the  same reason, the Company’s remedy at law (including under any forfeiture under Section II(F) above) for  any such 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 temporary, 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 part or 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 (and the court is authorized to amend), 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.  I. Notice of Agreement.  Optionee agrees that, during the Restricted Period, Optionee will  tell any prospective new employer, partner, in a business venture, investors and/or any entity seeking to  engage Optionee’s services, prior to accepting employment, engagement as a consultant or contractor, or  engaging in a business venture that this Agreement exists, and further, Optionee agrees to provide a true  and correct copy of this Agreement to any such individual or entity prior to accepting any such employment  or entering into any such employment or business venture.   J. Tolling.  In the event Optionee violates one of the time-limited restrictions in Section II of  this Agreement, the Company reserves the right to request as a form or equitable relief, and Optionee will  not object, that a court of competent jurisdiction extend the time period for such violated restriction by one  day for each day Optionee violated the restriction, up to the maximum extension equal to the length of the  original period of the time-limited restrictions in Section II of this Agreement.  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.  

 

   8  C. Governing Law.  Except as to matters of federal law and the provisions of Section II  hereof, this Agreement shall be governed by, and construed in accordance with, the laws of the State of  Delaware without regard to its conflict of laws rules. This Agreement shall also be governed by, and  construed in accordance with, the terms of the Plan.  D. Jurisdiction; Service of Process.  Any action or proceeding seeking to enforce any  provision of, or based on any right arising out of, this Agreement may be brought against any of the parties  in the courts of the Commonwealth of Kentucky, County of Jefferson, or, if it has or can acquire jurisdiction,  in the United States District Court for the Western District of Kentucky, and each of the parties consents to  the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and  waives any objection to venue laid therein.  Process in any action or proceeding referred to in the preceding  sentence may be served on any party anywhere in the world.  E. No Employment Agreement.  Nothing herein confers on Optionee any rights with respect  to the continuance of employment or other service with the Company, nor will it interfere with any right  the Company would otherwise have to terminate or modify the terms of Optionee's employment or other  service at any time.  F. Severability.  If any provision of this Agreement is or becomes or is deemed invalid, illegal  or unenforceable in any relevant jurisdiction, or would disqualify this Award under any law deemed  applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable  laws or if it cannot be construed or deemed amended without, in the determination of the Committee,  materially altering the intent of the Plan, it shall be stricken and the remainder of the Agreement shall remain  in full force and effect. Any provision in this Agreement determined by competent authority to be in conflict  with 422 of the Internal Revenue Code of 1986, as amended, or its successor, in regard to qualifying this  Option as an incentive stock option shall be ineffective ab initio to the extent of such conflict.   G. Assignment.  The Option granted under this Agreement to Optionee may not be assigned,  transferred, pledged, alienated or hypothecated in any manner during Optionee's lifetime, but shall be solely  and exclusively the right of Optionee to exercise during his/her lifetime.  Should Optionee attempt to assign,  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  

 

   9  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 (a)  by the Company or its acquirer or successor for any reason other than Cause or (b) 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 direct or indirect responsibilities, or had confidential  information about at the Company during the twenty-four (24) months prior to the Optionee’s Last Day (as  defined below).  (iii) “Competitor” means Optionee or any other person or organization, other than the  Company or any of its subsidiaries, 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, its subsidiaries,  and/or its affiliates (or immediate successor)  regardless of the reason for Optionee’s separation.  (v) “Protected Relationship” means, but is not necessarily limited to, vendors, healthcare  providers, hospitals, hospital systems, lobbyists, long-term care facilities, state Medicaid agencies,  pharmaceutical manufacturers, policyholders, agents, brokers, dealers, distributers, customers, and/or  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)  c  ity(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, its  subsidiaries’, and/or its affiliates’ 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, its subsidiaries’,  and/or its affiliates’ legitimate business interest and need for protection with each position.  

 

   10  (viii) “Solicit” means to hire, entice, encourage, persuade, recruit, or solicit, or attempt to hire,  entice, encourage, persuade, recruit, or solicit, either directly by Optionee or indirectly through another  individual.   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.                                                        

 

   11  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                                                               President & Chief Executive Officer            “Optionee”                  <first_name> <middle_name> <last_name>

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