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Exhibit
10(n)
CHANGE IN CONTROL
AGREEMENT
This CHANGE IN CONTROL
AGREEMENT (“AGREEMENT”) is made as of
, 2007 by and between HUMANA INC., Louisville, Kentucky (the
“COMPANY”), and
(the “EMPLOYEE”).
WHEREAS, the Board of
Directors (the “Board”) of the Company desires to
foster the continuous employment of the Employee and has determined
that appropriate steps should be taken to reinforce and encourage
the continued attention and dedication of the Employee to his or
her duties free from distractions which could arise in the event of
a threatened Change in Control of the Company.
[WHEREAS, the Company and the
Employee are each a party to a Change in Control Agreement dated [
], and whereas the parties desire to amend the Change in Control
Agreement to comply with Section 409A of the Internal Revenue
Code and the regulations and other interpretive guidance issued
thereunder (“Section 409A”) and to make certain other
changes to the Change in Control Agreement.]
NOW, THEREFORE, in
consideration of the mutual covenants contained herein, the Company
and the Employee agree as follows:
1. QUALIFYING TERMINATIONS.
The Employee shall receive the termination benefits set forth in
Section 2 of this Agreement if the Employee’s employment
with the Company is terminated
(i) by the Company other than
for Cause, or by the Employee for Good Reason within twenty-four
(24) months following a Change in Control and during the term
of this Agreement, or
(ii) by the Company other
than for Cause (A) within six (6) months prior to a
Change in Control or (B) prior to the date of a Change in
Control if the Executive reasonably demonstrates that such
termination was at the request of a third party who has indicated
an intention or taken steps reasonably calculated to effect a
Change in Control or was otherwise in contemplation of a Change in
Control and in any such case described in (A) or
(B) which Change in Control actually occurs during the term of
this Agreement.
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2. TERMINATION BENFEITS. In
the event of a Qualifying Termination, the Employee shall receive
the following termination benefits:
(i) The Company shall, within
ten (10) days of the later of the Date of Termination or the
date of the Change in Control, pay the Employee:
(a) The Employee’s base
salary earned but not yet paid through the Date of Termination at
the greater of the rate in effect at the time the Change in Control
occurred or when the Notice of Termination was given, plus any
bonuses or incentive compensation which, pursuant to the terms of
any compensation or benefit plan, have been earned and are payable
as of the Date of Termination. For purposes of this Agreement,
bonuses and incentive compensation shall be considered payable if
all conditions for earning them have been met and any requirement
that Employee be actively employed as of the date of payment shall
be disregarded; and
(b) A lump sum in an amount
equal to
(
) times the amount equal to the sum of (A) the
Employee’s Annual Base Salary at the greater of the rate in
effect at the time the Change in Control occurred or when the
Notice of Termination was given plus (B) the maximum bonus or
incentive compensation which could have been earned by the Employee
calculated as if all relevant goals had been met during the
then-current fiscal year of the Company pursuant to the terms of
the incentive compensation plan in which the Employee participates.
If there is no incentive compensation plan in effect at the time
the Notice of Termination is given, then for purposes of this
Agreement it shall be assumed that the amount of incentive
compensation to be paid to the Employee shall be the maximum target
amount under any incentive compensation plan in which the Employee
participated at the date of the Change in Control or the most
recent plan participated in, whichever would be greater.
(ii) The Company shall, for
the period stated below, maintain in full force and effect for the
benefit of the Employee and the Employee’s dependents and
beneficiaries, at the Company’s expense, all life insurance,
health insurance, dental insurance, accidental death and
dismemberment insurance and disability insurance under plans and
programs in which the Employee and/or the Employee’s
dependents and beneficiaries participated immediately prior to the
Date of Termination, provided that continued participation is
possible under the general terms and provisions of such plans and
programs. The extended benefits shall be continued until the
earlier of (A) the second (2nd) anniversary of the Date
of Termination, (B) the effective date of the Employee’s
coverage under equivalent benefits from a new employer (provided
that no such equivalent benefits shall be considered effective
unless and until all pre-existing condition limitations and waiting
period restrictions have been waived or have otherwise lapsed), or
(C) the death of the Employee. If participation in any such
plan or program is barred, the Company shall arrange at its own
expense to provide the Employee with benefits substantially similar
to those which the Employee was entitled to receive
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under such plans and
programs. At the end of the period of coverage, the Employee shall
have the right to have assigned to him or her, at no cost and with
no apportionment of prepaid premiums, any assignable insurance
policy relating specifically to him or her. At the conclusion of
the coverage provided under this Subsection, Employee shall be
entitled to the continuation for a period of 18 months of the
health and dental insurance then being provided to him or her at a
cost to him or her equal to the amount then being charged to
employees of the Company for such coverage provided pursuant to the
Consolidated Omnibus Budget Reconciliation Act (COBRA). The
coverage provided pursuant to this Subsection shall be in
satisfaction of the Company’s obligation to provide coverage
under COBRA. The Company will use all commercially reasonable
efforts to provide for the continuation of benefits in a manner
that (A) does not subject the benefits to Section 409A
and (B) does not cause the benefits to be included in the
taxable income of the Employee.
3. TIMING OF PAYMENTS AND
PROVISION OF BENEFITS.
(i) Notwithstanding any other
provision in this Agreement, if the Employee is a “specified
employee” as defined under Section 409A, the amount
payable to the Employee pursuant to Section 2(i)(b) of this
Agreement shall not be made or commenced until the date that is six
(6) months and one (1) day after the Employee’s
Date of Termination (the “Delay Period”) and shall be
paid on such date.
(ii) To the extent that
benefits to be provided to the Employee pursuant to
Section 2(ii) of this Agreement are not (A)”disability
pay,” “death benefit” plans or non-taxable
medical benefits within the meaning of Treasury Regulation
Section 1.409A-1(a)(5) or or (B) other benefits not
considered nonqualified deferred compensation within the meaning of
that regulation, such provision of benefits shall be delayed until
the end of the Delay Period. Notwithstanding the foregoing, to the
extent that the previous sentence applies to the provision of any
ongoing benefits that would not be required to be delayed if the
premiums were paid by the Employee, the Employee shall pay the full
cost of the premiums for such benefits during the Delay Period and
the Company shall pay the Employee an amount equal to the amount of
such premiums paid by the Employee during the Delay Period within
ten (10) days after the end of the Delay Period.
(iii) To the extent that any
benefits to be provided to the Employee pursuant to this Agreement
are considered nonqualified deferred compensation and are
reimbursements subject to Treasury Regulation
Section 1.409A-3(i)(1)(iv), the reimbursement of eligible
expenses related to such benefits shall be made on or before the
last day of the Employee’s taxable year following the
Employee’s taxable year in which the expense was
incurred.
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4. DEFINITIONS. For purposes
of this Agreement, the following definitions shall
apply:
(i) “Annual Base
Salary” shall mean an Employee’s stated annual
compensation without regard to any bonus, perquisite or other
benefits.
(ii) A termination for
“Cause” shall be termination by reason of the
conviction of the Employee, by a court of competent jurisdiction
and following the exhaustion of all possible appeals, of a criminal
act involving the Company or its assets.
(iii) “Change in
Control” shall have the meaning set forth in Appendix
A.
(iv) “Company”
shall mean Humana Inc. or any successor thereof.
(v) “Date of
Termination” shall mean the date specified in the Notice of
Termination, not to exceed thirty (30) days from the date such
Notice of Termination is given.
(vi) “Good
Reason
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