Exhibit 10(s)
THE HUMANA INC. DEFERRED
COMPENSATION PLAN
FOR NON-EMPLOYEE
DIRECTORS
ARTICLE 1
Purpose
The purpose of this Plan is to
provide members of the Board of Directors of Humana Inc. who are
not employees of the Company or any of its subsidiaries with the
opportunity to defer receipt of certain compensation to which they
will be entitled while the Plan is in effect. The Plan is intended
to be an unfunded, nonqualified deferred compensation plan and
shall be construed and administered accordingly.
ARTICLE 2
Definitions
For purposes of the Plan, the
following terms shall have the following meanings:
2.1 “Allocation
Date” shall mean,
with respect to a Deferral Election, the date on which all or a
portion of a Director’s Deferral Amount is credited to his or
her Cash and/or Stock Unit Accounts, which shall be the date on
which such Deferral Amount (or portion thereof) would have been
paid to the Director if the Director had not made a Deferral
Election.
2.2
“Beneficiary” has the meaning set forth in Section 8.3 of
Article 8.
2.3
“Board” shall
mean the Board of Directors of the Company.
2.4 “Cash
Account” shall mean
a memorandum account established on the books of the Company on
behalf of a Director, into which shall be credited amounts pursuant
to Section 4.1 of Article 4.
2.5 “Cash Account
Balance” has the
meaning set forth in Section 4.1 of Article 4.
2.6 “Change in
Capitalization” has
the meaning set forth in Section 4.2 of Article 4.
2.7 “Change in
Control” shall have
the same definition as is contained in the Humana Inc. 2003 Stock
Incentive Plan, as amended from time to time. (A copy of this
definition is attached hereto as Exhibit A.)
2.8 “Common
Stock” shall mean
the common stock, par value $0.16 2/3 per share, of the Company, or
any other securities or property into which such stock may be
converted or exchanged.
2.9
“Company” shall mean Humana Inc.
2.10
“Compensation” shall mean, with respect to a Plan Year, the
annual retainer fees, committee fees, and meeting fees payable to a
Director in such Plan Year for services rendered in such Plan Year.
For purposes of clarity, “Compensation” shall not mean,
with respect to any Director, stock options granted or to be
granted by the Company to such Director or Common Stock received or
to be received by such Director pursuant to the exercise of such
options, but shall include grants of Common Stock made or to be
made to such Director as payment of such Director’s annual
retainer fees, committee fees, and/or meeting fees.
2.11 “Deferral
Amount” shall mean
any part or all of his or her Compensation elected by a Director to
be deferred in a Plan Year.
2.12 “Deferral
Election” shall
mean a Director’s timely election of a Deferral Amount
pursuant to Article 3.
2.13 “Deferral
Period” shall have
the meaning set forth in Section 3.1 of Article 3.
2.14
“Director” shall mean each member of the Board who is not
an employee of the Company or any of its subsidiaries.
2.15 “Exchange
Act” shall mean the
Securities Exchange Act of 1934, as amended.
2.16 “Fair Market
Value” on any date
means (i) with respect to Common Stock, the average of the highest
and lowest reported sales prices, regular way, of Common Stock in
transactions reported on the New York Stock Exchange on such date,
or if no sales of Common Stock are reported on the New York Stock
Exchange for such date, the comparable average sales price for the
last previous day for which sales were reported on the New York
Stock Exchange or the value of a share of Common Stock for such
date as established by the Committee using any other reasonable
method of valuation, and (ii) with respect to any other property,
the fair market value of such property determined by such methods
or procedures as shall be established from time to time by the
Committee.
2.17 “Payment
Method” has the
meaning set forth in Section 5.2 of Article 5.
2.18
“Plan” shall
mean the Humana Inc. Deferred Compensation Plan for Non-Employee
Directors, as such Plan may be amended from time to
time.
2.19 “Plan
Administrator” shall mean the Organization & Compensation
Committee of the Board or such other committee of Directors
designated by the Board.
2.20 “Plan
Year” shall mean
each calendar year with the first plan year beginning January 1,
2004.
2.21 “Stock Unit
Account” shall mean
a memorandum account established on the books of the Company on
behalf of a Director, to which shall be credited a number of Stock
Units pursuant to Section 4.2 of Article 4.
2.22 “Stock Unit Account
Balance” shall have
the meaning set forth in Section 4.2 of Article 4.
2.23 “Stock
Units” shall mean
units credited to a Director’s Stock Unit Account, with one
Stock Unit having a value on any date equal to the Fair Market
Value of one share of Common Stock on such date.
2.24
“Termination” shall mean termination of a Director’s
service as a member of the Board for any reason, including by
reason of death or disability.
ARTICLE 3
Deferral Elections of
Compensation
3.1 Deferral Election.
Each Director may elect to have the
payment of all or any portion of his or her Compensation for a Plan
Year deferred pursuant to the Plan. Each Deferral Election shall be
made on a deferral election form to be provided by the Company and
shall specify (i) the Deferral Amount, (ii) the Deferral Period,
and (iii) the Payment Method (as defined in Section 5.2). For
purposes of this Plan, “Deferral Period”, with respect
to any Deferral Election, shall mean the period commencing on
the
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Allocation Date and ending, at the election of
the Director, on (i) the date of the Director’s Termination,
(ii) a date specified by the Director in his or her Deferral
Election, or (iii) the earlier of either the date of the
Director’s termination or any date specified by the Director
in his or her Deferral Election; provided, however, that any such
date specified by the Director in his or her Deferral Election must
be no earlier than two years after the end of the Plan Year with
respect to which the Deferral Election applies.
3.2 Timing of Deferral
Elections. Deferral
Elections in respect of Compensation otherwise payable to Directors
in a Plan Year shall be timely if made (i) with respect to the Plan
Year beginning January 1, 2004, on or before November 21, 2003, and
(ii) with respect to subsequent Plan Years, on or before September
1 of the preceding year; provided, however, that with respect to
new Directors, Deferral Elections in respect of Compensation
subsequently payable in the Plan Year in which they become a
Director shall be timely if made within 15 days after becoming a
Director.
3.3 Irrevocability.
A Deferral Election, once made,
shall be irrevocable.
ARTICLE 4
Treatment of Deferral
Amounts
4.1 Cash Account
(a) On each Allocation Date, an
amount reflecting the portion of a Director’s Deferral Amount
which would otherwise have been paid to the Director in cash shall
be credited to the Director’s Cash Account.
(b) All deferred amounts credited to
the Cash Account shall bear interest from the Allocation Date. The
interest credited to the Cash Account will be compounded quarterly
at the end of each calendar quarter. For all amounts whenever
credited, the rate of interest credited thereon, as of the end of
each calendar quarter thereon, shall be equal to the average
ten-year U.S. Treasury note rate for the previous calendar quarter
(the actual deferrals plus interest credits and credits in respect
of fractional Stock Units under Section 4.2(d) are collectively
referred to herein as the “ Cash Account Balance
”).
4.2 Stock Unit
Account.
(a) On each Allocation Date, a
number of Stock Units reflecting the portion of a Director’s
Deferral Amount which would otherwise have been paid to the
Director in Common Stock shall be credited to the Director’s
Stock Unit Account.
(b) In the event of a dividend paid
with respect to Common Stock, whether in cash, Common Stock or
other stock or property of the Company, credits (dividend
equivalents) will be made to each Director’s Stock Unit
Account as follows:
(i) in the case of a cash dividend,
or a dividend of stock of the Company (other than Common Stock) or
other property, additional credits will be made to the Stock Unit
Account consisting of a number of Stock Units equal to the number
determined by dividing (A) the cash amount of such dividend per
share (or the fair market value, on the date of payment, of
dividends per share paid in such stock or other property),
multiplied by the aggregate number of Stock Units credited to such
Stock Unit Account on the record date for the payment of such
dividend by (B) the Fair Market Value of a share of Common Stock on
the date such dividend is payable to holders;
(ii) in the case of a dividend
consisting of Common Stock, the Stock Unit Account will be credited
with a number of Stock Units equal to the number of Stock Units in
such account on the record date for the payment of such dividend
multiplied by the number of shares of Common Stock paid per share
of Common Stock in such dividend.
(c) In the event of any Change in
Capitalization, the Plan Administrator in good faith shall take
such action as it deems necessary to preserve the economic value of
each Director’s Stock Unit Account immediately prior to the
Change in Capitalization to reflect the impact of the Change
in
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Capitalization on the Common Stock, including
without limitation the making of equitable adjustments to the
number of Stock Units credited to the Stock Unit Account and the
number and kind of securities or other property deemed to be
represented by Stock Units held in the Stock Unit Account. For
purposes of this Section 4.2(c), “Change in
Capitalization” shall mean any increase or reduction in the
number of shares of Common Stock, or any change in such shares or
exchange of such shares for a different number or kind of shares or
other securities of the Company or another corporation, by reason
of a reclassification, recapitalization, merger, consolidation,
reorganization, spin-off, split-up, issuance of warrants or rights
or debentures, stock dividend, stock split or reverse stock split,
combination or exchange of shares, repurchase of shares, change in
corporate structure or otherwise. (The actual deferrals plus
adjustments pursuant to Sections 4.2(b) and 4.2(c) are collectively
referred to herein as the “ Stock Unit Account Balance
”).
(d) All fractional Stock Units to
which a Director is entitled shall be credited to the
Director’s Cash Account based on the Fair Market Value of
such Units as of the day preceding the date such credit is made. In
no event shall fractional Stock Unit
