Exhibit 10(a)
HUMANA INC.
STOCK OPTION
AGREEMENT
AND AGREEMENT NOT TO COMPETE OR
SOLICIT
UNDER THE AMENDED AND RESTATED
2003 STOCK INCENTIVE PLAN
THIS AGREEMENT
( “Agreement” )
made as of
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
,
an employee of the Company (hereinafter referred to as
“Optionee” ).
WITNESSETH
WHEREAS, the Amended and Restated 2003 Stock Incentive
Plan (the “Plan” ), for certain employee and
non-employee Directors of the Company and its subsidiaries was
approved by the Company’s Board of Directors (the
“Board” ) 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:
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 of the $.16 2 / 3
par value common stock of the
Company (“Common Stock”) at the purchase price of $
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
(“Expiration Date”).
C. Vesting of Option
. Except as otherwise set
forth herein, this Option shall be exercisable by Optionee or
his/her personal representative on and after the first anniversary
of the date hereof in cumulative annual installments of one-third
of the number of shares covered hereby.
D. Effect of Termination of
Employment on Option .
1. 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.
2. If the employment of Optionee is
terminated for any reason other than for Cause, Retirement, death
or Disability, unless otherwise specified herein, all the rights of
Optionee under this Agreement then exercisable shall remain
exercisable at any time within ninety (90) days after the date
of such termination, but in no event beyond the Expiration
Date.
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3. In the event of Optionee’s
Retirement, (i) to the extent that this Option (or portion
hereof) is exercisable as of the date of such Retirement, this
Option (or portion hereof) shall be exercisable at any time within
two (2) years after the date of Retirement, but in no event
beyond the Expiration Date, and only to the extent the Option (or
portion hereof) was exercisable at the date of Retirement, and
(ii) to the extent that this Option (or portion hereof) is not
exercisable as of the date of such Retirement, this Option (or
portion hereof) shall continue to vest and become exercisable as if
the Optionee were continuing to provide services to the Company or
a Subsidiary, as applicable, and this Option (or portion hereof)
shall be exercisable at any time within two (2) years
following the date on which this Option (or portion hereof) becomes
vested and exercisable.
4. In the event of death or
Disability of Optionee while in the employ of the Company, this
Option shall become immediately exercisable and shall remain
exercisable by Optionee or the person or the persons to whom those
rights pass by will or by the laws of descent and distribution or,
if appropriate, by the legal representative of the Optionee or the
estate of the Optionee at any time within two (2) years after
the date of such death or Disability, regardless of the Expiration
Date.
5. In the event of a Change in
Control, as defined in the Plan, the Option granted in Section I
shall become fully vested and immediately exercisable in its
entirety. In addition, Optionee will be permitted to surrender for
cancellation within sixty (60) days after a Change in Control,
any portion of this Option to the extent not yet exercised and
Optionee will be entitled to receive a payment in an amount equal
to the excess, if any, of (x) the greater of (1) the Fair
Market Value on the date of surrender of the Shares subject to this
Option or portion thereof surrendered, or (2) the Fair Market
Value, as Adjusted, of the Shares subject to this Option or portion
thereof surrendered, over (y) the aggregate purchase price for
such Shares under this Option or portion thereof surrendered. The
form of payment shall be determined by the Committee. In the event
Optionee’s employment with the Company is terminated other
than for Cause within three (3) years following a Change in
Control, each Option held by the Optionee that was exercisable as
of the date of termination of the Optionee’s employment or
service shall remain exercisable for a period ending the earlier of
the second anniversary of the termination of the Optionee’s
employment or the expiration of the stated term of the
Option.
E. Exercise of Option
.
1. This Option shall be exercisable
only by written notice to the Secretary of the Company at the
Company’s principal executive offices, or through the on-line
procedure to such broker-dealer as designated by the Company, by
Optionee or his/her legal representative as herein provided. Such
notice shall state the number of shares to be exercised and shall
be signed, or authorized electronically, by Optionee or his/her
legal representative, as applicable.
2
2. The purchase price shall be paid
as follows:
a) In full in cash upon the exercise
of the Option; or
b) By tendering to the Company
shares of the Common Stock of Company owned by him/her prior to the
date of exercise and having an aggregate fair market value equal to
the cash exercise price applicable to his/her 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 the Grantee by the Company.
3. Federal, state and local income
taxes and other amounts as may be required by law to be collected
by the Company in connection with the exercise of this Option shall
be paid pursuant to the Plan by Optionee prior to the delivery of
any Common Stock under this Agreement.
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II.
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AGREEMENT
NOT TO COMPETE AND AGREEMENT NOT TO SOLICIT
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A. Agreement Not To
Compete . Optionee
hereby covenants and agrees that for a period commencing on the
date hereof and ending twelve (12) months after the effective
date of Optionee’s termination of employment with the
Company, Optionee, directly or indirectly, personally, or as an
employee, officer, director, partner, member, owner, material
shareholder, investor or principal of, or consultant or independent
contractor with, another entity, shall not:
Participate in any business which
competes with the Company, including, without limitation, health
maintenance organizations, insurance companies or prepaid health
plan businesses, in which the Company has been actively engaged
during any part of the two (2) year period immediately
preceding the Optionee’s employment termination date
(“Company Business”), in any of the markets in which
the Company is then currently doing business.
B. Agreement Not To
Solicit . Optionee
hereby covenants and agrees that for a period commencing on the
date hereof and ending twelve (12) months after the effective
date of Optionee’s termination of employment with the
Company, Optionee, directly or indirectly, personally, or as an
employee, officer, director, partner, member, owner, material
shareholder, investor or principal of, or consultant or independent
contractor with, another entity, shall not:
1. Interfere with the relationship
of the Company and any of it
