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Exhibit 10(j)
HUMANA INC.
EXECUTIVE MANAGEMENT INCENTIVE COMPENSATION PLAN - GROUP I
CORPORATE
I. OBJECTIVES
The objectives of the Humana Inc. Executive Management Incentive
Compensation Plan are:
A. To optimize the profitability and growth of Humana
Inc. (the "Corporation") consistent with Humana's
mission of achieving unequaled, measurable quality
and productivity and with other goals of the
Corporation, its stockholders and its employees.
B. To promote teamwork among members of corporate
management, foster cooperation between corporate and
field management, as well as to encourage excellence in
the performance of individual responsibilities.
C. To provide significant opportunity for those members of
corporate management who have major profit
responsibility within the Corporation.
II. ELIGIBILITY AND AWARDS
A. Membership in this Plan will be approved by the Chief
Executive Officer. Individuals selected to participate (a
"Participant") will be notified in writing by the Vice
President of Human Resources.
B. Incentive compensation funds will be generated by the
Corporation's performance against annual objectives
established by the Compensation Committee. Except as
hereinafter provided, the attainment of such objectives shall
be determined by comparing them against the actual results as
certified by the Corporation's independent accountants. A
Participant's incentive compensation will be earned pursuant
to a schedule attached hereto of target goals established for
each fiscal year by the Compensation Committee (the
"Schedule"). The target goals in the Schedule will be based
upon the Corporation's approved annual business plan.
C. Incentive compensation shall be based on the Participant's
paid salary, exclusive of any bonus or fringe benefits. The
maximum incentive compensation paid shall not exceed
one-hundred percent (100%) of such paid salary.
(1)
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D. The Board of Directors of the Corporation reserves the right
to pass upon the quality of earnings and to adjust earnings
prior to calculation of incentive compensation awards if such
earnings are not in accordance with the assumptions included
in the Corporation's business plan.
E. Incentive compensation is earned in addition to consideration
for merit and promotional increases under the Corporation's
wage and salary program. Incentive compensation will be paid
to Participants on or before March 15, following the close of
the fiscal year.
III. EARNINGS PER SHARE OBJECTIVE
The minimum earnings per share objective shall be set by the
Compensation Committee so as to always require an increase in
earnings per share over the prior fiscal year before any
incentive compensation whatsoever may be earned pursuant to
this Plan. That is, should earnings per share decline in any
fiscal year, for whatever reason, there shall be no incentive
compensation paid for such fiscal year. In determining whether
earnings per share objectives have been achieved, incentive
compensation generated for all Incentive Plans shall be
accrued and deducted as an expense for the fiscal year.
IV. ADMINISTRATION OF THIS PlAN
This Plan shall be administered by the Compensation Committee
which shall have full power and final authority to construe,
interpret and administer the Plan. No member of the Committee
shall be personally liable for damage, in the absence of bad
faith, for any act or omission with respect to his service on
the Committee.
V. ELIGIBILITY DURING FISCAL YEAR
An individual who becomes a Participant in this Plan due to
employment, transfer or promotion during the fiscal year will
be eligible to receive partial incentive compensation based
upon the Participant's paid salary for the period of time
eligible and the level of achievement in relation to targeted
goals for the entire fiscal year. In no event, however, will
partial payments be made for any period of time of less than
two months.
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VI. INELIGIBILITY DURING FISCAL YEAR
A Participant in this Plan who becomes ineligible during the
fiscal year due to transfer or change of position shall cease
to be eligible for further participation in this Plan on the
date of transfer or change to the ineligible position. If the
Participant, prior to the date of transfer or change, has been
a Participant in the Plan for a minimum of two calendar months
of the fiscal year, the Participant will be eligible to
receive partial incentive compensation based upon the
Participant's paid salary for such period of time and the
level of achievement in relation to targeted goals for the
entire fiscal year.
VII. TERMINATION
Except as specifically provided herein to the contrary, in
order to be eligible for incentive compensation, a Participant
must be an active employee at the time incentive compensation
is paid. Termination, voluntary or involuntary, prior to the
date of payment will result in the forfeiture of any incentive
compensation claims for any year.
VIII. RETIREMENT
A Participant who has been employed during the entire fiscal
year for which incentive compensation is to be earned, but who
is retired at or after the end of such fiscal year, will be
eligible for full incentive compensation as determined in
accordance with the provisions of this Plan. If a Participant
retires prior to the end of the fiscal year but after April
30, the Participant will be eligible to receive partial
incentive compensation based upon the Participant's paid
salary for the period of time he/she was a participant at the
level of achievement in relation to targeted goals for the
entire fiscal year.
IX. LEAVE OF ABSENCE OR DISABILITY
A Participant who becomes disabled or who is granted a leave
of absence after April 30 may, at the discretion of the
Compensation Committee, and under such rules as the Committee
may from time to time prescribe, be eligible to receive
partial incentive compensation based upon the Participant's
paid salary for the period of time he/she was a Participant at
the level of achievement in relation to targeted goals for the
entire fiscal year.
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X. DEATH
If a Participant has been employed during the entire fiscal
year for which incentive compensation is to be earned, but
dies prior to the date of payment, there will be no forfeiture
and the Participant's estate will be eligible to receive the
Participant's incentive compensation. If a Participant dies
after April 30 and before the end of the fiscal year, the
Participant's estate will be eligible to receive partial
incentive compensation based upon the Participant's paid
salary for the period of time he/she was a Participant at the
level of achievement in relation to targeted goals for the
entire fiscal year.
XI. DEFERRED COMPENSATION
A Participant in this Plan may elect to defer receipt of any
amount earned pursuant to this Plan, provided such election is
made in writing. The terms of any deferred compensation
arrangement must be approved in writing by the Chairman of the
Compensation Committee and the Participant.
XII. CORPORATION'S RIGHT TO MODIFY OR TERMINATE
The Corporation shall have the right to change, modify or
terminate this plan, with or without notice, in whole or in
part, at any time.
XIII. 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 an official written 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 of the extent to which targeted
goals 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.
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