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Exhibit 10(l)
HUMANA INC.
SENIOR MANAGEMENT INCENTIVE COMPENSATION PlAN - GROUP II
CORPORATE
I. OBJECTIVES
The objectives of the Humana Inc. Senior 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. A Participant's incentive compensation shall be based
on his/her paid salary, exclusive of any bonus or
fringe benefits. The maximum Incentive Compensation
shall not exceed sixty percent (60%) of that
individual's 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.
(2)
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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.
(3)
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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.
(4)