Exhibit 10(n)
HUMANA INC.
1998 MANAGEMENT INCENTIVE COMPENSATION PLAN
I. OBJECTIVES
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The objective of the Humana Inc. 1998 Management Incentive Compensation
Plan (the "Plan") is to reward executive officers for their efforts in
optimizing the profitability and growth of Humana Inc. (the "Company")
consistent with the Company's vision to improve the health of its members,
and provide value to its customers, partners and shareholders.
II. ELIGIBILITY AND AWARDS
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A. Membership in this Plan will consist of any executive officers
designated (a "Participant") by the Organization and Compensation
Committee of the Board of Directors of the Company (the "Committee").
The Committee will notify each Participant of his/her selection.
B. Incentive compensation will be computed by measuring (i) the Company's
achievement of actual consolidated net income ("Consolidated Net
Income") measured as Earnings Per Share ("EPS") for each fiscal year
against Consolidated Net Income/EPS objectives established by the
Committee for each fiscal year, or (ii) Growth Objectives or Profit
Objectives, the relative weightings of which have been pre-determined by
the Committee, or (iii) such other performance goals as may be
established by the Compensation Committee from time to time.
C. Incentive compensation for a fiscal year shall be based on the
Participant's salary earnings paid during the fiscal year exclusive of
any bonus or fringe benefits paid or accrued during such fiscal year
("Salary"). The maximum incentive compensation paid for any fiscal year
to any Participant shall not exceed seventy-five percent (75%) of
Salary; the precise percentage earned shall be based upon a schedule of
target goals established pursuant to Section II B. above. The Committee
may, in its sole discretion, increase or decrease the amount of
incentive compensation to be paid for any fiscal year based on the
Company's actual performance for that year.
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D. The Company's achievement of predetermined goals for each fiscal year
will be determined in accordance with generally accepted accounting
principles; provided, however, that (i) the effects of accounting policy
changes from the prior fiscal year and unusual non-recurring gains and
losses will be excluded, and (ii) incentive compensation generated
pursuant to incentive plans of the Company, including this Plan, shall
be accrued and deducted as an expense for such fiscal year.
E. Incentive compensation will be paid to Participants on or before March
15 following the close of the fiscal year in respect of which it was
earned.
III. ADMINISTRATION OF THIS PLAN
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This Plan shall be administered by the Committee, which shall have full
power and final authority to construe, interpret and administer the Plan.
Following the close of a fiscal year and before any payments are made
hereunder for that fiscal year, the Committee shall determine whether and
to what extent the performance goals have been satisfied. 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 service on the Committee.
IV. ELIGIBILITY DURING FISCAL YEAR
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Subject to the discretion of the Committee as set forth in Section II C. of
this Plan, 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
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 (2) months.
V. INELIGIBILITY DURING FISCAL YEAR
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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. Subject to the discretion of the Committee as set
forth in Section II C. of this Plan, if the Participant, prior to the date
of transfer or change, has been a Participant in the Plan for a minimum of
two (2) calendar months of the fiscal year, the Participant will be
eligible to receive partial incentive compensation based upon the
Participant's Salary for such period of time and
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the level of achievement in relation to targeted goals for the entire
fiscal year.
VI. TERMINATION OF EMPLOYMENT; LEAVE OF ABSENCE
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Subject to the discretion of the Committee as set forth in Section II C. of
this Plan, a Participant who has been employed (i) during the entire fiscal
year for which incentive compensation is to be paid, but whose employment
is terminated, voluntarily or involuntarily (other than for cause), or who
is granted a leave of absence after the end of such fiscal year and prior
to the payment date therefor will be eligible to receive his/her full
incentive compensation with respect to such fiscal year as determined in
accordance with the provisions of this Plan, or (ii) through the first two
(2) calendar months of any fiscal year, but whose employment is terminated,
voluntarily or involuntarily (other than for cause), or who is granted a
leave of absence after the end of the first two (2) calendar months of any
fiscal year but prior to the end of such fiscal year will be eligible to
receive partial incentive compensation with respect to such fiscal year
based upon the Participant's 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. A Participant whose employment is terminated for
cause or whose employment is terminated for any other reason prior to the
end of the first two (2) calendar months of such fiscal year shall not be
eligible to receive any incentive compensation under this Plan other than
those amounts which have been paid to him/her prior to the date he/she is
terminated.
VII. DEFERRED COMPENSATION
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A Participant in this Plan may irrevocably 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 Committee and the Participant.
Any amount deferred pursuant to this Plan will bear interest at a rate
determined by the Committee.
VIII.COMPANY'S RIGHT TO TERMINATE
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The Company shall have the right to terminate this Plan, with or without
notice, in whole or in part, at any time.
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IX. GENERAL PROVISIONS
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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 by the Committee 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.
X. EFFECTIVE DATE.
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This Plan shall be effective as of January 1, 1998.
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