EXHIBIT 10(p)
HUMANA OFFICERS' TARGET RETIREMENT PLAN
AMENDED AND RESTATED AS OF
JULY 10, 1997
HUMANA OFFICERS' TARGET RETIREMENT PLAN
AMENDED AND RESTATED AS OF
JULY 10, 1997
WHEREAS, Humana Inc. ("Humana"), a Delaware corporation with its principal
place of business in Louisville, Kentucky ("Sponsoring Employer"), has adopted
the Humana Officers' Target Retirement Plan ("Plan"), and
WHEREAS, the Board of Directors of the Sponsoring Employer desires to amend
the Plan, and has authorized and approved the amendment and restatement of the
Plan provided for herein,
NOW, THEREFORE, the Sponsoring Employer, pursuant to the right to amend
hereby approves and adopts this amendment and restatement of the Plan effective
July 10, 1997, which should read as follows:
ARTICLE 1
PURPOSE AND APPLICABILITY OF PLAN
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1.01 The purpose of the Plan shall be to provide supplemental retirement
benefits to Participants upon the terms and conditions and subject to the
limitations contained herein.
1.02 The provisions of the Plan shall apply only to persons who are
Officers of the Sponsoring Employer duly elected by its Board of Directors or
other key management employees designated by the Committee on and after the
Effective Date.
ARTICLE 2
DEFINITIONS
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As used herein the following words and phrases shall have the meanings
specified below, unless a different meaning is plainly required by context or
otherwise determined by the Committee. The meaning of any term not specifically
defined below will be governed by the definition in the Humana Retirement and
Savings Plan.
2.01 The term "Attained Age" shall mean, unless clearly indicated to the
contrary, the age of a Participant as of the Participant's last birthday.
2.02 The term "Average Participating Compensation" shall mean the average
of Participating Compensation as determined using the highest three (3) Plan
Years of the Participant's last five (5) Plan Years (including any partial Plan
Year) coincident with or preceding the Participant's Early or Normal Retirement
Date, Disability Retirement Date, Late Retirement Date or date of death. If the
Participant has fewer than three (3) full Plan Years of Participating
Compensation, Average Participating Compensation shall be based on the number of
full Plan Years that the Participant has Participating Compensation.
2.03 The term "Annual Retirement Benefit" shall mean an amount equal to
the Participant's Average Participating Compensation multiplied by the lesser of
(i) fifty percent (50%), or (ii) a percentage equal to 1.67% times the
Participant's Service.
2.04 The term "Beneficiary and Secondary Beneficiary" shall mean the
person or persons (or an estate or trust) as set forth under the Employer
Retirement Account.
2.05 The term "Board of Directors" shall mean the Board of Directors of
the Sponsoring Employer.
2.06 The term "Code" shall mean the Internal Revenue Code of 1986, as it
has been and may be amended from time to time. Reference to any section of the
Code shall include any provision which is a successor thereto.
2.07 The term "Committee" shall mean the Compensation Committee (or its
equivalent) of the Board of Directors.
2.08 The term "Disability Retirement Date" shall mean the date a
Participant's employment is terminated due to Total and Permanent Disability.
2.09 The term "Disabled Participant" shall mean any Participant who has
been credited with at least ten (10) Years of Service and who is Totally and
Permanently Disabled.
2.10 The term "Disability Payment" shall mean Monthly Retirement Income
due a Disabled Participant.
2.11 The term "Early Retirement Date" shall mean, for each Participant,
the first (1st) day of the month immediately following or coinciding with the
date such Participant shall retire prior to the Participant's Normal Retirement
Date.
2.12 The term "Effective Date" shall mean May 10, 1990.
2.13 The term "Humana SERP" shall mean the Humana Supplemental Executive
Retirement Plan as it may be amended from time to time.
2.14 The term "Retirement Account and SERP Benefit" shall mean an amount
equal to the life annuity equivalent of the account balances in the Retirement
Account in the Humana Retirement and Savings Plan and the Humana SERP, using a
conversion factor based upon an interest rate of eight percent (8%) and the 1983
GAM table with no setback.
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2.15 The term "Late Retirement Date" shall mean the first day of any
month subsequent to the Participant's Normal Retirement Date coinciding with or
immediately following the date the Participant terminates employment for any
reason other than death.
2.16 The term "Monthly Retirement Income" shall mean a monthly income due
a Retired Participant which shall commence as of his Early, Normal or Late
Retirement Date, or the commencement date of payments due to disability.
2.17 The term "Normal Retirement Date" shall mean the first (1st) day of
the month coinciding with or immediately following the Participant's sixty-fifth
(65th) birthday.
2.18 The term "Officer" shall mean the Chief Executive Officer,
President, all Vice Presidents, Secretary and Treasurer of the Sponsoring
Employer who have been duly elected as officers of the Sponsoring Employer by
the Board of Directors.
2.19 The term "Participant" shall mean any Officer of the Sponsoring
Employer or other key management employee who has become a Participant as
provided in Article 3 hereof.
2.20 The term "Participating Compensation" shall mean the Participant's
annual base salary in effect for the first full pay period in the Plan Year,
plus any incentive compensation or bonus earned by the Participant in the
immediately preceding Plan Year and payable during the current Plan Year,
whether or not actually paid to the Participant during the Plan Year.
2.21 The term "Plan Administrator" shall mean the Sponsoring Employer.
2.22 The term "Plan Year" shall mean the twelve (12) month period
commencing on the first (1st) day of January and ending on the last day of the
immediately following December.
2.23 The term "Primary Insurance Amount" as of any date shall mean the
monthly amount of old age benefits payable to a Participant commencing at the
Participant's unreduced Social Security retirement age. The amount will be
calculated based on the Social Security Act in effect as of the date of
calculation, without regard to any dependent benefits.
2.24 The term "Retired Participant" shall mean any Participant who has
retired from Humana and who is receiving a Monthly Retirement Income.
2.25 The term "Retirement and Savings Plan" shall mean the Humana
Retirement and Savings Plan adopted effective as of the Distribution Date, as it
may be amended from time to time or its successor plan.
2.26 The term "Retirement Account" shall mean the Retirement Account in
the Humana Retirement and Savings Plan.
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2.27 The term "Service" shall mean all years and completed months of
Service with the Sponsoring Employer or any corporation which is a member of the
"affiliated group" [as defined in Section 1054(a) of the Code] of the Sponsoring
Employer.
2.28 The term "Sponsoring Employer" shall mean Humana Inc., a Delaware
corporation.
2.29 The term "Spouse" shall mean the legally married spouse of the
Participant at the Participant's date of death; provided, however, that for
purposes of Section 4.04(b), "Spouse" shall mean the legally married spouse of
the Participant at the earlier of the Participant's date of death or
commencement of benefits under that section.
2.30 The term "Target Plan" or "Plan" shall mean the Humana Officers'
Target Retirement Plan provided for herein, as it may be amended from time to
time.
2.31 The term "Total and Permanent Disability" shall mean a physical or
mental condition that renders the Participant eligible for disability benefits
under the Retirement and Savings Plan.
ARTICLE 3
PARTICIPATION IN THE PLAN
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3.01 Each person who is an Officer of the Sponsoring Employer on and
after the Effective Date or a key management employee designated by or at the
direction of the Committee shall be a Participant in this Plan to the extent of
the benefits provided herein.
3.02 Each Officer or key management employee designated hereunder shall
be notified upon becoming a Participant.
ARTICLE 4
RETIREMENT INCOME
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4.01 When a Participant retires, he shall be entitled to receive a
Monthly Retirement Income under this Plan in an amount provided in Section
4.01(a), reduced by the amounts provided in Section 4.01(b) and (c).
(A) An amount equal to one twelfth (1/12) of the Participant's
Annual Retirement Benefit.
(B) The amount provided in Section 4.01(a) shall be reduced by the
Retirement Account and Humana SERP Benefit.
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(C) The amount provided in Section 4.01(a) shall also be reduced by
the Participant's Primary Insurance Amount; provided that in the case of a
Participant taking Early Retirement, such reduction shall only apply when the
Participant is eligible for an unreduced Primary Insurance Amount.
4.02 A Participant may remain in the employ of the Sponsoring Employer
after his Normal Retirement Date, in which event no Monthly Retirement Income
shall be paid until the Participant's Late Retirement Date. The benefit payable
at the Participant's Late Retirement Date shall be equal to the amount as
determined in Section 4.01 except that the Participant's Average Participating
Compensation, Years of Service, Retirement Account and Humana SERP Benefit and
Primary Insurance Amount shall be determined as of the Participant's Normal or
Late Retirement Date, whichever would produce the greater benefit under this
Plan. Unless otherwise determined by the Committee, in no event, however, will
the Participant's Annual Retirement Benefit exceed fifty percent (50%) of his
Average Participating Compensation as of his Normal or Late Retirement Date,
whichever is greater.
4.03 Upon the written application of the Participant received by the Plan
Administration, a Participant whose Attained Age is at least fifty-five (55)
shall be retired as of an Early Retirement Date. Commencing at his Early
Retirement Date, such Participant shall be entitled to a benefit computed in
accordance with Section 4.01; provided, that the amount set forth in Section
4.01(a) shall be reduced by two/twelfths percent (2/12%) of that amount for each
full month that payments commence prior to the Participant's Normal Retirement
Date to a maximum reduction not to exceed twenty percent (20%). A Participant
taking an Early Retirement Benefit may also request an alternate form of
distribution in accordance with Section 4.04.
4.04 The basic form of payment of the Annual Retirement Benefit shall be
a Monthly Retirement Income specified in Section 4.01 which shall be paid on a
monthly basis commencing on the Participant's Disability, Early, Normal or Late
Retirement Date, payable for the life of the Participant.
A Participant may request the Committee to approve an alternate form
of payment of the benefits under this Plan. Such request shall be in writing
and shall be filed at least sixty (60) days before the payment is to be made or
commenced. Once a request is approved, it shall be binding on the Participant.
Alternative forms of payment are as follows:
(A) A monthly income payable to the Participant for either sixty
(60), one hundred and twenty (120), one hundred and eighty (180) or two hundred
and forty (240) payments guaranteed. Upon the Participant's death, distribution
of his remaining benefit, if any, shall be made to the Participant's Beneficiary
or Secondary Beneficiary.
(B) A monthly income payable for the lifetime of the Participant,
with one-half ( 1/2) of such amount continuing to the Participant's Spouse after
the Participant's death for the lifetime of the Spouse.
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(C) A single sum payment to the Participant.
(D) Any other form of payment which is actuarially equivalent and
is approved by the Committee.
If the single sum value of the Participant's Monthly Retirement
Income is less than Fifty Thousand Dollars ($50,000), the benefit shall be paid
to the Participant as a single sum.
The alternate forms as provided in Section 4.04(a), (b) and (c)
above shall be determined using the same conversion factor as is used to
determine the Retirement Account and SERP Benefit as defined in Section 2.14.
4.05 If a Participant should die before benefit payments under the Plan
commence, a death benefit shall be payable. Such death benefit shall be equal
to the present value of the Participant's monthly retirement income as of the
Participant's date of death calculated in accordance with this Article 4 as if
the Participant had retired on his date of death; provided, however, that the
reduction for the Primary Insurance Amount set forth in Section 4.01(c) shall
not apply. Such death benefit shall be paid to the Participant's Beneficiary as
a single sum in accordance with the provisions of Section 4.04(c).
If a death benefit is payable under this Article 4 and the designated
Beneficiary has predeceased the Participant, the death benefit shall be paid to
the Secondary Beneficiary. If neither the Beneficiary nor the Secondary
Beneficiary is living at the time of the death of the Participant, or if there
is not a valid Beneficiary designated, the Sponsoring Employer shall pay the
death benefit to the Participant's estate. If the Beneficiary or Secondary
Beneficiary is living at the death of the Participant but such person dies prior
to receiving the entire death benefit, the remaining portion of such death
benefit shall be paid in a single sum to the estate of such deceased Beneficiary
or Secondary Beneficiary.
ARTICLE 5
BENEFITS UPON DISABILITY
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5.01 If a Participant is determined to be Totally and Permanently
Disabled prior to his Normal Retirement Date, such Disabled Participant shall be
retired as of the date provided in the Retirement and Savings Plan. In such
event, the Disabled Participant's benefit under this Plan shall be deferred
until his Normal Retirement Date. The amount of the Participant's Monthly
Retirement Income payable on account of such Disability Retirement shall be
calculated in accordance with Section 4.01, provided that his Average
Participating Compensation shall be determined as of his date of disability.
Years of Service shall be calculated as though the Disabled Participant had
continued in employment until his Normal Retirement Date, and the Participant's
life annuity equivalent of the account balance in the Retirement Plan Account
shall be based on
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such account balance at time of distribution [if prior to age sixty-five (65)
projected to age sixty-five (65) at eight percent (8%) per annum].
5.02 As an alternative, a Participant who has met the requirements for
early Retirement shall be entitled to apply for Benefits pursuant to the
provisions of Section 4.03. If such request is granted, the continued accruals
provided for above will cease as of the Participant's receipt of Benefits.
5.03 If a Disabled Participant should die before benefit payments under
this Plan commence, a death benefit shall be payable. Such death benefit shall
be equal to the present value of the Participant's monthly retirement income as
of the Participant's date of death calculated in accordance with Article 4 and
shall be paid to the Participant's Beneficiary as a single sum in accordance
with the provisions of Section 4.04(c).
In calculating the death benefit, the continued accruals of Section 5.01
will cease at date of death and the benefit will be reduced as for Early
Retirement (as set forth in Section 4.03). The reduction for the Primary
Insurance Amount set forth in Section 4.01(c) shall not apply. A Participant
under age fifty-five (55) will be deemed to be age fifty-five (55) for purposes
of calculating his benefit.
If a death benefit is payable under this Article 5 and the designated
Beneficiary has predeceased the Participant, the death benefit shall be paid to
the Secondary Beneficiary. If neither the Beneficiary nor the Secondary
Beneficiary is living at the time of the death of the Participant, or if there
is not a valid Beneficiary designated, the Sponsoring Employer shall pay the
death benefit to the Participant's estate. If the Beneficiary or Secondary
Beneficiary is living at the death of the Participant, but such person dies
prior to receiving the entire death benefit, the remaining portion of such death
benefit shall be paid in a single sum to the estate of such deceased Beneficiary
or Secondary Beneficiary.
ARTICLE 6
PLAN ADMINISTRATION
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6.01 The Committee shall be responsible for making all policy decisions
which arise under the Plan. The Plan Administrator shall be responsible for
administering the Plan.
6.02 Subject to the limitations of the Plan, the Plan Administrator shall
from time to time establish rules for the administration of the Plan. Without
limiting the generality of the preceding sentence, it is specifically provided
that the Plan Administrator shall set forth the procedures to be followed in
presenting claims for benefits under the Plan. The Plan Administrator shall
rely on the records of the Sponsoring Employer, as certified to it, with respect
to any and all factual matters dealing with the employment of a Participant. In
case of any factual dispute hereunder, the Committee shall resolve such dispute
giving due weight to all evidence available to it. The
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Committee shall interpret the Plan and shall determine all questions arising in
the administration, interpretation and application of the Plan. All such
determinations shall be final, conclusive and binding.
6.03 Except as otherwise specifically provided herein, every decision and
action of the Committee shall be valid if concurred in by a majority of the
members then in office, which concurrence may be had without a formal meeting.
6.04 The Plan Administrator shall be responsible for the determination of
a Participant's benefit in accordance with this Plan.
6.05 In discharging its duties under this Plan, the Plan Administrator
and the Committee may employ such counsel, accountants and other agents as they
shall deem advisable. The Sponsoring Employer shall pay the compensation of such
counsel, accountants and other agents and any other expenses incurred by the
Plan Administrator and the Committee in carrying out their duties under the
plan.
ARTICLE 7
MODIFICATION AND TERMINATION
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7.01 The Sponsoring Employer reserves the right at any time, by action of
its Board of Directors, to modify or amend, in whole or in part, any or all of
the provisions of the Plan.
7.02 Notwithstanding the provisions of Section 7.01, no amendment,
suspension or termination shall adversely affect:
(A) the Monthly Retirement Income of any Participant, or the
Beneficiary or Secondary Beneficiary of any Participant, who has retired prior
thereto, or
(B) the right of any Participant then employed by the Sponsoring
Employer who has attained age fifty-five (55) or otherwise has vested benefits
under the Plan to receive upon death, retirement or disability, the benefit to
which such person would have been entitled under the Plan prior to its
amendment, suspension or termination.
ARTICLE 8
MISCELLANEOUS PROVISIONS
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8.01 Neither the interest of a Participant or any other person nor the
benefit payable hereunder is subject to the claim of creditors of Participants
or their Beneficiaries and will not be subject to attachment, garnishment or any
other legal process. Neither a Participant nor his Beneficiaries may assign,
sell, borrow against or otherwise encumber any of his beneficial interest
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in the Plan, nor shall any such benefits be in any manner liable for or subject
to the deeds, contracts, liabilities, engagements or torts of any Participant or
Beneficiary. All such payments and rights thereto are expressly declared to be
non-assignable and non-transferable, and in the event of any attempt of
assignment or transfer by the Participant or Beneficiaries, the Sponsoring
Employer shall have no further liability hereunder.
8.02 Although it is the intention of the Sponsoring Employer that this
Plan shall be continued, this Plan is entirely voluntary on the part of the
Sponsoring Employer, and, subject to the provisions of Article 7, the
continuance of the Plan is not assumed as a contractual obligation of the
Sponsoring Employer.
8.03 Benefits under this Plan shall be paid exclusively from the general
assets of the Sponsoring Employer and no Participant or other person shall have
any right or claim to the payment of a benefit which in any manner whatsoever is
superior to or different from the right or claim of a general and unsecured
creditor of the Sponsoring Employer.
8.04 This Plan shall not be deemed to constitute a contract between the
Sponsoring Employer and any Participant or to be a consideration or an
inducement for the employment of any Participant. Nothing contained in this
Plan shall be deemed to give any Participant the right to be retained in the
employment of the Sponsoring Employer or to interfere with the right of the
Sponsoring Employer to discharge any Participant at any time regardless of the
effect which such discharge shall have upon such individual as a Participant in
the Plan.
8.05 This Plan shall be construed and enforced according to the laws of
the Commonwealth of Kentucky, and all provisions hereunder shall be administered
according to the laws thereof. It is intended that this Plan be exempt from
Title I of the Employee Retirement Income Security Act of 1974, as amended,
under Section 4(b)(5) thereof, as an excess benefit plan which is unfunded, and
any ambiguities in construction shall be resolved in favor of interpretation
which will effectuate such intention.
8.06 Any words herein used in the masculine or neuter shall read and be
construed in the feminine, masculine or neuter where they would so apply. Words
in the singular shall be read and construed as though used in the plural in all
cases where they would so apply. Titles of articles are inserted for
convenience of reference only and, in the event of any conflict, the text of the
Plan, rather than such titles shall control.
8.07 In making any payment to or for the benefit of any minor or
incompetent Beneficiary, the Plan Administrator, in its sole, absolute and
uncontrolled discretion, may, but need not, make such payment to a legal or
natural guardian or other relative of such minor or court appointed committee of
such incompetent, or to any adult with whom such minor or incompetent
temporarily or permanently resides, with any such guardian, committee, relative
or other person shall have full authority and discretion to expend such
distribution for the use and benefit of such minor or incompetent, and the
receipt of such guardian, committee, relative or other person shall
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be a complete discharge of the Sponsoring Employer, without any responsibility
on its part or on the part of the Committee to see to the application thereof.
8.08 If a Participant's employment is terminated due to his commission of
theft, fraud, or criminal acts against the Sponsoring Employer or any
corporation which is a member of the "affiliated group" [as defined in Section
1054(a) of the Code] with the Sponsoring Employer, such Participant shall not be
entitled to receive any benefit under this Plan.
END
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