Involuntary Termination Without Cause. Under the Stock Plan, upon an involuntary termination by the Company for
reasons other than Cause, each NEO would have 90 days to exercise any vested options, but in no event beyond the expiration date. Any unvested stock options held by our NEOs would be forfeited. Any unvested restricted stock units held by our NEOs
would also be forfeited. In addition, our equity grant agreements contain non-compete and non-solicit provisions that only remain in full force and effect following an
involuntary termination by the Company for reasons other than Cause if we pay an amount at least equal to the NEOs then current annual base salary. Any such amounts that could be paid post-termination to enforce
non-compete and non-solicit provisions are not included in the table above.
Involuntary Termination for Cause. Under the Stock Plan, in the event of termination for Cause, all options and unvested restricted stock units are forfeited for
all NEOs, regardless of whether the options are vested. Under the Stock Plan, Cause is defined as a felony conviction of a Participant or the failure of a Participant to contest prosecution for a felony, or a Participants willful
misconduct or dishonesty, any of which is determined by the Committee to be directly and materially harmful to the business or reputation of the Company or its Subsidiaries.
Retirement. Under the Stock Plan, an eligible Retirement means a combination of age and years of service with the Company totaling 65 or greater, with a minimum
required age of 55 and a minimum requirement of five years of service. With respect to grants of options prior to July 2, 2015, in the event of an eligible Retirement by a NEO, any outstanding options that have vested as of the retirement
date of that NEO will be exercisable within two years of such retirement date. For awards granted after July 2, 2015, in the event of an eligible Retirement by a NEO, any outstanding options and restricted stock units will vest pro rata on the
next scheduled vesting date, and any remaining outstanding options or restricted stock units would then be forfeited.
Death or Disability. Under the Stock
Plan, in the event of death or Disability of a NEO, all outstanding options shall become immediately exercisable in full and the NEO, or his estate or representative shall have two years to exercise the options regardless of the expiration date.
Under the Stock Plan, in the event of death or Disability of a NEO, any unvested restricted stock units shall immediately vest, and any unvested Shares of performance-based restricted stock units will vest at the maximum level.
Change in Control. Under the Stock Plan, in the event of a termination other than for Cause or resignation for Good Reason within two years following a Change in
Control, (x) all outstanding options shall become immediately exercisable in full and the NEO shall have two years to exercise the options, but in no event beyond the expiration date, and (y) any unvested restricted stock units shall
immediately vest, and any unvested Shares of performance-based restricted stock units will vest at the target level.
(3) Change in Control
Policy and Benefits
We have a Change in Control Policy (CIC Policy), as adopted by the Organization & Compensation Committee. For the period ended
December 31, 2020, all of our NEOs, including the CEO were eligible under the CIC Policy. The CIC Policy provides certain benefits in the event an eligible employees employment is terminated by the Company without Cause or by the employee
with Good Reason within twenty-four months following a Change in Control, or by the Company without Cause under certain circumstances prior to a Change in Control. The table assumes treatment of each NEO under the CIC Policy.
Under the CIC Policy for the period ended December 31, 2020, NEOs would be entitled to receive a Cash Severance equal to twice the sum of each individuals
Annual Base Salary, excluding the CEO whose Cash Severance is equal to two and one-half times Annual Base Salary, as well as the target incentive compensation payable to him or her. Assuming a Change in
Control and subsequent termination event had occurred at December 31, 2020, the payments set forth in the table above would have been made within fifteen business days of the termination event (or such later date as may be required by
Section 409A) by the surviving company in the Change in Control. See the discussion herein under Note 3 regarding Change in Control treatment of equity compensation.
Further, under the CIC Policy, each NEO is entitled to receive all life insurance, health insurance, dental insurance, accidental death and dismemberment insurance and
disability insurance under plans and programs in which the NEO and/or the NEOs dependents and beneficiaries participated immediately prior to the date of termination. These benefits shall continue for 18 months following termination. These
benefits are valued at the amounts listed in the table above for the applicable period.
Pursuant to our long-standing Company policy, the CIC Policy does not include
an excise tax gross-up provision with respect to payments contingent upon a change in control.
(4)
Treatment of Equity Awards Granted to our CEO Prior to 2018
The Company and Mr. Broussard previously had in force an Amended and Restated Employment
Agreement, dated as of February 27, 2014, later amended on July 2, 2015 and August 16, 2018, which we refer to herein as the Broussard Agreement. Effective as of January 1, 2019, Mr. Broussard and the Company agreed not to
renew the Broussard Agreement, but that certain provisions pertaining to the treatment of equity awards granted prior to December 31, 2018, in the event of termination or change in control, would continue to apply. For all other purposes,
Mr. Broussard is governed by the Severance Policy and CIC Policy generally applicable to Company as described in Notes 1 and 3 above.
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Humana | 2021 Proxy Statement Executive Compensation
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