2001 SUPPLEMENTAL INCENTIVE PLAN
AWARD AGREEMENT
United Wisconsin Services, Inc. and
Blue Cross & Blue Shield United of Wisconsin
January 2001
CONTENTS
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Article 1. Performance Period 1
Article 2. Target Incentive Award and Achievement of Performance Measure 1
Article 3. Termination Provisions 2
Article 4. Interest 2
Article 5. Form and Timing of Payment of Earned Target Incentive Award 2
Article 6. Nontransferability 3
Article 7. Administration 4
Article 8. Miscellaneous 4
UNITED WISCONSIN SERVICES, INC. AND
BLUE CROSS & BLUE SHIELD UNITED OF WISCONSIN
2001 SUPPLEMENTAL INCENTIVE PLAN AWARD AGREEMENT
You have been selected to be a participant in the United Wisconsin
Services, Inc. ("UWSI) and Blue Cross & Blue Shield United of Wisconsin
("BCBSUW") 2001 Supplemental Incentive Plan (the "Plan"), as specified below:
PARTICIPANT: Participant
TARGET INCENTIVE AWARD: $ ---------------------
PERFORMANCE PERIOD: January 1, 2001 to December 31, 2001
PERFORMANCE MEASURE: The preestablished goals related to UWSI and BCBSUW
(herein referred to as "the Company") Annual Operating Plan ("AOP")
THIS AGREEMENT (the "Agreement") effective January 1, 2001, represents the
grant of the Supplemental Incentive Award by the Company to the Participant
named above, pursuant to the provisions of the Plan.
The Plan provides a complete description of the terms and conditions
governing the Supplemental Incentive Award and is hereby incorporated by
reference in this Agreement. If there is any inconsistency between the terms of
this Agreement and the terms of the Plan, the Plan's terms shall completely
supersede and replace the conflicting terms of this Agreement. All capitalized
terms shall have the meanings ascribed to them in the Plan, unless specifically
set forth otherwise herein. The parties hereto agree as follows:
ARTICLE 1. PERFORMANCE PERIOD
The Performance Period commences on January 1, 2001 and ends on December
31, 2001.
ARTICLE 2. TARGET INCENTIVE AWARD AND ACHIEVEMENT OF PERFORMANCE MEASURE
The amount of the Target Incentive Award to be earned under this Agreement
("Earned Target Incentive Award") shall be based upon the achievement of
preestablished performance goals related to the Company's AOP as set by the
Committee for the Performance Period, based on the following chart:
---------------------------- ------------------------------ ------------------------- -----------------------------
PERCENTAGE OF TARGET PERCENTAGE OF TARGET
AOP ATTAINMENT INCENTIVE AWARD EARNED(1) AOP ATTAINMENT INCENTIVE AWARD EARNED(1)
---------------------------- ------------------------------ ------------------------- -----------------------------
125% or more of target 200% 95% of target 90%
120% of target 180% 90% of target 80%
115% of target 160% 85% of target 70%
110% of target 140% 80% of target 60%
105% of target 120% 75% of target 50%
Target (100% of AOP) 100% < 75% of target None
(1) Awards for points in between the levels shown will be based on interpolation.
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ARTICLE 3. TERMINATION PROVISIONS
(a) Except as provided below, a Participant shall be eligible
for each of the payments of his/her Earned Target Incentive
Award, as determined in Article 2 and as set out in Article
5, only if the Participant's employment with the Company
continues through the end of the Performance Period and the
date each payment is paid, as called for by Article 5.
(b) If a participant terminates his or her employment during
the Performance Period because of death or Disability,
Earned Target Incentive Award amounts will vest upon
termination and will be paid out as soon as practical
following the close of the period. The Committee will
determine, in its sole discretion, the appropriate award
proportion of the full Earned Target Incentive Award amount
to be paid.
(c) If a Participant terminates his or her employment during
the Performance Period because of Retirement, Earned Target
Incentive Award amounts will vest upon Retirement and will
be paid out as soon as practical following the close of the
period. The Committee will determine, in its sole
discretion, the appropriate award proportion of the full
Earned Target Incentive Award amount to be paid.
(d) Termination of employment for any reason other than
Retirement, Disability, or death or following a Change in
Control during the Performance Period shall require
forfeiture of this entire award, with no payment to the
Participant.
(e) Termination of employment for any reason other than
Retirement, Disability, or death or following a Change in
Control after the Performance Period, but prior to any
payment date of the Earned Target Incentive Award shall
require forfeiture of the unpaid balance of the Earned
Target Incentive Award, with no payment to the Participant,
it being understood that the Participant's continued
employment on the payment dates of the Earned Target
Incentive Award is an integral part of this Agreement upon
which Company relied in entering into this Agreement.
ARTICLE 4. INTEREST
The Participant shall have no right to any interest with respect to the
unpaid portion of the Earned Target Incentive Award until ninety (90) calendar
days after the date such unpaid portion becomes vested in accordance with this
Agreement.
ARTICLE 5. FORM AND TIMING OF PAYMENT OF THE EARNED TARGET INCENTIVE AWARD
(a) Payment of the Earned Target Incentive Award shall be made
in three (3) installments, each to be paid within ninety
(90) calendar days following the dates specified in the
chart below, subject to the following:
(i) The Participant shall have no right with respect
to any portion of the Earned Target Incentive
Award until such amount becomes vested as of the
payment date following the dates identified in the
following schedule:
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PERCENTAGE OF EARNED TARGET
DATE INCENTIVE AWARD VESTED
---------------------- --------------------------
January 1, 2002 25%
January 1, 2003 25%
January 1, 2004 50%
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(ii) If the Committee determines, in its sole
discretion, that a Participant at any time has
willfully engaged in any activity that the
Committee determines was or is harmful to the
Company, any unpaid portion of the Earned Target
Incentive Award (whether or not vested) will be
forfeited by such Participant.
(b) Upon a Change in Control, as defined in the Plan, prior to
the expiration of the Performance Period, the Participant
shall become fully vested in the Target Incentive Award
with the Earned Target Incentive Award to be calculated as
if 100% of the AOP Goal had been achieved. The Earned
Target Incentive Award so determined shall be paid to the
Participant within ninety (90) days of the Change in
Control.
(c) Upon a Change in Control, as defined in the Plan, after the
expiration of the Performance Period, but prior to full
payment of the Earned Target Incentive Award, the
Participant shall become fully vested in the unpaid portion
of the Earned Target Incentive Award with such amount being
paid to the Participant within ninety (90) days of the
Change in Control.
(d) For purposes of this Agreement, "Change in Control" shall
have the same meaning as the term has in the United
Wisconsin Services, Inc. Equity Incentive Plan, except that
such term shall apply to both UWSI and BCBSUW and shall not
include any merger, consolidation, reorganization, or other
similar transaction between the Company, or its parent or
subsidiaries and Blue Cross & Blue Shield United of
Wisconsin, or its parent or subsidiaries ("BCBSUW"), or the
conversion of BCBSUW into a Stock Corporation.
(e) Notwithstanding anything else herein to the contrary, to
the extent any payment would be made to the Participant
while the Participant is the chief executive officer or any
other "covered employee" and such payment would be
nondeductible under Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"), then such payment
shall be deferred until such time that the Participant
ceases to be a "covered employee" under Section 162(m) of
the Code.
ARTICLE 6. NONTRANSFERABILITY
Neither the Target Incentive Award or the Earned Target Incentive Award
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution.
Further, except as otherwise provided in a Participant's Award Agreement, a
Participant's rights under the Plan shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's legal
representative.
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ARTICLE 7. ADMINISTRATION
This Agreement and the rights of the Participant hereunder are subject to
all the terms and conditions of the Plan, as the same may be amended from time
to time, as well as to such rules and regulations as the Committee may adopt for
administration of the Plan. It is expressly understood that the Committee is
authorized to administer, construe, and make all determinations necessary or
appropriate to the administration of the Plan and this Agreement, all of which
shall be binding and conclusive with respect to the Participant. Any
inconsistency between the Agreement and the Plan shall be resolved in favor of
the Plan.
ARTICLE 8. MISCELLANEOUS
(a) The selection of any employee for participation in the Plan
shall not give such Participant any right to be retained in
the employ of the Company. The right and power of the
Company to dismiss or discharge any Participant is
specifically reserved. Such Participant or any person
claiming under or through the Participant shall not have
any right or interest in the Plan or any Award thereunder,
unless and until all terms, conditions, and provisions of
the Plan that affect such Participant have been complied
with as specified herein.
(b) The Committee may, in its sole discretion, modify, amend,
or terminate in whole or in part, any or all provisions of
the Plan, provided that no such modification, amendment, or
termination shall reduce or impair the value of any awards
after such awards are vested.
(c) This Agreement shall be subject to all applicable laws,
rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as
may be required.
(d) To the extent not preempted by federal law, this Agreement
shall be governed by, and construed in accordance with, the
laws of the State of Wisconsin.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
effective as of ____________, 2001.
United Wisconsin Services, Inc. and
Blue Cross & Blue Shield United of Wisconsin
By: _______________________
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Please acknowledge your agreement to participate in the Plan and this Agreement,
and to abide by all of the governing terms and provisions, by signing the
following representation:
AGREEMENT TO PARTICIPATE
By signing a copy of this Agreement and returning it to the Director of Human
Resources of United Wisconsin Services, Inc. and Blue Cross & Blue Shield United
of Wisconsin, I acknowledge that I have read the Plan, and that I fully
understand all of my rights under the Plan, as well as all of the terms and
conditions which may limit my eligibility to receive payment(s) of the Target
Incentive Award or the Earned Target Incentive Award. Without limiting the
generality of the preceding sentence, I understand that my right to receive
payment(s) of the Target Incentive Award or the Earned Target Incentive Award is
conditioned upon my continued employment with the Company.
ATTEST:
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Participant
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